2012-10-30 11:30:00 CET
2012-10-30 11:30:14 CET
REGULATED INFORMATION
Affecto Oyj - Interim report (Q1 and Q3)
Affecto Plc's Interim Report 1-9/2012
Helsinki, 2012-10-30 11:30 CET (GLOBE NEWSWIRE) -- AFFECTO PLC -- INTERIM
REPORT -- 30 OCTOBER 2012 at 12.30
Affecto Plc's Interim Report 1-9/2012
Group key figures
MEUR 7-9/12 7-9/11 1-9/12 1-9/11 2011 Last 12m
Net sales 28.4 27.9 95.1 90.6 127.3 131.7
Operational segment result 1.7 2.6 7.5 6.9 10.2 10.8
% of net sales 6.1 9.2 7.9 7.6 8.0 8.2
Operating profit 1.2 2.1 5.9 5.4 8.2 8.8
% of net sales 4.2 7.4 6.2 5.9 6.4 6.7
Profit before taxes 1.3 1.7 5.8 4.4 7.1 8.4
Profit for the period 0.9 1.3 4.3 3.3 5.3 6.3
Equity ratio, % 51.7 46.2 51.7 46.2 46.1 -
Net gearing, % 29.7 42.3 29.7 42.3 27.1 -
Earnings per share, eur 0.04 0.06 0.21 0.16 0.26 0.31
Earnings per share (diluted), 0.04 0.06 0.20 0.16 0.25 0.30
eur
Equity per share, eur 3.10 2.75 3.10 2.75 2.91 -
CEO Pekka Eloholma comments:
Affecto's net sales grew by 2% in the third quarter to 28.4 MEUR (27.9 MEUR).
Strong growth was achieved in Baltic and Denmark, but net sales decreased in
the other countries. Slower decision-making pace by customers affected
especially Finland lowering net sales. Net sales of consultant work grew
somewhat, while 3rd party license sales remained significantly below last year.
Operating profit decreased to 1.2 MEUR (2.1 MEUR) and was 4% of the net sales.
Profit grew in Baltic and Denmark and profitability was good. Although profit
was good also in Finland, it decreased from last year. The loss in Sweden grew
and includes over 0.2 MEUR non-recurring items related to the change of the
country manager.
Customers' increased cautiousness has been visible after the summer especially
in Finland and investment decisions have taken more time. On the other hand,
customers' activity has increased in Norway and Denmark suggesting that the
business environment is improving there. There are also signs about increasing
activity in Finland after the review period. Affecto's order backlog grew to
46.5 MEUR, 3% above last year (45.2 MEUR). We believe that the last quarter
will be moderately good, although the predictability of the business is weaker
than normally.
In 2012 the main focus continues to be on profitability improvement.
Profitability (EBIT-%) is estimated to improve and net sales are estimated to
grow in 2012.
Additional information:
CEO Pekka Eloholma, +358 205 777 737
CFO Satu Kankare, +358 205 777 202
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
This release is unaudited. The amounts in this report have been rounded from
exact numbers.
INTERIM REPORT 1-9/2012
Affecto is the forerunner in the field of Enterprise Information Management in
the Northern Europe. Our solutions for information management and business
analytics help organisations to improve productivity and competitiveness with
superior use of information in decision making and execution. We also deliver
operational solutions for improving and simplifying processes at customer
organisations and offer geographic information services.
Affecto's head office is in Finland. The company has subsidiaries in Finland,
Sweden, Norway, Denmark, Estonia, Lithuania, Latvia, Poland and South Africa.
NET SALES
Affecto's net sales in 1-9/2012 were 95.1 MEUR (1-9/2011: 90.6 MEUR). Net sales
in Finland were 37.9 MEUR (35.4 MEUR), in Norway 19.2 MEUR (20.6 MEUR), in
Sweden 16.7 MEUR (14.8 MEUR), in Denmark 11.1 MEUR (10.2 MEUR) and 12.4 MEUR
(11.3 MEUR) in Baltic.
Net sales by reportable segments
Net sales, MEUR 7-9/12 7-9/11 1-9/12 1-9/11 2011 Last 12m
Finland 10.7 11.3 37.9 35.4 50.3 52.7
Norway 5.9 6.3 19.2 20.6 27.8 26.4
Sweden 4.3 4.9 16.7 14.8 21.5 23.4
Denmark 3.8 3.1 11.1 10.2 14.1 14.9
Baltic 4.6 2.9 12.4 11.3 16.2 17.2
Other -0.8 -0.6 -2.1 -1.8 -2.6 -2.9
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Group total 28.4 27.9 95.1 90.6 127.3 131.7
Net sales grew by 2% in the third quarter thanks to the good growth in Baltic
(56%) and Denmark (22%). Net sales decreased by 5% in Finland, by 7% in Norway
and by 11% in Sweden. The increased economic uncertainty has slowed customers'
investment decisions, which has contributed to the development. Sales of the
third-party licenses, sold with the solutions, decreased significantly compared
to last year which contributed negatively both to net sales and profit.
Net sales of Information Management Solutions business in 1-9/2012 were 87.4
MEUR (83.0 MEUR) and net sales of Geographic Information Services were 8.7 MEUR
(8.3 MEUR).
Order backlog grew to 46.5 MEUR, 3% above last year (45.2 MEUR). The order
backlog is estimated to contain a bit more long-term projects than earlier.
PROFIT
Affecto's operating profit in 1-9/2012 was 5.9 MEUR (5.4 MEUR) and the
operational segment result was 7.5 MEUR (6.9 MEUR). Operational segment result
was in Finland 5.2 MEUR (4.5 MEUR), in Norway 2.0 MEUR (2.2 MEUR), in Sweden
-1.3 MEUR (-1.5 MEUR), in Denmark 0.9 MEUR (0.9 MEUR) and in Baltic 1.5 MEUR
(1.6 MEUR).
Operating profit in the third quarter was 1.2 MEUR being 4% of net sales.
Profitability decreased by 3 percentage points. Profitability improved in
Baltic and Denmark, while Norway was flat and Sweden and Finland weakened. The
growth in net sales of consultant work was smaller than the increase in the
headcount and did not fully compensate for the growth in personnel costs. Also
the decrease in license sales affected the result negatively. The effects of
the vacation period are shown to a larger extent in Sweden than in other
countries and the loss in Sweden was also escalated by the over 0.2 MEUR costs
related to the change of the country manager in September.
Operational segment result by reportable segments
Operational segment 7-9/12 7-9/11 1-9/12 1-9/11 2011 Last 12m
result, MEUR
Finland 1.3 2.0 5.2 4.5 6.8 7.5
Norway 0.7 0.7 2.0 2.2 3.1 3.0
Sweden -1.0 -0.5 -1.3 -1.5 -2.1 -2.0
Denmark 0.4 0.2 0.9 0.9 1.6 1.5
Baltic 0.6 0.3 1.5 1.6 2.1 1.9
Other -0.2 -0.2 -0.8 -0.9 -1.3 -1.1
--------------------------------------------------------------------------
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Operational segment result 1.7 2.6 7.5 6.9 10.2 10.8
IFRS3 Amortization -0.5 -0.5 -1.5 -1.5 -2.0 -2.0
--------------------------------------------------------------------------
Operating profit 1.2 2.1 5.9 5.4 8.2 8.8
According to the IFRS3 requirements, operating profit includes 1.5 MEUR (1.5
MEUR) of amortization on intangible assets related to acquisitions. The IFRS3
amortization is estimated to be approx. 2.1 MEUR per year until 2014, as the
other intangible assets impacting in the IFRS3 amortization totaled 4.4 MEUR at
the end of the reporting period.
R&D costs totaled 0.1 MEUR (0.7 MEUR), i.e. 0.1% of net sales (0.7%). These
costs have been recognized as an expense in the income statement.
The fluctuation in financial costs is explained to a large extent by changes in
the fair value of the interest swap taken, which changes have no effect on
actual cash flow. The interest rate changes have caused 0.4 MEUR income in
1-9/2012 (0.3 MEUR).
Taxes corresponding to the profit of the period have been entered as tax
expense. Net profit for the period was 4.3 MEUR, while it was 3.3 MEUR last
year.
FINANCE AND INVESTMENTS
At the end of the reporting period Affecto's balance sheet totaled 133.5 MEUR
(12/2011: 145.1 MEUR). Equity ratio was 51.7% (12/2011: 46.1%) and net gearing
was 29.7% (12/2011: 27.1%).
The financial loans were 32.5 MEUR (12/2011: 34.5 MEUR) at the end of reporting
period. The company's cash and liquid assets were 13.3 MEUR (12/2011: 18.0
MEUR). The interest-bearing net debt was 19.1 MEUR (12/2011: 16.4 MEUR).
Cash flow from operating activities for the reported period was 0.5 MEUR (1.5
MEUR) and cash flow from investing activities was -0.8 MEUR (-1.7 MEUR).
Investments in tangible and intangible assets were 0.8 MEUR (1.0 MEUR).
The Annual General Meeting held in April decided to distribute a dividend of
2.4 MEUR (1.3 MEUR).
EMPLOYEES
The number of employees was 1102 persons at the end of the reporting period
(1035). 417 employees were based in Finland, 130 in Norway, 145 in Sweden, 74
in Denmark and 336 in the Baltic countries. The average number of employees
during the period was 1087 (998).
Rene Lykkeskov was appointed as the country manager for Sweden in September.
REVIEW OF MARKET DEVELOPMENTS
The growth in uncertainty about the general economic development has affected
Affecto's business negatively, especially after the summer. During 2012
customers' decision-making pace has been slower than normal, which has
decreased Affecto's growth. That was clearly visible in the third quarter. The
sales of third-party licenses have decreased clearly, which may be caused by
customers preferring to invest in further development of existing solutions
instead of investing in totally new solutions.
In general, there has been no significant negative change in the market
situation regarding our core markets. Enterprise Information Management (EIM)
solutions are seen as tools for improving operational efficiency, so
investments in them are expected to continue. The demand for EIM solutions,
including Business Intelligence (BI) and Enterprise Content Management (ECM),
is estimated to continue growing more rapidly than the general IT services. The
analyst forecasts for the average annual global growth of BI and analytics
software license markets are approx. 8% in the next few years. The Nordic EIM
services markets are estimated to grow annually by 6-8% on average. However,
based on the year so far, Affecto believes that the market growth in 2012 will
remain below the average. The scope of EIM solutions continues to evolve, and
the new offerings like Master Data Management (MDM), Data Quality and
Collaborative Decision Making will increase their role in the solution
offering.
BUSINESS REVIEW BY AREAS
The group's business is managed through five country units. Finland, Norway,
Sweden, Denmark and Baltic are also the reportable segments.
In 7-9/2012 the net sales in Finland were 10.7 MEUR (11.3 MEUR). Operational
segment result was 1.3 MEUR (2.0 MEUR). Net sales decreased by 5%, and net
sales of consultancy work equaled last year, while net sales of licenses
decreased clearly. Profitability was at a good level, 12%, but decreased from
last year's record level. Customers' cautiousness in decision making was
clearly visible during the third quarter, but the business climate and
customers' activity seem to have somewhat improved at the end of the period.
Net sales of Karttakeskus GIS business, reported as part of Finland, grew
slightly in 7-9/2012 to 2.6 MEUR (2.6 MEUR) and its profitability was good.
In 7-9/2012 the net sales in Norway were 5.9 MEUR (6.3 MEUR) and operational
segment result was 0.7 MEUR (0.7 MEUR). Net sales decreased by 7%, but
profitability remained at last year's level at 12%. Customers' cautiousness was
clearly visible during the quarter, but the customers' activity seems to have
somewhat improved by the end of the period. Order backlog is at a good level,
although it contains more long-term projects than earlier.
In 7-9/2012 the net sales in Sweden were 4.3 MEUR (4.9 MEUR) and operational
segment result -1.0 MEUR (-0.5 MEUR). The net sales and profit development were
disappointments. License sales decreased significantly and sales in general
performed weakly compared to last year. The negative effects of the vacation
period are more visible in Sweden than in the other countries due to the
smaller volume of the maintenance business. The country manager for Sweden was
changed in September, which caused over 0.2 MEUR non-recurring costs.
In 7-9/2012 the net sales in Denmark were 3.8 MEUR (3.1 MEUR) and operational
segment result was 0.4 MEUR (0.2 MEUR). Net sales grew by 22% and profitability
improved. Market climate seems to have improved and the customers' activity has
improved somewhat.
In 7-9/2012 the net sales in Baltic (Lithuania, Latvia, Estonia, Poland, South
Africa) were 4.6 MEUR (2.9 MEUR). Operational segment result was 0.6 MEUR (0.3
MEUR). Net sales grew by 56% thanks to improved business conditions, which seem
to be more normal and optimistic than in the Nordic countries. Profitability
continued to improve along with the net sales.
ANNUAL GENERAL MEETING AND GOVERNANCE
The Annual General Meeting of Affecto Plc, held on 19 April 2012, adopted the
financial statements for 1.1.-31.12.2011 and discharged the members of the
Board of Directors and the CEO from liability. Approximately 36 percent of
Affecto's shares and votes were represented at the Meeting. The Annual General
Meeting decided on a dividend distribution of EUR 0.11 per share for the year
2011.
Aaro Cantell, Heikki Lehmusto, Jukka Ruuska, Haakon Skaarer, Tuija Soanjärvi
and Lars Wahlström were re-elected as members of the Board of Directors. The
organization meeting of the Board of Directors was held immediately after the
Annual General Meeting and Aaro Cantell was re-elected Chairman of the Board
and Jukka Ruuska as Vice-Chairman. KPMG Oy Ab was elected as the auditor of the
company.
The Meeting approved the Board's proposal for appointing a Nomination Committee
to prepare proposals concerning members of the Board of Directors and their
remunerations for the following Annual General Meeting. The Nomination
Committee will consist of the representatives of the three largest shareholders
and the Chairman of the Board of Directors, acting as an expert member, if
he/she is not appointed representative of a shareholder. The members
representing the shareholders will be appointed by the three shareholders whose
share of ownership of the shares of the company is largest on 31 October
preceding the Annual General Meeting.
According to the Articles of Association, the General Meeting of Shareholders
annually elects the Board of Directors by a majority decision. The term of
office of the board members expires at the end of the next Annual General
Meeting of Shareholders following their election. The Board appoints the CEO.
The Articles of Association do not contain any special rules for changing the
Articles of Association or for issuing new shares.
THE AUTHORIZATIONS GIVEN TO THE BOARD OF DIRECTORS
The Board has not used the authorizations given by the Annual General Meeting
in 2011, which authorizations expired on 19 April 2012.
The complete contents of the new authorizations given by the Annual General
Meeting held on 19 April 2012 have been published in the stock exchange release
regarding the Meetings' decisions.
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 company has acquired 100 000 own shares by
30 September 2012.
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. The authorisation has
not been used in the review period.
SHARES AND TRADING
During the review period a total of 14 600 new shares were subscribed with
2008B options. New shares were registered in the trade register on 7 May, 28
June and 28 September 2012.
The company has only one share series and all shares have similar rights. As at
30 September 2012 Affecto Plc's share capital consisted of 21 531 068 shares
including the 823 000 shares owned by Affecto Management Oy. The company owned
100 000 treasury shares as of 30 September 2012.
During 1-9/2012, the highest share price was 3.00 euro, the lowest price 2.39
euro, the average price 2.72 euro and the closing price 2.95 euro. The trading
volume was 4.0 million shares, corresponding to 25% (annualized) 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 including the shares owned by Affecto Management Oy but
excluding the treasury shares.
2008B options have been listed on Nasdaq OMX Helsinki since 2 April 2012.
SHAREHOLDERS
The company had a total of 2183 owners on 30 September 2012 and the foreign
ownership was 14%. 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. 14.8%
(14.6% shares and 0.2% options).
According to the flagging announcement made on 16 January 2012, the ownership
of Evli Group has exceeded 5%. The ownership will later decrease below 5% when
a forward contract made by Evli matures.
According to the flagging announcement made on 25 April 2012, the ownership of
funds managed by Danske Invest Fund Management Ltd. has exceeded 5%.
ASSESSMENT OF RISKS AND UNCERTAINTIES
The changes in the general economic conditions and the operating environment of
customers have direct impact in Affecto's markets. The Euro crisis 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 order backlog has traditionally been only for a few months, which
decreases the reliability of longer-term forecasts. Affecto sells third party
software licenses as part of its solutions. Typically the license sales have
most impact on the last month of each quarter and especially in the fourth
quarter. This increases the fluctuation in net sales between quarters and
increases the difficulty of accurately forecasting the quarters. Affecto had
license sales of approx. 11 MEUR in 2011.
Affecto's balance sheet includes a material amount of goodwill. Goodwill has
been allocated to cash generating units. Cash generating units, to which
goodwill has been allocated, are tested for impairment both annually and
whenever there is an indication that the unit may be impaired. Potential
impairment losses may have material effect on reported profit and value of
assets. The greatest uncertainty is related to Sweden.
Approximately a half of Affecto's business is in Sweden, Norway and Denmark,
thus the development of the currencies of these countries (SEK, NOK and DKK)
may have impact on Affecto's profitability. The main part of the companies'
income and costs are within the same currency, which decreases the risks.
Affecto's success depends also on good customer relationships. Affecto has a
well-diversified customer base. Although none of the customers is critically
large for the whole group, there are large customers in various countries who
are significant for local business in the country.
Affecto's bank loan has covenants, the breach of which may lead to higher
financing costs or even the termination of the loan. The covenants are based on
total net debt to earnings before interest, taxes, depreciation and
amortization and total net debt to total equity.
Affecto's continued success is very much dependent on its management team and
personnel. The loss of the services of any member of its senior management or
other key employee could have a negative impact on Affecto's business and the
ability of the company to implement its strategy. In addition, Affecto's
success depends on its ability to hire, develop, train, motivate and retain
skilled professionals on its staff.
FUTURE OUTLOOK
In 2012 the main focus continues to be on profitability improvement.
Profitability (EBIT-%) is estimated to improve and net sales are estimated to
grow in 2012.
The company does not provide exact guidance for net sales or EBIT development,
as single projects and timing of license sales may have large impact on
quarterly sales and profit.
Affecto Plc
Board of Directors
It is possible to order Affecto's stock exchange releases to be delivered
automatically by e-mail. Please visit the Investors section of the company
website: www.affecto.com
A briefing for analysts and media will be arranged at 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) 7-9/2012 7-9/2011 1-9/201 1-9/2011 2011
2
-----------------------------------------------
-----------------------------------------------
Net sales 28 420 27 897 95 098 90 627 127 270
Other operating income 7 4 25 90 97
Changes in inventories of -25 -27 -26 13 -72
finished
goods and work in progress
Materials and services -5 866 -5 713 -18 075 -18 486 -26 777
Personnel expenses -16 604 -15 334 -56 025 -51 771 -72 003
Other operating expenses -3 889 -3 929 -12 552 -12 566 -16 907
Other depreciation and -320 -342 -969 -1 037 -1 405
amortisation
IFRS3 amortisation -525 -500 -1 546 -1 519 -2 020
Operating profit 1 198 2 056 5 932 5 351 8 182
Net financial expenses 88 -331 -176 -916 -1 096
Profit before income tax 1 287 1 725 5 756 4 435 7 087
Income tax -435 -429 -1 431 -1 135 -1 762
Profit for the period 851 1 295 4 325 3 300 5 324
Profit for the period
attributable to:
Owners of the parent company 862 1 312 4 292 3 306 5 328
Non-controlling interest -10 -17 33 -5 -3
Earnings per share
(EUR per share):
Basic 0.04 0.06 0.21 0.16 0.26
Diluted 0.04 0.06 0.20 0.16 0.25
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
(1 000 EUR) 7-9/2012 7-9/2011 1-9/201 1-9/2011 2011
2
-----------------------------------------------
-----------------------------------------------
Profit for the period 851 1 295 4 325 3 300 5 324
Other comprehensive income:
Translation difference 1 176 -411 2 046 -923 252
Total Comprehensive income 2 027 885 6 371 2 377 5 576
for the period
Total Comprehensive income
attributable to:
Owners of the parent company 2 038 901 6 338 2 383 5 579
Non-controlling interest -10 -17 33 -5 -3
CONSOLIDATED BALANCE SHEET
(1 000 EUR) 9/2012 9/2011 12/2011
--------------------------
--------------------------
Non-current assets
Property, plant and equipment 1 880 2 014 2 051
Goodwill 74 957 72 066 73 102
Other intangible assets 4 648 6 321 5 974
Deferred tax assets 1 708 1 604 1 562
Trade and other receivables 11 17 17
83 204 82 022 82 706
Current assets
Inventories 404 496 402
Trade and other receivables 35 842 36 314 43 373
Current income tax receivables 742 1 168 665
Cash and cash equivalents 13 307 13 778 17 964
50 295 51 756 62 405
-------------------------------------------------------------
-------------------------------------------------------------
Total assets 133 499 133 777 145 111
Equity attributable to owners
of the parent Company
Share capital 5 105 5 105 5 105
Reserve of invested non-restricted 46 619 46 591 46 591
equity
Other reserves 673 560 593
Treasury shares -2 262 -1 996 -1 996
Translation differences 1 269 -1 951 -777
Retained earnings 12 521 8 620 10 642
-------------------------------------------------------------
-------------------------------------------------------------
63 925 56 929 60 159
Non-controlling interest 320 374 376
Total equity 64 245 57 304 60 535
Non-current liabilities
Borrowings 28 379 32 347 30 355
Derivative financial instruments - 529 -
Deferred tax liabilities 1 180 1 886 1 550
29 559 34 763 31 905
Current liabilities
Borrowings 4 000 5 699 4 000
Derivative financial instruments 92 - 475
Trade and other payables 32 479 33 165 45 380
Current income tax liabilities 2 395 1 989 1 994
Provisions 728 858 822
39 694 41 711 52 670
Total liabilities 69 253 76 474 84 576
-------------------------------------------------------------
-------------------------------------------------------------
Equity and liabilities 133 499 133 777 145 111
SUMMARY CONSOLIDATED CASH FLOW STATEMENT
(1 000 EUR) 1-9/2012 1-9/2011 2011
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Cash flows from operating activities
Profit for the period 4 325 3 300 5 324
Adjustments to profit for the period 4 314 4 634 6 461
8 639 7 934 11 786
Change in working capital -5 656 -4 092 985
Interest and other financial cost paid -874 -1 215 -1 579
Interest and other financial income received 114 130 202
Income taxes paid -1 674 -1 233 -1 685
-----------------------------------------------------------------------------
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Net cash from operating activities 549 1 524 9 709
Cash flows from investing activities
Payment of liabilities, Affecto Estonia - -740 -740
Acquisition of tangible and intangible assets -833 -981 -1 416
Proceeds from sale of tangible and 14 46 42
intangible assets
-----------------------------------------------------------------------------
Net cash used in investing activities -820 -1 675 -2 114
Cash flows from financing activities
Proceeds from non-current borrowings - 36 339 36 339
Repayments of non-current borrowings -2 000 -36 500 -38 500
Purchase of treasury shares -266 - -
Proceeds from share options exercised 27 - -
Acquisition of non-controlling interest -134 - -
Dividends paid to the owners -2 367 -1 291 -1 291
of the parent company
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Net cash from financing activities -4 740 -1 452 -3 452
(Decrease)/increase in cash and cash equivalents -5 011 -1 604 4 144
Cash and cash equivalents 17 964 13 818 13 818
at the beginning of the period
Foreign exchange effect on cash 354 -135 3
Cash and cash equivalents 13 307 12 079 17 964
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 Other Treasu Trans Ret. Non-co Total
capita of reserv ry lat. earnin ntroll equity
l invested es shares diff. gs ing
non-restr intere
icted st
equity
Equity at 1 5 105 46 591 593 -1 996 -777 10 642 376 60 535
January 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit 4 292 33 4 325
Translation 2 046 2 046
differences
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 2 046 4 292 33 6 371
compre-hensi
ve income
Share-based 80 80
payments
Exercise of 27 27
share
options
Purchase of -266 -266
treasury
shares
Acquisition -51 -89 -140
of
non-controll
ing interest
without
changing
control
Other 6 6
movements
Dividends -2 367 -2 367
paid
--------------------------------------------------------------------------------
Equity at 30 5 105 46 619 673 -2 262 1 269 12 521 320 64 245
September
2012
Equity attributable to owners of the parent
company
------------------------------------------------------
------------------------------------------------------
(1 000 Share Reserve of Other Treasu Trans Ret. Non-cont Total
EUR) capita invested reserv ry lat. earnin rolling equity
l non-restrict es shares diff. gs interest
ed equity
Equity 5 105 46 591 417 -1 996 -1 028 6 605 380 56 074
at 1
January
2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit 3 306 -5 3 300
Translat -923 -923
ion
differe
nces
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total -923 3 306 -5 2 377
compre-
hensive
income
Share-ba 143 143
sed
payment
s
Dividend -1 291 -1 291
s paid
--------------------------------------------------------------------------------
Equity 5 105 46 591 560 -1 996 -1 951 8 620 374 57 304
at 30
Septemb
er 2011
2. Notes
2.1. Basis of preparation
This condensed interim financial information has been prepared in accordance
with IAS 34, Interim Financial Reporting. The condensed interim financial
report should be read in conjunction with the annual financial statements for
the year ended 31 December 2011. In material respects, the same accounting
policies have been applied as in the 2011 annual consolidated financial
statements. The amendments to and interpretations of IFRS standards that
entered into force on 1 January 2012 had no impact on this interim report.
The non-controlling interest has been presented separately after net profit for
the period and in total equity.
2.2. Segment information
Affecto's reporting segments are based on geographical locations and are
Finland, Norway, Sweden, Denmark and Baltic.
Segment net sales and result
(1 000 EUR) 7-9/201 7-9/201 1-9/201 1-9/20 2011 Last
2 1 2 11 12m
----------------------------------------------------
----------------------------------------------------
Total net sales
Finland 10 709 11 312 37 890 35 436 50 277 52 730
Norway 5 904 6 317 19 158 20 575 27 841 26 424
Sweden 4 318 4 878 16 661 14 820 21 513 23 354
Denmark 3 752 3 072 11 091 10 231 14 072 14 932
Baltic 4 579 2 944 12 396 11 342 16 167 17 221
Other -841 -626 -2 098 -1 778 -2 600 -2 921
--------------------------------------------------------------------------------
Group total 28 420 27 897 95 098 90 627 127 270 131 741
Operational segment result
Finland 1 253 1 980 5 215 4 550 6 804 7 469
Norway 689 743 2 006 2 153 3 109 2 962
Sweden -982 -488 -1 280 -1 464 -2 141 -1 957
Denmark 354 249 878 934 1 593 1 537
Baltic 608 295 1 460 1 646 2 100 1 915
Other -198 -222 -803 -950 -1 263 -1 116
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total operational segment 1 723 2 556 7 478 6 870 10 202 10 810
result
IFRS amortisation -525 -500 -1 546 -1 519 -2 020 -2 047
--------------------------------------------------------------------------------
Operating profit 1 198 2 056 5 932 5 351 8 182 8 763
Net sales by business lines
(1 000 EUR) 7-9/201 7-9/201 1-9/201 1-9/20 2011 Last
2 1 2 11 12m
----------------------------------------------------
----------------------------------------------------
Information Management 26 178 25 565 87 381 83 030 116 812 121 164
Solutions
Geographic Information 2 619 2 560 8 725 8 309 11 533 11 949
Services
Other -377 -228 -1 007 -711 -1 076 -1 371
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Group total 28 420 27 897 95 098 90 627 127 270 131 741
2.3. Changes in intangible and tangible assets
(1 000 EUR) 1-9/2012 1-9/2011 1-12/2011
------------------------------
------------------------------
Carrying amount at the beginning of period 81 127 82 873 82 873
Additions 833 981 1 416
Disposals -4 -9 -7
Depreciation and amortization for the period - 2 515 -2 555 - 3 424
Exchange rate differences 2 042 -890 269
---------------------------------------------------------------------------
Carrying amount at the end of period 81 485 80 401 81 127
2.4. Share capital, share premium, reserve of invested non-restricted equity
and treasury shares
(1 000 EUR) Number of shares Share Reserve of invested Treasury
outstanding capital non-restricted equity shares
---------------------------------------------------------------
---------------------------------------------------------------
1.1.2011 20 693 468 5 105 46 591 -1 996
30.9.2011 20 693 468 5 105 46 591 -1 996
1.1.2012 20 693 468 5 105 46 591 -1 996
Exercise of 14 600 - 27 -
share options
Purchase of -100 000 - - -266
treasury shares
30.9.2012 20 608 068 5 105 46 619 -2 262
At the end of reporting period Affecto Plc owned 100 000 treasury shares. In
addition to that Affecto Management Oy, included in consolidated accounts,
owned 823 000 shares in Affecto Plc. The amount of registered shares was 21 531
068 shares.
2.5. Interest-bearing liabilities
(1 000 EUR) 30.9.2012 31.12.2011
Interest-bearing non-current liabilities
Loans from financial institutions, 28 379 30 355
non-current portion
Loans from financial institutions, 4 000 4 000
current portion
---------------------------------------------------------------
---------------------------------------------------------------
32 379 34 355
Affecto's loan facility agreement includes financial covenants, breach of which
might lead to an increase in cost of debt or cancellation of the facility
agreement. The covenants are based on total net debt to earnings before
interest, taxes, depreciation and amortization and total net debt to total
equity. The covenants will be measured quarterly, and these terms and
conditions of covenants were met at the end of the reporting period.
2.6. Contingencies and commitments
The future aggregate minimum lease payments under non-cancelable operating
leases:
(1 000 EUR) 30.9.2012 31.12.2011
Not later than one (1) year 3 607 4 046
Later than one (1) year, 6 020 7 526
but not later than five (5) years
Later than five (5) years 151 614
--------------------------------------------------------
Total 9 778 12 186
Guarantees given:
(1 000 EUR) 30.9.2012 31.12.2011
Liabilities secured by a mortgage
Financial loans 32 500 34 500
The above-mentioned liabilities are secured by bearer bonds with a nominal
value of 52.5 million euro. The bonds are held by Nordea Pankki Suomi Oyj and
secured by a mortgage on company assets of the group companies. In addition,
the shares in Affecto Finland Oy and Affecto Norway AS have been pledged to
secure the financial liabilities above.
Other securities given on own behalf:
(1 000 EUR) 30.9.2012 31.12.2011
Pledges 43 30
Other guarantees 2 293 2 073
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. Derivative contracts
(1 000 EUR) 30.9.2012 31.12.2011
Interest rate swaps:
Nominal value 20 250 20 250
Fair value -92 -475
2.8. Related party transactions
Key management compensation and remunerations to the board of directors:
(1 000 EUR) 1-9/2012 1-9/2011 1-12/2011
Salaries and other short-term employee benefits 1 587 1 737 2 203
Post-employment benefits 238 296 384
Termination benefits 245 - -
Share-based payments 10 24 30
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Total 2 080 2 057 2 616
Loans to related party:
(1 000 EUR) 9/2012 9/2011 12/2011
Loans to key management of the group 1 612 1 613 1 625
3. Key figures
7-9/20 7-9/20 1-9/20 1-9/20 2011 Last
12 11 12 11 12m
-----------------------------------------------
-----------------------------------------------
Net sales, 1 000 eur 28 420 27 897 95 098 90 627 127 131
270 741
EBITDA, 1 000 eur 2 044 2 898 8 446 7 907 11 608 12 147
Operational segment result, 1 723 2 556 7 478 6 870 10 202 10 810
1 000 eur
Operating result, 1 000 eur 1 198 2 056 5 932 5 351 8 182 8 763
Result before taxes, 1 000 eur 1 287 1 725 5 756 4 435 7 087 8 408
Profit attributable to the 862 1 312 4 292 3 306 5 328 6 314
owners of the parent company, 1
000 eur
EBITDA, % 7.2 % 10.4 % 8.9 % 8.7 % 9.1 % 9.2 %
Operational segment result, % 6.1 % 9.2 % 7.9 % 7.6 % 8.0 % 8.2 %
Operating result, % 4.2 % 7.4 % 6.2 % 5.9 % 6.4 % 6.7 %
Result before taxes, % 4.5 % 6.2 % 6.1 % 4.9 % 5.6 % 6.4 %
Net income for equity holders 3.0 % 4.7 % 4.5 % 3.6 % 4.2 % 4.8 %
of the parent company, %
Equity ratio, % 51.7 % 46.2 % 51.7 % 46.2 % 46.1 %
Net gearing, % 29.7 % 42.3 % 29.7 % 42.3 % 27.1 %
Interest-bearing net debt, 19 073 24 268 19 073 24 268 16 391
1 000 eur
Gross investment in non-current 185 268 833 981 1 416
assets (excl. acquisitions),
1 000 eur
Gross investments, % of net 0.7 % 1.0 % 0.9 % 1.1 % 1.1 %
sales
Research and development costs, 29 113 89 651 717
1 000 eur
R&D costs, % of net sales 0.1 % 0.4 % 0.1 % 0.7 % 0.6 %
Order backlog, 1 000 eur 46 523 45 225 46 523 45 225 57 110
Average number of employees 1 098 1 019 1 087 998 1 011
Earnings per share, eur 0.04 0.06 0.21 0.16 0.26 0.31
Earnings per share (diluted), 0.04 0.06 0.20 0.16 0.25 0.30
eur
Equity per share, eur 3.10 2.75 3.10 2.75 2.91
Average number of shares, 20 604 20 693 20 651 20 693 20 693 20 662
1 000 shares
Number of shares at the end of 20 608 20 693 20 608 20 693 20 693 20 608
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:
CEO Pekka Eloholma, +358 205 777 737
CFO Satu Kankare, +358 205 777 202
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
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