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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 1-9/2012Helsinki, 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 ---------------------------------------------------------------- ---------------------------------------------------------------- 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 -------------------------------------------------------------------------- -------------------------------------------------------------------------- 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 ----------------------------------------------------------------------------- ----------------------------------------------------------------------------- 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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