2016-04-29 08:00:02 CEST
2016-04-29 08:00:02 CEST
REGULATED INFORMATION
Digia Oyj - Interim report (Q1 and Q3)
NET SALES GROW BY MORE THAN 10 PER CENT IN BOTH BUSINESSES. OPERATING PROFIT IN THE DOMESTIC BUSINESS IMPROVED SIGNIFICANTLY AND QT REMAINED PROFITABLE IN SPITE OF DEMERGER EXPENSES.
HELSINKI, 2016-04-29 08:00 CEST (GLOBE NEWSWIRE) -- DIGIA PLC INTERIM REPORT 1
JANUARY - 31 MARCH 2016 29 APRIL 2016 AT 9:00
NET SALES GROW BY MORE THAN 10 PER CENT IN BOTH BUSINESSES. OPERATING PROFIT IN
THE DOMESTIC BUSINESS IMPROVED SIGNIFICANTLY AND QT REMAINED PROFITABLE IN
SPITE OF DEMERGER EXPENSES.
SUMMARY:
January - March 2016 (comparison figures for 2015 are in parenthesis)
- Net sales EUR 28.6 (25.7) million, up 11.4 per cent
- Net sales of continuing operations EUR 21.4 (19.4) million, up 10.5 per cent;
net sales of the Qt business EUR 7.1 (6.3) million, up 14.3 per cent
- Operating profit EUR 1.2 (0.7) million, operating margin 4.2 (2.7) per cent
- Operating profit of continuing operations EUR 0.9 (0.3) million, operating
margin 4.4 (1.3) per cent
- Operating profit of the Qt business EUR 0.3 (0.4) million, operating margin
3.5 (6.9) per cent
- Earnings per share EUR 0.04 (0.01)
In accordance with the proposal of the Board of Directors, Digia Plc’s Annual
General Meeting, held on 16 March 2016, approved the demerger plan signed by
the Board on 16 December 2015, and decided on the partial demerger of Digia
Plc.
As set out in the demerger plan, Digia Plc is being demerged such that all
assets, liabilities and responsibilities related to Digia’s Qt business are
transferred to a new company called Qt Group Plc. Digia Plc will continue the
operations of the domestic business.
The demerger will come into force once its implementation has been registered
in the Trade Register. The planned date of registration is 1 May 2016. Once the
demerger comes into effect, it has been agreed that Juha Varelius will assume
the position of President and CEO of Qt Group Plc. Timo Levoranta, M.Sc.
(Tech.), B.Sc. (Econ. & Bus.Adm.), born in 1965, has been appointed as the new
CEO of Digia Plc.
This interim report presents the financial development of both Digia's domestic
business (continuing operations) and the Qt business (discontinued operations).
In addition, Digia Plc will publish a separate stock exchange release today, 29
April 2016, to provide more detailed information on the financial development
of the Qt business.
The net sales of the Digia Group continued to grow vigorously during the first
quarter of 2016. The rate of growth exceeded 10 per cent in both businesses,
amounting to 10.5 per cent in the domestic business and 14.3 per cent in Qt. At
the Group level, growth was 11.4 per cent compared with the figures for the
corresponding period of the previous year.
As net sales grew, consolidated operating profit also improved substantially.
Operating profit in the domestic business almost trebled compared with 2015. In
the first months of the year, the expenses incurred by Qt due to the demerger
and setting up administrative functions required for Qt to operate
independently remained smaller than expected, thanks to which the Qt business
also remained profitable during the review period, even though its operating
profit did see a year-on-year decrease.
Digia expects that demand in the domestic business will remain reasonable and
its net sales will continue to grow in 2016. The company expects that in 2016
the operating margin of the domestic business will remain on a par with the
previous year, even though after the demerger the domestic business will be
burdened by fixed costs that were earlier partly allocated to the Qt business.
Digia estimates that Qt's net sales will see year-on-year growth of more than
10 per cent in 2016. An exceptional licensing deal made with Nokia Corporation
in 2012 in connection with the acquisition of the Qt business will no longer
generate net sales in 2016. In 2015, net sales of a total of about EUR 1.4
million were still recognised from this deal.
Digia's demerger and the resulting establishment of Qt as an independent public
listed company involve considerable expenses that will tax the profitability of
the Qt business in the future. Due to these expenses and growth investments,
the company estimates that Qt's operating profit will remain in the red in
2016.
KEY FIGURES FOR CONTINUING AND DISCONTINUED OPERATIONS
1-3/2016 1-3/2015 Change, % 2015
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Net sales 28,580 25,652 11.4% 107,880
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Operating profit 1,189 690 72.4% 7,641
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- % of net sales 4.2% 2.7% 7.1%
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Net profit 824 272 202.6% 5,228
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- % of net sales 2.9% 1.1% 4.8%
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Return on equity, % 8.1% 3.0% 13.5%
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Return on capital invested, % 9.3% 7.0% 15.6%
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Interest-bearing liabilities 13,613 16,468 -17.3% 13,513
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Cash and cash equivalents 6,421 4,529 41.8% 6,710
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Net gearing, % 17.9% 33.0% 16.6%
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Equity ratio, % 53.2% 51.0% 53.7%
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Earnings per share, EUR, undiluted 0.04 0.01 0.25
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Earnings per share, EUR, diluted 0.04 0.01 0.25
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KEY FIGURES FOR CONTINUING OPERATIONS
1-3/2016 1-3/2015 Change, % 2015
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Net sales 21,432 19,399 10.5% 80,946
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Operating profit 936 261 259.0% 5,854
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- % of net sales 4.4% 1.3% 7.2%
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Net profit 695 51 1,274.3% 4,246
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- % of net sales 3.2% 0.3% 5.2%
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Earnings per share, EUR, undiluted 0.03 0.00 0.20
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Earnings per share, EUR, diluted 0.03 0.00 0.20
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KEY FIGURES FOR DISCONTINUED OPERATIONS
1-3/2016 1-3/2015 Change, % 2015
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Net sales 7,148 6,253 14.3% 26,934
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Operating profit 253 429 -41.0% 1,786
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- % of net sales 3.5% 6.9% 6.6%
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Net profit 129 222 -41.8% 981
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- % of net sales 1.8% 3.5% 3.6%
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Earnings per share, EUR, undiluted 0.01 0.01 0.05
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Earnings per share, EUR, diluted 0.01 0.01 0.05
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MARKETS AND DIGIA'S BUSINESS OPERATIONS
DOMESTIC BUSINESS:
Demand remained good for integration and analytics services during the review
period. Digia's business outperformed general IT market growth, and
profitability was at a solid level. Development investments were targeted at
building new kinds of service packages enabled by digitisation and Digia's
extensive offering. These investments are expected to enhance competitiveness
in 2016. Further major investments were made in the development of product and
business models for site optimisation, which as expected weakened the segment's
overall profitability.
In ERP and MES, the company's ERP business based on Digia's own technologies
developed as planned and grew faster than the market. The ERP business based on
Microsoft technologies also saw growth, but delays in starting new projects
burdened earnings. Net sales growth in the Microsoft-based solution business
was negative due to the decline in the public sector project volume and
challenges related to resource availability.
The business segment based on financial-sector software solutions continued to
grow vigorously throughout the review period and its profitability remained
reasonable. The segment signed many new agreements. For instance, the number of
customers for official reporting services in Sweden continued to grow. On the
other hand, a significant long-term maintenance customer relationship in Sweden
ended during the review period.
The service business grew substantially during the review period and its
profitability was good. Demand for the company's services continued to develop
extremely favourably.
QT BUSINESS:
The Qt business continued to grow throughout the period, although growth slowed
down from the extremely strong figures recorded last year. Operations were
slightly in the black.
During the review period, the new Qt 5.6 version was launched. A new office was
opened in Japan during the period and sales resources were strengthened,
especially in Asia. Business development efforts were particularly focused on
the consumer electronics and automotive segments.
An ISO 9001:2008 certificate was granted to the Qt quality system during the
review period.
NET SALES
Consolidated net sales for the period totalled EUR 28.6 (25.7) million,
representing an increase of 11.4 per cent year-on-year.
Net sales in the domestic business during the review period amounted to EUR
21.4 (19.4) million, up 10.5 per cent. Qt's net sales in the review period were
EUR 7.1 (6.3) million, an increase of 14.3 per cent.
Consolidated net sales grew thanks to good demand for services and successful
sales in many of the Group's business areas. Unlike in 2015, changes in
exchange rates did not have a significant effect on the growth in net sales
from the Qt segment. The effect of exchange rate changes on Qt’s net sales
growth only amounted to EUR 0.05 million in total, whereas it was EUR 0.5
million in the corresponding period of 2015. Qt's net sales for the comparison
period include EUR 0.6 million in net sales based on an exceptional licensing
deal made with Nokia Corporation in 2012. The figure for the review period is
weaker as net sales were no longer recognised from this deal. Qt's comparable
net sales, excluding the Nokia licensing deal, saw year-on-year growth of 26.2
per cent during the review period.
During the reporting period, the product business accounted for EUR 12.9
million (1-3/2015: EUR 10.3 million), or 45.3 (40.1) per cent of consolidated
net sales.
International operations accounted for EUR 7.7 million (1-3/2015: EUR 6.4
million), or 27.0 (25.1) per cent of consolidated net sales.
PROFIT PERFORMANCE AND PROFITABILITY
Consolidated operating profit for the review period was EUR 1.2 (0.7) million.
Operating margin (EBIT%) stood at 4.2 (2.7) per cent. Comparable consolidated
operating profit for the review period was EUR 1.2 (1.1) million. Comparable
operating margin (EBIT%) stood at 4.2 (4.5) per cent.
Comparable operating profit for 2015 included a total of EUR 0.4 million in
restructuring expenses in the domestic business and operating profit for 2016
includes a total of EUR 0.2 million in expenses due to demerger-related fees
paid to external service providers, which are allocated to the Qt business.
In the domestic business, operating profit for the review period amounted to
EUR 0.9 (0.3) million and the operating margin (EBIT%) to 4.4 (1.4) per cent.
Comparable operating profit for the domestic business in the review period
amounted to EUR 0.9 (0.7) million, up 37.1 per cent, and the comparable
operating margin (EBIT%) to 4.4 (3.5) per cent.
Qt's operating profit was EUR 0.3 (0.4) million and the operating margin
(EBIT%) was 3.5 (6.9) per cent. Qt's comparable operating profit for the review
period amounted to EUR 0.5 (0.5) million and the comparable operating margin
(EBIT%) to 6.4 (7.4) per cent.
Consolidated operating profit for the review period grew thanks to the increase
in the domestic business's net sales and the improvement in its profitability.
Qt's operating profit declined as a result of expenses incurred due to the
demerger and setting up administrative functions required for the segment to
operate independently.
Consolidated earnings before tax for the period totalled EUR 1.0 (0.4) million,
and after tax EUR 0.8 (0.3) million.
Consolidated earnings per share for the review period were EUR 0.04 (1-3/2015:
0.01). Earnings per share for continuing operations in the period amounted to
EUR 0.03 (1-3/2015: 0.0) and for discontinued operations EUR 0.01 (1-3/2015:
0.01).
The Group's net financial expenses for the review period were EUR -0.1 (-0.3)
million.
FINANCIAL POSITION AND EXPENDITURE
At the end of the review period, the Digia Group's consolidated balance sheet
total stood at EUR 83.3 million (12/2015: EUR 84.3 million) and the equity
ratio stood at 53.2 (12/2015: 53.7) per cent. Net gearing was 17.9 per cent
(12/2015: 16.6) per cent. Cash and cash equivalents totalled EUR 6.4 million at
period end (12/2015: EUR 6.7 million).
Interest-bearing liabilities amounted to EUR 13.6 million (12/2015: EUR 13.5
million) at period end. These consisted of EUR 12.0 million in short-term loans
from financial institutions and EUR 1.6 million in financial leasing
liabilities.
On 14 April 2016, Digia Plc agreed on a new three-year financial loan
arrangement with Danske Bank Oyj that replaces Digia's current loan portfolio,
which totals EUR 12 million. The new financial arrangement totals EUR 17
million. The financial agreement includes customary covenant terms concerning
the company's solvency and debt-servicing ability.
Ilmarinen Mutual Pension Insurance Company granted Qt Group a loan of EUR 6.0
million on 29 February 2016. The loan must be drawn down within six months of
the signature of the agreement at the latest. It is a bilateral loan secured
with collateral. The collateral for the loan consists of a corporate mortgage
on Qt's mortgageable assets and the shares outstanding in the Qt subsidiary The
Qt Company Oy, which will be transferred into the direct ownership of Qt on the
day of the demerger. In addition to the terms presented above, the loan is
subject to other covenants and terms customary to financial agreements.
Cash flow from operating activities for the period was EUR 1.8 million positive
(1-3/2015: EUR 0.6 million positive). Cash flow from investments for the period
was negative by EUR 0.5 million (EUR 0.4 million negative). Cash flow from
finance for the period was negative by EUR 1.5 million (EUR 0.9 million
negative).
Investments in fixed assets during the period totalled EUR 0.5 (0.5) million.
Return on investment (ROI) for the period was 9.3 (7.0) per cent, and return on
equity (ROE) was 8.1 (3.0) per cent.
PERSONNEL, MANAGEMENT AND ADMINISTRATION
At the end of the period, the total number of Group personnel was 967,
representing an increase of 23 employees or 2.4 per cent since the end of the
2015 fiscal period (12/2015: 944). During the review period, the number of
employees averaged 962, an increase of 30 employees, or 3.2 per cent, on the
2015 average (2015: 932).
Employees by function at the end of the period:
Domestic business 75%
----------------------------------
Qt business 20%
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Administration and management 4%
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As of the end of the period, 152 (12/2015: 145) employees were working abroad.
The Digia Plc Annual General Meeting of 16 March 2016 re-elected Päivi
Hokkanen, Robert Ingman, Pertti Kyttälä and Seppo Ruotsalainen as members of
the Board. Martti Ala-Härkönen was elected as a new member. At the Board's
organisation meeting, 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.
KMPG Oy Ab, Authorised Public Accountants, has served as the auditor of the
Group since the 2015 Annual General Meeting, with Authorised Public Accountant
Virpi Halonen as the principal auditor.
RISKS AND UNCERTAINTIES
Digia's short-term risks and uncertainties are described in the 2015 financial
statements and have remained unchanged. In the company's view, there are no
significant indications that the general downward trend in the economy would
have impacted on the company's operations during the review period.
Risks and their management are also described on the company's website at
www.digia.com.
FUTURE PROSPECTS
In 2016, Digia will strongly invest in building better growth opportunities for
both businesses. Besides pursuing organic growth, Digia will actively seek
potential acquisitions to support its strategy and to accelerate domestic
business growth.
Digia believes that digitalisation, the growing popularity of multi-channel
services and the revolution in business models involve major business
opportunities. To fully tap into these opportunities, Digia will make
determined investments in personnel development and recruitment, and in
bolstering its offering. Overall, Digia expects to hire approximately 150 new
employees, most of them in the domestic business.
Digia expects that demand in the domestic business will remain reasonable and
its net sales will continue to grow in 2016. The company expects that in 2016
the operating margin of the domestic business will remain on a par with the
previous year, even though after the demerger the domestic business will be
burdened by fixed costs that were earlier partly allocated to the Qt business.
Considering the time of year and general market situation, demand for the Qt
business's services is at a moderate level, and the long-term business outlook
is promising. The company will continue to introduce changes to open source
code licensing in forthcoming versions of its Qt software. These changes are
aimed at promoting licence sales to commercial players.
Qt’s business development efforts will particularly focus on embedded systems
in the automotive sector, digital TV and industrial automation. Areas targeted
in product development include value-added features and tools required for
building embedded systems.
Sales growth associated with embedded systems will also reflect on the earnings
logic. Licence revenue from these sales accumulates over the long term, as
opposed to one-off licence payments. Consequently, Digia anticipates no major
impact from embedded systems sales growth on Qt's net sales in 2016.
Digia estimates that Qt's net sales will see year-on-year growth of more than
10 per cent in 2016. An exceptional licensing deal made with Nokia Corporation
in 2012 in connection with the acquisition of the Qt business will no longer
generate net sales in 2016. In 2015, net sales of a total of about EUR 1.4
million were still recognised from this deal.
Exchange rate fluctuations, particularly between the US dollar and euro, may
have a large impact on Qt's net sales development, but no such fluctuations are
currently foreseen. Another factor contributing to considerable fluctuation in
quarterly net sales and profitability in particular is contract turnaround
times which, in the major customer segment, are very long at up to 18 months.
Digia's demerger and the resulting establishment of Qt as an independent public
listed company involve considerable expenses that will tax the profitability of
the Qt business in the future. Due to these expenses and growth investments,
the company estimates that Qt's operating profit will remain in the red in
2016.
OTHER MAJOR EVENTS OF THE REVIEW PERIOD
Digia Plc's Annual General Meeting
Digia Plc's Annual General Meeting (AGM) was held on 16 March 2016. The AGM
adopted the financial statements for 2015, released the Board members and the
CEO from liability, determined the Board and auditor fees, decided to set the
number of Board members at five (5) and elected the company's Board of
Directors for a new term.
The AGM decided to amend Article 4 of the Articles of Association in such a way
that the current number of members of the Board of Directors, 5-8, was amended
to 4-8 members.
With regard to profit distribution for 2015, the AGM approved the Board's
proposal to pay a dividend of EUR 0.08 per share to all shareholders listed in
the shareholder register maintained by Euroclear Finland Ltd on the
reconciliation date of 18 March 2016. The dividend payment date was set at 29
March 2016.
The AGM granted the following authorisations to the Board:
Authorising 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 no 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
Helsinki Oy in accordance with the rules and instructions of NASDAQ 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 or
complete 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 2015 and is valid for 18 months, i.e. until 16
September 2017.
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 4,000,000 shares at a maximum. 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 decided by the Board. 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 2015 and is valid
for 18 months, i.e. until 16 September 2017.
Demerger of Digia Plc to form two separate listed companies
In accordance with the proposal of the Board of Directors, Digia Plc’s Annual
General Meeting, held on 16 March 2016, approved the demerger plan signed by
the Board on 16 December 2015, and decided on the partial demerger of Digia
Plc. As set out in the demerger plan, Digia Plc is being demerged such that all
assets, liabilities and responsibilities related to Digia’s Qt business are
transferred to a new company established in the demerger called Qt Group Plc.
Digia Plc will continue the operations of the domestic business. As a part of
the demerger, the Articles of Association of Qt Group Plc and the decrease in
Digia Plc's additional paid-in capital by its entire amount of EUR 7,899,485.80
were approved.
The Annual General Meeting determined Qt Group Plc’s Board and auditor fees,
decided to set the number of Board members at five (5) and elected the
company's Board of Directors and auditor.
Robert Ingman, Matti Rossi, Leena Saarinen, Tommi Uhari and Kai Öistämö were
elected as members of Qt Group Plc's Board of Directors. At the Board's
organisation meeting, Robert Ingman was elected Chairman of the Board and Tommi
Uhari was elected Vice Chairman.
The Annual General Meeting granted the following authorisations to the Board of
Directors of Qt Group Plc:
Authorising the Board of Directors to decide on buying back own shares and/or
accepting them as collateral
The AGM authorised the Board of Qt Group Plc to decide on the buyback and/or
acceptance as collateral of no more than 1,000,000 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 Helsinki Oy in accordance with the rules and instructions
of NASDAQ 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 or complete 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. The
authorisation is valid until 16 September 2017. Qt Group Plc's Board of
Directors may only make decisions on the basis of the authorisation after the
implementation of the demerger has been registered.
Authorising the Board of Directors to decide on a share issue and granting of
special rights
The AGM authorised the Board of Qt Group Plc 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 2,000,000 shares at a maximum. 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 decided by the Board. 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. The authorisation is valid until 16 September 2017. Qt Group
Plc's Board of Directors may only make decisions on the basis of the
authorisation after the implementation of the demerger has been registered.
On 3 March 2016, Digia Plc announced that it had published a demerger
prospectus that had been drafted on behalf of Qt Group Plc for implementing the
partial demerger of Digia and applying for the listing of Qt Group shares on
the official list of NASDAQ Helsinki Oy.
The demerger will come into force once its implementation has been registered
in the Trade Register. The planned date of registration is 1 May 2016. Once the
demerger comes into effect, it has been agreed that Juha Varelius will assume
the position of President and CEO of Qt Group Plc. Timo Levoranta, M.Sc.
(Tech.), B.Sc. (Econ. & Bus.Adm.), born in 1965, has been appointed as the new
CEO of Digia Plc.
SHARE CAPITAL AND SHARES
On 31 March 2016, the number of Digia Plc shares totalled 20,875,645.
According to Finnish Central Securities Depository Ltd, Digia had 4,237
shareholders on 31 March 2016.
The ten major shareholders were:
Shareholder Percentage of shares and votes
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Ingman Development Oy Ab 20.6%
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Ilmarinen Mutual Pension Insurance Company 14.6%
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Jyrki Hallikainen 7.4%
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Kari Karvinen 5.0%
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Varma Mutual Pension Insurance Company 4.6%
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Matti Savolainen 4.3%
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Aktia Capital investment fund 2.9%
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Investment Fund Säästöpankki Small Cap 1.4%
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Aktia Nordic Small Cap investment fund 1.3%
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Juha Varelius 1.1%
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Distribution of holdings by number of shares held on 31 Mar 2016
Number of shares Shareholders Percentage of shares and votes
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1 – 100 27.0% 0.4%
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101 – 1 000 55.3% 4.9%
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1 001 – 10 000 15.5% 8.8%
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10 001 – 100 000 1.6% 11.1%
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100 001 – 1 000 000 0.5% 27.2%
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1 000 001 – 4 000 000 0.1% 47.6%
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Shareholding by sector on 31 March 2016
Shareholders Shares
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Non-financial corporations 4.1% 27.5%
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Financial and insurance corporations 0.4% 10.0%
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General government 0.1% 19.2%
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Not-for-profit institutions serving households 0.2% 0.6%
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Households 94.6% 40.7%
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Foreign holding 0.6% 1.8%
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The weighted average number of shares during the reporting period, adjusted for
share issues, came to 20,741,144 in total. The number of outstanding shares at
the end of the review period was 20,741,144.
Digia Plc held a total of 57,372 treasury shares at the end of the review
period. The accounting counter value of these treasury shares is EUR 0.10 per
share. The company held about 0.6 per cent of the capital stock as of 31 March
2016. Digia has financed the acquisition of 121,000 treasury shares for
distribution through incentive schemes for key personnel. At the end of the
period, 77,129 of these shares remained undistributed and were under the
management of Evli Alexander Management Ltd.
REPORTED SHARE PERFORMANCE ON THE HELSINKI STOCK EXCHANGE
During the review period, Digia Plc shares were 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 5.36 and the highest was EUR
7.20. The share officially closed at EUR 6.52 on the last trading day. The
trade-weighted average was EUR 6.44. The Group's market capitalisation totalled
EUR 136,109,205 at the end of the period.
The company did not receive flagging notifications during the review period.
EVENTS AFTER THE REVIEW PERIOD
On 14 April 2016, Digia Plc agreed on a new three-year financial loan
arrangement with Danske Bank Oyj that replaces Digia's current loan portfolio,
which totals EUR 12 million. The new financial arrangement totals EUR 17
million. The financial agreement includes customary covenant terms concerning
the company's solvency and debt-servicing ability.
Helsinki, 29 April 2016
Digia Plc
Board of Directors
BRIEFING
Digia will hold a briefing on this interim report for analysts on Friday, 29
April 2016 at 11:00 am, in the Tapiola cabinet of Hotel Scandic Simonkenttä,
Simonkatu 9, 00100 Helsinki, Finland. Welcome.
FURTHER INFORMATION
Juha Varelius, CEO, tel. +358 (0)10 313 3000 (exchange)
The interim report and CEO's presentation will be available in the Investors
section at www.digia.com from 11 am on 29 April 2016.
DISTRIBUTION
NASDAQ Helsinki
Key media
www.digia.com
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 1-3/2016 1-3/2015 Change, 2015
%
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Continuing operations
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NET SALES 21,431.8 19,398.9 10.5% 80,946.3
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Other operating income 121.4 64.7 87.5% 427.7
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Materials and services -2,688.4 -2,041.0 31.7% -9,151.8
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Depreciation, amortisation and -472.9 -428.1 10.4% -1,607.1
impairment
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Other operating expenses -17,455.5 -16,733.6 4.3% -64,760.8
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Operating profit 936.4 260.9 259.0% 5,854.4
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Financial expenses (net) -58.1 -205.3 -71.7% -513.3
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Profit before taxes 878.2 55.5 1,481.2% 5,341.0
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Income taxes -183.5 -5.0 3,578.0% -1,094.7
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NET PROFIT 694.8 50.6 1,274.3% 4,246.4
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Other comprehensive income:
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Items which may be reclassified
subsequently to profit or loss:
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Exchange differences on translation -82.6 149.2 -26.9
of foreign operations
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TOTAL COMPREHENSIVE INCOME, 612.2 199.7 206.5% 4,219.5
continuing operations
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Distribution of net profit:
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Parent-company shareholders 694.8 50.6 1,274.3% 4,246.4
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Distribution of comprehensive income,
domestic business
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Parent-company shareholders 612.2 199.7 206.5% 4,219.5
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Discontinued operations
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Comprehensive income 173.6 211.7 -18.0% 1,099.2
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Parent-company shareholders 173.6 211.7 -18.0% 1,099.2
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Continuing and discontinued
operations, total
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Comprehensive income 785.8 411.5 91.0% 5,318.7
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Parent-company shareholders 785.8 411.5 91.0% 5,318.7
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Earnings per share, EUR, continuing 0.03 0.00 0.20
operations
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Earnings per share, EUR, discontinued 0.01 0.01 0.05
operations
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Earnings per share, EUR, continuing 0.04 0.01 0.25
and discontinued operations, total
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Earnings per share, diluted, EUR, 0.03 0.00 0.20
continuing operations
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Earnings per share, diluted, EUR, 0.01 0.01 0.05
discontinued operations
--------------------------------------------------------------------------------
Earnings per share, diluted, EUR, 0.04 0.01 0.25
continuing and discontinued
operations, total
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QT’S INCOME STATEMENT, EUR 1,000
EUR 1,000 1-3/2016 1-3/2015 Change 2015
, %
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NET SALES 7,148.2 6,252.8 14.3% 26,933.8
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Other operating income and expenses -6,895.2 -5,823.9 18.4% -25,343.0
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Profit before taxes 171.5 330.4 -48.1% 1,590.8
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Income taxes -42.4 -108.7 -61.0% -609.6
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NET PROFIT 129.1 221.7 -41.8% 981.2
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Other comprehensive income:
--------------------------------------------------------------------------------
Items which may be reclassified
subsequently to profit or loss:
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Exchange differences on translation of 44.5 -10.0 118.0
foreign operations
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TOTAL COMPREHENSIVE INCOME, discontinued 173.6 211.7 -18.0% 1,099.2
operations
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CONSOLIDATED BALANCE SHEET, EUR 1,000
Assets 31.3.2016 31.12.2015
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Non-current assets
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Goodwill 44,549.7 44,549.7
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Other intangible assets 6,217.8 6,485.7
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Tangible assets 2,005.5 1,859.1
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Investments 627.0 627.0
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Long-term receivables 28.9 29.7
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Deferred tax assets 380.7 293.3
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Total non-current assets 53,809.6 53,844.4
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Current assets
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Current receivables 23,106.0 23,741.1
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Available-for-sale financial assets 330.4 330.6
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Cash and cash equivalents 6,090.2 6,379.2
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Total current assets 29,526.6 30,450.9
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Total assets 83,336.2 84,295.3
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Shareholders’ equity and liabilities 31.3.2016 31.12.2015
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Share capital 2,087.6 2,087.6
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Issue premium fund 7,899.5 7,899.5
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Other reserves 5,203.8 5,203.8
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Unrestricted shareholders’ equity reserve 31,370.3 31,370.3
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Translation difference 454.0 492.1
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Retained earnings -7,638.3 -11,393.6
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Net profit 823.9 5,227.6
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Equity attributable to parent-company shareholders 40,200.8 40,887.2
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Total shareholders’ equity 40,200.8 40,887.2
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Liabilities
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Long-term interest-bearing liabilities 679.0 8,195.9
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Received long-term advances 825.1 874.6
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Deferred tax liabilities 244.0 253.9
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Total long-term liabilities 1,848.3 9,324.4
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Short-term interest-bearing liabilities 11,595.6 5,316.8
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Other short-term liabilities 28,453.1 28,766.8
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Total short-term liabilities 41,287.1 34,083.7
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Total liabilities 43,135.5 43,408.1
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Shareholders’ equity and liabilities 83,336.2 84,295.3
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The comparison period figures presented in the balance sheet include Qt
business-related assets and liabilities that will be transferred to the Qt
Group in the demerger on 1 May 2016.
CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000
1.1.2016-31.3.2016 1.1.2015-31.3.2015
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Cash flow from operations:
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Net profit 824 272
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Adjustments to net profit 976 445
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Change in working capital 424 -265
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Interest paid -45 -78
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Interest income 0 0
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Taxes paid -182 -62
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Discontinued operations -193 274
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Cash flow from operations 1,804 586
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Net cash flow from operations:
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Purchases of tangible and intangible -466 -413
assets
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Discontinued operations -23 -18
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Net cash flow from investments -489 -431
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Cash flow from financing:
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Proceeds from share issue 0 0
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Payments of finance lease liabilities -75 0
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Repayments of current loans 0 0
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Repayments of non-current loans 0 0
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Withdrawals of current loans 0 0
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Withdrawals of non-current loans 0 0
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Dividends paid and other profit -1,440 -888
distribution
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Discontinued operations -26 -45
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Cash flow from financing -1,541 -933
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Change in cash and cash equivalents -225 -778
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Cash and cash equivalents at beginning 6,710 5,132
of period
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Net foreign exchange difference -64 175
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Change in cash and cash equivalents -225 -778
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Cash and cash equivalents at end of 6,421 4,529
period
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Cash and cash equivalents, continuing 3,150 1,286
operations
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Cash and cash equivalents, discontinued 3,271 3,243
operations
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CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY, EUR 1,000
a b c d e f g h
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SHAREHOLDERS’ EQUITY 2,088 0 7,899 31,370 5,204 401 -10,243 36,719
1.1.2015
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Net profit 5,228 5,228
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Other comprehensive income 91 91
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Repayment of capital -1,039 -1,039
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Share-based payments -111 -111
recognised against equity
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SHAREHOLDERS’ EQUITY 2,088 0 7,899 31,370 5,204 492 -6,166 40,887
31.12.2015
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a b c d e f g h
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SHAREHOLDERS’ EQUITY 2,088 0 7,899 31,370 5,204 492 -6,166 40,887
1.1.2016
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Net profit 824 824
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Other comprehensive income -38 -38
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Repayment of capital -1,659 -1,659
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Share-based payments 59 59
recognised against equity
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Other items 128 128
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SHAREHOLDERS’ EQUITY 2,088 0 7,899 31,370 5,204 454 -6,814 40,201
31.3.2016
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a = Share capital
b = Rights issue
c = Issue premium fund
d = Unrestricted shareholders’ equity reserve
e = Other reserves
f = Translation difference
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. The report has not been audited.
The same accounting principles have been applied as in the 2015 financial
statements. The amendments to and interpretations of IFRS standards effective
as of 1 January 2016 had no material effect on this interim report.
Due to the demerger approved by the Annual General Meeting, the Qt business is
presented under discontinued operations.
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 during the reporting period totalled EUR 1,659,291.52.
Related-party transactions:
Digia Group's related parties include the CEO and the members of the Board of
Directors and Group Management, their related parties and their controlled
entities. There were no significant transactions between the Group and its
related parties during the review period.
Quarterly income statement for continuing and discontinued operations:
EUR 1,000 1-3/2016 10-12/201 7-9/2015 4-6/2015 1-3/2015
5
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Net sales 28,580.0 30,566.7 24,552.5 27,109.2 25,651.7
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Other operating income 163.5 628.9 771.4 424.8 423.1
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Materials and services -2,858.8 -3,484.4 -2,020.0 -2,358.3 -2,292.7
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Depreciation, -610.1 -614.3 -675.9 -655.6 -615.3
amortisation and
impairment
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Other operating expenses -24,085.3 -24,968.6 -20,112.8 -22,212.5 -22,477.0
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Operating profit 1,189.4 2,128.2 2,515.2 2,307.6 689.8
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Financial expenses (net) -139.6 -187.7 -40.7 -176.8 -303.8
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Profit before taxes 1,049.8 1,940.5 2,474.5 2,130.8 386.0
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Income taxes -225.9 -494.0 -623.7 -472.9 -113.7
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Net profit 823.9 1,446.6 1,850.9 1,657.8 272.3
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Distribution of net
profit:
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Parent-company 823.9 1,446.6 1,850.9 1,657.8 272.3
shareholders
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Earnings per share, EUR 0.04 0.07 0.09 0.08 0.01
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Earnings per share, 0.04 0.07 0.09 0.08 0.01
diluted, EUR
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Key figures for continuing and discontinued operations:
EUR 1,000 1-3/2016 1-3/2015
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Extent of business:
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Net sales 28,580 25,652
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- change from previous year 11.4% 7.1%
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Average capital invested 54,282 52,856
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Personnel 967 927
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Average number of personnel 932 930
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Profitability:
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Operating profit 1,189 690
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- % of net sales 4.2% 2.7%
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Earnings before tax 1,050 386
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- % of net sales 3.7% 1.5%
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Net profit 824 272
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- % of net sales 2.9% 1.1%
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Return on equity 8.1% 3.0%
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Return on investment 9.3% 7.0%
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Financing and financial standing:
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Interest-bearing liabilities 13,613 16,468
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Short-term investments & cash and bank receivables 6,421 4,529
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Net gearing 17.9% 33.0%
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Equity ratio 53.2% 51.0%
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Cash flow from operations 1,804 761
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Earnings per share, EUR, undiluted 0.04 0.01
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Earnings per share, EUR, diluted 0.04 0.01
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Equity/share, EUR 1.93 1.73
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Lowest share trading price, EUR 5.36 2.74
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Highest share trading price, EUR 7.20 4.30
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Average share price, EUR 6.44 3.42
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Market capitalisation 136,109 88,513
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Formulae for key figures are presented in the 2015 financial statements. These
remained unchanged during the reporting period.
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