2015-02-05 07:00:02 CET
2015-02-05 07:00:07 CET
REGULATED INFORMATION
Digia Oyj - Financial Statement Release
DIGIA's FINAL QUARTER 2014: DOMESTIC BUSINESS SHOWED VERY GOOD PROFITABILITY, STRONG GROWTH IN QT NET SALES
Helsinki, 2015-02-05 07:00 CET (GLOBE NEWSWIRE) -- DIGIA PLC FINANCIAL
STATEMENT RELEASE, 5 FEBRUARY 2015 at 08:00
DIGIA's FINAL QUARTER 2014: DOMESTIC BUSINESS SHOWED VERY GOOD PROFITABILITY,
STRONG GROWTH IN QT NET SALES
SUMMARY:
January-December
- Consolidated net sales EUR 97.4 (99.7) million, down 2.3 per cent
- Operating profit before extraordinary items EUR 4.5 (4.5) million
- Extraordinary items include EUR 0.2 million in restructuring costs
(1-12/2013: EUR 7.4 million)
- Operating profit after extraordinary items: EUR 4.3 (-2.8) million
- Profitability (EBIT%) before extraordinary items 4.6 (4.6) per cent and 4.4
(-2.8) per cent after extraordinary items
- Product business accounted for 40.7 (41.1) per cent of net sales
- Earnings per share before extraordinary items EUR 0.14 (0.15) and after
extraordinary items EUR 0.14 (-0.20)
October-December
- Consolidated net sales: EUR 27.2 (26.8) million, up 1.7 per cent
- Operating profit before extraordinary items EUR 2.5 (2.1) million
- Extraordinary items include EUR 0.2 million in restructuring costs
(1-12/2013: EUR 7.4 million)
- Operating profit after extraordinary items: EUR 2.3 (-5.3) million
- Profitability (EBIT%) before extraordinary items 9.0 (7.8) per cent and 8.5
(-19.7) per cent after extraordinary items
- Product business accounted for 38.9 (37.1) per cent of net sales
- Earnings per share before extraordinary items EUR 0.09 (0.09) and 0.08
(-0.26) after extraordinary items
In the final quarter, net sales from the domestic segment decreased from the
corresponding period a year earlier. This could be primarily attributed to the
extraordinary low-margin maintenance deal for a third-party software product
included in the figures for 2013 but not for 2014. Excluding the impact of this
deal, net sales from domestic business in the quarter were almost on a par with
the previous year. Net sales decline in domestic business affected the total
net sales, which fell from the previous year's comparison figures.
Although the Qt segment's net sales in Q4 grew year-on-year, they failed to
reach the target. Overall, however, net sales showed strong growth in the final
quarter (17.3%).
Operating profit before extraordinary items for the final quarter reached the
previous year's level.
Operating profit from domestic business grew both in the review period and
especially in the final quarter (EBIT % 12.6). Very good profitability
performance in the domestic business contributed to better overall
profitability in the final quarter.
Meanwhile, the Qt business continued to make a loss throughout the review
period, as expected. This could be attributed to the company's determined and
strong investments in business development to enable future growth.
Digia expects healthy demand to continue in the domestic business, and net
sales to grow slightly in 2015 from the previous year. Domestic business is
also expected to be at least moderately profitable. However, historically the
company's profitability has always been weaker in the first quarter than in the
rest of the year.
Digia expects the Qt business to grow its net sales in 2015 from the previous
year, and to generate a slight operating profit for the full year.
Proposal for dividend distribution
On 31 December 2014, the distributable shareholders' equity of Digia Plc was
EUR 32,592,518, of which EUR 1,774,483 was the net profit for the year. At the
Annual General Meeting, the Board of Directors will propose that a dividend of
EUR 0.05 per share be paid according to the confirmed statement of financial
position for the fiscal year ending 31 December 2014. Shareholders listed on
the shareholder register maintained by Euroclear Finland Oy on the dividend
reconciliation date, 16 March 2015, will be eligible for the payment of
dividend. Dividends will be paid on 23 March 2015.
GROUP KEY FIGURES AND RATIOS
10-12/2 10-12/2 Change, 1-12/2 1-12/20 Change,
014 013 % 014 13 %
--------------------------------------------------------------------------------
Net sales 27,246 26,782 1.7% 97,433 99,740 -2.3%
--------------------------------------------------------------------------------
Operating profit before 2,460 2,093 17.5% 4,461 4,549 -1.9%
extraordinary items
--------------------------------------------------------------------------------
- % of net sales 9.0% 7.8% 4.6% 4.6%
--------------------------------------------------------------------------------
Operating profit 2,309 -5,278 4,310 -2,822
--------------------------------------------------------------------------------
- % of net sales 8.5% -19.7% 4.4% -2.8%
--------------------------------------------------------------------------------
Net profit 1,681 -5,396 2,850 -4,067
--------------------------------------------------------------------------------
- % of net sales 6.2% -20.1% 2.9% -4.1%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Return on equity, % 18.7% -55.5% 7.8% -10.4%
--------------------------------------------------------------------------------
Return on capital invested, 18.9% -36.1% 9.0% -4.4%
%
--------------------------------------------------------------------------------
Interest-bearing 16,245 16,883 -3.8% 16,245 16,883 -3.8%
liabilities
--------------------------------------------------------------------------------
Cash and cash equivalents 5,132 6,454 -20.5% 5,132 6,454 -20.5%
--------------------------------------------------------------------------------
Net gearing 30.3% 28.9% 30.3% 28.9%
--------------------------------------------------------------------------------
Equity ratio, % 51.5% 49.9% 51.5% 49.9%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR, 0.08 -0.26 0.14 -0.20
undiluted
--------------------------------------------------------------------------------
Earnings per share, EUR, 0.08 -0.26 0.14 -0.20
diluted
--------------------------------------------------------------------------------
MARKETS AND DIGIA'S BUSINESS OPERATIONS
DOMESTIC SEGMENT:
The Integration, Analytics and Site Optimization business performed extremely
well during the reporting period. Besides enjoying active demand from its
existing clientele, Digia signed a number of new customer agreements and
recruited more personnel to meet the growing demand. Major investments were
made in the segment in Digia's own workforce management software (Digia Tempus
product line) and the related new business development. The segment was also
able to improve its profitability from the previous year.
Similarly, demand for ERP systems was healthy, with Digia's own software
products showing positive development. Investments in product and service
offering in integrated e-commerce, analytics and mobility solutions have
clearly boosted demand across the segment. Demand for operating and lifecycle
services also increased. However, significant differences in demand between
sectors continued to exist, and sales cycles were, on occasion, quite long.
Demand for services in the Finnish financial sector was particularly good, with
order and bid volumes at a healthy level.
Customers' cost pressures affected the pricing of tailored solutions and
services, and thereby to net sales and profitability. Furthermore, some
challenges experienced with a few fixed-price projects also eroded
profitability. A clear need was identified in the customer base for
comprehensive services and for the development and acquisition of a variety of
service centres. In the future, developing new service models will be an
increasingly important part of our tailored solutions offering. The order book
is reasonably strong. During the review period, Digia invested in the
development and streamlining of its tailored solutions offering, particularly
in the areas of cloud services, service management and mobility.
QT SEGMENT:
Although the Qt business failed to reach its net sales targets for the review
period, the situation improved in the final quarter and net sales showed strong
growth.
As expected, the Qt business recorded a loss for the review period. This could
be attributed to the company's determined and strong investments in business
development to enable future growth.
The Qt user ecosystem has seen powerful growth. Feedback from users has been
extremely positive.
During the period, Digia continued to implement the previously reported Qt
product development plans. During the period, a new Qt 5.4 version was launched
involving changes in the open source code licence. The objective of licensing
changes is to promote the sale of licences to commercial players. Overall,
special attention has been paid to sales enhancement, with several development
projects currently in progress.
NET SALES
Digia's consolidated net sales for the reporting period totalled EUR 97.4
(99.7) million, down 2.3 per cent on the same period a year earlier.
Net sales from the domestic segment decreased by 3.5 per cent to EUR 77.0
(79.9) million. Net sales from the Qt segment amounted to EUR 20.4 (19.9)
million, showing an increase of 2.6 per cent.
In the domestic business, the net sales decline could be primarily attributed
to the fact that the comparison figures for 2013 included a one-off EUR 2.4
million low-margin maintenance deal for a third-party software product
concluded in the second quarter. Excluding the impact of this deal, net sales
from domestic business in the quarter were almost on a par with the previous
year.
Similarly, the net sales development in the Qt business could be attributed to
an exceptional net sales item included in the previous year's comparison
figures. Net sales in the reference period last year, generated by this
five-year deal worth EUR 3.0 million signed in Q2/2013, were EUR 1.1 million
higher than those recorded for the reporting period. Excluding the impact of
this exceptional deal, Qt net sales grew by 8.7 per cent in the review period,
with the final quarter showing particularly strong growth.
During the reporting period, the product business accounted for EUR 39.7
million (1-12/2013: EUR 41.0 million), or 40.7(41.1)per cent of consolidated
net sales.
International operations accounted for EUR 20.2 million (1-12/2013: EUR 21.1
million), or 20.7 (21.2) per cent of consolidated net sales during the
reporting period.
Digia's consolidated net sales for the final quarter were EUR 27.2 (26.8)
million, up 1.7 per cent from the same period a year earlier.
In the final quarter, net sales from the domestic segment decreased by 1.8 per
cent to EUR 21.4 (21.8) million, while net sales from the Qt business increased
by 17.3 per cent to EUR 5.8 (5.0) million.
During the fourth quarter, the product business accounted for EUR 10.6 (9.9)
million of consolidated net sales, or 38.9 (37.1) per cent.
In the same period, the international business accounted for EUR 5.7 (5.3)
million of consolidated net sales, or 21.0 (19.9) per cent.
PROFIT PERFORMANCE AND PROFITABILITY
Digia's consolidated operating profit before extraordinary items for the
reporting period was EUR 4.5 (4.5) million, down 1.9 per cent year-on-year.
Profitability (EBIT%) before extraordinary items was 4.6 (4.6) per cent.
Digia's consolidated operating profit after extraordinary items for the review
period was EUR 4.3 (-2.8) million. Profitability (EBIT%) was 4.4 (-2.8) per
cent.
Digia's consolidated fourth-quarter operating profit before extraordinary items
was EUR 2.5 (2.1) million, representing a year-on-year increase of 17.5 per
cent. Profitability (EBIT%) before extraordinary items was 9.0 (7.8) per cent.
Digia's consolidated operating profit after extraordinary items amounted to EUR
2.3 (-5.3) million. Profitability (EBIT%) was 8.5 (-19.7) per cent.
Operating profit before extraordinary items from domestic operations for the
reporting period totalled EUR 6.3 (5.4) million, up 17.0 per cent, and
profitability (EBIT%) was 8.2 (6.8) per cent. Operating profit before
extraordinary items from domestic operations for the final quarter totalled EUR
2.7 (2.7) million, up 1.5 per cent, and profitability (EBIT%) was 12.6 (12.2)
per cent.
Operating profit after extraordinary items for the review period was EUR 6.3
(-2.0) million and profitability (EBIT %) was 8.2 (-2.5) per cent. Operating
profit after extraordinary items for the final quarter was EUR 2.7 (-4.7)
million and profitability (EBIT%) was 12.6 (-21.6) per cent.
The Qt business recorded an operating profit of EUR -1.9 (-0.8) million before
extraordinary items for the review period, and the segment's profitability
(EBIT%) was -9.1 (-4.3) per cent. Qt's operating profit before extraordinary
items in the final quarter was EUR -0.2 (-0.6) million, and the segment's
profitability (EBIT%) was -4.0 (-11.3) per cent.
Qt's operating profit after extraordinary items for the review period was EUR
-2.0 (-0.8) million and profitability (EBIT%) was -9.8 (-4.3) per cent. Qt's
operating profit after extraordinary items for the final quarter was EUR -0.4
(-0.6) million and profitability (EBIT%) was -6.6 (-11.3) per cent.
Towards the end of the review period, operating profit from the domestic
business improved from the weak first half. In the final quarter, profitability
was extremely good.
In the Qt business, investments made to boost business growth taxed
profitability. Similarly, weaker than expected net sales development in the
first three quarters had a negative impact on profitability. Qt business has
recorded a loss throughout the reporting period. However, since the first
quarter business has seen positive development and losses from operations have
been minor.
Consolidated earnings before taxes for the period totalled EUR 3.6 (-3.6)
million, and net profit was EUR 2.9 (-4.1) million. Consolidated earnings
before taxes for the final quarter amounted to EUR 2.1 (-5.5) million, and net
profit after taxes totalled EUR 1.7 (-5.4) million.
Consolidated earnings per share in the review period were EUR 0.14 (0.15)
before extraordinary items and EUR 0.14 (-0.20) after extraordinary items.
Consolidated earnings per share in the final quarter were EUR 0.09 (0.09)
before extraordinary items and EUR 0.08 (-0.26) after extraordinary items.
The Group's net financial expenses for the reporting period were EUR 0.7 (0.8)
million, and EUR 0.2 (0.2) million for the final quarter.
FINANCIAL POSITION AND EXPENDITURE
At the end of the reporting period, the Digia Group's consolidated balance
sheet total stood at EUR 80.4 (12/2013: 83.3) million and the equity ratio was
51.5 (12/2013: 49.9) per cent. Net gearing was 30.3 per cent (12/2013: 28.9)
per cent. Cash and cash equivalents at the end of the period totalled EUR 5.1
(12/2013: 6.5) million.
Interest-bearing liabilities at period end amounted to EUR 16.2 (12/2013: 16.9)
million. These consisted of EUR 15.0 million in loans from financial
institutions and EUR 1.2 million in financial leasing liabilities.
Consolidated net cash flow from operating activities for the period was EUR 1.9
million (4.9) million positive. Cash flow from investments for the period was
negative by EUR 1.2 (1.6) million. Cash flow from finance for the period was
negative by EUR 2.0 (5.1) million, with a EUR 0.1 million positive net impact
of loans on cash flow. Repayments of bank loans totalled EUR 4.7 million,
short-term loan withdrawals amounted to EUR 3.0 million and long-term loan
withdrawals to EUR 1.8 million.
The Group's investments in fixed assets during the period totalled EUR 1.1
(1.6) million.
Return on investment (ROI) for the period was 9.0 (-4.4) per cent, and return
on equity (ROE) was 7.8 (-10.4) per cent.
The Group carries out quarterly impairment testing of goodwill and intangible
assets with an indefinite useful life. The table below shows the distribution
of goodwill and values subject to testing at the end of the reporting period:
EUR 1,000 Specified Amortisations Goodwi Other Total value
intangible during the ll items subject to
assets reporting period testing
--------------------------------------------------------------------------------
Digia, 824 490 37,987 5,549 44,360
domestic
business
--------------------------------------------------------------------------------
EUR 1,000 Specified Amortisations during Goodwi Other Total value
intangible the reporting period ll items subject to
assets testing
--------------------------------------------------------------------------------
Digia, Qt 6,210 672 6,562 1,747 14,520
business
--------------------------------------------------------------------------------
EUR 1,000 Specified Amortisations during Goodwi Other Total value
intangible the reporting period ll items subject to
assets testing
--------------------------------------------------------------------------------
Digia 7,034 1,162 44,550 7,295 58,879
Group,
total
--------------------------------------------------------------------------------
Present values for domestic operations were calculated for the five-year
forecast period based on the following assumptions: Net sales and operating
profit for 2015 according to budget; in the five-year forecast period, annual
growth in net sales of 3.0 per cent and 2.5 per cent thereafter, operating
profit growth of 8.1 per cent, and a pre-tax discount rate of 8.5 per cent.
Cash flows following the forecast period were extrapolated using the same
assumptions as for the forecast period.
According to a sensitivity analysis, the goodwill related to domestic
operations requires either net sales to remain at the current level with
profitability at 4.4 per cent, or a 3.0 per cent growth in net sales with
profitability at 2.4 per cent. The management sees no risk of goodwill
impairment associated with domestic operations.
Present values for the Qt business were calculated for the five-year forecast
period based on the following assumptions: Net sales and operating profit for
2015 according to budget; in the five-year forecast period, annual growth in
net sales of 6.5 per cent and 5.5 per cent thereafter, operating profit growth
of 4.5 per cent, and a pre-tax discount rate of 8.5 per cent. Cash flows
following the forecast period were extrapolated using the same assumptions as
for the forecast period.
According to a completed sensitivity analysis, the goodwill of the Qt business
requires either net sales to remain at the current level with profitability at
3.5 per cent, or a 4.5 per cent growth in net sales with profitability at 0.2
per cent. The management sees no risk of goodwill impairment associated with Qt
operations.
PERSONNEL, MANAGEMENT AND ADMINISTRATION
At the end of the period, the total number of Group personnel was 932,
representing a decrease of 6 employees or -0.6 per cent since the end of fiscal
2013 (12/2013: 938). The average number of personnel during the reporting
period was 935, a decrease of 4 employees or 0.4 per cent from the 2013 average
(2013: 939).
Employees by function at the end of the period:
Domestic operations 76%
----------------------------------
Qt operations 19%
----------------------------------
Administration and management 5%
----------------------------------
As of the end of the period, 146 (12/2013: 170) employees were working abroad.
The Digia Plc Annual General Meeting of 11 March 2014 re-elected Päivi
Hokkanen, Robert Ingman, Kari Karvinen, Pertti Kyttälä, Seppo Ruotsalainen,
Leena Saarinen and Tommi Uhari as members of the Board. At the organisation
meeting of the Board, Pertti Kyttälä was elected Chairman of the Board and
Robert Ingman was elected Vice Chairman.
Juha Varelius has been Digia Plc's President and CEO since 1 January 2008.
Ernst & Young Oy, Authorised Public Accountants, are the Group's auditors, with
Authorised Public Accountant Heikki Ilkka as the principal auditor.
Tommi Laitinen, who was previously in charge of the Qt business, left the
company during the reporting period. Digia's CEO Juha Varelius is temporarily
in charge of the Qt business in addition his other duties. Digia has initiated
a recruitment process to hire a new director for the business.
RISKS AND UNCERTAINTIES
Short-term uncertainties are related to any major changes occurring in the
company's core business areas.
The company made a significant investment in Qt technology and the related
business opportunities with the Qt business acquisition completed in 2012. If
the Qt business fails to develop according to the company's expectations, the
investments and related costs may have a significant impact on the company's
short-term profitability. Possible changes in the competitive scenario or
market for that business may also impact the company's future net sales and
profitability.
If prolonged, the downward trend in the global economy may affect customers'
investment decisions and liquidity, and thereby the company's sales and
profits. Signs of the impact of the global economy on customers' investment
decisions and the schedules of planned projects appeared steadily throughout
the period under review.
Furthermore, the growth in customer project sizes increases the risks related
to projects and their profitability.
Risks and their management are described on the company's website at
www.digia.com.
FUTURE PROSPECTS
The company expects the IT market in Finland to remain at roughly the previous
year's level in 2015.
The objective in the Digia's domestic business is to raise annual profitability
to a good level, and to achieve organic growth at least equivalent to general
market development. Besides organic growth, the company actively pursues
opportunities to make carefully considered business acquisitions that support
its strategy.
Efforts will continue to develop Digia's customer understanding and sales and
service portfolio to ensure that it can offer increasingly competitive services
and solutions for boosting its customers' business efficiency.
Digia expects healthy demand to continue in the domestic business, and net
sales to grow slightly in 2015 from the previous year. Domestic business is
also expected to be at least moderately profitable. However, historically the
company's profitability has always been weaker in the first quarter than in the
rest of the year.
In the Qt business, operational focus is on sales development and on creating
better growth opportunities. Besides making growth-targeted investments, Digia
is also keeping a close eye on business profitability.
The Qt order book is satisfactory, considering the time of year and general
market situation, and the company expects to see continued growth in demand in
the large customer segment. However, contract turnaround times in these markets
are very long, which can cause significant fluctuation in quarterly net sales
and, particularly, profitability.
Digia will continue to invest significantly in Qt business and sales
development. Business development efforts will focus on embedded systems in
automotive, digital TV and DTV receivers, and in industrial automation and
industrial products. Areas targeted in product development include value-added
features and tools required for building embedded systems.
The sales growth associated with embedded systems will also reflect on the
earnings logic. Licence revenue from these sales accumulates over the longer
term rather than representing a one-time payment.
Digia expects the Qt business to grow its net sales in 2015 from the previous
year, and to generate a slight operating profit for the full year.
OTHER EVENTS DURING THE REVIEW PERIOD
Digia Plc's Annual General Meeting (AGM) was held on 11 March 2014. The AGM
adopted the financial statements for 2013, released the Board members and the
CEO from liability, determined Board emoluments, resolved to keep the number of
Board members at seven (7), and elected the company's Board of Directors for a
new term.
With regard to profit distribution for 2013, the AGM approved the Board's
proposal to make a repayment of capital of EUR 0.10 per share to all
shareholders listed on the shareholder list maintained by Euroclear Finland Ltd
on the reconciliation date of 14 March 2014. The date for the repayment of
capital was set at 21 March 2014.
The AGM granted the following authorisations to the Board:
Authorisation of the Board of Directors to decide on buying back own shares
and/or accepting them as collateral
The AGM authorised the Board to decide on the buyback and/or acceptance as
collateral of not more than 2,000,000 shares in the company. This buyback can
only be executed by means of the company's unrestricted equity. The Board shall
decide on how these shares are to be bought. Own shares may be bought back in
disproportion to the holdings of the shareholders. The authorisation also
includes acquisition of shares through public trading organised by NASDAQ OMX
Helsinki Oy in accordance with the rules and instructions of NASDAQ OMX
Helsinki and Euroclear Finland Ltd, or through offers made to shareholders.
Shares may be acquired in order to improve the company's capital structure, to
fund acquisitions or other business transactions, for offering share-based
incentive schemes, to sell on, or to be annulled. The shares must be acquired
at the market price in public trading. This authorisation supersedes that
granted by the AGM of 12 March 2013 and is valid for 18 months, i.e. until 11
September 2015.
Authorising the Board of Directors to decide on a share issue and granting of
special rights
The AGM authorised the Board to decide on an ordinary or bonus issue of shares
and the granting of special rights (as defined in Section 1, Chapter 10 of the
Limited Liability Companies Act) in one or more instalments, as follows: The
issue may total, at a maximum, 4,000,000 shares. The authorisation applies both
to new shares and to treasury shares held by the company. By virtue of the
authorisation, the Board has the right to decide on share issues and the
granting of special rights, in deviation from the pre-emptive subscription
rights of the shareholders (a directed issue). The authorisation may be used to
fund or complete acquisitions or other business transactions, for offering
share-based incentive schemes, to develop the company's capital structure, or
for other purposes. The Board was authorised to decide on all terms related to
the share issue or special rights, including the subscription price, its
payment in cash or (partly or wholly) in capital contributed in kind or its
being written off against the subscriber's receivables, and its recognition in
the company's balance sheet. This authorisation supersedes that granted by the
AGM of 12 March 2013 and is valid for 18 months, i.e. until 11 September 2015.
In a meeting held on 17 June 2014, Digia Plc's Board of Directors authorized
the company's management to further streamline the company's organizational
structure between Digia's domestic business and the international Qt business.
This was carried out by setting up a new company entity for Qt under the parent
company Digia Plc. The Qt Company Oy, parent company of the Qt business,
launched operations at the end of the reporting period, on 1 January 2015.
SHARE CAPITAL AND SHARES
On 31 December 2014, the number of Digia Plc shares totalled 20,875,645.
According to Finnish Central Securities Depository Ltd, Digia had 4,594
shareholders on 31 December 2014.
The 10 biggest shareholders were:
Shareholder Shares and votes
--------------------------------------------------------------
Ingman Group Oy Ab 20.2%
--------------------------------------------------------------
Ilmarinen Mutual Pension Insurance Company 14.6%
--------------------------------------------------------------
Jyrki Hallikainen 7.4%
--------------------------------------------------------------
Kari Karvinen 5.7%
--------------------------------------------------------------
Matti Savolainen 5.6%
--------------------------------------------------------------
Varma Mutual Pension Insurance Company 4.6%
--------------------------------------------------------------
Investment Fund Säästöpankki Small Cap 1.3%
--------------------------------------------------------------
Nordea Finnish Small Cap investment fund 1.3%
--------------------------------------------------------------
Nordea Bank Finland Plc (nominee-registered) 1.3%
--------------------------------------------------------------
Etola Oy 1.0%
--------------------------------------------------------------
Distribution of holdings by number of shares held on 31 December 2014
Number of shares Shareholders Shares and votes
-----------------------------------------------------
1 - 100 23.3% 0.4%
-----------------------------------------------------
101 - 1,000 57.9% 5.7%
-----------------------------------------------------
1,001 - 10,000 16.9% 9.9%
-----------------------------------------------------
10,001 - 100,000 1.4% 8.6%
-----------------------------------------------------
100,001 - 1,000,000 0.5% 21.9%
-----------------------------------------------------
1,000,001 - 4,000,000 0.1% 53.5%
-----------------------------------------------------
Shareholding by sector on 31/12/2014
Shareholders Shares
--------------------------------------------------------------------
Non-financial corporations 4.2% 26.1%
--------------------------------------------------------------------
Financial and insurance corporations 0.2% 5.2%
--------------------------------------------------------------------
General government 0.1% 19.2%
--------------------------------------------------------------------
Not-for-profit institutions serving households 0.3% 1.0%
--------------------------------------------------------------------
Households 94.6% 45.8%
--------------------------------------------------------------------
Foreign holding 0.6% 2.6%
--------------------------------------------------------------------
The weighted average number of shares during the reporting period, adjusted for
share issues, was 20,780,221. The number of outstanding shares was 20,775,273
in total at the end of the period.
The company held a total of 57,372 treasury shares at the end of the reporting
period. The accounting counter value of these treasury shares is EUR 0.10 per
share. The company held about 0.3 per cent of the capital stock as of 31
December 2014. Digia has financed the acquisition of 43,000 treasury shares for
distribution through incentive schemes for key personnel. At the end of the
period, 43,000 of these shares remained undistributed and were under the
management of Evli Alexander Management Ltd.
REPORTED SHARE PERFORMANCE ON THE HELSINKI STOCK EXCHANGE
Digia Plc shares are listed on the NASDAQ OMX Nordic Exchange under IT, IT
Consulting & Other Services. The company's short name is DIG1V. The lowest
reported share quotation was EUR 2.66 and the highest was EUR 4.59. The share
officially closed at EUR 2.66 on the last trading day. The trade-weighted
average was EUR 3.79. The Group's market capitalisation totalled EUR 55,529,216
at the end of the reporting period.
The company received the following flagging notifications during the reporting
period:
- Ilmarinen Mutual Pension Insurance Company announced on 18 February
2014 that its holding in the company had risen above the 10% flagging
threshold, to 10.05% of all shares and votes in the company.
- The Ingman Group announced on 25 March 2014 that its holding in the
company had risen above the 20% flagging threshold and was 20.12% of all
shares and votes in the company.
- Jyrki Hallikainen announced on 7 July 2014 that his holding in the
company had fallen below the 10% flagging threshold to 7.83% of all shares and
votes.
STOCK OPTION SCHEMES
Digia Plc had no outstanding options.
Helsinki, 5 February 2015
Digia Plc
Board of Directors
BRIEFING
Digia will hold a briefing on its Financial Statements for analysts on Thursday
5 February 2015 at 11 am, in the Tapiola cabinet of Hotel Scandic Simonkenttä,
Simonkatu 9, 00100 Helsinki, Finland. Welcome.
FURTHER INFORMATION
Juha Varelius, President and CEO, mobile: +358 400 855 849, email:
juha.varelius@digia.com
The financial statements and the related PowerPoint presentation will be
available in the Investors section at www.digia.com from 11 am.
DISTRIBUTION
NASDAQ OMX Helsinki
Key media
CONDENSED FINANCIAL STATEMENTS AND NOTES
Consolidated Income Statement
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Consolidated Statement of Changes In Shareholders' Equity
Notes to the accounts
CONSOLIDATED INCOME STATEMENT, EUR 1,000
EUR 1,000 10-12/201 10-12/201 Change 1-12/2014 1-12/2013 Change
4 3 , % , %
--------------------------------------------------------------------------------
NET SALES 27,246.4 26,781.8 1.7% 97,433.5 99,740.5 -2.3%
--------------------------------------------------------------------------------
Other operating 276.6 504.2 -45.1% 1,302.9 1,542.7 -15.5%
income
--------------------------------------------------------------------------------
Materials and -2,819.6 -3,033.5 -7.0% -9,501.1 -11,989.4 -20.8%
services
--------------------------------------------------------------------------------
Depreciation, -600.5 -7,761.9 -92.3% -2,490.4 -9,977.0 -75.0%
amortisation and
impairment
--------------------------------------------------------------------------------
Other operating -21,794.4 -21,768.2 0.1% -82,435.0 -82,138.8 0.4%
expenses
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit 2,308.5 -5,277.6 4,309.8 -2,822.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial expenses -164.6 -247.3 -33.5% -675.6 -784.0 -13.8%
(net)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings before tax 2,143.9 -5,524.9 3,634.2 -3,605.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -463.3 128.6 -783.8 -461.2 69.9%
--------------------------------------------------------------------------------
NET PROFIT 1,680.6 -5,396.3 2,850.4 -4,067.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive
income:
--------------------------------------------------------------------------------
Items which may be
reclassified
subsequently to
profit or loss:
--------------------------------------------------------------------------------
Exchange differences -72.3 -48.8 -116.6 -36.2
on translation of
foreign operations
--------------------------------------------------------------------------------
TOTAL COMPREHENSIVE 1,608.3 -5,445.1 2,733.8 -4,103.3
INCOME
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of net
profit:
--------------------------------------------------------------------------------
Parent-company 1,680.6 -5,396.3 2,850.4 -4,067.1
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of
total comprehensive
income:
--------------------------------------------------------------------------------
Parent-company 1,608.3 -5,445.1 2,733.8 -4,103.3
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, 0.08 -0.26 0.14 -0.20
EUR
--------------------------------------------------------------------------------
Earnings per share 0.08 -0.26 0.14 -0.20
(diluted), EUR
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET, EUR 1,000
Assets 31/12/2014 31/12/2013 Change, %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Intangible assets 52,309.0 53,327.2 -1.9%
--------------------------------------------------------------------------------
Tangible assets 1,698.6 1,986.0 -14.5%
--------------------------------------------------------------------------------
Financial assets 627.0 627.0 0.0%
--------------------------------------------------------------------------------
Inventories 0.0 0.6 -100.0%
--------------------------------------------------------------------------------
Long-term receivables 26.0 64.6 -59.8%
--------------------------------------------------------------------------------
Deferred tax assets 201.2 370.9 -45.7%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total non-current assets 54,861.8 56,376.2 -2.7%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Current receivables 20,399.3 20,447.8 -0.2%
--------------------------------------------------------------------------------
Available-for-sale financial assets 328.7 324.0 1.5%
--------------------------------------------------------------------------------
Cash and cash equivalents 4,803.3 6,129.8 -21.6%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total current assets 25,531.3 26,901.7 -5.1%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total assets 80,393.1 83,277.9 -3.5%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity and liabilities 31/12/2014 31/12/2013 Change, %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Share capital 2,087.6 2,087.6 0.0%
--------------------------------------------------------------------------------
Rights issue 0.0 0.0
--------------------------------------------------------------------------------
Issue premium fund 7,899.5 7,899.5 0.0%
--------------------------------------------------------------------------------
Other reserves 5,203.8 5,203.8 0.0%
--------------------------------------------------------------------------------
Unrestricted invested shareholders' equity 31,370.3 33,447.8 -6.2%
--------------------------------------------------------------------------------
Translation difference 401.0 517.6 -22.5%
--------------------------------------------------------------------------------
Retained earnings -13,093.8 -9,028.6 -45.0%
--------------------------------------------------------------------------------
Net profit 2,850.4 -4,067.1
--------------------------------------------------------------------------------
Equity attributable to parent-company 36,718.7 36,060.6 1.8%
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total shareholders' equity 36,718.7 36,060.6 1.8%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities
--------------------------------------------------------------------------------
Long-term interest-bearing liabilities 9,646.4 12,741.9 -24.3%
--------------------------------------------------------------------------------
Received long-term advances 1,113.5 2,876.5 -61.3%
--------------------------------------------------------------------------------
Other long-term liabilities 0.0 0.0
--------------------------------------------------------------------------------
Deferred tax liabilities 288.5 461.0 -37.4%
--------------------------------------------------------------------------------
Total long-term liabilities 11,048.4 16,079.4 -31.3%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Short-term interest-bearing liabilities 6,599.0 4,140.9 59.4%
--------------------------------------------------------------------------------
Other short-term liabilities 26,026.9 26,996.9 -3.6%
--------------------------------------------------------------------------------
Total short-term liabilities 32,625.9 31,137.8 4.8%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total liabilities 43,674.4 47,217.3 -7.5%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity and liabilities 80,393.1 83,277.9 -3.5%
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000
1/1/2014-31/12/201 1/1/2013-31/12/201
4 3
--------------------------------------------------------------------------------
Cash flow from operations:
--------------------------------------------------------------------------------
Net profit 2,850 -4,067
--------------------------------------------------------------------------------
Adjustments to net profit 1,054 8,162
--------------------------------------------------------------------------------
Change in working capital -1480 1,312
--------------------------------------------------------------------------------
Interest paid -420 -571
--------------------------------------------------------------------------------
Interest income 0 0
--------------------------------------------------------------------------------
Taxes paid -123 19
--------------------------------------------------------------------------------
Net cash flow from operations 1,881 4,855
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from investments:
--------------------------------------------------------------------------------
Purchases of tangible and intangible -1,185 -1,602
assets
--------------------------------------------------------------------------------
Cash flow from investments -1,185 -1,602
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from financing:
--------------------------------------------------------------------------------
Proceeds from share issue 0 0
--------------------------------------------------------------------------------
Acquisition of own shares 0 0
--------------------------------------------------------------------------------
Repayment of current loans 0 -11,500
--------------------------------------------------------------------------------
Repayments of non-current loans -4,698 -9,500
--------------------------------------------------------------------------------
Withdrawals of current loans 3,000 6,000
--------------------------------------------------------------------------------
Withdrawals of non-current loans 1,758 12,000
--------------------------------------------------------------------------------
Dividends paid and other profit -2,078 -2,082
distribution
--------------------------------------------------------------------------------
Cash flow from financing -2,018 -5,082
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in liquid assets -1,322 -1,829
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liquid assets at beginning of period 6,454 8,283
--------------------------------------------------------------------------------
Change in fair value
--------------------------------------------------------------------------------
Change in liquid assets -1,322 -1,829
--------------------------------------------------------------------------------
Liquid assets at end of period 5,132 6,454
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, EUR 1,000
a b c d e f g h
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY, 1 2,088 0 7,899 33,448 5,204 554 -7,129 42,063
January 2013
--------------------------------------------------------------------------------
Net profit -4,067 -4,067
--------------------------------------------------------------------------------
Other comprehensive -36 -36
income
--------------------------------------------------------------------------------
Dividends -2,082 -2,082
--------------------------------------------------------------------------------
Share-based payments 183 183
recognised against
equity
--------------------------------------------------------------------------------
Other items
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY 31 2,088 0 7,899 33,448 5,204 518 -13,096 36,061
December 2013
--------------------------------------------------------------------------------
a b c d e f g h
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY, 1 2,088 0 7,899 33,448 5,204 518 -13,096 36,061
January 2014
--------------------------------------------------------------------------------
Net profit 2,850 2,850
--------------------------------------------------------------------------------
Other comprehensive -117 -117
income
--------------------------------------------------------------------------------
Repayment of capital -2,078 -2,078
--------------------------------------------------------------------------------
Share-based payments 2 2
recognised against
equity
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY, 31 2,088 0 7,899 31,370 5,204 401 -10,243 36,719
December 2014
--------------------------------------------------------------------------------
a = share capital
b = rights issue
c = share premium
d = unrestricted invested shareholders' equity
e = other reserves
f = currency translation differences
g = retained earnings
h = total shareholders' equity
NOTES TO THE ACCOUNTS
Accounting principles:
The interim report was prepared in compliance with IFRS and the IAS 34 standard.
Otherwise, the same accounting principles have been applied as in the 2013
financial statements. The accounting principles and formulae for the
calculation of key figures and ratios are unchanged and are presented in the
2013 financial statements.
Seasonal nature of business:
The Group's business is affected by the number of workdays each month, as well
as by holiday seasons.
Dividends paid:
Dividends paid in the form of capital repayments during the reporting period
totalled EUR 2,081,827.30.
Related-party transactions:
Digia Group's related parties include the CEO and the members of the Board of
Directors and Group Management Team. Digia Group had no significant
transactions with related parties during the reporting period.
Segment information:
Digia's business operations are divided into two main business segments:
Domestic and Qt.
NET SALES, EUR 10-12/201 10-12/201 Change, % 1-12/201 1-12/201 Change, %
1,000 4 3 4 3
--------------------------------------------------------------------------------
Domestic 21,401 21,798 -1.8% 77,028 79,850 -3.5%
operations
--------------------------------------------------------------------------------
Qt operations 5,845 4,983 17.3% 20,406 19,891 2.6%
--------------------------------------------------------------------------------
Digia Group 27,246 26,782 1.7% 97,433 99,740 -2.3%
--------------------------------------------------------------------------------
OPERATING PROFIT BEFORE 10-12/2 10-12/2 Change 1-12/2 1-12/2 Change,
EXTRAORDINARY ITEMS, EUR 014 013 , % 014 013 %
1,000
--------------------------------------------------------------------------------
Domestic operations 2,695 2,654 1.5% 6,311 5,395 17.0%
--------------------------------------------------------------------------------
Qt operations -235 -561 58.0% -1,850 -846 -118.7%
--------------------------------------------------------------------------------
Digia Group 2,460 2,093 17.5% 4,461 4,549 -1.9%
--------------------------------------------------------------------------------
OPERATING PROFIT, 10-12/20 10-12/20 Change, 1-12/201 1-12/201 Change,
EUR 1,000 14 13 % 4 3 %
--------------------------------------------------------------------------------
Domestic operations 2,695 -4,717 6,311 -1,976
--------------------------------------------------------------------------------
Qt operations -386 -561 31.1% -2,001 -846 -136.5%
--------------------------------------------------------------------------------
Digia Group 2,309 -5,278 4,310 -2,822
--------------------------------------------------------------------------------
ASSETS, EUR 1,000 31 December 2014 31 December 2013
-------------------------------------------------------
Domestic operations 51,076 53,199
-------------------------------------------------------
Qt operations 17,332 17,021
-------------------------------------------------------
Unallocated 11,985 13,058
-------------------------------------------------------
Digia Group 80,393 83,278
-------------------------------------------------------
Consolidated income statement by quarter:
EUR 1,000 10-12/201 7-9/2014 4-6/2014 1-3/2014 10-12/201
4 3
--------------------------------------------------------------------------------
Net sales 27,246.4 21,731.9 24,497.2 23,957.9 26,781.8
--------------------------------------------------------------------------------
Other operating income 276.6 302.7 322.8 400.8 504.2
--------------------------------------------------------------------------------
Materials and services -2,819.6 -1,960.3 -2,343.1 -2,378.0 -3,033.5
--------------------------------------------------------------------------------
Depreciation, -600.5 -580.1 -607.2 -702.8 -7,761.9
amortisation and
impairment
--------------------------------------------------------------------------------
Other operating expenses -21,794.4 -18,637.4 -20,444.9 -21,558.3 -21,768.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit 2,308.5 856.9 1,424.8 -280.4 -5,277.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial expenses (net) -164.6 -307.1 -53.2 -150.8 -247.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings before tax 2,143.9 549.8 1,371.6 -431.2 -5,524.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -463.3 -78.0 -342.8 100.4 128.6
--------------------------------------------------------------------------------
Net profit 1,680.6 471.7 1,028.9 -330.8 -5,396.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Allocation:
--------------------------------------------------------------------------------
Parent-company 1,680.6 471.7 1,028.9 -330.8 -5,396.3
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR 0.08 0.02 0.05 -0.02 -0.26
--------------------------------------------------------------------------------
Earnings per share 0.08 0.02 0.05 -0.02 -0.26
(diluted), EUR
--------------------------------------------------------------------------------
Group key figures and ratios:
EUR 1,000 1-12/2014 1-12/2013
--------------------------------------------------------------------------------
Extent of business:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 97,433 99,740
--------------------------------------------------------------------------------
- change from previous year -2.3% -0.7%
--------------------------------------------------------------------------------
Average capital invested 52,954 57,428
--------------------------------------------------------------------------------
Personnel at period end 932 938
--------------------------------------------------------------------------------
Average number of personnel 935 939
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profitability:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit before extraordinary items and impairment 4,461 4,549
--------------------------------------------------------------------------------
- % of net sales 4.6% 4.6%
--------------------------------------------------------------------------------
Operating profit 4,310 -2,822
--------------------------------------------------------------------------------
- % of net sales 4.4% -2.8%
--------------------------------------------------------------------------------
Earnings before tax 3,634 -3,606
--------------------------------------------------------------------------------
- % of net sales 3.7% -3.6%
--------------------------------------------------------------------------------
Net profit 2,850 -4,067
--------------------------------------------------------------------------------
- % of net sales 2.9% -4.1%
--------------------------------------------------------------------------------
Return on equity, % 7.8% -10.4%
--------------------------------------------------------------------------------
Return on investment, % 9.0% -4.4%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financing and financial standing:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Interest-bearing liabilities 16,245 16,883
--------------------------------------------------------------------------------
Short-term investments & cash and bank receivables 5,132 6,454
--------------------------------------------------------------------------------
Net gearing 30.3% 28.9%
--------------------------------------------------------------------------------
Equity ratio 51.5% 49.9%
--------------------------------------------------------------------------------
Net cash flow from operations 1,607 4,855
--------------------------------------------------------------------------------
Earnings per share, undiluted (EUR) 0.14 -0.20
--------------------------------------------------------------------------------
Earnings per share, diluted (EUR) 0.14 -0.20
--------------------------------------------------------------------------------
Equity/share, (EUR) 1.76 1.73
--------------------------------------------------------------------------------
Lowest share trading price, (EUR) 2.66 2.65
--------------------------------------------------------------------------------
Highest share trading price, (EUR) 4.59 4.34
--------------------------------------------------------------------------------
Average share price, (EUR) 3.79 3.19
--------------------------------------------------------------------------------
Market capitalisation 55,529 81,624
--------------------------------------------------------------------------------
Formulae for key figures and ratios are presented in the 2013 financial
statements. These remained unchanged during the reporting period.
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