2014-08-08 08:00:03 CEST
2014-08-08 08:00:10 CEST
REGULATED INFORMATION
Digia Oyj - Interim report (Q1 and Q3)
DIGIA'S SECOND QUARTER 2014: NET SALES AND OPERATING PROFIT FELL, OPERATING PROFIT FROM DOMESTIC OPERATIONS SHOWED MARKED IMPROVEMENT.
Helsinki, 2014-08-08 08:00 CEST (GLOBE NEWSWIRE) -- DIGIA PLC INTERIM REPORT 8
August 2014, 09:00 am
DIGIA'S SECOND QUARTER 2014: NET SALES AND OPERATING PROFIT FELL, OPERATING
PROFIT FROM DOMESTIC OPERATIONS SHOWED MARKED IMPROVEMENT.
SUMMARY:
January-June
- Consolidated net sales: EUR 48.5 (51.5) million, down 6.0 per cent
- Operating profit EUR 1.1 (1.5) million
- Profitability (EBIT%)2.4 (2.8) per cent
- Product business accounted for 41.0 (42.6) per cent
- Earnings per share: EUR 0.03 (0.02)
April-June
- Consolidated net sales: EUR 24.5 (28.0) million, down 12.5 per cent
- Operating profit EUR 1.4 (1.9) million
- Profitability (EBIT%) 5.8 (6.9) per cent
- Product business accounted for 41.4 (46.9) per cent
- Earnings per share: EUR 0.05 (0.04)
Consolidated net sales and operating profit fell from the previous year's
comparison figures. Net sales decreased in both segments. The decrease can be
primarily attributed to exceptional net sales items included in previous year's
comparison figures, which did not exist in the reporting period.
In addition, last year's comparison figures for domestic business included a
one-off EUR 2.4 million low-margin maintenance deal for a third-party software
product. Excluding the impact of this deal, net sales from domestic business in
the second quarter were at the previous year's level.
In the Qt business, the net sales recorded in the reporting period generated by
the five-year deal worth EUR 3.0 million signed in Q2 last year were EUR 1.1
million lower than in the corresponding period a year earlier. Excluding the
impact of this exceptional deal, Qt net sales grew by 10.0 per cent, even
though prolonged negotiations on a number of major new deals have held back
growth.
In domestic business, operating profit rose significantly both in the reporting
period and in the second quarter. Meanwhile, Qt business recorded a loss as
expected, and as a result the company's net sales fell from previous year's
comparison figures. However, losses from the Qt business shrank towards the end
of the review period.
Overall, Digia expects demand to remain good in all domestic business areas and
the net sales from operations and profitability to remain at least at a
reasonable level. The general market uncertainty may, however, reflect on the
company's order book and bid volume development.
Digia expects the Qt business to generate more net sales in 2014 than in the
previous year. Investments made to secure this growth will continue to burden
profitability development.
Overall, Digia expects its net sales to slightly fall short of the previous
year's level. Investments in Qt business growth are expected to stall the
company's overall profitability development.
GROUP KEY FIGURES AND RATIOS
4-6/20 4-6/20 Change, 1-6/20 1-6/20 Change,
14 13 % 14 13 %
--------------------------------------------------------------------------------
Net sales 24,497 28,011 -12.5% 48,455 51,523 -6.0%
--------------------------------------------------------------------------------
Operating profit before 1,425 1,931 -26.2% 1,144 1,458 -21.5%
extraordinary items
--------------------------------------------------------------------------------
- % of net sales 5.8% 6.9% 2.4% 2.8%
--------------------------------------------------------------------------------
Operating profit 1,425 1,931 -26.2% 1,144 1,458 -21.5%
--------------------------------------------------------------------------------
- % of net sales 5.8% 6.9% 2.4% 2.8%
--------------------------------------------------------------------------------
Net profit 1,029 1,347 -23.6% 698 875 -20.2%
--------------------------------------------------------------------------------
- % of net sales 4.2% 4.8% 1.4% 1.7%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Return on equity,% 12.1% 16.0% 4.0% 2.9%
--------------------------------------------------------------------------------
Return on capital invested, % 12.3% 14.7% 5.2% 5.8%
--------------------------------------------------------------------------------
Interest-bearing liabilities 17,759 19,383 -8.4% 17,759 19,383 -8.4%
--------------------------------------------------------------------------------
Cash and cash equivalents 4,202 6,948 -39.5% 4,202 6,948 -39.5%
--------------------------------------------------------------------------------
Net gearing 39.2% 30.3% 39.2% 30.3%
--------------------------------------------------------------------------------
Equity ratio, % 48.8% 49.9% 48.8% 49.9%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR, 0.05 0.04 0.03 0.02
undiluted
--------------------------------------------------------------------------------
Earnings per share, EUR, 0.05 0.04 0.03 0.02
diluted
--------------------------------------------------------------------------------
MARKETS AND DIGIA'S BUSINESS OPERATIONS
DOMESTIC SEGMENT
The general economic conditions are making companies increasingly cautious;
this continues to translate into prolonged decision-making and growing cost
pressure in the competitive bidding procedures.
The Integration, Analytics and Site Optimization business showed positive
overall development during the reporting period, with performance improving
notably towards the period end.
Similarly, demand for ERP systems was healthy, although there were significant
differences in demand between sectors. Despite long sales cycles, the order
book and bid volumes remained healthy.
Market uncertainty was most clearly reflected in the business for tailored
solutions and services, where the customers' cost pressure is eroding business
profitability significantly. Despite a slight improvement towards the end of
the reporting period, profitability remained weak. Demand for services has
remained relatively good, but with marked differences between sectors.
QT SEGMENT
Qt business failed to reach its net sales targets for the reporting period,
with development being particularly disappointing in the second quarter. Key
factors contributing to poor net sales performance included prolonged
negotiations concerning major deals.
The Qt business recorded a loss for the reporting period. This could be
attributed to weaker-than-expected net sales development and to the company's
determined and strong investments in business development to enable future
growth.
The Qt user ecosystem has seen powerful growth, with version 5.2 having been
downloaded more than one million times since its launch in December 2013. The
new version Qt 5.3 launched in May 2014 contains significant improvements to
mobile offering, and a new version for creating embedded systems. During the
first two months the new Qt version has been downloaded with record-breaking
pace over 500 000 times. Feedback from users has been extremely positive.
During the period, Digia continued to implement the previously reported Qt
product development plans. The Qt online store offering and the retail network
in Taiwan were expanded. Steps were also taken to reorganise sales to major
customers and European sales. Special attention has been paid to sales
development, with several projects designed to generate net sales growth
currently in progress.
NET SALES
Digia's consolidated net sales for the reporting period totalled EUR 48.5
(51.5) million, down 6.0 per cent on the same period in 2013.
Net sales from the domestic segment decreased by 6.7 per cent to EUR 38.8
(41.7) million. Net sales from the Qt segment amounted to EUR 9.6 (9.9)
million, showing a decrease of 2.6 per cent.
In the domestic business, the net sales decline could be primarily attributed
to the fact that last year's comparison figures included a one-off EUR 2.4
million low-margin maintenance deal for a third-party software product.
Excluding the impact of this deal, net sales from domestic business in the
second quarter were at the previous year's level. Furthermore, local business
operations in Russia were discontinued in 2013 and therefore generated no net
sales during the reporting period. In domestic business, investments aimed at
future net sales growth were made which have a negative impact on net sales
performance in the reporting period.
Similarly, the net sales decline in the Qt business could be attributed to an
exceptional net sales item included in last year's comparison figures. Net
sales recorded in the review period generated by a five-year deal worth EUR 3.0
million signed in Q2 last year were EUR 1.1 million lower than in the
corresponding period a year earlier. Excluding the impact of this exceptional
deal, net sales from Qt business grew by 10.0 per cent, even though prolonged
negotiations on a number of major new deals have held back growth.
During the reporting period, the product business accounted for EUR 19.8
million (1-6/2013: EUR 21.9 million), or 41.0(42.6) per cent of consolidated
net sales.
International operations accounted for EUR 9.5 million (1-6/2013: EUR 10.8
million), or 19.5 (20.9) per cent of consolidated net sales during the
reporting period.
Digia's consolidated net sales for the second quarter were EUR 24.5 (28.0)
million, down 12.5 per cent on the same period a year earlier.
In the second quarter, net sales from the domestic segment decreased by 11.0
per cent to EUR 19.7 (22.1) million, while net sales from the Qt business
decreased by 18.3 per cent to EUR 4.8 (5.9) million.
In the second quarter, product business accounted for EUR 10.1 (13.1) million
or 41.4 (46.9) per cent of consolidated net sales.
International operations accounted for EUR 4.7 (6.4) million, or 19.2 (22.8)
per cent of consolidated net sales in the second quarter.
PROFIT PERFORMANCE AND PROFITABILITY
Digia's consolidated operating profit for the reporting period was EUR 1.1
(1.5) million, down 21.5 per cent from the same period a year earlier.
Profitability (EBIT %) was 2.4 (2.8) per cent.
Digia's consolidated operating profit for the second quarter was EUR 1.4 (1.9)
million, down 26.2 per cent on the same period a year earlier. Profitability
(EBIT %) was 5.8 (6.9) per cent.
Operating profit from domestic operations for the reporting period totalled EUR
2.4 (1.6) million, up 48.6 per cent, and the segment's profitability (EBIT%)
was 5.8 (3.9) per cent. Operating profit from domestic operations in the second
quarter amounted to EUR 1.8 (1.2) million, up 50.2 per cent, and the
profitability (EBIT%) was 9.0 (5.3) per cent.
Operating profit in the Qt business fell by 653.7 per cent to EUR -1.3 (-0.2)
million, while profitability (EBIT %) was -12.9 (-1.7) per cent. Operating
profit in the Qt business fell by 146.2 per cent to EUR -0.3 (0.8) million in
the second quarter, while profitability (EBIT %) was -7.2 (12.7) per cent.
In domestic business, operating profit saw positive development towards the end
of the period, and almost reached the healthy target level aimed for in the
second quarter.
In the Qt business, investments made to boost business growth reduced
profitability, as expected. Profitability was also adversely affected by the
weak net sales performance in the reporting period. Losses did, however, shrink
towards the end of the period.
Consolidated earnings before taxes for the period totalled EUR 0.9 (1.2)
million, and net profit was EUR 0.7 (0.9) million. Consolidated earnings before
taxes for the second quarter amounted to EUR 1.4 (1.9) million, and net profit
after taxes totalled EUR 1.0 (1.3) million.
Earnings per share in the reporting period were EUR 0.03 (1-6/2013: EUR 0.02),
while earnings per share for the second quarter were EUR 0.05 (Q2/2013: EUR
0.04).
The Group's net financial expenses for the reporting period were EUR 0.2 (0.3)
million and for the second quarter EUR 0.1 (0.0) million.
FINANCIAL POSITION AND EXPENDITURE
At the end of the reporting period, the Digia Group's consolidated balance
sheet total stood at EUR 80.7 million (12/2013: EUR 83.3 million) and the
equity ratio was 48.8 (12/2013: 49.9) per cent. Net gearing was 39.2 per cent
(12/2013: 28.9 cent). Cash and cash equivalents at the end of the period
totalled EUR 4.2 (12/2013: 6.5) million.
Interest-bearing liabilities amounted to EUR 17.8 (12/2013: 16.9) million at
the period end. These consisted of EUR 16.5 million in loans from financial
institutions and EUR 1.3 million in financial leasing liabilities.
Consolidated net cash flow from operating activities for the period was
negative by EUR 1.3 million (1-6/2013: positive by EUR 0.9 million). Cash flow
from investments for the period was negative by EUR 0.7 (0.1) million. Cash
flow from finance for the period was negative by EUR 0.2 (2.1) million, with a
EUR 1.5 million positive net impact of loans on cash flow. Repayments of bank
loans totalled EUR 1.5 million, and short-term loan withdrawals amounted to EUR
3.0 million.
The Group's investments in fixed assets during the period totalled EUR 0.7
(0.0) million.
Return on investment (ROI) for the period was 5.2 (5.8) per cent, and return on
equity (ROE) was 4.0 (2.9) per cent.
The Group carries out quarterly impairment testing of goodwill and intangible
assets with an indefinite useful life. The table below shows the distribution
of goodwill and values subject to testing at the end of the reporting period:
EUR 1,000 Specified Amortisations Goodwi Other Total value
intangible during the ll items subject to
assets reporting period testing
--------------------------------------------------------------------------------
Digia, 1,069 245 37,987 5,763 44,819
domestic
business
--------------------------------------------------------------------------------
EUR 1,000 Specified Amortisations during Goodwi Other Total value
intangible the reporting period ll items subject to
assets testing
--------------------------------------------------------------------------------
Digia, Qt 6,475 368 6,562 2,012 15,050
business
--------------------------------------------------------------------------------
EUR 1,000 Specified Amortisations during Goodwi Other Total value
intangible the reporting period ll items subject to
assets testing
--------------------------------------------------------------------------------
Digia 7,544 613 44,550 7,776 59,869
Group,
total
--------------------------------------------------------------------------------
Present values for domestic operations were calculated for the five-year
forecast period based on the following assumptions: Net sales and operating
profit for the first two quarters of the forecast period according to the
confirmed figures for the latest two quarters, and for the following two
quarters according to budget; after this, annual growth in net sales of 3.0 per
cent and in operating profit of 8.0 per cent, and a pre-tax discount rate of
8.9 per cent. Cash flows following the forecast period were extrapolated using
the same assumptions as for the forecast period.
According to a sensitivity analysis, the goodwill related to domestic
operations requires either net sales to remain at the current level with
profitability of 4.6 per cent, or a 3.0 per cent growth in net sales with
profitability of 2.6 per cent. The management sees no risk of goodwill
impairment associated with domestic operations.
Present values for the Qt business were calculated for the five-year forecast
period based on the following assumptions: Net sales and operating profit for
the first two quarters of the forecast period according to the confirmed
figures for the latest two quarters, and for the following two quarters
according to budget; after this, annual growth in net sales of 6.5 per cent and
in operating profit of 5.3 per cent, and a pre-tax discount rate of 8.9 per
cent. Post-forecast-period cash flows were extrapolated using the same
assumptions as for the forecast period.
According to a completed sensitivity analysis, the goodwill of the Qt business
requires either net sales to remain at the current level with profitability of
4.7 per cent, or a 5.0 per cent growth in net sales with profitability of 1.3
per cent. The management sees no risk of goodwill impairment associated with Qt
operations.
PERSONNEL, MANAGEMENT AND ADMINISTRATION
At the end of the period, the total number of Group personnel was 937,
representing a decrease of one employee or -0.1 per cent since the end of
fiscal 2013 (938). The average number of personnel during the reporting period
was 936, which was 3 persons or 0.3 per cent less than the average for fiscal
2013 (939).
Employees by function at the end of the period:
Domestic operations 75%
----------------------------------
Qt operations 20%
----------------------------------
Administration and management 5 %
----------------------------------
As of the end of the period, 151 (12/2013: 170) employees were working abroad.
The Digia Plc Annual General Meeting of 11 March 2014 re-elected Päivi
Hokkanen, Robert Ingman, Kari Karvinen, Pertti Kyttälä, Seppo Ruotsalainen,
Leena Saarinen and Tommi Uhari as members of the Board. At the organisation
meeting of the Board, Pertti Kyttälä was elected Chairman of the Board and
Robert Ingman was elected Vice Chairman.
Juha Varelius has been Digia Plc's President and CEO since 1 January 2008.
Ernst & Young Oy, Authorised Public Accountants, are the Group's auditors, with
Authorised Public Accountant Heikki Ilkka as the principal auditor.
Tommi Laitinen, who was previously in charge of the Qt business, decided to
step down in the end of the review period. Digia's CEO Juha Varelius is
temporarily in charge of the Qt business in addition his other duties. Digia
has iniatiated the recruitment campaign to hire a new director for Qt business.
RISKS AND UNCERTAINTIES
The company's short-term business risks and uncertainties were described in the
2013 Financial Statements. These are unchanged.
Risks and their management are described on the company's website at
www.digia.com.
FUTURE PROSPECTS
The company expects the IT market in Finland to remain at roughly the previous
year's level in 2014.
The objective for the company's domestic operations is to raise profitability
to a good level, and to achieve organic growth at least equivalent to general
market development. Besides organic growth, the company actively pursues
opportunities to make carefully considered business acquisitions that support
its strategy.
Efforts will continue to develop the company's customer understanding and sales
and service portfolio, to ensure that it can offer increasingly competitive
services and solutions for boosting its customers' business efficiency.
Measures aimed at further improving the company's operational efficiency will
also continue.
Overall, Digia expects demand to remain good in all domestic business areas and
the net sales and profitability to remain at least at a reasonable level. The
general market uncertainty may, however, reflect on the company's order book
and bid volume development.
In the Qt business, operational focus is on sales development and on creating
better growth opportunities. Besides making growth-targeted investments, Digia
is also keeping a close eye on business profitability. The objective is to
ensure that income from the Qt business covers any operating expenses.
The Qt order book is satisfactory, considering the time of year and general
market situation, and the company expects to see continued growth in demand in
the large customer segment. However, contract turnaround times in these markets
are very long, typically around 6-18 months, which can cause significant
fluctuation in quarterly net sales and, particularly, profitability.
Digia will continue to invest significantly in Qt business and sales
development. Business development efforts will focus on embedded systems in
automotive, digital TV and DTV receivers. Areas targeted in product development
include value-added features and tools required for building embedded systems.
Digia expects the Qt business to generate more net sales in 2014 than in the
previous year. Investments made to secure this growth will continue to tax
Digia's profitability performance.
Overall, Digia expects its net sales to slightly fall short of the previous
year's level. Investments in Qt business growth are expected to stall the
company's overall profitability development.
OTHER EVENTS DURING THE REVIEW PERIOD
Digia Plc's Annual General Meeting (AGM) was held on 11 March 2014. The AGM
adopted the financial statements for 2013, released the Board members and the
CEO from liability, determined Board emoluments, resolved to keep the number of
Board members at seven (7), and elected the company's Board of Directors for a
new term.
With regard to profit distribution for 2013, the AGM approved the Board's
proposal to make a repayment of capital of EUR 0.10 per share to all
shareholders listed on the shareholder list maintained by Euroclear Finland Ltd
on the reconciliation date of 14 March 2014. The date for the repayment of
capital was set at 21 March 2014.
The AGM granted the following authorisations to the Board:
Authorisation of the Board of Directors to decide on buying back own shares
and/or accepting them as collateral
The AGM authorised the Board to decide on the buyback and/or acceptance as
collateral of not more than 2,000,000 shares in the company. This buyback can
only be executed by means of the company's unrestricted equity. The Board shall
decide on how these shares are to be bought. Own shares may be bought back in
disproportion to the holdings of the shareholders. The authorisation also
includes acquisition of shares through public trading organised by NASDAQ OMX
Helsinki Oy in accordance with the rules and instructions of NASDAQ OMX
Helsinki and Euroclear Finland Ltd, or through offers made to shareholders.
Shares may be acquired in order to improve the company's capital structure, to
fund acquisitions or other business transactions, for offering share-based
incentive schemes, to sell on, or to be annulled. The shares must be acquired
at the market price in public trading. This authorisation supersedes that
granted by the AGM of 12 March 2013 and is valid for 18 months, i.e. until 11
September 2015.
Authorising the Board of Directors to decide on a share issue and granting of
special rights
The AGM authorised the Board to decide on an ordinary or bonus issue of shares
and the granting of special rights (as defined in Section 1, Chapter 10 of the
Limited Liability Companies Act) in one or more instalments, as follows: The
issue may total, at a maximum, 4,000,000 shares. The authorisation applies both
to new shares and to treasury shares held by the company. By virtue of the
authorisation, the Board has the right to decide on share issues and the
granting of special rights, in deviation from the pre-emptive subscription
rights of the shareholders (a directed issue). The authorisation may be used to
fund or complete acquisitions or other business transactions, for offering
share-based incentive schemes, to develop the company's capital structure, or
for other purposes. The Board was authorised to decide on all terms related to
the share issue or special rights, including the subscription price, its
payment in cash or (partly or wholly) in capital contributed in kind or its
being written off against the subscriber's receivables, and its recognition in
the company's balance sheet. This authorisation supersedes that granted by the
AGM of 12 March 2013 and is valid for 18 months, i.e. until 11 September 2015.
In a meeting held on 17 June 2014, Digia Plc's Board of Directors has
authorized the company's management to further streamline the company's
organizational structure between Digia's domestic business and the
international Qt business. This will be carried out by setting up a new company
entity for Qt under the parent company Digia Plc.
SHARE CAPITAL AND SHARES
On 30 June 2014, the number of Digia Plc shares totalled 20,875,645.
At the end of the period, according to Finnish Central Securities Depository
Ltd, Digia had 4,772 shareholders.
The 10 biggest shareholders were:
Shareholder Shares and votes
--------------------------------------------------------------
Ingman Group Oy Ab 20.1%
--------------------------------------------------------------
Ilmarinen Mutual Pension Insurance Company 12.2%
--------------------------------------------------------------
Jyrki Hallikainen 10.2%
--------------------------------------------------------------
Kari Karvinen 6.0%
--------------------------------------------------------------
Matti Savolainen 5.8%
--------------------------------------------------------------
Varma Mutual Pension Insurance Company 4.6%
--------------------------------------------------------------
Evli Finnish Small Cap investment fund 1.5%
--------------------------------------------------------------
Nordea Finnish Small Cap investment fund 1.4%
--------------------------------------------------------------
Nordea Bank Finland Plc (nominee-registered) 1.3%
--------------------------------------------------------------
Etola 1.0%
--------------------------------------------------------------
Distribution of holdings by number of shares held on 30 June 2014
Number of shares Shareholders Shares and votes
-----------------------------------------------------
1 - 100 23.3% 0.4%
-----------------------------------------------------
101 - 1,000 58.7% 6.1%
-----------------------------------------------------
1,001 - 10,000 16.2% 9.9%
-----------------------------------------------------
10,001 - 100,000 1.2% 9.0%
-----------------------------------------------------
100,001 - 1,000,000 0.4% 20.2%
-----------------------------------------------------
1,000,001 - 4,000,000 0.1% 54.4%
-----------------------------------------------------
Shareholding by sector on 30 June 2014
Shareholders Shares
--------------------------------------------------------------------
Non-financial corporations 4.3% 24.9%
--------------------------------------------------------------------
Financial and insurance corporations 0.1% 4.7%
--------------------------------------------------------------------
General government 0.1% 16.9%
--------------------------------------------------------------------
Not-for-profit institutions serving households 0.3% 1.1%
--------------------------------------------------------------------
Households 94.7% 49.8%
--------------------------------------------------------------------
Foreign holding 0.5% 2.6%
--------------------------------------------------------------------
The weighted average number of shares during the reporting period, adjusted for
share issues, was 20,785.251. The number of outstanding shares was 20,775,273
in total at the end of the period.
The company held a total of 100,372 treasury shares at the end of the reporting
period. The accounting counter value of these treasury shares is EUR 0.10 per
share. The company held about 0.5 per cent of the capital stock as of 30 June
2014.
REPORTED SHARE PERFORMANCE ON THE HELSINKI STOCK EXCHANGE
Digia Plc shares are listed on the NASDAQ OMX Nordic Exchange under IT, IT
Consulting & Other Services. The company's short name is DIG1V. The lowest
reported share quotation was EUR 3.80 and the highest was EUR 4.59. The share
officially closed at EUR 3.81 on the last trading day. The trade-weighted
average was EUR 4.15. The Group's market capitalisation totalled EUR 79,536,207
at the end of the reporting period.
The company received the following flagging notifications during the reporting
period:
- Ilmarinen Mutual Pension Insurance Company announced on 18 February
2014 that its holding in the company had risen above the 10% flagging threshold
to 10.05% of all shares and votes in the company.
- The Ingman Group announced on 25 March 2014 that its holding in the
company had risen above the 20% flagging threshold to 20.12% of all shares and
votes.
STOCK OPTION SCHEMES
Digia Plc had no outstanding options.
Helsinki, 8 August 2014
Digia Plc
Board of Directors
BRIEFING
Digia will hold a briefing on its Interim Report for analysts on Friday, 8
August 2014 at 11 am, in the Tapiola cabinet of Hotel Scandic Simonkenttä,
Simonkatu 9, 00100 Helsinki, Finland. All are welcome.
FURTHER INFORMATION
Juha Varelius, President and CEO, mobile: +358 400 855 849, email:
juha.varelius@digia.com
The Interim Report and the CEO's presentation will be available on
www.digia.com, in the ‘Investors' section, from 11 am on 8 August 2014.
DISTRIBUTION
NASDAQ OMX Helsinki
Key media
ABBREVIATED FINANCIAL STATEMENTS AND ATTACHMENTS
Consolidated Income Statement
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Consolidated Statement of Changes In Shareholders' Equity
NOTES TO THE ACCOUNTS
The interim report has been prepared in compliance with IFRS and the IAS 34
standard.
This interim report is based on unaudited figures.
CONSOLIDATED INCOME STATEMENT, EUR 1,000
EUR 1,000 4-6/2014 4-6/201 Change, 1-6/201 1-6/201 Change 2013
3 % 4 3 , %
--------------------------------------------------------------------------------
NET SALES 24,497.2 28,010. -12.5% 48,455. 51,523. -6.0% 99,740.5
6 1 5
--------------------------------------------------------------------------------
Other 322.8 441.0 -26.8% 723.6 732.7 -1.2% 1,542.7
operating
income
--------------------------------------------------------------------------------
Materials and -2,343.1 -4,772. -50.9% -4,721. -7,084. -33.4% -11,989.4
services 7 2 5
--------------------------------------------------------------------------------
Depreciation, -607.2 -775.0 -21.7% -1,309. -1,506. -13.1% -9,977.0
amortisation 9 6
and
impairment
--------------------------------------------------------------------------------
Other -20,444.9 -20,972 -2.5% -42,003 -42,206 -0.5% -82,138.8
operating .8 .2 .8
expenses
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating 1,424.8 1,931.0 -26.2% 1,144.4 1,458.2 -21.5% -2,822.0
profit
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial -53.2 -4.3 1145.0% -204.0 -271.7 -24.9% -784.0
expenses
(net)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings 1,371.6 1,926.8 -28.8% 940.4 1,186.5 -20.7% -3,605.9
before tax
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -342.8 -580.2 -40.9% -242.4 -311.6 -22.2% -461.2
--------------------------------------------------------------------------------
NET PROFIT 1,028.9 1,346.5 -23.6% 698.0 874.9 -20.2% -4,067.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other
comprehensive
income:
--------------------------------------------------------------------------------
Items which
may be
reclassified
subsequently
to profit or
loss:
--------------------------------------------------------------------------------
Exchange -80.9 -317.7 -74.5% -125.0 -201.3 -37.9% -36.2
differences
on
translation
of foreign
operations
--------------------------------------------------------------------------------
TOTAL 947.9 1,028.8 -7.9% 573.0 673.5 -14.9% -4,103.3
COMPREHENSIVE
INCOME
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution
of net
profit:
--------------------------------------------------------------------------------
Parent-company 1,028.9 1,346.5 -23.6% 698.0 874.9 -20.2% -4,067.1
shareholders
--------------------------------------------------------------------------------
Minority 0.0 0.0 0.0 0.0 0.0
interest
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution
of total
comprehensive
income:
--------------------------------------------------------------------------------
Parent-company 947.9 1,028.8 -7.9% 573.0 673.5 -14.9% -4,103.3
shareholders
--------------------------------------------------------------------------------
Minority 0.0 0.0 0.0 0.0 0.0
interest
----------------------------------------------------------------------
----------------------------------------------------------------------
Earnings per 0.05 0.04 0.03 0.02 -0.20
share, EUR
----------------------------------------------------------------------
Earnings per 0.05 0.04 0.03 0.02 -0.20
share
(diluted),
EUR
----------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET, EUR 1,000
Assets 30/06/2014 31/12/2013 Change, %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Intangible assets 52,879.7 53,327.2 -0.8%
--------------------------------------------------------------------------------
Tangible assets 1,830.0 1,986.0 -7.9%
--------------------------------------------------------------------------------
Financial assets 627.0 627.0 0.0 %
--------------------------------------------------------------------------------
Inventories 0.5 0.6 -2.3%
--------------------------------------------------------------------------------
Long-term receivables 64.6 64.6 0.0%
--------------------------------------------------------------------------------
Deferred tax assets 499.1 370.9 34.6%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total non-current assets 55,900.9 56,376.2 -0.8%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Current receivables 20,571.2 20,447.8 0.6%
--------------------------------------------------------------------------------
Available-for-sale financial assets 327.0 324.0 0.9%
--------------------------------------------------------------------------------
Cash and cash equivalents 3,875.1 6,129.8 -36.8%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total current assets 24,773.2 26,901.7 -7.9%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total assets 80,674.2 83,277.9 -3.1%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity and liabilities 30/06/2014 31/12/2013 Change, %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Share capital 2,087.6 2,087.6 0.0%
--------------------------------------------------------------------------------
Rights issue 0.0 0.0
--------------------------------------------------------------------------------
Issue premium fund 7,899.5 7,899.5 0.0%
--------------------------------------------------------------------------------
Other reserves 5,203.8 5,203.8 0.0%
--------------------------------------------------------------------------------
Unrestricted invested shareholders' equity 31,370.3 33,447.8 -6.2%
--------------------------------------------------------------------------------
Translation difference 392.6 517.6 -24.2%
--------------------------------------------------------------------------------
Retained earnings -13,083.5 -9,028.6 -44.9%
--------------------------------------------------------------------------------
Net profit 698.0 -4,067.1 117.2%
--------------------------------------------------------------------------------
Equity attributable to parent-company 34,568.2 36,060.6 -4.1%
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total shareholders' equity 34,568.2 36,060.6 -4.1%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities
--------------------------------------------------------------------------------
Long-term interest-bearing liabilities 12,724.1 12,741.9 -0.1%
--------------------------------------------------------------------------------
Received long-term advances 1,515.0 2,876.5 -47.3%
--------------------------------------------------------------------------------
Other long-term liabilities 0.0 0.0
--------------------------------------------------------------------------------
Deferred tax liabilities 289.1 461.0 -37.3%
--------------------------------------------------------------------------------
Total long-term liabilities 14,528.2 16,079.4 -9.6%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Short-term interest-bearing liabilities 5,035.3 4,140.9 21.6 %
--------------------------------------------------------------------------------
Other short-term liabilities 26,542.4 26,996.9 -1.7%
--------------------------------------------------------------------------------
Total short-term liabilities 31,577.7 31,137.8 1.4%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total liabilities 46,105.9 47,217.3 -2.4%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity and liabilities 80,674.2 83,277.9 -3.1%
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000
1/1/2014-30/6/2014 1/1/2013-30/6/2013
--------------------------------------------------------------------------------
Cash flow from operations:
--------------------------------------------------------------------------------
Net profit 698 875
--------------------------------------------------------------------------------
Adjustments to net profit 100 -297
--------------------------------------------------------------------------------
Change in working capital -1,949 18
--------------------------------------------------------------------------------
Interest paid -171 -222
--------------------------------------------------------------------------------
Interest income 0 0
--------------------------------------------------------------------------------
Taxes paid 20 496
--------------------------------------------------------------------------------
Net cash flow from operations -1,301 871
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from investments:
--------------------------------------------------------------------------------
Purchases of tangible and intangible -706 -124
assets
--------------------------------------------------------------------------------
Cash flow from investments -706 -124
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from financing:
--------------------------------------------------------------------------------
Proceeds from share issue 0 0
--------------------------------------------------------------------------------
Acquisition of own shares 0 0
--------------------------------------------------------------------------------
Repayment of current loans -2,000 -3,000
--------------------------------------------------------------------------------
Repayments of non-current loans 0 0
--------------------------------------------------------------------------------
Withdrawals of current loans 3,000 3,000
--------------------------------------------------------------------------------
Withdrawals of non-current loans 560 0
--------------------------------------------------------------------------------
Dividends paid and other profit -1,804 -2,082
distribution
--------------------------------------------------------------------------------
Cash flow from financing -244 -2,082
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in liquid assets -2,252 -1,336
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liquid assets at beginning of period 6,454 8,283
--------------------------------------------------------------------------------
Change in fair value
--------------------------------------------------------------------------------
Change in liquid assets -2,252 -1,336
--------------------------------------------------------------------------------
Liquid assets at end of period 4,202 6,948
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, EUR 1,000
a b c d e f g h
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY, 2,088 0 7,899 33,448 5,204 554 -7,129 42,063
01/01/2013
--------------------------------------------------------------------------------
Net profit 875 875
--------------------------------------------------------------------------------
Other comprehensive -201 -201
income
--------------------------------------------------------------------------------
Dividends -2,082 -2,082
--------------------------------------------------------------------------------
Share-based payments 365 365
recognised against
equity
--------------------------------------------------------------------------------
Other items
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY 30 2,088 0 7,899 33,448 5,204 353 -7,971 41,020
June 2013
--------------------------------------------------------------------------------
a b c d e f g h
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY, 2,088 0 7,899 33,448 5,204 518 -13,096 36,061
01/01/2014
--------------------------------------------------------------------------------
Net profit 698 698
--------------------------------------------------------------------------------
Other comprehensive -125 -125
income
--------------------------------------------------------------------------------
Repayment of capital -2,078 -2,078
--------------------------------------------------------------------------------
Share-based payments 12 12
recognised against
equity
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY, 2,088 0 7,899 31,370 5,204 393 -12,385 34,568
30/06/2014
--------------------------------------------------------------------------------
a = share capital
b = rights issue
c = share premium
d = unrestricted invested shareholders' equity
e = other reserves
f = currency translation differences
g = retained earnings
h = total shareholders' equity
NOTES TO THE ACCOUNTS
Accounting principles
The interim report has been drafted in line with IFRS. Otherwise, the the same
accounting principles have been applied as in the 2013 financial statements.
The accounting principles and formulae for the calculation of key figures and
ratios are unchanged and are presented in the 2013 financial statements.
Seasonal nature of business
The Group's business is affected by the number of workdays each month, as well
as by holiday seasons.
Dividends paid
Dividends paid in the form of capital repayments during the reporting period
totalled EUR 2,081,827.30.
Related-party transactions
Digia Group's related parties include the CEO and the members of the Board of
Directors and Group Management Team. Digia Group had no significant
transactions with related parties during the reporting period.
Segment information
Digia's business operations are divided into two main business segments:
Domestic and Qt.
NET SALES, EUR 4-6/201 4-6/201 Change, 1-6/201 1-6/201 Change, 2013
1,000 4 3 % 4 3 %
--------------------------------------------------------------------------------
Domestic 19,663 22,093 -11.0% 38,844 41,651 -6.7% 79,850
operations
--------------------------------------------------------------------------------
Qt operations 4,834 5,918 -18.3% 9,611 9,873 -2.6% 19,891
--------------------------------------------------------------------------------
Digia Group 24,497 28,011 -12.5% 48,455 51,523 -6.0 % 99,740
--------------------------------------------------------------------------------
OPERATING PROFIT BEFORE 4-6/20 4-6/20 Change, 1-6/20 1-6/20 Change, 2013
EXTRAORDINARY ITEMS, 14 13 % 14 13 %
EUR 1,000
--------------------------------------------------------------------------------
Domestic operations 1,772 1,180 50.2% 2,418 1,627 48.6% 5,395
--------------------------------------------------------------------------------
Qt operations -347 751 -146.2% -1,273 -169 -653.7% -846
--------------------------------------------------------------------------------
Digia Group 1,425 1,931 -26.2% 1,144 1,458 -21.5% 4,549
--------------------------------------------------------------------------------
OPERATING PROFIT, 4-6/201 4-6/201 Change, 1-6/20 1-6/201 Change, 2013
EUR 1000 4 3 % 14 3 %
--------------------------------------------------------------------------------
Domestic 1 772 1 180 50,2 % 2 418 1 627 48,6 % -1 976
operations
--------------------------------------------------------------------------------
Qt operations -347 751 -146,2 % -1 273 -169 -653,7 % -846
--------------------------------------------------------------------------------
Digia Group 1 425 1 931 -26,2 % 1 144 1 458 -21,5 % -2 822
--------------------------------------------------------------------------------
ASSETS, EUR 1,000 30 Jun 2014 31 Dec 2013
---------------------------------------------
Domestic operations 51,962 53,336
---------------------------------------------
Qt operations 16,418 16,884
---------------------------------------------
Unallocated 12,293 13,058
---------------------------------------------
Digia Group 80,674 83,278
---------------------------------------------
Consolidated income statement by quarter
EUR 1,000 4-6/2014 1-3/2014 10-12/201 7-9/2013 4-6/2013
3
--------------------------------------------------------------------------------
Net sales 24,497.2 23,957.9 26,781.8 21,435.2 28,010.6
--------------------------------------------------------------------------------
Other operating income 322.8 400.8 504.2 305.9 441.0
--------------------------------------------------------------------------------
Materials and services -2,343.1 -2,378.0 -3,033.5 -1,871.3 -4,772.7
--------------------------------------------------------------------------------
Depreciation, -607.2 -702.8 -7,761.9 -708.5 -775.0
amortisation and
impairment
--------------------------------------------------------------------------------
Other operating expenses -20,444.9 -21,558.3 -21,768.2 -18,163.8 -20,972.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit 1,424.8 -280.4 -5,277.6 997.4 1,931.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial expenses (net) -53.2 -150.8 -247.3 -264.9 -4.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings before tax 1,371.6 -431.2 -5,524.9 732.5 1,926.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -342.8 100.4 128.6 -278.2 -580.2
--------------------------------------------------------------------------------
Net profit 1,028.9 -330.8 -5,396.3 454.3 1,346.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Allocation:
--------------------------------------------------------------------------------
Parent-company 1,028.9 -330.8 -5,396.3 454.3 1,346.5
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR 0.05 -0.02 -0.26 0.02 0.04
--------------------------------------------------------------------------------
Earnings per share 0.05 -0.02 -0.26 0.02 0.04
(diluted), EUR
--------------------------------------------------------------------------------
Group key figures and ratios
EUR 1,000 1-6/2014 1-6/2013
------------------------------------------------------------------------------
Extent of business:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Net sales 48,455 51,523
------------------------------------------------------------------------------
- change from previous year -6.0% 1.9%
------------------------------------------------------------------------------
Average capital invested 52,636 61,158
------------------------------------------------------------------------------
Personnel at period end 937 936
------------------------------------------------------------------------------
Average number of personnel 936 941
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Profitability:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Operating profit before extraordinary items and impairment 1,144 1,458
------------------------------------------------------------------------------
- % of net sales 2.4% 2.8%
------------------------------------------------------------------------------
Operating profit 1,144 1,458
------------------------------------------------------------------------------
- % of net sales 2.4% 2.8%
------------------------------------------------------------------------------
Earnings before tax 940 1,187
------------------------------------------------------------------------------
- % of net sales 1.9% 2.3%
------------------------------------------------------------------------------
Net profit 698 875
------------------------------------------------------------------------------
% of net sales 1.4% 1.7%
------------------------------------------------------------------------------
Return on equity, % 4.0% 2.9%
------------------------------------------------------------------------------
Return on investment, % 5.2% 5.8%
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Financing and financial standing:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Interest-bearing liabilities 17,759 19,383
------------------------------------------------------------------------------
Short-term investments & cash and bank receivables 4,202 6,948
------------------------------------------------------------------------------
Net gearing 39.2% 30.3%
------------------------------------------------------------------------------
Equity ratio 48.8% 49.9%
------------------------------------------------------------------------------
Net cash flow from operations -1,301 871
------------------------------------------------------------------------------
Earnings per share, undiluted (EUR) 0.03 0.02
------------------------------------------------------------------------------
Earnings per share, diluted (EUR) 0.03 0.02
------------------------------------------------------------------------------
Equity/share, EUR 1.66 1.96
------------------------------------------------------------------------------
Lowest share trading price, EUR 3.80 2.65
------------------------------------------------------------------------------
Highest share trading price, EUR 4.59 3.40
------------------------------------------------------------------------------
Average share price, EUR 4.15 3.02
------------------------------------------------------------------------------
Market capitalisation 79,536 62,627
------------------------------------------------------------------------------
Formulae for key figures and ratios are presented in the 2013 financial
statements. These remained unchanged during the reporting period.
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