2011-04-28 08:30:00 CEST
2011-04-28 08:30:09 CEST
REGULATED INFORMATION
Affecto Oyj - Interim report (Q1 and Q3)
AFFECTO PLC'S INTERIM REPORT 1-3/2011
Helsinki, 2011-04-28 08:30 CEST (GLOBE NEWSWIRE) -- AFFECTO PLC -- INTERIM
REPORT -- 28 APRIL 2011 at 9.30
AFFECTO PLC'S INTERIM REPORT 1-3/2011
GROUP KEY FIGURES
MEUR 1-3/11 1-3/10 2010
Net sales 30.1 25.7 114.1
Operational segment result 2.1 0.1 5.3
% of net sales 7.1 0.3 4.6
Operating profit/loss 1.6 -0.4 3.3
% of net sales 5.4 -1.6 2.9
Profit/loss before taxes 1.5 -1.1 1.5
Profit/loss for the period 1.2 -0.9 0.9
Equity ratio, % 45.5 43.4 43.1
Net gearing, % 37.1 40.4 40.4
Earnings per share, eur 0.06 -0.04 0.05
Earnings per share (diluted), eur 0.06 -0.04 0.05
Equity per share, eur 2.69 2.48 2.69
CEO Pekka Eloholma comments:"First quarter net sales grew by 17% to 30.1 MEUR. Net sales grew in all
countries, and Denmark and Sweden generated the highest growth. EBIT grew to
1.6 MEUR and was 5% of net sales. Both net sales and EBIT clearly exceed the
results in the same quarter in the previous two years.""Year 2011 has started well. The market situation seems to be currently rather
normal and the effects of the economic crisis start to be over in all
countries, also in the still recovering Baltic. In other countries our business
operations are doing well already now and achieved over 10% operational segment
profit, but the ongoing growth-oriented development actions caused the result
in Sweden to remain negative.""Affecto's order backlog is 51.2 MEUR, which is 19% higher than in Q1/2010
(43.1 MEUR). The order backlog that has grown in all countries and the good
level of customer activity strengthen our belief in continuing positive
development of business conditions.""In 2011 the main focus is on profit improvement. Operating profit is estimated
to at least double compared to year 2010. The net sales are estimated to grow
at least by 10% in year 2011."
Additional information:
CEO Pekka Eloholma, +358 205 777 737
CFO Satu Kankare, +358 205 777 202
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
This release is unaudited. The amounts in this report have been rounded from
exact numbers.
INTERIM REPORT 1-3/2011
Affecto is the largest Business Intelligence solution provider in the Nordic
countries. We help our customers to improve productivity and competitiveness by
superior use of information for decision making. We build IT solutions that
enable organisations to integrate their strategic targets with their business
management. Affecto also delivers operational solutions for improving and
simplifying processes at customer organizations and offers geographic
information services.
Affecto is headquartered in Helsinki, Finland. The company has subsidiaries in
Finland, Sweden, Norway, Denmark, Estonia, Lithuania, Latvia, Poland and South
Africa.
NET SALES
Affecto's net sales in 1-3/2011 were 30.1 MEUR (1-3/2010: 25.7 MEUR). Net sales
in Finland were 11.5 MEUR (11.0 MEUR), in Norway 7.1 MEUR (5.9 MEUR), in Sweden
4.9 MEUR (3.5 MEUR), in Denmark 3.7 MEUR (2.7 MEUR) and 3.5 MEUR (3.1 MEUR) in
Baltic.
The quarter can be characterized as a rather normal first quarter, which did
not contain any specially negative or positive factors. In the Nordic countries
the business developed steadily and the Nordic BI market strengthened during
the period. The economic situation in the Baltic countries has improved, but
the local IT market has not yet fully recovered from the effects of the
financial crisis.
Net sales by reportable segments
Net sales, MEUR 1-3/11 1-3/10 2010
Finland 11.5 11.0 46.5
Norway 7.1 5.9 25.8
Sweden 4.9 3.5 15.3
Denmark 3.7 2.7 15.4
Baltic 3.5 3.1 13.7
Other -0.6 -0.5 -2.7
--------------------------------------
Group total 30.1 25.7 114.1
--------------------------------------
Net sales of Information Management Solutions business in 1-3/2011 were 27.5
MEUR (23.3 MEUR) and net sales of Geographic Information Services were 2.8 MEUR
(2.5 MEUR).
The order backlog was 51.2 MEUR, which is 19% higher than the Q1/2010 order
backlog (43.1 MEUR). Affecto has a well-diversified customer base. The ten
largest customers generated approx. 20% of group revenue in 2010 and the
largest customer corresponded to 4% of net sales.
PROFIT
Affecto's EBIT in 1-3/2011 was 1.6 MEUR (-0.4 MEUR) and the operational segment
result was 2.1 MEUR (0.1 MEUR). Operational segment result was in Finland 1.2
MEUR (0.5 MEUR), in Norway 0.8 MEUR (0.4 MEUR), in Sweden -0.5 MEUR (-0.4
MEUR), in Denmark 0.4 MEUR (0.2 MEUR) and in Baltic 0.6 MEUR (-0.1 MEUR).
Profitability was excellent in Baltic, good in Finland, Norway and Denmark, and
weak in Sweden. Profitability improved in all other countries except Sweden,
which remained loss-making due to the ongoing development actions, as the local
organization and processes have been developed in search of strong growth in
2011. A 37% growth was reached in the first quarter in Sweden, but the result
did not yet turn positive. The business in Sweden is estimated to turn
profitable in the second year-half and the whole year is estimated to be
profitable at the operational segment result level.
Operational segment result by reportable segments
Operational segment 1-3/11 1-3/10 2010
result, MEUR
Finland 1.2 0.5 5.1
Norway 0.8 0.4 2.4
Sweden -0.5 -0.4 -1.7
Denmark 0.4 0.2 1.2
Baltic 0.6 -0.1 0.6
Other -0.4 -0.6 -2.4
------------------------------------------------
Operational segment result 2.1 0.1 5.3
------------------------------------------------
IFRS3 Amortization -0.5 -0.5 -2.0
Operating profit/loss 1.6 -0.4 3.3
------------------------------------------------
According to IFRS3 requirements, 1-3/2011 EBIT includes 0.5 MEUR (0.5 MEUR) of
amortization of intangible assets related to acquisitions. In year 2011 the
IFRS3 amortization is estimated to total 2.0 MEUR and in 2012 approx. 1.9 MEUR.
R&D costs 1-3/2011 totaled 0.3 MEUR (0.3 MEUR), i.e. 1.0% of net sales (1.0%).
The costs have been recognized as an expense in the income statement.
The fluctuation in financial costs is explained to a large extent by changes in
the fair value of the interest swap taken, which changes have no effect on
actual cash flow. The interest rate changes have caused 0.2 MEUR income in
1-3/2011.
Taxes corresponding to the profit of the period have been entered as tax
expense. Net profit for the period was 1.2 MEUR, while it was -0.9 MEUR last
year.
FINANCE AND INVESTMENTS
At the end of the reporting period, Affecto's balance sheet totaled 134.7 MEUR
(12/2010: 142.9 MEUR). Equity ratio was 45.5% (12/2010: 43.1%) and net gearing
was 37.1% (12/2010: 40.4%).
The financial loans were 36.5 MEUR (12/2010: 36.5 MEUR) at the end of reporting
period. The company's cash and liquid assets were 15.7 MEUR (12/2010: 13.8
MEUR). The interest-bearing net debt was 20.8 MEUR (12/2010: 22.6 MEUR).
Affecto's bank loan has covenants based on net debt, result and cash flow. In
2010 Affecto has agreed with the bank about changes to the covenants. The
covenants based on net debt and result will be measured quarterly, and these
terms and conditions of covenants were met at the end of the reporting period.
The covenant based on cash flow will be measured next time in June 2011 and
will be measured quarterly after that. The maturity of the loan has been
presented based on the loan agreement.
Cash flow from operating activities for the reported period was 2.4 MEUR (-0.6
MEUR) and cash flow from investing activities was -0.5 MEUR (-0.3 MEUR).
Investments in non-current assets were 0.5 MEUR (0.3 MEUR).
Based on decision by the Annual General Meeting held on 31 March 2011, Affecto
has distributed dividends of 1.3 MEUR (previous year 1.3 MEUR). The dividend is
presented as non-interest bearing debt in the balance sheet of 31 March 2011.
Dividend was paid on 14 April 2011.
EMPLOYEES
The number of employees was 984 persons at the end of the reporting period
(911). 383 employees were based in Finland, 131 in Norway, 134 in Sweden, 66 in
Denmark and 270 in the Baltic countries. The average number of employees during
the period was 974 (911).
Affecto invests on personnel development through various initiatives like the
training concept "Affecto University". The employees' satisfaction level is
annually measured in the global Great Place to Work survey. In GPTW surveys
published in 2011, Affecto ranked among the country best workplaces in Finland,
Norway and Sweden.
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.
Finland
In 1-3/2011 the net sales in Finland were 11.5 MEUR (11.0 MEUR). Operational
segment result was 1.2 MEUR (0.5 MEUR). The business developed rather steadily
and net sales grew by 5%. Customers' activity has remained good especially
regarding BI and GIS solutions. The Digiroad outsourcing agreement with the
Finnish Transport Agency for the next three years was signed in March. During
the period new orders were received diversifiedly, e.g. from TeliaSonera,
UPM-Kymmene, YLE, Landis & Gyr and Lähikauppa.
The growth of IT services market in Finland is forecast to be approx. 3% in
2011 (Marketvisio's estimate, December 2010). However, Affecto's focus segments
are expected to experience a clearly higher growth in software sales (BI and
ECM approx. 8%).
Norway
In 1-3/2011 the net sales in Norway were 7.1 MEUR (5.9 MEUR) and operational
segment result was 0.8 MEUR (0.4 MEUR). The market has developed positively
along the economic growth and the demand for BI solutions has remained good.
During the period new orders were received e.g. from DnV, Grieg Seafood and
Statens Pensjonkasse.
Sweden
In 1-3/2011 the net sales in Sweden were 4.9 MEUR (3.5 MEUR) and operational
segment result -0.5 MEUR (-0.4 MEUR). The net sales grew by 37%, partially due
to currency effect, but also the organic growth was good. The BI market is
expected to grow especially regarding finance, retail and telecom sectors.
The forward-looking building of the local organization, targeting a significant
growth in net sales in 2011, has clearly lowered profitability. Number of
employees has grown by over 20% during year 2011, which has lowered the
utilization rate and profitability. The business in Sweden is estimated to turn
profitable in second year-half and the whole year is estimated to be profitable
at the operational segment result level. Expectations about improving
profitability are supported by the order backlog that has grown significantly
compared to the previous year. During the period new orders were received e.g.
from Skatteverket, IKEA, Hennes & Mauritz, Folksam and Vattenfall.
Denmark
In 1-3/2011 the net sales in Denmark were 3.7 MEUR (2.7 MEUR) and operational
segment result was 0.4 MEUR (0.2 MEUR). In Denmark the net sales grew by 37%
and also profitability improved from previous year. The market situation has
developed moderately positively. During the period new orders were received
e.g. from IC Companys, Dong and FDC.
Baltic (Lithuania, Latvia, Estonia, Poland, South Africa)
The Baltic business mostly consists of projects related to large
customer-specific systems. Public sector entities in the Baltic countries and
insurance companies also outside Baltic area are significant customer segments.
In 1-3/2011 the Baltic net sales were 3.5 MEUR (3.1 MEUR). Operational segment
result was 0.6 MEUR (-0.1 MEUR). Net sales grew by 13% and profitability was
excellent. The national economies in the Baltic countries have already returned
to growth path, but the local IT markets have not yet fully recovered from the
effects of the financial crisis. The price competition continues tight and the
EU continues to have great importance in financing both public and also private
investments.
New projects were received during the period mostly from public sector
entities. E.g. SODRA, the Lithuanian Social Insurance Institution, ordered a
project for further developing its ECM systems. Other examples are Lithuanian
Parliament, Lithuanian department of statistics and RSA Estonia.
Review by business lines
The net sales of Information management solutions in 1-3/2011 were 27.5 MEUR
(23.3 MEUR). The business developed positively during the period. The
customers' interest for IT investments has clearly grown compared to last year.
The demand for Enterprise Information Management (EIM) solutions, including
Business Intelligence (BI) and Enterprise Content Management (ECM), is
estimated to develop positively along the general economy. The average annual
global growth of BI and analytics software license markets is estimated to
exceed 8% until year 2013. The Nordic BI/DW services markets have been
estimated to grow annually by 6-8% in 2011-2013. Also the ECM solutions market
is estimated to grow correspondingly.
The market situation in the Baltic countries has continued to improve and the
effects of the recession are being overcome. The demand for insurance sector
solutions is recovering.
Net sales of the Geographic Information Services business in 1-3/2011 were 2.8
MEUR (2.5 MEUR). The business developed favorably during the period and the
customers' interest for GIS solutions is estimated to have grown. Development
actions continued by founding Karttakeskus Oy as of 1 January 2011. The
Digiroad outsourcing agreement with the Finnish Transport Agency for the next
three years was signed in March.
CHANGES IN GROUP STRUCTURE
Affecto has formed a separate subsidiary company Karttakeskus Oy for conducting
the Geographic Information Services (GIS) business in Finland. The GIS services
business was separated from Affecto Finland Ltd through a partial de-merger.
Both Affecto Finland Ltd and the new Karttakeskus Oy are wholly owned
subsidiaries of the parent company Affecto Plc. The partial de-merger was
completed on 1 January 2011.
ANNUAL GENERAL MEETING AND GOVERNANCE
The Annual General Meeting of Affecto Plc, which was held on 31 March 2011,
adopted the financial statements for 1.1.-31.12.2010 and discharged the members
of the Board of Directors and the CEO from liability. Approximately 41 percent
of Affecto's shares and votes were represented at the Meeting. The Annual
General Meeting decided that a dividend of EUR 0.06 per share will be
distributed for the year 2010.
Aaro Cantell, Heikki Lehmusto, Jukka Ruuska and Haakon Skaarer were re-elected
as members of the Board of Directors, and Tuija Soanjärvi and Lars Wahlström
were elected as new members. Immediately after the Annual General Meeting the
organization meeting of the Board of Directors was held and Aaro Cantell was
re-elected Chairman of the Board and Jukka Ruuska as Vice-Chairman. KPMG Oy Ab
was elected 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
In 2011 the Board has not used the authorizations given by the previous Annual
General Meeting. Those authorizations ended on 31 March 2011.
The complete contents of the new authorizations given by the Annual General
Meeting held on 31 March 2011 have been published in the stock exchange release
regarding the Meetings' decisions. The Board did not use the authorizations by
the end of the review period.
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
The company has only one share series, and all shares have similar rights. As
at 31 March 2011, Affecto Plc's share capital consisted of 21 516 468 shares
including the shares owned by Affecto Management Oy. The company does not own
treasury shares. Affecto Management Oy owns 823 000 shares.
In 1-3/2011, the highest share price was 2.64 euro, lowest price 2.37 euro,
average price 2.50 euro and closing price 2.50 euro. Trading volume was 4.4
million shares, corresponding to 83% of the number of shares at the end of
period (annualized). The market value of shares was 53.8 MEUR at the end of the
period including the shares owned by Affecto Management Oy.
SHAREHOLDERS
The company had a total of 1842 owners on 31 March 2011 and the foreign
ownership was 21%. The list of the largest owners can be viewed in the
company's web site. Information about ownership structure and option programs
is included as a separate section in the financial statements. The ownership of
board members, CEO and their controlled corporations totaled approx. 13.4%
(13.1% shares and 0.4% options).
According to the flagging announcements made on 12 January 2011, the ownership
of Capman Public Market Investment has decreased below 5% and the ownership of
OP-Rahastoyhtiö has exceeded 5%.
According to the flagging announcement made on 17 February 2011, the ownership
of Nordea Rahastoyhtiö Suomi has exceeded 5%.
ASSESSMENT OF RISKS AND UNCERTAINTIES
Affecto's bank loan has covenants based on net debt, result and cash flow.
Breach of covenant may lead to higher financing costs or even the termination
of the loan. Affecto needs to refinance the loan latest in 2012, when the
current loan comes due. It is not certain that a new loan facility can be
received with the same or better conditions than the current loan.
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 risk is related to Sweden, where Affecto has invested in
reforming the organization and processes, which has weakened profitability in
the short term.
The changes in the general economic conditions and the operating environments
of its customers have direct impact in Affecto's markets. The competition in
the markets also tightens continuously. This could have a negative effect on
the business, operating results and financial condition of Affecto.
Affecto's success depends also on good customer relationships. Affecto has a
well-diversified customer base. 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.
Affecto's order backlog has traditionally been only for a few months, which
decreases the reliability of longer-term forecasts. Slower investment decision
making, postponing or cancellation of customers' IT investments may have
negative impact on Affecto's profitability.
Approximately a half of Affecto's business is in Sweden, Norway and Denmark,
thus the development of the currencies of these countries (SEK, NOK and DKK)
may have impact on Affecto's profitability.
Affecto's continued success is very much dependent on its management team and
personnel. The loss of the services of any member of its senior management or
other key employee could have a negative impact on Affecto's business and the
ability of the company to implement its strategy. In addition, Affecto's
success depends on its ability to hire, develop, train, motivate and retain
skilled professionals on its staff.
Affecto sells third party software licenses as part of its solutions. The
license sales have most impact on the last month of each quarter and especially
in the fourth quarter. This increases the fluctuation in sales between quarters
and increases the difficulty of accurately forecasting the quarters. Affecto
had license sales of approx. 13 MEUR in 2010.
EVENTS AFTER THE REPORTING PERIOD
According to the flagging announcement made on 11 April 2011, the ownership of
Nordea Rahastoyhtiö Suomi has decreased below 5%.
FUTURE OUTLOOK
In 2011 the main focus is on profit improvement. Operating profit is estimated
to at least double compared to year 2010. The net sales are estimated to grow
at least by 10% in year 2011.
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
It is possible to 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 11.00 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) 1-3/11 1-3/10 2010
--------------------------
--------------------------
Net sales 30 121 25 732 114 078
Other operating income 37 13 57
Changes in inventories of 29 50 -181
finished goods and work in
progress
Materials and services -5 563 -4 484 -25 393
Personnel expenses -17 812 -16 749 -64 838
Other operating expenses -4 336 -4 130 -17 106
Other depreciation and amortisation -347 -353 -1 352
IFRS3 amortisation -514 -491 -1 990
Operating profit/loss 1 615 -412 3 275
Net financial expenses -143 -664 -1 797
Profit/loss before income tax 1 472 -1 076 1 479
Income tax -299 134 -546
Profit/loss for the period 1 173 -941 933
Profit/loss for the period
attributable to:
Owners of the parent company 1 186 -941 955
Non-controlling interest -13 - -22
Earnings per share
(EUR per share):
Basic 0.06 -0.04 0.05
Diluted 0.06 -0.04 0.05
CONSOLIDATED COMPREHENSIVE
INCOME STATEMENT
(1 000 EUR) 1-3/11 1-3/10 2010
--------------------------
--------------------------
Profit/loss for the period 1 173 -941 933
Other comprehensive income:
Translation difference -10 1 852 4 214
Total Comprehensive income 1 163 911 5 146
for the period
Total Comprehensive income
attributable to:
Owners of the parent company 1 176 911 5 169
Non-controlling interest -13 - -22
CONSOLIDATED BALANCE SHEET
(1 000 EUR) 3/2011 3/2010 12/2010
--------------------------
--------------------------
Non-current assets
Property, plant and equipment 2 110 2 105 1 908
Goodwill 72 879 70 895 72 866
Other intangible assets 7 519 9 368 8 099
Deferred tax assets 1 535 2 061 1 506
Available-for-sale financial assets 19 54 19
Trade and other receivables 17 171 36
84 079 84 654 84 434
Current assets
Inventories 506 739 482
Trade and other receivables 33 776 27 961 43 662
Current income tax receivables 616 978 505
Cash and cash equivalents 15 682 18 933 13 818
50 580 48 610 58 468
--------------------------------------------------------------
Total assets 134 658 133 264 142 901
--------------------------------------------------------------
Equity attributable to owners
of the parent Company
Share capital 5 105 5 105 5 105
Share premium - 25 404 -
Reserve of invested non-restricted 46 591 21 188 46 591
equity
Other reserves 466 314 417
Treasury shares -1 996 -106 -1 996
Translation differences -1 038 -3 390 -1 028
Retained earnings 6 500 4 726 6 605
--------------------------------------------------------------
55 629 53 240 55 695
--------------------------------------------------------------
Non-controlling interest 367 - 380
Total equity 55 996 53 240 56 074
Non-current liabilities
Borrowings 32 467 36 448 32 462
Derivative financial instruments 579 1 006 784
Deferred tax liabilities 2 153 2 983 2 288
Trade and other payables - 786 -
35 199 41 224 35 535
Current liabilities
Borrowings 4 000 4 000 4 000
Trade and other payables 37 435 33 790 45 290
Current income tax liabilities 1 157 743 953
Provisions 872 266 1 049
43 463 38 800 51 292
Total liabilities 78 662 80 024 86 827
--------------------------------------------------------------
Equity and liabilities 134 658 133 264 142 901
--------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT
(1 000 EUR) 1-3/2011 1-3/2010 2010
----------------------------------------------------------------------------
Cash flows from operating activities
----------------------------------------------------------------------------
Profit/loss for the period 1 173 -941 933
Adjustments to profit for the period 1 280 1 474 5 737
2 453 533 6 670
Change in working capital 572 -736 -3 314
Interest and other finance cost paid -363 -354 -1 651
Interest and other finance income received 53 42 144
Income taxes paid -366 -77 -335
----------------------------------------------------------------------------
Net cash from operating activities 2 350 -592 1 514
----------------------------------------------------------------------------
Cash flows from investing activities
Acquisition of tangible and intangible -490 -350 -1 072
assets
Proceeds from sale of tangible and 43 5 6
intangible assets
Proceeds from sale of Available-for-sale - - 41
financial assets
----------------------------------------------------------------------------
Net cash used in investing activities -447 -345 -1 025
----------------------------------------------------------------------------
Cash flows from financing activities
Related party investments* - - 402
Repayments of borrowings - - -4 000
Acquisition and disposal of treasury - - -1 906
shares**
Dividends paid to the owners - - -1 289
of the parent company
----------------------------------------------------------------------------
Net cash from financing activities - - -6 792
----------------------------------------------------------------------------
(Decrease)/increase in cash and cash equivalents 1 903 -937 -6 304
Cash and cash equivalents 13 818 19 525 19 525
at the beginning of the period
Foreign exchange effect on cash -39 345 597
Cash and cash equivalents 15 682 18 933 13 818
at the end of the period
* Affecto Group management's investment to incentive arrangement
** Includes shares in Affecto Plc acquired by Affecto Management Oy.
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 46 591 417 -1 996 -1 028 6 605 380 56 074
at 1
January
2011
--------------------------------------------------------------------------------
Profit 1 186 -13 1 173
--------------------------------------------------------------------------------
Translat -10 -10
ion
differe
nces
Total -10 1 186 -13 1 163
compre-
hensive
income
Share 49 49
options
Dividend -1 291 -1 291
s paid
Equity 5 105 46 591 466 -1 996 -1 038 -6 500 367 55 996
at 31
March
2011
--------------------------------------------------------------------------------
Equity attributable to owners of the parent
company
----------------------------------------------------------
(1 000 Share Share Reserve Other Treasu Transl Ret. Non-co Total
EUR) capita premiu of reserv ry at. earnin ntroll equity
l m invested es shares diff. gs ing
non-rest intere
ricted st
equity
----------------------------------------------------------
Equity 5 105 25 404 21 188 264 -106 -5 242 6 955 - 53 568
at 1
Janua
ry
2010
--------------------------------------------------------------------------------
Profit -941 - -941
--------------------------------------------------------------------------------
Transl 1 852 1 852
ation
diffe
rences
Total 1 852 -941 - 911
compr
e-hens
ive
incom
e
Share 50 50
optio
ns
Divide -1 289 -1 289
nds
paid
Equity 5 105 25 404 21 188 314 -106 -3 390 4 726 - 53 240
at 31
March
2010
--------------------------------------------------------------------------------
2. Notes
2.1. Basis of preparation
This report has been prepared in accordance with the IFRS recognition and
measurement principles. This report does not comply with all of the
requirements of IAS 34 Interim Financial Reporting. The report should be read
in conjunction with the annual financial statements for the year 2010. The
non-controlling interest has been presented separately after net profit for the
period and in total equity.
2.2. Segment information
Affecto's reporting segments are based on geographical locations and are
Finland, Norway, Sweden, Denmark and Baltic.
Segment sales and result
(1 000 EUR) 1-3/11 1-3/10 2010
------------------------
------------------------
Total sales
Finland 11 502 10 985 46 522
Norway 7 113 5 912 25 845
Sweden 4 874 3 548 15 276
Denmark 3 657 2 673 15 411
Baltic 3 546 3 136 13 694
Other -570 -522 -2 669
Group total 30 121 25 732 114 078
---------------------------------------------------------
Operational segment result
Finland 1 200 549 5 073
Norway 849 425 2 405
Sweden -521 -365 -1 666
Denmark 395 162 1 226
Baltic 584 -102 595
Other -378 -589 -2 367
---------------------------------------------------------
Total operational segment result 2 128 80 5 265
---------------------------------------------------------
IFRS amortisation -514 -491 -1 990
Operating profit/loss 1 615 -412 3 275
---------------------------------------------------------
Sales by business lines
(1 000 EUR) 1-3/11 1-3/10 2010
------------------------
------------------------
Information Management Solutions 27 544 23 335 103 579
Geographic Information Services 2 823 2 498 10 950
Other -246 -100 -451
---------------------------------------------------------
Group total 30 121 25 732 114 078
---------------------------------------------------------
2.3. Interest-bearing liabilities
1 000 EUR 31.3.2011 31.12.2010
Interest-bearing non-current liabilities
Loans from financial institutions, 32 467 32 462
non-current portion
Loans from financial institutions, 4 000 4 000
current portion
---------------------------------------------------------------
36 467 36 462
---------------------------------------------------------------
The loan facility agreement of the group includes financial covenants based on
net debt, result and cash flow. Breach of covenants might lead to an increase
in cost of debt or cancellation of the facility agreement. In 2010 Affecto has
agreed with the bank about changes to the covenants. The covenants based on net
debt and result will be measured quarterly, and these terms and conditions of
covenants were met at the end of the reporting period. The covenant based on
cash flow will be measured next time in June 2011 and will be measured
quarterly after that. The maturity of the loan has been presented based on the
loan agreement.
2.4. Contingencies and commitments
The future aggregate minimum lease payments under non-cancelable operating
leases:
1 000 EUR 31.3.2011 31.12.2010
Not later than one (1) year 3 167 2 788
Later than one (1) year, 3 146 2 788
but not later than five (5) years
Later than five (5) years 268 268
Total 6 581 5 844
--------------------------------------------------------
Guarantees:
1 000 EUR 31.3.2011 31.12.2010
Debt secured by a mortgage
Financial loans 36 500 36 500
The above-mentioned debts are secured by bearer bonds with capital 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 loans above.
Other securities given on own behalf: 31.3.2011 31.12.2010
Pledges 9 39
Other guarantees 1 579 1 526
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 directly to the customer.
2.5. Derivative contracts
1 000 EUR 31.3.2011 31.12.2010
Interest rate swaps:
Nominal value 20 250 20 250
Fair value -579 -784
3. Key figures
1-3/11 1-3/10 2010
------------------------
------------------------
Net sales, 1 000 eur 30 121 25 732 114 078
EBITDA, 1 000 eur 2 476 433 6 617
Operational segment result, 2 128 80 5 265
1 000 eur
Operating result, 1 000 eur 1 615 -412 3 275
Result before taxes, 1 000 eur 1 472 -1 076 1 479
Net income for equity holders 1 186 -941 955
of the parent company,
1 000 eur
EBITDA, % 8.2 % 1.7 % 5.8 %
Operational segment result, % 7.1 % 0.3 % 4.6 %
Operating result, % 5.4 % -1.6 % 2.9 %
Result before taxes, % 4.9 % -4.2 % 1.3 %
Net income for equity holders 3.9 % -3.7 % 0.8 %
of the parent company, %
Equity ratio, % 45.5 % 43.4 % 43.1 %
Net gearing, % 37.1 % 40.4 % 40.4 %
Interest-bearing net debt, 20 785 21 516 22 645
1 000 eur
Gross investment in non-current 490 350 1 072
assets (excl. acquisitions),
1 000 eur
Gross investments, % of sales 1.6 % 1.4 % 0.9 %
Research and development costs, 303 264 1 178
1 000 eur
R&D -costs, % of sales 1.0 % 1.0 % 1.0 %
Order backlog, 1 000 eur 51 155 43 124 54 354
Average number of employees 974 911 919
Earnings per share, eur 0.06 -0.04 0.05
Earnings per share (diluted), 0.06 -0.04 0.05
eur
Equity per share, eur 2.69 2.48 2.69
Average number of shares, 20 693 21 480 21 146
1 000 shares
Number of shares at the end of 20 693 21 480 20 693
period, 1 000 shares
Calculation of key figures
EBITDA = Earnings before interest, taxes,
depreciation, amortization and impairment
Operational segment result = Operating profit before amortisations on
fair value adjustments due to business
combinations (IFRS3) and Goodwill
impairments
Equity ratio, % = Total equity *100
________________________________
Total assets - advances received
Gearing, % = Interest-bearing liabilities - *100
cash, bank receivables and
securities held as financial asset
__________________________________
Total equity
Interest-bearing net debt = Interest-bearing liabilities - cash and
bank receivables
Earnings per share (EPS) = Result for the period to equity holders
of the Company
______________________________________
Adjusted average number of shares 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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