2015-02-12 11:30:00 CET
2015-02-12 11:30:03 CET
REGULATED INFORMATION
Affecto Oyj - Financial Statement Release
Affecto Plc's Financial Statements Bulletin 2014
Helsinki, 2015-02-12 11:30 CET (GLOBE NEWSWIRE) -- AFFECTO PLC -- FINANCIAL
STATEMENTS BULLETIN -- 12 FEBRUARY 2015 at 12.30
Affecto Plc's Financial Statements Bulletin 2014
Group key figures
MEUR 10-12/14 10-12/13 2014 2013
Net sales 32.8 36.2 122.7 132.9
Operational segment result 3.9 2.7 10.0 10.3
% of net sales 12.0 7.6 8.2 7.7
Operating profit -3.7 2.3 0.8 8.3
% of net sales -11.3 6.3 0.7 6.2
Profit before taxes -3.8 2.1 0.3 8.0
Profit for the period -4.7 1.4 -1.6 5.6
Equity ratio, % 54.6 53.0 54.6 53.0
Net gearing, % 1.8 7.4 1.8 7.4
Earnings per share, eur -0.22 0.07 -0.07 0.26
Earnings per share (diluted), eur -0.22 0.07 -0.07 0.26
Equity per share, eur 2.80 3.14 2.80 3.14
Dividend proposal, eur/share 0.16 0.16
CEO Juko Hakala comments:
In the fourth quarter Affecto's net sales decreased by 9% to 32.8 MEUR (36.2
MEUR). Net sales decreased in all Nordic countries. Net sales grew in Baltic,
where especially the insurance business performed well.
Fourth quarter's operational result was good. Operational segment result was
3.9 MEUR (2.7 MEUR). Baltic had excellent 23% profitability. Finland had 12%
profitability and Norway improved to 14% profitability. It is also positive
that we reached 7% profitability in Sweden. However, an impairment of 7.4 MEUR
was made to the goodwill related to Sweden, after which the operating profit
was -3.7 MEUR (2.3 MEUR).
In the whole year 2014 net sales decreased by 8% to 122.7 MEUR. Operational
segment profit 10.0 MEUR was almost at the previous year's level (10.3 MEUR).
Due to the goodwill impairment of 7.4 MEUR in Sweden, operating profit was 0.8
MEUR (8.3 MEUR).
Changes in customers' demands in the current economic conditions have affected
us during the year. Our business area and our customers' industries are under
transformation due to the rapid technological changes and we are developing our
operations and offering to be able to fulfill the changing needs of our
customers also in the future. We are publishing today also a strategic update.
Thanks to good order intake in the last few months, the order backlog of 49.6
MEUR was somewhat larger than last year (48.7 MEUR).
Net sales and operating profit are estimated to grow in 2015.
Additional information:
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
CEO Juko Hakala, + 358 205 777 450
CFO Satu Kankare, +358 205 777 202
This release is unaudited. The amounts in this report have been rounded from
exact numbers.
BUSINESS DEVELOPMENT 10-12/2014
Affecto's net sales in 10-12/2014 were 32.8 MEUR (10-12/2013: 36.2 MEUR). Net
sales in Finland were 13.8 MEUR (14.9 MEUR), in Norway 6.5 MEUR (7.3 MEUR), in
Sweden 4.8 MEUR (6.2 MEUR), in Denmark 2.8 MEUR (4.1 MEUR) and 5.7 MEUR (4.5
MEUR) in Baltic.
Net sales by reportable segments
Net sales, MEUR 10-12/14 10-12/13 2014 2013
Finland 13.8 14.9 50.6 53.2
Norway 6.5 7.3 25.0 29.6
Sweden 4.8 6.2 20.0 23.2
Denmark 2.8 4.1 12.0 15.4
Baltic 5.7 4.5 19.0 16.0
Other -0.9 -0.9 -4.0 -4.4
-------------------------------------------------
-------------------------------------------------
Group total 32.8 36.2 122.7 132.9
Net sales decreased by 9% in the fourth quarter. Largest decreases were seen in
Denmark and Sweden. Baltic grew by 25% mainly thanks to the insurance business.
Resource utilization was low especially in Denmark. Net sales of both
consultant work and licenses decreased, and the decrease in licenses was
visible especially in Denmark and Sweden.
Net sales of Information Management Solutions business in 10-12/2014 were 30.6
MEUR (33.5 MEUR) and net sales of Karttakeskus GIS business were 3.0 MEUR (3.5
MEUR).
The general market sentiment continues cautious in all Nordic countries. In
Affecto's core business customers continued to show interest mainly in shorter
and smaller projects, especially true for mid-sized customers, and investment
decisions took a long time. In the new business technology markets the
customers' showed more active interest, but their needs were often still
forming up. The Finnish market picked up a bit during the quarter. The order
backlog increased to 49.6 MEUR (48.7 MEUR).
PROFIT
Affecto's operating profit in 10-12/2014 was -3.7 MEUR (2.3 MEUR) and the
operational segment result was 3.9 MEUR (2.7 MEUR). Operational segment result
was in Finland 1.7 MEUR (1.9 MEUR), in Norway 0.9 MEUR (0.5 MEUR), in Sweden
0.3 MEUR (0.1 MEUR), in Denmark 0.1 MEUR (0.6 MEUR) and in Baltic 1.3 MEUR
(-0.2 MEUR).
Operational segment result by reportable segments
Operational segment 10-12/14 10-12/13 2014 2013
result, MEUR
Finland 1.7 1.9 5.4 6.9
Norway 0.9 0.5 2.0 2.7
Sweden 0.3 0.1 0.3 -0.2
Denmark 0.1 0.6 0.9 1.9
Baltic 1.3 -0.2 2.9 0.2
Other -0.5 -0.2 -1.5 -1.2
----------------------------------------------------------
----------------------------------------------------------
Operational segment result 3.9 2.7 10.0 10.3
IFRS3 Amortization -0.2 -0.4 -1.8 -2.0
Impairment of goodwill -7.4 - -7.4 -
Operating profit -3.7 2,3 0.8 8,3
----------------------------------------------------------
Operational result in 10-12/2014 was good. Operational segment result 3.9 MEUR
was above the previous year (2.7 MEUR). Profitability in Baltic improved to 23%
thanks to the insurance business and Estonia. Finland had 12% profitability and
Norway improved to 14% profitability. Largest negative change was seen in
Denmark, where profitability decreased to 5% due to low utilization and
decreased license sales. Sweden reached 7% profitability, which is the best
quarterly performance in several years.
According to the IFRS3 requirements, in 10-12/2014 operating profit includes
0.2 MEUR (0.4 MEUR) of amortization on intangible assets related to
acquisitions.
Sweden has shown progress in profitability. There is still uncertainty
regarding Sweden and an impairment of 7.4 MEUR was made to the goodwill related
to Sweden. Goodwill impairment is reported separately.
After the impairment the operating profit -3.7 MEUR was clearly below the
previous year (2.3 MEUR).
YEAR 2014
NET SALES
Affecto's net sales in 2014 were 122.7 MEUR (2013: 132.9 MEUR). Net sales in
Finland were 50.6 MEUR (53.2 MEUR), in Norway 25.0 MEUR (29.6 MEUR), in Sweden
20.0 MEUR (23.2 MEUR), in Denmark 12.0 MEUR (15.4 MEUR) and 19.0 MEUR (16.0
MEUR) in Baltic.
Net sales decreased by 8% in 2014. Largest decrease was in Denmark, but also
Sweden and Norway decreased clearly. Baltic grew by 19% mainly thanks to the
insurance business, but also due some improvement in the Lithuanian market.
Resource utilization was low especially in Denmark. Net sales of consultant
work was clearly lower than in the previous year.
Net sales of Information Management Solutions business were 114.0 MEUR (123.6
MEUR) and net sales of Karttakeskus GIS business were 11.9 MEUR (12.2 MEUR).
The general market sentiment continued cautious in all Nordic countries. In
Affecto's core business customers continued to show interest mainly in shorter
and smaller projects, especially true for mid-sized customers, and investment
decisions took a long time. In the new business technology markets the
customers' showed more active interest, but their needs were often still
forming up. The Finnish market that was rather weak in the early part of the
year, picked up a bit in the last few months. The order backlog slightly
increased to 49.6 MEUR (48.7 MEUR).
PROFIT
Affecto's operating profit was 0.8 MEUR (8.3 MEUR) and the operational segment
result was 10.0 MEUR (10.3 MEUR). Operational segment result was in Finland 5.4
MEUR (6.9 MEUR), in Norway 2.0 MEUR (2.7 MEUR), in Sweden 0.3 MEUR (-0.2 MEUR),
in Denmark 0.9 MEUR (1.9 MEUR) and in Baltic 2.9 MEUR (0.2 MEUR).
Operational segment profit 10.0 MEUR was almost at the previous year's level
(10.3 MEUR). Finland had 11% profitability and Norway had 8% profitability.
Profitability in Baltic improved to 15% thanks to the insurance business and
Estonia. Denmark's profitability decreased to 7% mainly due to decreased
resource utilisation. Sweden reached slightly positive profitability of 2%.
There were streamlining actions in Norway and Sweden that caused 0.9 MEUR
non-recurring costs in the first quarter, but had positive impact on the
profitability later in the year.
According to the IFRS3 requirements, operating profit includes 1.8 MEUR (2.0
MEUR) of amortization on intangible assets related to acquisitions. The other
intangible assets impacting in the IFRS3 amortization have been wholly
amortized and the amortization has ended.
Sweden has shown progress in profitability. There is still uncertainty
regarding Sweden and an impairment of 7.4 MEUR was made to the goodwill related
to Sweden. Goodwill impairment is reported separately.
R&D costs totaled 0.3 MEUR (0.0 MEUR), i.e. 0.3 % of net sales (0.0%). These
costs have been recognized as an expense in the income statement.
Taxes corresponding to the profit of the period have been entered as tax
expense. Net profit for the period was -1.6 MEUR, while it was 5.6 MEUR last
year.
FINANCE AND INVESTMENTS
At the end of the reporting period Affecto's balance sheet totaled 124.8 MEUR
(12/2013: 139.5 MEUR). Equity ratio was 54.6% (53.0%) and net gearing was 1.8%
(7.4%).
The financial loans were 22.5 MEUR (26.5 MEUR) at the end of reporting period.
The company's cash and liquid assets were 21.4 MEUR (21.5 MEUR). The
interest-bearing net debt was 1.1 MEUR (5.0 MEUR).
Cash flow from operating activities for the reported period was 8.3 MEUR (10.9
MEUR) and cash flow from investing activities was -0.7 MEUR (-1.6 MEUR).
Investments in tangible and intangible assets were 0.7 MEUR (1.6 MEUR).
The Annual General Meeting held in April decided to distribute a dividend of
3.6 MEUR (3.4 MEUR).
EMPLOYEES
The number of employees was 1028 persons at the end of the reporting period
(1088). 426 employees were based in Finland (444), 93 in Norway (124), 129 in
Sweden (146), 68 in Denmark (71) and 312 in the Baltic countries (303). The
average number of employees during the period was 1041 (1081). Wages and
salaries were 54.1 MEUR (59.1 MEUR in 2013, 60.2 MEUR in 2012).
Board member Lars Wahlström served as the interim CEO in 1 January - 7
September 2014. Juko Hakala started as the CEO on 8 September 2014.
REVIEW OF MARKET DEVELOPMENTS
Changes in customers' demands in the current economic conditions have affected
the company during the year. Customers' decision-making pace was rather slow
and they also preferred to split large projects into smaller lots, which had
negative impact on order backlog during the year. Order backlog has slightly
increased compared to last year, thanks to good development in Baltic and in
Sweden.
Market development in the core business is twofold: some technology and
solution areas grow well, but some see only very slow growth. E.g. demand for
appliances and other next-generation data warehouse solutions is growing, while
the demand for basic data warehouse solutions is not growing much. Affecto is
shifting our offerings and resources to match the changing customer needs. For
example, in Norway the company has had emphasis on next-generation data
warehouses, while in Sweden and Finland it has had more focus on collaboration
and digitalization solutions.
The information technology markets and buying are building into several
separate markets. IT buying continues to change, cloud and commodity-like
services will grow and the roles of customers' IT organizations are changing.
Price competition continues tight and the global service companies will
continue to grow in this market. Small local companies can develop their
competitiveness by specializing, for example into the new fields in analytics.
At the same time new business technology markets are emerging, where
information technology solutions and the information generated by them form an
integral part of customer organizations' own products and services. From
customers' perspective these solutions will be elemental for their business and
will have close connection to their own competitiveness and profit. So, the
decisions regarding these solutions will be made in proximity of or within the
business itself. Business capabilities based on Internet of Things offer
examples of this kind of solutions that may transform products and business
models in various industries. Affecto aims to grow in these markets together
with customers.
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.
The net sales in Finland decreased by 5% to 50.6 MEUR (53.2 MEUR). Operational
segment result was 5.4 MEUR (6.9 MEUR) and profitability was 11%. Net sales
decreased due to smaller sales of consultancy work. General mood is still
cautious in Finland and customers are slow with their investment decisions, but
customer activity picked up a bit toward the year-end. Order backlog is below
last year's level.
The net sales of Karttakeskus GIS business, reported as part of Finland,
decreased by 3% to 11.9 MEUR (12.2 MEUR) and its profitability was good.
The net sales in Norway were 25.0 MEUR (29.6 MEUR) and operational segment
result was 2.0 MEUR (2.7 MEUR). Net sales decreased by 15% mainly due to
smaller sales of consultant work. Profitability was 8%. Streamlining actions
done at the beginning of the year have helped to decrease the cost base and
have improved profitability toward the year-end. Amount of Norwegian employees
decreased clearly during the year, while the usage of nearshore resources from
Baltic grew. Order backlog is slightly above last year's level.
The net sales in Sweden were 20.0 MEUR (23.2 MEUR) and operational segment
result 0.3 MEUR (-0.2 MEUR). Net sales decreased by 14%, to which both the
decreased amount of employees, decreased license sales and the weakened SEK
have contributed. It is positive that after several loss-making years Sweden
reached slightly positive profitability of 2%. Development actions in Sweden
will continue and the company wants to be the leading Enterprise Information
Management company also in this market. Order backlog is above last year's
level. Although Sweden's profitability has developed positively and it made a
positive result in 2014, there is still uncertainty regarding the pace of the
development in Sweden. An impairment of 7.4 MEUR was made to the goodwill
related to Sweden.
The net sales in Denmark were 12.0 MEUR (15.4 MEUR) and operational segment
result was 0.9 MEUR (1.9 MEUR). Net sales decreased by 22% mainly due to low
resource utilization but also due to decrease in license sales. Profitability
decreased to 7%. Competition in Denmark is tight. Order backlog is below last
year's level.
The net sales in Baltic (Lithuania, Latvia, Estonia, Poland, South Africa) were
19.0 MEUR (16.0 MEUR). Operational segment result was 2.9 MEUR (0.2 MEUR). Net
sales increased by 19% and profitability increased to 15%. The Lithuanian
public sector market has recovered slower than anticipated, as the preparations
of new EU funded projects has progressed slowly. Euro conversion projects had
positive impact on the Lithuanian market during the fall. Estonian market
situation is normal. The insurance business is performing well. Order backlog
is significantly above last year's level.
ANNUAL GENERAL MEETING AND GOVERNANCE
The Annual General Meeting of Affecto Plc, held on 10 April 2014, adopted the
financial statements for 1.1.-31.12.2013 and discharged the members of the
Board of Directors and the CEO from liability. Approximately 33 percent of
Affecto's shares and votes were represented at the Meeting. The Annual General
Meeting decided on a dividend distribution of EUR 0.16 per share for the year
2013.
Aaro Cantell, Magdalena Persson, Jukka Ruuska, Olof Sand, Tuija Soanjärvi and
Lars Wahlström were elected as members of the Board of Directors. The
organization meeting of the Board of Directors re-elected Aaro Cantell as
Chairman and Jukka Ruuska as Vice-Chairman. KPMG Oy Ab was elected as the
auditor of the company with Reino Tikkanen, APA, as auditor in charge.
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 Company will issue a Corporate Governance Statement for year 2014 that has
been composed in accordance with Recommendation 54 of the Corporate Governance
code and Chapter 7, Section 7 of the Finnish Securities Market Act. The
Corporate Governance Statement is issued separately from the report of the
board of directors and it will be available on the company's website.
THE AUTHORIZATIONS GIVEN TO THE BOARD OF DIRECTORS
The Board has not used in the review period the authorizations given by the
Annual General Meeting in 2013, that expired on 10 April 2014.
The complete contents of the new authorizations given by the Annual General
Meeting held on 10 April 2014 have been published in the stock exchange release
regarding the Meetings' decisions. Key facts about the authorizations:
The Annual General Meeting decided to authorize the Board of Directors to
decide to acquire the company's own shares with distributable funds. A maximum
of 2 100 000 shares may be acquired. The authorization shall be in force until
the next Annual General Meeting.
The Annual General Meeting decided to authorize the Board of Directors to
decide to issue new shares and to convey the company's own shares held by the
company in one or more tranches. The share issue may be carried out as a share
issue against consideration or without consideration on terms to be determined
by the Board of Directors and in relation to a share issue against
consideration at a price to be determined by the Board of Directors. A maximum
of 4 200 000 new shares may be issued. A maximum of 2 100 000 own shares held
by the company may be conveyed. In addition, the authorization includes the
right to decide on a share issue without consideration to the company itself so
that the amount of own shares held by the company after the share issue is a
maximum of one-tenth (1/10) of all shares in the company. The authorization
shall be in force until the next Annual General Meeting. Based on the
authorization a total of 20 333 shares have been conveyed in August to the
Board members as a partial payment of their fees, in accordance to the decision
made by the Annual General Meeting.
CHANGES IN GROUP STRUCTURE
Fully owned subsidiary Affecto Management Oy was merged to its parent Affecto
Plc on 31 December 2014.
SHARES AND TRADING
The company has one share series and all shares have similar rights. At the end
of the review period Affecto Plc's share capital consisted of 22 450 745
shares. The company owned 867 219 treasury shares, approx. 3.9 % of the total
amount of the shares.
During the review period the highest share price was 4.62 euro, the lowest
price 2.80 euro, the average price 3.12 euro and the closing price 2.93 euro.
The trading volume was 5.8 million shares, corresponding to 26% of the number
of shares at the end of the period. The market value of shares was 63.2 MEUR at
the end of the period excluding the treasury shares.
2008C options' exercise period ended on 31 May 2014 and 132 141 new shares were
subscribed with the 2008C options.
SHAREHOLDERS
The company had a total of 2 987 owners on 31 December 2014 and the foreign
ownership was 15%. The list of the largest owners can be found in the company's
web site. Information about the ownership structure and option programs is
included as a separate section in the financial statements. The ownership of
the board members, CEO and their controlled corporations totaled approx. 10.6%.
According to the flagging announcement made on 21 May 2014, the ownership of
Evli Pankki and funds managed by Evli Rahastoyhtiö has decreased below 5%.
According to flagging announcements the ownership of Mika Laine has decreased
below 5% on 17 October 2014 and the ownership of Lombard International
Assurance S.A. has exceeded 5% on 17 October 2014.
ASSESSMENT OF RISKS AND UNCERTAINTIES
Affecto's order backlog has traditionally been only for a few months, which
decreases the reliability of longer-term forecasts. The changes in the general
economic conditions and the operating environment of customers have direct
impact in Affecto's markets. The uncertain economy may affect Affecto's
customers negatively, and their slower investment decision making, postponing
or cancellation of IT investments may have negative impact on Affecto. Slower
decision making by customers may decrease the predictability of the business
and may decrease the utilisation rate of resources.
Affecto's balance sheet includes a material amount of goodwill. Goodwill has
been allocated to cash generating units. Cash generating units, to which
goodwill has been allocated, are tested for impairment both annually and
whenever there is an indication that the unit may be impaired. Potential
impairment losses may have material effect on reported profit and value of
assets.
Affecto's success depends also on good customer relationships. Affecto has a
well-diversified customer base. In 2014 the largest customer generated 3% of
Affecto's net sales, while the 10 largest together generated 17%. Although none
of the customers is critically large for the whole group, there are large
customers in various countries who are significant for local business in the
country.
Affecto sells third party software licenses as part of its solutions. Typically
the license sales have most impact on the last month of each quarter and
especially in the fourth quarter. This increases the fluctuation in net sales
between quarters and increases the difficulty of accurately forecasting the
quarters. Additionally the increase of cloud services and other similar market
trends may affect the license sales negatively. Affecto had license sales of
approx. 9 MEUR in 2014.
Approximately 40% of Affecto's net sales is generated in Sweden and Norway,
thus the development of the currencies of these countries (SEK and NOK) may
have impact on Affecto's profitability. The main part of the companies' income
and costs are within the same currency, which decreases the risks.
EVENTS AFTER THE REVIEW PERIOD
Hellen Wohlin Lidgard, the country manager for Sweden, has resigned from
Affecto in January 2015 to be an entrepreneur. She will continue as the country
manager until July 2015 at the latest.
DIVIDEND PROPOSAL
Distributable funds of the group parent company on 31 December 2014 are 60 434
767.73 euros, of which the distributable profit is 16 940 906.97 euros. Board
of Directors proposes that from the financial year 2014 a dividend of 0.16
euros per share will be paid, a total of 3 453 364.16 euros with the
outstanding number of shares at the end of the financial period, and the rest
is carried forward to the retained earnings account. No material changes have
taken place in respect of the company's financial position after the balance
sheet date. The liquidity of the company is good and in the opinion of the
Board of Directors proposed distribution of profit does not risk the liquidity
of the company.
FUTURE OUTLOOK
Net sales and operating profit are estimated to grow in 2015.
The company does not provide exact guidance for net sales or EBIT development,
as single projects and timing of license sales may have large impact on
quarterly sales and profit.
Affecto Plc
Board of Directors
You can order Affecto's stock exchange releases to be delivered automatically
by e-mail.
Please visit the Investors section of the company website: www.affecto.com
A briefing for analysts and media will be arranged at 14.00 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) 10-12/1 10-12/1 2014 2013
4 3
-----------------------------------
-----------------------------------
Net sales 32 823 36 195 122 693 132 896
Other operating income 15 58 27 65
Changes in inventories of finished -55 0 -83 306
goods and work in progress
Materials and services -7 283 -9 485 -26 560 -29 952
Personnel expenses -16 865 -19 035 -67 630 -74 031
Other operating expenses -4 398 -4 705 -17 221 -17 803
Other depreciation and amortisation -297 -294 -1 218 -1 230
IFRS3 amortisation -216 -442 -1 753 -1 989
Impairment -7 423 - -7 423 -
Operating profit -3 699 2 292 833 8 262
Financial income and expenses -61 -163 -563 -289
Profit before income tax -3 760 2 129 270 7 973
Income tax -948 -698 -1 861 -2 407
Profit for the period -4 708 1 431 -1 591 5 566
Profit for the period
attributable to:
Owners of the parent company -4 708 1 433 -1 591 5 493
Non-controlling interest - -2 - 73
Earnings per share
(EUR per share):
Basic -0.22 0.07 -0.07 0.26
Diluted -0.22 0.07 -0.07 0.26
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
(1 000 EUR) 10-12/1 10-12/1 2014 2013
4 3
-----------------------------------
-----------------------------------
Profit for the period -4 708 1 431 -1 591 5 566
Other comprehensive income
Items that may be reclassified subsequently
to the statement of income:
Translation difference -1 955 -1 029 -2 141 -3 074
Total Comprehensive income -6 663 402 -3 732 2 491
for the period
Total Comprehensive income
attributable to:
Owners of the parent company -6 663 404 -3 732 2 419
Non-controlling interest - -2 - 73
CONSOLIDATED BALANCE SHEET
(1 000 EUR) 12/2014 12/2013
----------------------------------------------------
----------------------------------------------------
Non-current assets
Property, plant and equipment 1 505 1 947
Goodwill 62 814 72 166
Other intangible assets 254 2 072
Deferred tax assets 1 263 1 606
Trade and other receivables - 4
65 836 77 795
Current assets
Inventories 493 622
Trade and other receivables 36 736 38 969
Current income tax receivables 393 615
Cash and cash equivalents 21 380 21 469
59 002 61 675
----------------------------------------------------
----------------------------------------------------
Total assets 124 838 139 470
Equity attributable to owners
of the parent Company
Share capital 5 105 5 105
Reserve of invested non-restricted 47 718 47 448
equity
Other reserves 835 763
Treasury shares -2 111 -2 165
Translation differences -4 269 -2 128Retained earnings 13 159 18 184
----------------------------------------------------
----------------------------------------------------
60 437 67 207
Non-controlling interest - -
Total equity 60 437 67 207
Non-current liabilities
Loans and borrowings 18 452 22 420
Deferred tax liabilities 190 505
18 642 22 924
Current liabilities
Loans and borrowings 4 000 4 000
Trade and other payables 40 254 42 788
Current income tax liabilities 927 1 913
Provisions 578 638
45 759 49 339
Total liabilities 64 401 72 264
----------------------------------------------------
----------------------------------------------------
Equity and liabilities 124 838 139 470
SUMMARY CONSOLIDATED CASH FLOW STATEMENT
(1 000 EUR) 2014 2013
----------------------------------------------------------------
----------------------------------------------------------------
Cash flows from operating activities
Profit for the period -1 591 5 566
Adjustments to profit for the period 12 878 6 271
11 287 11 837
Change in working capital 348 2 863
Interest and other financial cost paid -418 -566
Interest and other financial income received 68 123
Income taxes paid -2 946 -3 343
----------------------------------------------------------------
----------------------------------------------------------------
Net cash from operating activities 8 339 10 915
Cash flows from investing activities
Acquisition of tangible and intangible assets -740 -1 566
Proceeds from sale of tangible and 1 1
intangible assets
Net cash used in investing activities -739 -1 564
----------------------------------------------------------------
Cash flows from financing activities
Repayments of non-current borrowings -4 000 -4 000
Proceeds from share options exercised 262 781
Acquisition of non-controlling interest - -30
Dividends paid to the owners -3 434 -3 444
of the parent company
----------------------------------------------------------------
----------------------------------------------------------------
Net cash from financing activities -7 172 -6 694
(Decrease)/increase in cash and cash equivalents 429 2 657
Cash and cash equivalents 21 469 19 767
at the beginning of the period
Foreign exchange effect on cash -518 -954
Cash and cash equivalents 21 380 21 469
at the end of the period
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to owners of the parent company
----------------------------------------------------
--------
(1 000 EUR) Share Reserve of Other Treasu Trans Ret. Non-con Total
capita invested reserv ry lat. earnin trollin equity
l non-restri es shares diff. gs g
cted interes
equity t
--------------------------------------------
Equity at 1 5 105 47 448 763 -2 165 -2 128 18 184 - 67 207
January
2014
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit -1 591 - -1 591
Translation -2 141 -2 141
difference
s
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total -2 141 -1 591 - -3 732
compre-hen
sive income
Share-based 72 72
payments
Exercise of 262 262
share
options
Treasury 8 54 62
shares as
compensati
on to the
Board
Dividends -3 434 -3 434
paid
Equity at 5 105 47 718 835 -2 111 -4 269 13 159 - 60 437
31
December
2014
--------------------------------------------------------------------------------
Equity attributable to owners of the parent
company
----------------------------------------------------
--------
(1 000 EUR) Share Reserve of Other Treasu Trans Ret. Non-con Total
capita invested reserv ry lat. earnin trollin equity
l non-restri es shares diff. gs g
cted interes
equity t
--------------------------------------------
Equity at 1 5 105 46 643 693 -2 202 946 15 781 311 67 277
January
2013
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit 5 493 73 5 566
Translation -3 074 -3 074
difference
s
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total -3 074 5 493 73 2 491
compre-hen
sive income
Share-based 70 70
payments
Exercise of 781 781
share
options
Treasury 25 37 62
shares as
compensati
on to the
Board
Acquisition 355 -384 -30
of
non-contro
lling
interest
Dividends -3 444 -3 444
paid
Equity at 5 105 47 448 763 -2 165 -2 128 18 184 - 67 207
31
December
2013
--------------------------------------------------------------------------------
2. Notes
2.1. Basis of preparation
This financial statement bulletin has been prepared in accordance with the IFRS
recognition and measurement principles and in accordance with IAS 34, Interim
Financial reporting. The financial statement bulletin should be read in
conjunction with the annual financial statements for the year ended 31 December
2013. In material respects, the same accounting policies have been applied as
in the 2013 annual consolidated financial statements. The amendments to and
interpretations of IFRS standards that entered into force on 1 January 2014 had
no material impact on this interim report.
2.2. Segment information
Affecto's reporting segments are based on geographical locations and are
Finland, Norway, Sweden, Denmark and Baltic.
Segment net sales and result
(1 000 EUR) 10-12/14 10-12/13 2014 2013
-------------------------------------
-------------------------------------
Total net sales
Finland 13 849 14 889 50 564 53 175
Norway 6 481 7 319 25 028 29 554
Sweden 4 833 6 173 19 985 23 152
Denmark 2 850 4 140 12 038 15 363
Baltic 5 669 4 530 19 032 16 018
Other -857 -856 -3 954 -4 366
Group total 32 823 36 195 122 693 132 896
----------------------------------------------------------------------
Operational segment result
Finland 1 706 1 935 5 441 6 863
Norway 935 477 1 966 2 718
Sweden 347 74 304 -229
Denmark 143 633 865 1 884
Baltic 1 320 -200 2 944 193
Other -512 -185 -1 511 -1 177
----------------------------------------------------------------------
----------------------------------------------------------------------
Total operational segment result 3 940 2 734 10 009 10 251
IFRS3 amortisation -216 -442 -1 753 -1 989
Impairment of goodwill -7 423 - -7 423 -
----------------------------------------------------------------------
----------------------------------------------------------------------
Operating profit -3 699 2 292 833 8 262
Financial income and expenses -61 -163 -563 -289
----------------------------------------------------------------------
----------------------------------------------------------------------
Profit before income tax -3 760 2 129 270 7 973
The impairment of goodwill is allocated to assets of Sweden segment.
Net sales by business lines
(1 000 EUR) 10-12/14 10-12/13 2014 2013
-------------------------------------
-------------------------------------
Information Management Solutions 30 645 33 528 114 008 123 608
Karttakeskus GIS business 3 002 3 470 11 868 12 239
Other -824 -804 -3 183 -2 950
----------------------------------------------------------------------
----------------------------------------------------------------------
Group total 32 823 36 195 122 693 132 896
2.3. Changes in intangible and tangible assets
(1 000 EUR) 1-12/2014 1-12/2013
---------------------
---------------------
Carrying amount at the beginning of period 76 185 80 460
Additions 740 1 566
Disposals -1 -1
Depreciation and amortization for the period -2 971 - 3 219
Impairments -7 423 -
Exchange rate differences -1 957 -2 621
Carrying amount at the end of period 64 573 76 185
------------------------------------------------------------------
An impairment of 7 423 thousand euro has been recognized on assets allocated to
Sweden cash-generating unit for the financial year 2014. The impairment is
fully recognized on goodwill.
2.4. Share capital, reserve of invested non-restricted equity and treasury
shares
(1 000 EUR) Number of Share Reserve of Treasury
shares capital invested shares
outstanding non-restricted
equity
------------------------------------------------------
------------------------------------------------------
1.1.2013 20 641 641 5 105 46 643 -2 202
Exercise of share options 384 076 - 729 -
Payment for share options - - 52 -
Treasury shares of 13 875 - 25 37
compensation to the
Board of Directors
Directed share issue 391 460 - - -
31.12.2013 21 431 052 5 105 47 448 -2 165
1.1.2014 21 431 052 5 105 47 448 -2 165
Exercise of share options 132 141 - 260 -
Payment for share options - - 2 -
Treasury shares of 20 333 - 8 54
compensation to the
Board of Directors
31.12.2014 21 583 526 5 105 47 718 -2 111
Affecto Management Oy has been merged into Affecto Plc on 31 December 2014. Due
to the merger 823 000 shares in Affecto Plc owned by Affecto Management Oy have
transferred into Affecto Plc's direct ownership. Before merger Affecto Plc
owned 44 219 treasury shares. In total these 867 219 shares correspond to 3.9%
of the total amount of the shares. The amount of registered shares was 22 450
745 shares.
2.5. Interest-bearing liabilities
(1 000 EUR) 31.12.2014 31.12.2013
Interest-bearing non-current liabilities
Loans from financial institutions, 18 452 22 420
non-current portion
Loans from financial institutions, 4 000 4 000
current portion
----------------------------------------------------------------
----------------------------------------------------------------
22 452 26 420
Affecto's loan facility agreement includes financial covenants, breach of which
might lead to an increase in cost of debt or cancellation of the facility
agreement. The covenants are based on total net debt to earnings before
interest, taxes, depreciation and amortization and total net debt to total
equity. The covenants will be measured quarterly, and these terms and
conditions of covenants were met at the end of the reporting period.
2.6. Contingencies and commitments
The future aggregate minimum lease payments under non-cancelable operating
leases:
(1 000 EUR) 31.12.2014 31.12.2013
Not later than one (1) year 3 333 3 675
Later than one (1) year, 3 421 3 719
but not later than five (5) years
Later than five (5) years - -
Total 6 755 7 394
---------------------------------------------------------
Guarantees given:
(1 000 EUR) 31.12.2014 31.12.2013
Liabilities secured by a mortgage
Financial loans 22 500 26 500
The above-mentioned liabilities are secured by bearer bonds with a nominal
value of 52.5 million euro. The bonds are held by Nordea Pankki Suomi Oyj and
secured by a mortgage on company assets of the group companies. In addition,
the shares in Affecto Finland Oy and Affecto Norway AS have been pledged to
secure the financial liabilities above.
Other securities given on own behalf:
(1 000 EUR) 31.12.2014 31.12.2013
Pledges 33 36
Other guarantees 2 118 2 836
Other guarantees are mostly securities issued for customer projects. These
guarantees include both bank guarantees secured by parent company of the group
and guarantees issued by the parent company and subsidiaries.
2.7. Related party transactions
Key management compensation and remunerations to the board of directors:
(1 000 EUR) 1-12/2014 1-12/2013
Salaries and other short-term employee benefits 2 312 2 017
Post-employment benefits 283 288
Termination benefits 80 85
Share-based payments 3 6
---------------------------------------------------------------------
---------------------------------------------------------------------
Total 2 678 2 395
Purchases from related party:
(1 000 EUR) 1-12/20 1-12/20
14 13
Purchases from the entity that are controlled by key 3 5
management personnel of the group
3. Key figures
10-12/14 10-12/13 2014 2013
-------------------------------------
-------------------------------------
Net sales, 1 000 eur 32 823 36 195 122 693 132 896
EBITDA, 1 000 eur 4 237 3 028 11 227 11 481
Operational segment result, 3 940 2 734 10 009 10 251
1 000 eur
Operating result, 1 000 eur -3 699 2 292 833 8 262
Result before taxes, 1 000 eur -3 760 2 129 270 7 973
Profit attributable to the owners -4 708 1 433 -1 591 5 493
of the parent company, 1 000 eur
EBITDA, % 12.9 % 8.4 % 9.2 % 8.6 %
Operational segment result, % 12.0 % 7.6 % 8.2 % 7.7 %
Operating result, % -11.3 % 6.3 % 0.7 % 6.2 %
Result before taxes, % -11.5 % 5.9 % 0.2 % 6.0 %
Net income for equity holders -14.3 % 4.0 % -1.3 % 4.1 %
of the parent company, %
Equity ratio, % 54.6 % 53.0 % 54.6 % 53.0 %
Net gearing, % 1.8 % 7.4 % 1.8 % 7.4 %
Interest-bearing net debt, 1 071 4 950 1 071 4 950
1 000 eur
Gross investment in non-current 129 210 740 1 566
assets (excl. acquisitions),
1 000 eur
Gross investments, % of net sales 0.4 % 0.6 % 0.6 % 1.2 %
Order backlog, 1 000 eur 49 645 48 682 49 645 48 682
Average number of employees 1 022 1 087 1 041 1 081
Earnings per share, eur -0.22 0.07 -0.07 0.26
Earnings per share (diluted), -0.22 0.07 -0.07 0.26
eur
Equity per share, eur 2.80 3.14 2.80 3.14
Average number of shares, 21 584 21 212 21 519 20 906
1 000 shares
Number of shares at the end of 21 584 21 431 21 584 21 431
period, 1 000 shares
Calculation of key figures
EBITDA = Earnings before interest, taxes,
depreciation, amortization and impairment losses
Operational segment result = Operating profit before amortizations on
fair value adjustments due to business
combinations (IFRS3) and goodwill
impairments
Equity ratio, % = Total equity *100
________________________________
Total assets - advance payments
Gearing, % = Interest-bearing liabilities - cash *100
and cash equivalents
__________________________________
Total equity
Interest-bearing net debt = Interest-bearing liabilities - cash and
cash equivalents
Earnings per share (EPS) = Profit attributable to owners of the parent
company
______________________________________
Weighted average number of ordinary shares in
issue during the period
Equity per share = Total equity
______________________________________
Adjusted number of shares at the end of
the period
Market capitalization = Number of shares at the end of period
(excluding company's own shares held by
the company) x share price at closing date
-----
Additional information:
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
CEO Juko Hakala, + 358 205 777 450
CFO Satu Kankare, +358 205 777 202
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