2014-08-04 10:00:00 CEST
2014-08-04 10:00:04 CEST
REGULATED INFORMATION
Affecto Oyj - Interim report (Q1 and Q3)
Affecto Plc's Interim Report 1-6/2014
Helsinki, 2014-08-04 10:00 CEST (GLOBE NEWSWIRE) -- AFFECTO PLC -- INTERIM
REPORT -- 4 AUGUST 2014 at 11.00
Affecto Plc's Interim Report 1-6/2014
Group key figures
MEUR 4-6/14 4-6/13 1-6/14 1-6/13 2013 last 12m
Net sales 33.0 34.8 64.2 69.2 132.9 127.9
Operational segment result 3.0 2.5 3.1 5.0 10.3 8.4
% of net sales 9.2 7.1 4.9 7.3 7.7 6.5
Operating profit 2.5 2.0 2.1 4.0 8.3 6.3
% of net sales 7.5 5.7 3.2 5.8 6.2 4.9
Profit before taxes 2.3 1.8 1.7 3.9 8.0 5.8
Profit for the period 1.8 1.2 1.3 2.7 5.6 4.1
Equity ratio, % 56.0 53.5 56.0 53.5 53.0 -
Net gearing, % 15.7 21.1 15.7 21.1 7.4 -
Earnings per share, eur 0.09 0.05 0.06 0.13 0.26 0.19
Earnings per share (diluted), 0.09 0.05 0.06 0.13 0.26 0.19
eur
Equity per share, eur 2.99 3.10 2.99 3.10 3.14 -
CEO Lars Wahlström comments:
Our profit increased in the second quarter despite a decrease in net sales. Net
sales decreased by 5% to 33.0 MEUR (34.8 MEUR). We grew in Baltic, but net
sales of our other units decreased. The decrease in the number of employees
contributed to the decrease in consulting revenue. On the positive side,
license sales improved.
The streamlining actions done earlier this year in Norway and Sweden impacted
positively on the second quarter's profit. Operating profit grew to 2.5 MEUR
(2.0 MEUR) and profitability improved to 7.5% (5.7%). Baltic with 13% had the
highest profitability and also Norway as well as Finland reached 10%
profitability. Also Sweden made a clearly positive profit.
We are actively working to modify our offering to correspond to the customer
needs that are changing along the rapid technology changes. Both cloud and
appliance based solutions are getting more common also in our field. Also the
generic Digitalisation and Internet of Things trends create new business
opportunities for us.
The order backlog was 48.1 MEUR, somewhat below last year (48.8 MEUR) due to
Finland and Norway. Customers are still cautious in their investment decision
making which slows down sales.
Year 2014 net sales and operating profit are estimated to be below last year's
level.
Additional information:
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
CFO Satu Kankare, +358 205 777 202
This release is unaudited. The amounts in this report have been rounded from
exact numbers.
NET SALES
Affecto's net sales in 1-6/2014 were 64.2 MEUR (1-6/2013: 69.2 MEUR). Net sales
in Finland were 26.4 MEUR (27.0 MEUR), in Norway 13.3 MEUR (16.1 MEUR), in
Sweden 11.3 MEUR (12.3 MEUR), in Denmark 6.6 MEUR (8.1 MEUR) and 8.8 MEUR (8.2
MEUR) in Baltic.
Net sales by reportable segments
Net sales, MEUR 4-6/14 4-6/13 1-6/14 1-6/13 2013 last 12m
Finland 13.8 14.3 26.4 27.0 53.2 52.5
Norway 7.0 7.6 13.3 16.1 29.6 26.8
Sweden 5.5 6.2 11.3 12.3 23.2 22.2
Denmark 3.1 4.3 6.6 8.1 15.4 13.9
Baltic 4.7 3.9 8.8 8.2 16.0 16.7
Other -1.1 -1.4 -2.2 -2.4 -4.4 -4.1
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Group total 33.0 34.8 64.2 69.2 132.9 127.9
Net sales decreased by 5% in the second quarter. Net sales decreased in all
other areas except Baltic. Weaker NOK and SEK contributed to the decrease.
Resource utilization was low especially in Finland and Denmark. The number of
employees decreased especially in Norway, which decreased consultancy revenue.
There were about 5% less working days in the quarter than one year ago.
Net sales of Information Management Solutions business in 1-6/2014 were 59.6
MEUR (64.7 MEUR) and net sales of Karttakeskus GIS business were 6.2 MEUR (5.7
MEUR).
Customers continue to show interest mainly in shorter and smaller projects, and
investment decisions take a long time. The general market sentiment continues
cautious especially in Finland. The order backlog decreased to 48.1 MEUR (48.8
MEUR).
PROFIT
Affecto's operating profit in 1-6/2014 was 2.1 MEUR (4.0 MEUR) and the
operational segment result was 3.1 MEUR (5.0 MEUR). Operational segment result
was in Finland 2.2 MEUR (3.2 MEUR), in Norway 0.4 MEUR (1.7 MEUR), in Sweden
0.0 MEUR (-0.3 MEUR), in Denmark 0.6 MEUR (0.8 MEUR) and in Baltic 0.8 MEUR
(0.4 MEUR).
Operational segment result by reportable segments
Operational segment 4-6/14 4-6/13 1-6/14 1-6/13 2013 last 12m
result, MEUR
Finland 1.4 1.7 2.2 3.2 6.9 5.9
Norway 0.7 0.8 0.4 1.7 2.7 1.4
Sweden 0.3 -0.2 0.0 -0.3 -0.2 0.1
Denmark 0.3 0.5 0.6 0.8 1.9 1.7
Baltic 0.6 0.1 0.8 0.4 0.2 0.6
Other -0.2 -0.4 -0.8 -0.7 -1.2 -1.3
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Operational segment result 3.0 2.5 3.1 5.0 10.3 8.4
IFRS3 Amortization -0.5 -0.5 -1.1 -1.0 -2.0 -2.0
Operating profit 2.5 2.0 2.1 4.0 8.3 6.3
--------------------------------------------------------------------------
In 4-6/2014 operating profit increased to 2.5 MEUR (2.0 MEUR) and profitability
increased to 8% (6%). Finland and Norway had 10% profitability. Profitability
improved to 6% in Sweden. Denmark's profitability decreased to 8% due to
decreased net sales and low utilization rate. Profitability in Baltic improved
to 13% thanks to the insurance business.
According to the IFRS3 requirements, operating profit includes 1.1 MEUR (1.0
MEUR) of amortization on intangible assets related to acquisitions. The other
intangible assets impacting in the IFRS3 amortization totaled 0.7 MEUR at the
end of the reporting period and the amortization will end during year 2014.
Taxes corresponding to the profit of the period have been entered as tax
expense. Net profit for the period was 1.3 MEUR, while it was 2.7 MEUR last
year.
FINANCE AND INVESTMENTS
At the end of the reporting period Affecto's balance sheet totaled 126.0 MEUR
(12/2013: 139.5 MEUR). Equity ratio was 56.0% (12/2013: 53.0%) and net gearing
was 15.7% (12/2013: 7.4%).
The financial loans were 24.5 MEUR (12/2013: 26.5 MEUR) at the end of reporting
period. The company's cash and liquid assets were 14.3 MEUR (12/2013: 21.5
MEUR). The interest-bearing net debt was 10.1 MEUR (12/2013: 5.0 MEUR).
Cash flow from operating activities for the reported period was -1.5 MEUR (1.1
MEUR) and cash flow from investing activities was -0.4 MEUR (-1.1 MEUR).
Investments in tangible and intangible assets were 0.4 MEUR (1.1 MEUR).
EMPLOYEES
The number of employees was 1040 persons at the end of the reporting period
(1082). 424 employees were based in Finland (430), 101 in Norway (126), 138 in
Sweden (140), 66 in Denmark (67) and 311 in the Baltic countries (319). The
average number of employees during the period was 1059 (1082).
Board member Lars Wahlström has been the interim CEO since 1 January 2014 and
serves in that position during the CEO recruitment process.
REVIEW OF MARKET DEVELOPMENTS
Weak economic development in our operating area continued to affect Affecto's
business negatively. Customers' decision-making pace was slow and they are
ordering short and small projects. Order backlog has decreased in Finland and
in Norway compared to last year, but it has grown in Denmark and Baltic.
Market development in our BI/EIM market segments is twofold: some technology
and solution areas grow well, but some see only very slow growth. E.g. demand
for basic data warehouse services is not growing much, while demand for
appliances and other next-generation data warehouse solutions is growing more
rapidly. We are shifting our offerings and resources to match the changing
needs. The streamlining actions we took in Q1 in Norway and Sweden are part of
that adjustment process.
Cloud adoption is also finally progressing in the Business Intelligence & Data
Warehouse markets. In addition to cloud solutions built for customers, we are
also building our own cloud-based industry-specific solution for the utilities
industry.
The industrial internet / "Internet of things" will create huge new analysis
possibilities for our customers. We are actively looking into development of
new solutions to satisfy the changing customer needs.
BUSINESS REVIEW BY AREAS
The group's business is managed through five country units. Finland, Norway,
Sweden, Denmark and Baltic are also the reportable segments.
In 4-6/2014 the net sales in Finland decreased by 3% to 13.8 MEUR (14.3 MEUR).
Operational segment result was 1.4 MEUR (1.7 MEUR) and profitability was 10%.
General mood is still cautious and customers are slow with their investment
decisions. Order backlog is below last year.
In 4-6/2014 the net sales of Karttakeskus GIS business, reported as part of
Finland, increased by 10% to 3.3 MEUR (3.0 MEUR) and its profitability was
moderate.
In 4-6/2014 the net sales in Norway were 7.0 MEUR (7.6 MEUR) and operational
segment result was 0.7 MEUR (0.8 MEUR). Net sales in euros decreased by 8%
mostly due to the weakened NOK. Profitability was at last year's level of 10%.
Streamlining actions have helped to decrease the cost base and have improved
profitability. Order backlog is below last year.
In 4-6/2014 the net sales in Sweden were 5.5 MEUR (6.2 MEUR) and operational
segment result 0.3 MEUR (-0.2 MEUR). Net sales decreased by 12%, to which the
weakened SEK contributed. Profitability was clearly positive 6%, partially
thanks to the streamlining actions taken earlier this year. Development actions
continue and the goal is to achieve normal profitability, but structural and
operational changes for the business will take some time. Order backlog is at
last year's level.
In 4-6/2014 the net sales in Denmark were 3.1 MEUR (4.3 MEUR) and operational
segment result was 0.3 MEUR (0.5 MEUR). Net sales decreased by 27% due to less
third-party subcontracting work and a lower utilisation rate of own
consultants. Profitability decreased to 8%. Market situation in Denmark is
rather normal with tight competition. Order backlog is above last year's level.
In 4-6/2014 the net sales in Baltic (Lithuania, Latvia, Estonia, Poland, South
Africa) were 4.7 MEUR (3.9 MEUR). Operational segment result was 0.6 MEUR (0.1
MEUR). Net sales increased by 20% and profitability increased to 13%. The
Lithuanian public sector, a key market for us, has not yet recovered, but the
situation in Lithuania is expected to improve later this year due to the
entrance of Lithuania into the Euro zone in January 2015. Estonian market
situation is normal. The insurance business is running well. Order backlog is
above last year's level.
ANNUAL GENERAL MEETING AND GOVERNANCE
The Annual General Meeting of Affecto Plc, held on 10 April 2014, adopted the
financial statements for 1.1.-31.12.2013 and discharged the members of the
Board of Directors and the CEO from liability. Approximately 33 percent of
Affecto's shares and votes were represented at the Meeting. The Annual General
Meeting decided on a dividend distribution of EUR 0.16 per share for the year
2013.
Aaro Cantell, Magdalena Persson, Jukka Ruuska, Olof Sand, Tuija Soanjärvi and
Lars Wahlström were elected as members of the Board of Directors. The
organization meeting of the Board of Directors re-elected Aaro Cantell as
Chairman and Jukka Ruuska as Vice-Chairman. KPMG Oy Ab was elected as the
auditor of the company.
The Meeting approved the Board's proposal for appointing a Nomination Committee
to prepare proposals concerning members of the Board of Directors and their
remunerations for the following Annual General Meeting. The Nomination
Committee will consist of the representatives of the three largest shareholders
and the Chairman of the Board of Directors, acting as an expert member, if
he/she is not appointed representative of a shareholder. The members
representing the shareholders will be appointed by the three shareholders whose
share of ownership of the shares of the company is largest on 31 October
preceding the Annual General Meeting.
According to the Articles of Association, the General Meeting of Shareholders
annually elects the Board of Directors by a majority decision. The term of
office of the board members expires at the end of the next Annual General
Meeting of Shareholders following their election. The Board appoints the CEO.
The Articles of Association do not contain any special rules for changing the
Articles of Association or for issuing new shares.
THE AUTHORIZATIONS GIVEN TO THE BOARD OF DIRECTORS
The Board has not used in the review period the authorizations given by the
Annual General Meeting in 2013, that expired on 10 April 2014.
The complete contents of the new authorizations given by the Annual General
Meeting held on 10 April 2014 have been published in the stock exchange release
regarding the Meetings' decisions. Key facts about the authorizations:
The Annual General Meeting decided to authorize the Board of Directors to
decide to acquire the company's own shares with distributable funds. A maximum
of 2 100 000 shares may be acquired. The authorization shall be in force until
the next Annual General Meeting.
The Annual General Meeting decided to authorize the Board of Directors to
decide to issue new shares and to convey the company's own shares held by the
company in one or more tranches. The share issue may be carried out as a share
issue against consideration or without consideration on terms to be determined
by the Board of Directors and in relation to a share issue against
consideration at a price to be determined by the Board of Directors. A maximum
of 4 200 000 new shares may be issued. A maximum of 2 100 000 own shares held
by the company may be conveyed. In addition, the authorization includes the
right to decide on a share issue without consideration to the company itself so
that the amount of own shares held by the company after the share issue is a
maximum of one-tenth (1/10) of all shares in the company. The authorization
shall be in force until the next Annual General Meeting.
SHARES AND TRADING
During the review period a total of 132 141 new shares have been subscribed
with the 2008C options.
The company has one share series and all shares have similar rights. At the end
of the review period Affecto Plc's share capital consisted of 22 450 745
shares. The company owned directly 64 552 shares and a fully owned subsidiary
Affecto Management Oy owned 823 000 shares. Thus there are 887 552 treasury
shares in total, approx. 4 % of the total amount of the shares.
In 1-6/2014 the highest share price was 4.62 euro, the lowest price 2.90 euro,
the average price 3.43 euro and the closing price 3.00 euro. The trading volume
was 2.3 million shares, corresponding to annualized 21% of the number of shares
at the end of the period. The market value of shares was 64.7 MEUR at the end
of the period excluding the treasury shares.
2008C options' exercise period ended on 31 May 2014. A total of 306 000 shares
were subscribed with the options.
SHAREHOLDERS
The company had a total of 3 018 owners on 30 June 2014 and the foreign
ownership was 11%. The list of the largest owners can be found in the company's
web site. Information about the ownership structure and option programs is
included as a separate section in the financial statements. The ownership of
the board members, CEO and their controlled corporations totaled approx. 10.4%.
According to the flagging announcement made on 21 May 2014, the ownership of
Evli Pankki and funds managed by Evli Rahastoyhtiö has decreased below 5%.
ASSESSMENT OF RISKS AND UNCERTAINTIES
Affecto's order backlog has traditionally been only for a few months, which
decreases the reliability of longer-term forecasts. The changes in the general
economic conditions and the operating environment of customers have direct
impact in Affecto's markets. The uncertain economy may affect Affecto's
customers negatively, and their slower investment decision making, postponing
or cancellation of IT investments may have negative impact on Affecto. Slower
decision making by customers may decrease the predictability of the business
and may decrease the utilisation rate of resources.
Affecto's balance sheet includes a material amount of goodwill. Goodwill has
been allocated to cash generating units. Cash generating units, to which
goodwill has been allocated, are tested for impairment both annually and
whenever there is an indication that the unit may be impaired. Potential
impairment losses may have material effect on reported profit and value of
assets. The greatest uncertainty is related to Sweden, where impartment testing
has been done on the basis of 30 June 2014 and the recoverable amount exceeds
the carrying amount only by a narrow margin.
Affecto sells third party software licenses as part of its solutions. Typically
the license sales have most impact on the last month of each quarter and
especially in the fourth quarter. This increases the fluctuation in net sales
between quarters and increases the difficulty of accurately forecasting the
quarters. Affecto had license sales of approx. 10 MEUR in 2013.
Affecto's success depends also on good customer relationships. Affecto has a
well-diversified customer base. In 2013 the largest customer generated 3% of
Affecto's net sales, while the 10 largest together generated 17%. Although none
of the customers is critically large for the whole group, there are large
customers in various countries who are significant for local business in the
country.
Approximately a 40% of Affecto's net sales is generated in Sweden and Norway,
thus the development of the currencies of these countries (SEK and NOK) may
have impact on Affecto's profitability. The main part of the companies' income
and costs are within the same currency, which decreases the risks.
FUTURE OUTLOOK
Year 2014 net sales and operating profit are estimated to be below last year's
level.
The company does not provide exact guidance for net sales or EBIT development,
as single projects and timing of license sales may have large impact on
quarterly sales and profit.
Affecto Plc
Board of Directors
You can order Affecto's stock exchange releases to be delivered automatically
by e-mail.
Please visit the Investors section of the company website: www.affecto.com
A briefing for analysts and media will be arranged at 12.30 at Restaurant
Savoy, Eteläesplanadi 14, Helsinki.
www.affecto.com
-----
Financial information:
1. Consolidated income statement, consolidated comprehensive income statement,
balance sheet, cash flow statement and statement of changes in equity
2. Notes
3. Key figures
1. Consolidated income statement, consolidated comprehensive income statement,
balance sheet, cash flow statement and statement of changes in equity
CONSOLIDATED INCOME STATEMENT
(1 000 EUR) 4-6/14 4-6/13 1-6/14 1-6/13 2013 last
12m
----------------------------------------------------
----------------------------------------------------
Net sales 33 018 34 810 64 205 69 203 132 896 127
898
Other operating income 23 6 23 7 65 82
Changes in inventories of 17 -79 26 358 306 -26
finished
goods and work in progress
Materials and services -8 172 -7 357 -14 171 -15 201 -29 952 -28
922
Personnel expenses -17 081 -19 992 -37 216 -39 774 -74 031 -71
472
Other operating expenses -4 472 -4 587 -9 096 -8 936 -17 803 -17
964
Other depreciation and -309 -314 -622 -608 -1 230 -1 243
amortisation
IFRS3 amortisation -549 -517 -1 098 -1 040 -1 989 -2 047
Operating profit 2 475 1 971 2 051 4 008 8 262 6 305
Financial income and -183 -150 -363 -123 -289 -529
expenses
Profit before income tax 2 292 1 821 1 688 3 885 7 973 5 776
Income tax -445 -616 -392 -1 143 -2 407 -1 656
Profit for the period 1 847 1 205 1 297 2 742 5 566 4 120
Profit for the period
attributable to:
Owners of the parent 1 847 1 113 1 297 2 660 5 493 4 129
company
Non-controlling interest - 92 - 82 73 -9
Earnings per share
(EUR per share):
Basic 0.09 0.05 0.06 0.13 0.26 0.19
Diluted 0.09 0.05 0.06 0.13 0.26 0.19
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
(1 000 EUR) 4-6/14 4-6/13 1-6/14 1-6/13 2013 last
12m
----------------------------------------------------
----------------------------------------------------
Profit for the period 1 847 1 205 1 297 2 742 5 566 4 120
Other comprehensive income
Items that may be
reclassified subsequently
to the statement of
income:
Translation difference -765 -1 961 -809 -1 817 -3 074 -2 066
Total Comprehensive income 1 082 -756 488 926 2 491 2 054
for the period
Total Comprehensive income
attributable to:
Owners of the parent 1 082 -849 488 843 2 419 2 063
company
Non-controlling interest - 92 - 82 73 -9
CONSOLIDATED BALANCE SHEET
(1 000 EUR) 6/2014 6/2013 12/2013
-------------------------------------------------------------
-------------------------------------------------------------
Non-current assets
Property, plant and equipment 1 745 2 037 1 947
Goodwill 71 377 73 157 72 166
Other intangible assets 988 3 091 2 072
Deferred tax assets 1 588 1 500 1 606
Trade and other receivables 2 7 4
75 701 79 792 77 795
Current assets
Inventories 628 677 622
Trade and other receivables 34 749 37 193 38 969
Current income tax receivables 599 579 615
Cash and cash equivalents 14 308 14 566 21 469
50 284 53 015 61 675
-------------------------------------------------------------
-------------------------------------------------------------
Total assets 125 985 132 807 139 470
Equity attributable to owners
of the parent Company
Share capital 5 105 5 105 5 105
Reserve of invested non-restricted 47 710 47 300 47 448
equity
Other reserves 800 718 763
Treasury shares -2 165 -2 202 -2 165
Translation differences -2 937 -871 -2 128
Retained earnings 16 046 14 996 18 184
-------------------------------------------------------------
-------------------------------------------------------------
64 559 65 046 67 207
Non-controlling interest - 394 -
Total equity 64 559 65 439 67 207
Non-current liabilities
Loans and borrowings 20 436 24 403 22 420
Deferred tax liabilities 185 707 505
20 621 25 110 22 924
Current liabilities
Loans and borrowings 4 000 4 000 4 000
Trade and other payables 34 753 35 940 42 788
Current income tax liabilities 1 467 2 068 1 913
Provisions 585 249 638
40 805 42 257 49 339
Total liabilities 61 426 67 367 72 264
-------------------------------------------------------------
-------------------------------------------------------------
Equity and liabilities 125 985 132 807 139 470
SUMMARY CONSOLIDATED CASH FLOW STATEMENT
(1 000 EUR) 1-6/2014 1-6/2013 2013
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash flows from operating activities
Profit for the period 1 297 2 742 5 566
Adjustments to profit for the period 2 471 3 100 6 271
3 767 5 842 11 837
Change in working capital -3 543 -2 904 2 863
Interest and other financial cost paid -228 -289 -566
Interest and other financial income received 35 100 123
Income taxes paid -1 511 -1 660 -3 343
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net cash from operating activities -1 479 -1 089 10 915
Cash flows from investing activities
Acquisition of tangible and intangible assets -440 -1 063 -1 566
Proceeds from sale of tangible and - 1 1
intangible assets
Net cash used in investing activities -440 -1 061 -1 564
----------------------------------------------------------------------------
Cash flows from financing activities
Repayments of non-current borrowings -2 000 -2 000 -4 000
Proceeds from share options exercised 262 657 781
Acquisition of non-controlling interest - - -30
Dividends paid to the owners -3 434 -3 444 -3 444
of the parent company
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net cash from financing activities -5 172 -4 788 -6 694
(Decrease)/increase in cash and cash equivalents -7 092 -4 760 2 657
Cash and cash equivalents 21 469 19 767 19 767
at the beginning of the period
Foreign exchange effect on cash -70 -440 -954
Cash and cash equivalents 14 308 14 566 21 469
at the end of the period
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to owners of the parent
company
------------------------------------------------------
--------
(1 000 Share Reserve of Other Treasu Trans Ret. Non-cont Total
EUR) capita invested reserv ry lat. earnin rolling equity
l non-restrict es shares diff. gs interest
ed equity
----------------------------------------------
Equity 5 105 47 448 763 -2 165 -2 128 18 184 - 67 207
at 1
January
2014
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit 1 297 - 1 297
Translat -809 -809
ion
differe
nces
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total -809 1 297 - 488
compre-
hensive
income
Share-ba 36 36
sed
payment
s
Exercise 262 262
of
share
options
Dividend -3 434 -3 434
s paid
Equity 5 105 47 710 800 -2 165 -2 937 16 046 - 64 559
at 30
June
2014
--------------------------------------------------------------------------------
Equity attributable to owners of the parent
company
------------------------------------------------------
--------
(1 000 Share Reserve of Other Treasu Trans Ret. Non-cont Total
EUR) capita invested reserv ry lat. earnin rolling equity
l non-restrict es shares diff. gs interest
ed equity
----------------------------------------------
Equity 5 105 46 643 693 -2 202 946 15 781 311 67 277
at 1
January
2013
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit 2 660 82 2 742
Translat -1 817 -1 817
ion
differe
nces
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total -1 817 2 660 82 926
compre-
hensive
income
Share-ba 25 25
sed
payment
s
Exercise 657 657
of
share
options
Dividend -3 444 -3 444
s paid
Equity 5 105 47 300 718 -2 202 -871 14 996 394 65 439
at 30
June
2013
--------------------------------------------------------------------------------
2. Notes
2.1. Basis of preparation
This interim report has been prepared in accordance with the IFRS recognition
and measurement principles and in accordance with IAS 34, Interim Financial
reporting. The interim report should be read in conjunction with the annual
financial statements for the year ended 31 December 2013. In material respects,
the same accounting policies have been applied as in the 2013 annual
consolidated financial statements. The amendments to and interpretations of
IFRS standards that entered into force on 1 January 2014 had no material impact
on this interim report.
2.2. Segment information
Affecto's reporting segments are based on geographical locations and are
Finland, Norway, Sweden, Denmark and Baltic.
Segment net sales and result
(1 000 EUR) 4-6/14 4-6/13 1-6/14 1-6/13 2013 last 12m
--------------------------------------------------
--------------------------------------------------
Total net sales
Finland 13 810 14 253 26 393 27 034 53 175 52 534
Norway 7 005 7 609 13 279 16 074 29 554 26 759
Sweden 5 452 6 206 11 278 12 273 23 152 22 157
Denmark 3 127 4 263 6 585 8 097 15 363 13 852
Baltic 4 696 3 912 8 831 8 166 16 018 16 682
Other -1 072 -1 433 -2 162 -2 441 -4 366 -4 086
Group total 33 018 34 810 64 205 69 203 132 896 127 898
--------------------------------------------------------------------------------
Operational segment result
Finland 1 359 1 747 2 220 3 164 6 863 5 919
Norway 714 766 421 1 710 2 718 1 429
Sweden 311 -187 33 -330 -229 134
Denmark 260 471 554 781 1 884 1 656
Baltic 597 74 757 388 193 562
Other -217 -384 -835 -664 -1 177 -1 348
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total operational segment 3 024 2 488 3 149 5 048 10 251 8 352
result
IFRS3 amortisation -549 -517 -1 098 -1 040 -1 989 -2 047
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit 2 475 1 971 2 051 4 008 8 262 6 305
Financial income and expenses -183 -150 -363 -123 -289 -529
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit before income tax 2 292 1 821 1 688 3 885 7 973 5 776
Net sales by business lines
(1 000 EUR) 4-6/14 4-6/13 1-6/14 1-6/13 2013 last 12m
--------------------------------------------------
--------------------------------------------------
Information Management 30 526 32 575 59 581 64 740 123 608 118 449
Solutions
Karttakeskus GIS business 3 264 2 964 6 229 5 732 12 239 12 736
Other -773 -728 -1 605 -1 269 -2 950 -3 287
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Group total 33 018 34 810 64 205 69 203 132 896 127 898
2.3. Changes in intangible and tangible assets
(1 000 EUR) 1-6/2014 1-6/2013 1-12/2013
------------------------------
------------------------------
Carrying amount at the beginning of period 76 185 80 460 80 460
Additions 440 1 063 1 566
Disposals - -1 -1
Depreciation and amortization for the period -1 719 -1 648 - 3 219
Exchange rate differences -796 -1 558 -2 621
Carrying amount at the end of period 74 110 78 285 76 185
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2.4. Share capital, reserve of invested non-restricted equity and treasury
shares
(1 000 EUR) Number of shares Share Reserve of invested Treasury
outstanding capital non-restricted equity shares
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----------------------------------------------------------------
1.1.2013 20 641 641 5 105 46 643 -2 202
Exercise of 349 667 - 657 -
share options
30.6.2013 20 991 308 5 105 47 300 -2 202
1.1.2014 21 431 052 5 105 47 448 -2 165
Exercise of 132 141 - 260 -
share options
Payment for - - 2 -
share options
30.6.2014 21 563 193 5 105 47 710 -2 165
At the end of reporting period Affecto Plc owned 64 552 treasury shares. In
addition to that Affecto Management Oy, a fully owned subsidiary, owned 823 000
shares in Affecto Plc. In total these 887 552 shares correspond to 4.0% of the
total amount of the shares. The amount of registered shares was 22 450 745
shares.
2.5. Interest-bearing liabilities
(1 000 EUR) 30.6.2014 31.12.2013
Interest-bearing non-current liabilities
Loans from financial institutions, 20 436 22 420
non-current portion
Loans from financial institutions, 4 000 4 000
current portion
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24 436 26 420
Affecto's loan facility agreement includes financial covenants, breach of which
might lead to an increase in cost of debt or cancellation of the facility
agreement. The covenants are based on total net debt to earnings before
interest, taxes, depreciation and amortization and total net debt to total
equity. The covenants will be measured quarterly, and these terms and
conditions of covenants were met at the end of the reporting period.
2.6. Contingencies and commitments
The future aggregate minimum lease payments under non-cancelable operating
leases:
(1 000 EUR) 30.6.2014 31.12.2013
Not later than one (1) year 3 339 3 675
Later than one (1) year, 4 109 3 719
but not later than five (5) years
Later than five (5) years - -
Total 7 448 7 394
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Guarantees given:
(1 000 EUR) 30.6.2014 31.12.2013
Liabilities secured by a mortgage
Financial loans 24 500 26 500
The above-mentioned liabilities are secured by bearer bonds with a nominal
value of 52.5 million euro. The bonds are held by Nordea Pankki Suomi Oyj and
secured by a mortgage on company assets of the group companies. In addition,
the shares in Affecto Finland Oy and Affecto Norway AS have been pledged to
secure the financial liabilities above.
Other securities given on own behalf:
(1 000 EUR) 30.6.2014 31.12.2013
Pledges 36 36
Other guarantees 3 000 2 836
Other guarantees are mostly securities issued for customer projects. These
guarantees include both bank guarantees secured by parent company of the group
and guarantees issued by the parent company and subsidiaries.
2.7. Related party transactions
Key management compensation and remunerations to the board of directors:
(1 000 EUR) 1-6/2014 1-6/2013 1-12/2013
Salaries and other short-term employee benefits 1 203 1 061 2 017
Post-employment benefits 138 152 288
Termination benefits 80 6 85
Share-based payments 1 2 6
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Total 1 422 1 221 2 395
Loans to related party:
(1 000 EUR) 30.6.2014 30.6.2013 31.12.2013
Loans to key management of the group - 1 600 -
Purchases from related party:
(1 000 EUR) 1-6/20 1-6/20 1-12/2
14 13 013
Purchases from the entity that are controlled by key - 5 5
management personnel of the group
3. Key figures
4-6/14 4-6/13 1-6/14 1-6/13 2013 last 12m
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Net sales, 1 000 eur 33 018 34 810 64 205 69 203 132 896 127 898
EBITDA, 1 000 eur 3 333 2 802 3 771 5 657 11 481 9 595
Operational segment result, 3 024 2 488 3 149 5 048 10 251 8 352
1 000 eur
Operating result, 1 000 eur 2 475 1 971 2 051 4 008 8 262 6 305
Result before taxes, 1 000 2 292 1 821 1 688 3 885 7 973 5 776
eur
Profit attributable to the 1 847 1 113 1 297 2 660 5 493 4 129
owners
of the parent company, 1 000
eur
EBITDA, % 10.1 % 8.1 % 5.9 % 8.2 % 8.6 % 7.5 %
Operational segment result, % 9.2 % 7.1 % 4.9 % 7.3 % 7.7 % 6.5 %
Operating result, % 7.5 % 5.7 % 3.2 % 5.8 % 6.2 % 4.9 %
Result before taxes, % 6.9 % 5.2 % 2.6 % 5.6 % 6.0 % 4.5 %
Net income for equity holders 5.6 % 3.2 % 2.0 % 3.8 % 4.1 % 3.2 %
of the parent company, %
Equity ratio, % 56.0 % 53.5 % 56.0 % 53.5 % 53.0 %
Net gearing, % 15.7 % 21.1 % 15.7 % 21.1 % 7.4 %
Interest-bearing net debt, 10 128 13 837 10 128 13 837 4 950
1 000 eur
Gross investment in 305 568 440 1 063 1 566
non-current
assets (excl. acquisitions),
1 000 eur
Gross investments, % of net 0.9 % 1.6 % 0.7 % 1.5 % 1.2 %
sales
Order backlog, 1 000 eur 48 113 48 824 48 113 48 824 48 682
Average number of employees 1 040 1 081 1 059 1 082 1 081
Earnings per share, eur 0.09 0.05 0.06 0.13 0.26 0.19
Earnings per share (diluted), 0.09 0.05 0.06 0.13 0.26 0.19
eur
Equity per share, eur 2.99 3.10 2.99 3.10 3.14
Average number of shares, 21 479 20 768 21 458 20 706 20 906 21 279
1 000 shares
Number of shares at the end 21 563 20 991 21 563 20 991 21 431 21 563
of
period, 1 000 shares
Calculation of key figures
EBITDA = Earnings before interest, taxes,
depreciation, amortization and impairment losses
Operational segment result = Operating profit before amortizations on
fair value adjustments due to business
combinations (IFRS3) and goodwill
impairments
Equity ratio, % = Total equity *100
________________________________
Total assets - advance payments
Gearing, % = Interest-bearing liabilities - cash *100
and cash equivalents
__________________________________
Total equity
Interest-bearing net debt = Interest-bearing liabilities - cash and
cash equivalents
Earnings per share (EPS) = Profit attributable to owners of the parent
company
______________________________________
Weighted average number of ordinary shares in
issue during the period
Equity per share = Total equity
______________________________________
Adjusted number of shares at the end of
the period
Market capitalization = Number of shares at the end of period
(excluding company's own shares held by the company) x share price at closing date
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Additional information:
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
CFO Satu Kankare, +358 205 777 202
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