2012-10-25 15:10:00 CEST
2012-10-25 15:10:07 CEST
REGULATED INFORMATION
Ixonos - Interim report (Q1 and Q3)
CORRECTION: IXONOS’ CHANGE PROCESS IS COMING CLOSE TO ITS TURNING POINT
Helsinki, Finland, 2012-10-25 15:10 CEST (GLOBE NEWSWIRE) --
Ixonos Plc Interim report
25 October 2012 at 16.10
Correction to Ixonos Interim report for the period 1 January - 30 September 2012
Ixonos released today an Interim Report for the period 1January -30 September
2012. Ixonos corrects the second paragraph of the English version release.
In the original interim report was mentioned the second quarter. The reported
turnover figure regards the third quarter.
The operating profit before nonrecurring items regarding third quarter was
reported wrongly EUR 4.3 million. The correct figure is EUR -4.3 million.
The corrected Interim report for the period is published below
For more information, please contact:
Ixonos Plc
Timo Leinonen, CFO, tel. +358 400 793 073, timo.leinonen@ixonos.com
Distribution:
NASDAQ OMX Helsinki
Main media
Ixonos Plc Interim report
25 October 2012 at 10.05
Interim report for the period 1 January - 30 September 2012
IXONOS' CHANGE PROCESS IS COMING CLOSE TO ITS TURNING POINT
The review period in brief
- Turnover for the review period was EUR 44.1 million (2011: EUR 61.9 million),
a change of −28.8 per cent.
- The operating profit before nonrecurring items was EUR −6.9 million (2011:
EUR 1.9 million), −15.7 per cent of turnover.
- Goodwill was impaired by EUR -9.2 million.
- Nonrecurring costs due to restructuring EUR 2.9 million
- The operating profit was EUR −19.0 million (2011: EUR 1.9 million).
- The net result was EUR −17.5 million (2011: EUR 1.1 million).
- Earnings per share were EUR -1.16 (2011: EUR 0.07).
- Net cash flow from operating activities was EUR 1.6 million (2011: EUR 0.8
million).
Q3/2012 in brief
- Turnover for the third quarter was EUR 10.0 million (2011: EUR 18.9
million), a change of −47.3 per cent.
- The operating profit before nonrecurring items was EUR - 4.3 million
(2011:EUR 0.8 million), -43.4 per cent of turnover.
- Operating profit was EUR -7.2 million (2011:0,8 EUR million)
- Net profit was EUR −6.2 million (2011: EUR 0.4 million), −62.5 per cent of
turnover.
- Earnings per share were EUR −0.41 (2011: EUR 0.03).
Future prospects in brief
- In accordance with the most recent forecast, the company estimates that
turnover for 2012 will be in the range of EUR 55-60 million and that operating
profit before nonrecurring items will be negative.
- Operating profit for the final quarter of the year is expected to be positive.
Kari Happonen, President and CEO:
Our process of change, brought about by the technology choices Ixonos' single
most significant customer made in February 2011, is approaching its
culmination. Demand for our development services concerning Symbian and MeeGo
mobile operating systems and applications has vanished during the current year.
In our new mobile device and software accounts, we work on the Android, Tizen
and webOS platforms.
As part of the change process and in accordance with our strategy, we have
further focused our efforts to seek growth opportunities with European and
North American customers. We have also concentrated the solution and service
offering of our Connected Devices, Online Solutions and User Experience Design
service areas, catering especially for the telecommunications, automotive and
media industries.
During this year, we have succeeded in gaining new Finnish and international
customers in all three service areas. Our clientele, which already last year
grew significantly, has continued to expand in 2012. New international
customers include the BBC, ESPN, Hewlett-Packard, Huawei, Intel, Polycom,
Samsung, Sony and Vodafone.
Still, our new accounts have not compensated for the lost volume in Symbian
and MeeGo development this year. To ensure our competitiveness, we have had to
adjust our capacity to the decreased turnover as part of the change process.
During the year, our workforce has decreased by 166 employees in Finland and
176 in Estonia, Slovakia and China. We have also taken many other measures to
adjust the company's cost structure to the new situation. In September, we
recorded non-recurring expenses of EUR 3 million in connection with the
changes. This amount consists of future rent for redundant premises, upcoming
salaries for notice periods and write-downs of capitalised R&D expenditure.
We are now moving into the final stages of our strenuous process of change.We
expect our operating profit for the fourth quarter of the year to turn positive
and us to continue to incoming financial year with renewed ability to compete.
Research institutes predict strong growth in the global market for wireless
devices and for the multi-channel online services those devices use. We believe
that our high-quality productised solutions, which offer outstanding user
experiences, make a solid foundation for boosting our new accounts and creating
growth in the coming years.
OPERATIONS
Ixonos is a creative producer of mobile solutions. We deliver products and
services for the development of wireless devices, multi-channel cloud services
and mobile applications. Together with our corporate customers, we create
products and services that allow consumers to enjoy inspiring digital
experiences regardless of time and place.
By enabling cost-efficient development, a short time-to-market and superior
user experiences, we improve the competitiveness of client organisations
creating devices and services. We aim to position ourselves as a strategic
partner to the leading innovators in the mobile industry.
We have offices in Finland, China, Denmark, Estonia, Germany, Great Britain,
Slovakia, South Korea and the United States.
Our Connected Devices service area comprises products and services for R&D of
mobile devices:
-- Ixonos Smartphone Platform™: A device platform engineered for powerful
chipsets, high-quality components and 3D user interfaces.
-- Ixonos Smartphone Reference Design: A reference phone implemented on
Ixonos' device platform and featuring the Qualcomm Snapdragon chipset as
well as the Android Ice Cream Sandwich operating system.
-- Ixonos IVI Connect™: This software product integrates in-car infotainment
systems with the user's mobile devices and cloud services, supporting the
MirrorLink standard as well as iOS and Android devices.
-- Device Creation Services: Comprehensive device creation services from
concept development to manufacturing and maintenance: hardware design,
electronics design, mechanical engineering, software development,
production and testing.
-- Expert services in mobile software development and system integration.
The clientele of the Connected Devices area comprises wireless technology
suppliers, mobile device manufacturers, telecommunications companies,
automotive industry companies and entertainment electronics manufacturers
operating on the international market. Customers include Bang & Olufsen,
Cassidian, Cargotec, Hewlett-Packard, Huawei, Intel, Nokia, Polycom, Samsung,
UN Cells and Vodafone.
The Online Solutions service area encompasses global products and services for
development of cloud services and mobile applications:
-- Ixonos Elastic Cloud™: A Red Hat certified, scalable and secure enterprise
cloud solution, developed especially as a platform for R&D and for
online services.
-- Ixonos App Agency™: Provides services ranging from mobile business
consulting to application production, deployment, maintenance and analysis,
on all mobile platforms.
-- Ixonos Experience Store™: This boutique app store platform is a digital
marketing and distribution channel that enables companies to improve brand
awareness, deepen customer loyalty and monetise mobile applications.
-- System integration and expert services for online services.
In Finland, the Online Solutions offering is supplemented by solutions for
e-commerce, e-government and service operations:
-- Ixonos City Online™: A cloud service that enables municipalities to develop
and deploy e-government services in a rapid, standardised and
cost-efficient manner.
-- System integration and expert services for e-commerce, e-government and
service operations.
The clientele of this area consists of companies in the publishing,
communications, telecommunications and service sectors and also includes
Finnish public administration organisations. International customers comprise,
among others, the BBC, eBay India, Evri, eZ Systems, Groupon, Hotels.com,
Nokia, Nokia Siemens Networks, Procter & Gamble and Time Out. Finnish customers
include Elisa, Fonecta, Kuntien Tiera, the Ministry of Finance, OP-Pohjola, the
cities of Oulu and Tampere, TeliaSonera and Sanoma Pro.
User Experience Design service area includes concept development and
implementation services for brand-supporting comprehensive user experiences as
well as user interface products and services for wireless devices,
multi-channel online services and mobile applications:
-- Ixonos 3D Engine™: A user interface platform that enables customised 3D
user interfaces to be developed for devices of all shapes and sizes,
regardless of the platform and chipset.
-- Ixonos Super App™: This next-generation application platform creates a
seamless and user-friendly combination of the contents and functionalities
of multiple online services, integrating them with social network services.
-- Expert services in service design, user experience design, user interface
design and implementation.
Our clients in this area include the BBC, ESPN, Intel, Nokia, ScanLife, Sony,
Turner Broadcasting and Vodafone.
CHANGES IN SEGMENT REPORTING
From 1 January 2012, Ixonos reports its operations as a single segment. This
change was announced on 25 April 2012. The reporting segment comprises the
three service areas described above: Connected Devices, Online Solutions and
User Experience Design. The product and service offering of the service areas
make up the company's core business, which focuses on wireless devices, online
services and mobile-application R&D.
TURNOVER
Consolidated turnover for the review period was EUR 44.1 million (2011: EUR
61.9 million), which is 28.8 per cent less than in the previous year.
Turnover in the third quarter was EUR 10.0 million (2011: EUR 18.9 million),
47.3 per cent less than in the previous year.
FINANCIAL RESULT
The consolidated operating result before goodwill impairment and nonrecurring
items was EUR -6.9 million (2011: EUR 1.9 million). The consolidated operating
result was EUR −19.0 million (2011: EUR 1.9 million) and the result before tax
was EUR −19.4 million (2011: EUR 1.6 million). The result for the review period
was negative, EUR −17.5 million (2011: EUR 1.1 million). Earnings per share
were EUR −1.16 (2011: EUR 0.07). Cash flow from operating activities was EUR
-0.11 per share (2011: EUR 0.12). The result for the review period was affected
by a EUR 9.2 million one-off goodwill impairment in the Online Solutions area
nonrecurring cost due to restructuring EUR 2.9 million.
The operating result for the third quarter was EUR -7.2 million (2011: EUR 0.8
million) and the result before taxes was EUR −7.4 million (2011: EUR 0.7
million). The result for the third quarter was EUR −6.2 million (2011: EUR 0.4
million). Third-quarter earnings per share were EUR −0.41 (2011: EUR 0.03).
Cash flow from operating activities in the third quarter was EUR -0.23 per
share (2011: EUR 0.10).
RETURN ON CAPITAL
Consolidated return on equity was −113.2 per cent (2011: 4.9 per cent). Return
on investment was −78.7 per cent (2011: 6.8 per cent).
BALANCE SHEET AND FINANCING
The balance sheet total was EUR 36.7 million (2011: EUR 55.8 million).
Shareholders' equity was EUR 11.9 million (2011: EUR 29.6 million). The equity
ratio was 32.5 per cent (2011: 53.2 per cent). The group's liquid assets at the
end of the review period amounted to EUR 0.5 million (2011: EUR 0.8 million).
At the end of the review period, the balance sheet of the company showed EUR
7.4 million (2011: EUR 9.2 million) in bank loans. This amount includes
overdraft in use. The bank loans have covenants attached to them. These
covenants are based on the equity ratio and on the proportion of
interest-bearing bank loans to the 12-month rolling operating profit. During
the review period, the company and its financiers in Finland entered into a
financial agreement involving changes to the maturities of the company's
existing financing as well as EUR 3 million in new long-term funding. The
overall value of the financial package is EUR 6.5 million. The package includes
normal covenants related to business operations and to the balance sheet
structure.
GOODWILL
On 30 September 2012, the consolidated balance sheet included EUR 14.4 million
in goodwill. This is EUR 9.2 million less than at the end of the financial
period 2011. Goodwill has been reduced by the goodwill impairment in the Online
Solutions area.
In February, the company published its financial statement release, in which it
estimated that the risk of goodwill impairment had increased substantially. The
company noted that should its projections regarding this year's developments
and the rationalisation program fail to materialise, goodwill might be
impaired. At the end of March, the company tested for impairment the goodwill
distributed among the group's new cash generating service areas. The refined
estimates of the company's turnover and profit are lower than the ones made at
the turn of the year, particularly concerning the accounts in the Finnish
public sector. Because of this, the company recognised in the first quarter a
goodwill impairment of EUR 9.2 million in the Online Solutions area. According
to impairment testing at the end of September, no impairment of the company's
goodwill is required
CASH FLOW
During the review period, consolidated cash flow from operating activities was
EUR -1.6 million (2011: EUR 1.8 million). By 30 September 2012, the company had
sold EUR 3.4 million (2011: EUR 3.0 million) in accounts receivable so as to
reduce their turnaround time. The negative cash flow from operating activities
was mainly caused by expenses related to the shutdown of various activities.
PERSONNEL
The number of personnel averaged 891 (2011: 1,135) during the review period and
was 683 (2011: 1,110) at the end of the period. Staff decreased in Finland as
well as abroad. At the end of the review period, the group had 432 employees
(2011: 641) in Finnish companies, while group companies in other countries
employed 251 (2011: 469). During the third quarter, the number of employees
decreased by 208. The expenses associated with these redundancies added to the
losses in the third quarter.
SHARES AND SHARE CAPITAL
Share turnover and price
During the review period, the highest price of the company's share was EUR 1.20
(2011: EUR 2.79) and the lowest EUR 0.76 (2011: EUR 0.66). The closing price on
30 September 2012 was EUR 0.82 (2011: EUR 0.87). The average price over the
review period was EUR 0.93 (2011: EUR 1.41). The number of shares traded during
the review period was 2,710,190 (2011: 5,675,690), which corresponds to 17.9
per cent (2011: 37.6 per cent) of the total number of shares at the end of the
review period. Based on the closing price at 30 September 2012, the market
value of the company's shares was EUR 12,233,012 (2011: EUR 15,139,161).
Share capital
At the beginning as well as the end of the review period, the company's
registered share capital was EUR 585,394.16 and the number of shares was
15,102,484.
Option plan 2011
The Board of Directors of Ixonos Plc decided on 30 November 2011 to grant new
options. This decision was based on the authorisation given by the Annual
General Meeting on 29 March 2011.
The options were issued by 31 December 2011, free of charge, to a subsidiary
wholly owned by Ixonos Plc. This subsidiary will distribute the options, as the
Board decides, to employees of Ixonos Plc and other companies in the Ixonos
Group, to increase their commitment and motivation. Options will not be issued
to the members of the Board of Directors of Ixonos Plc or to the senior
management of the group of companies (Ixonos Management Invest Oy
shareholders).
The options will be marked IV/A, IV/B and IV/C. A total of 600,000 options will
be issued. According to the terms of the options, the Board of Directors
decides how the options will be divided between option series and, if needed,
how undistributed options will be converted from one series to another.
Each option entitles its holder to subscribe for one new or treasury share in
Ixonos Plc. The shares that can be subscribed for with options comprise 3.82
per cent of all Ixonos Plc shares and votes on a fully diluted basis.
The exercise period for the IV/A options will begin on 1 October 2014, for the
IV/B options on 1 October 2015 and for the IV/C options on 1 October 2016. The
exercise periods for all options will end on 31 December 2018. The exercise
price for each option series is a trade volume weighted average price at NASDAQ
OMX Helsinki. The period during which this average price is determined is 1
September - 30 November 2011 for the IV/A options (resulting in an exercise
price of EUR 0.86), 1 June - 31 August 2012 for the IV/B options and 1 June -
31 August 2013 for the IV/C options. The exercise prices will be reduced by the
amount of dividends and can also be adjusted under the other circumstances
specified in the option terms.
A total of 495,000 options have been allocated to series IV/A and granted to
employees of group companies in accordance with the terms of the option plan.
Shareholders
On 30 September 2012, the company had 3,027 shareholders (2011: 3,223). Private
persons owned 55.2 per cent (2011: 55.2 per cent) and institutions 44.8 per
cent (2011: 46.7 per cent) of the shares. Foreign ownership was 7.1 per cent
(2011: 7.3 per cent) of all shares.
Board authorisations
On 4 April 2012, the Annual General Meeting of Ixonos Plc authorised the Board
of Directors to decide on a rights issue and on issuing stock options and other
special rights entitling to shares pursuant to chapter 10, section 1 of the
Limited Liability Companies Act (624/2006) as well as on transferring treasury
shares in one or more lots under the following terms:
The number of shares to be issued under the authorisation may not exceed
1,500,000, which corresponds to approximately 10 per cent of all company shares
at the time of convening the Annual General Meeting.
Within the limits of the authorisation, the Board of Directors may decide on
all terms of the rights issue, of the issue of special rights entitling to
shares and of the treasury share transfers.
The meeting also granted the Board of Directors authority to decide on
crediting the subscription price to the share capital or, in whole or in part,
to the invested non-restricted equity fund.
Shares as well as special rights entitling to shares may also be issued in a
way that deviates from the pre-emptive rights of shareholders, if a weighty
financial reason for this exists as laid out in the Limited Liability Companies
Act. In such a case, the authorisation may be used to finance corporate
acquisitions or other investments related to the operations of the company as
well as to maintain and improve the solvency of the group of companies.
The Annual General Meeting also authorised the Board of Directors to decide on
acquiring, or accepting as pledge, a maximum of 1,500,000 own shares, using the
company's non-restricted equity. This amount of shares corresponds to
approximately 10 per cent of all company shares at the time of convening the
meeting. The acquisition may take place in one or more lots. The acquisition
price will not exceed the highest market price in public trading at the time of
the acquisition. In executing the acquisition of own shares, the company may
enter into derivative, share lending and other contracts customary on the
capital market, within the limits set by law and regulations. The authorisation
entitles the Board to decide on a directed acquisition, i.e. on acquiring
shares in a proportion other than that of the shares held by the shareholders.
The shares may be acquired to execute corporate acquisitions or other business
arrangements related to the company's operations, to improve the capital
structure of the company, to otherwise transfer the shares or to cancel them.
The authorisation includes the right for the Board of Directors to decide on
all other matters related to the acquisition of shares.
The authorisations are effective until the Annual General Meeting 2013.
OTHER EVENTS DURING THE REVIEW PERIOD
Focusing of strategy and continuation of cost saving activities
On 25 July 2012, Ixonos announced a refocus of its strategy as well as the
continuation of its cost saving activities. Due to changes in the technology
strategy of the company's single most significant customer, demand for Ixonos'
mobile software development services in Finland has decreased substantially
during the first half-year.
Ixonos announced that because of these changes, it would further focus its
efforts to seek growth opportunities with European and North American
customers. The company also reported that it would sharpen its solution and
service offering in the Connected Devices, Online Solutions and User Experience
Design service areas, catering especially for the telecommunications,
automotive and media industries.
Ixonos announced that as part of the strategy refocus, the company would
commence cooperation negotiations with its personnel in the Connected Devices
service area in Finland for reasons related to production, financial position
and reorganisation. The goal of the negotiations is to adjust the company's
cost structure to the new situation, safeguarding competitiveness.
The negotiations apply to all personnel in the Connected Devices service area
in Finland employed by a company in the Ixonos Group as well as to employees
working at sites abroad but employed by a Finnish company or by a foreign
branch of one. The results of the negotiations are estimated to affect 120
employees at the most.
Action to reorganise operations and improve efficiency is also being taken in
Estonia, Slovakia and Asia, in accordance with local legislation and practice.
With these savings, Ixonos aims at positive earnings before interest and taxes
(EBIT) for the final quarter of this year.
Changes in the Management Team
Ixonos announced on 9 August 2012 that Vice President Taina Makkonen was
leaving Ixonos and that Senior Vice President Timo Kaisla was returning from
his sabbatical leave and would continue as a member of the Management Team. On
19 September 2012, the company announced that Senior Vice President Kari Liuska
had resigned as from 31 October 2012.
Non-recurring expenses; finance arrangements
Ixonos announced on 3 September 2012, that its result for September would
include EUR 3 million in non-recurring expenses caused by the adjustment of the
company's operations. The company also announced that it had signed an
agreement on changing the maturities of its interest-bearing liabilities as
well as on additional funding. In accordance with the agreement, the financiers
granted Ixonos a EUR 3 million non-equity loan. Additionally, EUR 3.5 million
in short-term financing was converted into a five-year loan. Thus, the overall
value of the financial package is approximately EUR 6.5 million. A five-year
debt-servicing programme was agreed on, and the loan is non-amortising during
the first year. The terms of the loan include normal covenants related to
business operations. These covenants are based on the ratio of net liabilities
to operating profit and on the equity ratio of the company.
EVENTS AFTER THE REVIEW PERIOD
Ixonos announced on 23 October 2012, that CFO, Senior Vice President Timo
Leinonen has resigned from company on his own volition and will end his
employment and his membership in Ixonos Management Team on 22 January 2013.
RISK MANAGEMENT AND NEAR-FUTURE UNCERTAINTY FACTORS
Ixonos Plc's risk management aims to ensure undisturbed continuity and
development of the company's operations, support attainment of the commercial
targets set by the company and promote increasing company value. Details on the
risk management organisation and process as well as on recognised risks are
presented on the company's website at www.ixonos.com.
Changes in key customer accounts may have adverse effects on Ixonos'
operations, earning power and financial status. Should a major customer switch
its purchases from Ixonos to its competitors or make forceful changes to its
own operating model, Ixonos would have limited ability to acquire, in the short
term, new customer volume to compensate for such changes.
The reduction and rationalisation of the company's operations causes one-off
expenses, such as redundancy payments in various countries. This increases the
company's need for short-term financing. The company manages this need by
creating, together with financiers, adequate buffers to ensure sufficient funds
as well as by facilitating the circulation of working capital. The company's
balance sheet also includes a significant amount of goodwill, which may still
be impaired should internal or external factors reduce the profit expectations
of the company or any of its cash generating units. Goodwill is tested during
the final quarter of each year and, if necessary, at other times. During 2012,
the company will assess on a quarterly basis the need for goodwill impairment,
as previously announced.
The company's financial agreements have covenants attached to them. A covenant
violation may increase the company's financial expenses or lead to a call for
swift partial or full repayment of non-equity loans. The main risks related to
covenant violations are associated with operating profit fluctuation due to the
market situation and with a potential need to increase the company's working
capital through non-equity funding. The company manages these risks by
negotiating with financiers and by maintaining readiness for various financing
methods. Ixonos has in use the cash funds its normal operations require.
LONG-TERM GOALS AND STRATEGY
In the long term, Ixonos aims to achieve an operating profit of at least 10 per
cent. Because of the ongoing transition process, the company will announce its
long-term growth objective later this year.
To reach its long-term goals, Ixonos focuses its strategy on expanding the
company's product, solution and service operations into new accounts and
industries.
In future, mobile technologies and wireless connectivity will be used not only
by the mobile and smartphone industry and in computers but also by the
automotive industry, in home entertainment electronics and in domestic
appliances. These connected devices will be interlinked with the Internet and
with each other. The R&D service market for such devices is expected to grow
intensely in the next few years.
The proliferation of connected devices will create a growing market for cloud
services and mobile applications based on premium user experiences. The
always-on wireless connectivity of these devices will enable cloud services and
applications to be used regardless of time and place. Services and applications
will extend the feature set of the devices as well as create new services and
functionality for consumers, businesses and authorities alike. These services
and apps must be designed with a user-oriented approach and for a multi-channel
environment, ensuring that they work on countless different devices
irrespective of technology, software, user interface and usage habits.
Ixonos positions itself as a globally significant enabler of the connected
life. We create wireless technologies and connected devices as well as
multi-channel cloud services and mobile applications. We aim to improve the
competitiveness of our client organisations by enabling top-class usability,
cost-efficient development and a short time-to-market for their devices and
services.
Ixonos' customer promise and competitive edge are founded on user experience
innovations that support the brand of the customer as well as on product-based,
customisable technology solutions. Productised device and software platforms
and the utilisation of open source technologies enable customer devices,
services and applications to be developed in a cost-efficient manner and rolled
out rapidly.
In the connected-device market, we work with smartphone manufacturers as well
as with technology suppliers, telecommunications companies, consumer
electronics manufacturers, the automotive industry, the domestic appliance
industry and defence & security industry players.
In the market for cloud services and applications, we collaborate with media
companies, telecommunications companies, the service sector, public
administration and global consumer brands.
Ixonos' key strengths are:
-- user experience and user interface design encompassing devices and
services;
-- technology platform and operating system independent creation of wireless
technologies and mobile software;
-- electronics design and mechanical engineering for mobile devices;
-- a top-class mobile laboratory and extensive testing services;
-- open source based systems development and cloud services;
-- a global network of service centres and sales offices.
FUTURE PROSPECTS
According to Gartner research, the global market in R&D services for mobile
devices is expected to continue its intense growth, and wireless connectivity
is anticipated to extend into new fields. The expansion of wireless
connectivity is expected to increase demand for the services of design houses
such as Ixonos.
In accordance with its strategy, Ixonos continues to expand its clientele by
boosting sales of products, solutions and services to technology suppliers,
mobile device manufacturers, consumer electronics manufacturers, the automotive
industry and other customers in Finland as well as internationally. By
rationalising its operations, the company aims to maintain a positive cash flow
and the best possible profitability.
Even though the company has intensified its acquisition of new customers as
well as its sales, business volume is expected to decline significantly this
year. In accordance with the most recent forecast, the company estimates that
turnover for 2012 will be in the range of EUR 55-60 million and that operating
profit before nonrecurring items will be negative.
Operating profit for the final quarter of the year is expected to be positive.
NEXT REPORTS
The publication time of the financial statement release for the period 1
January - 31 December 2012 will be announced later.
IXONOS PLC
Board of Directors
For more information, please contact:
Ixonos Plc
Kari Happonen, President and CEO, tel. +358 400 700 761,
kari.happonen@ixonos.com
Timo Leinonen, CFO, tel. +358 400 793 073, timo.leinonen@ixonos.com
Distribution:
NASDAQ OMX Helsinki
Main media
THE IXONOS GROUP
ABBREVIATED FINANCIAL STATEMENTS 1 January - 30 September 2012
Accounting policies
This interim report has been prepared in accordance with IAS 34 (Interim
Financial Reporting) and with the accounting principles for the financial
statements of 31 December 2011. The IFRS amendments and interpretations that
took effect on 1 January 2012 have not affected the consolidated financial
statements.
Preparing the financial statements in accordance with IFRS requires Ixonos'
management to make estimates and assumptions that affect the amounts of assets
and liabilities on the balance sheet date as well as the amounts of income and
expenses for the financial period. In addition, judgment must be used in
applying the accounting policies. As the estimates and assumptions are based on
views prevailing at the time of releasing the interim report, they involve
risks and uncertainty factors. Actual results may differ from estimates and
assumptions.
The figures in the income statement and balance sheet are consolidated. The
consolidated balance sheet includes all group companies as well as Ixonos
Management Invest Oy, a company owned by members of Ixonos' management. The
original interim report is in Finnish. The interim report in English is a
translation of the original report.
As the figures in the report have been rounded, sums of individual figures may
differ from the sums presented. The interim report is unaudited.
CONSOLIDATED INCOME STATEMENT, EUR 1,000
1.1.-30.9. 1.1.-30.9. Change, per 1.1.-31.12.
2012 2011 cent 2011
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Turnover 44,066 61,871 −28.8 81,408
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Operating expenses −53,910 −59,937 −10.1 −79,472
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OPERATING PROFIT BEFORE −9,844 1,934 −609,0 1,937
GOODWILL IMPAIRMENT
--------------------------------------------------------------------------------
Goodwill impairment −9,200 0 0
--------------------------------------------------------------------------------
OPERATING PROFIT −19,044 1,934 −1,084.7 1,937
--------------------------------------------------------------------------------
Financial income and expenses −391 −376 4.2 −528
--------------------------------------------------------------------------------
Profit before tax −19,436 1,558 −1,347.5 1,409
--------------------------------------------------------------------------------
Income tax 1,881 −499 -10,2 −478
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PROFIT FOR THE PERIOD −17,555 1,059 1757,7 931
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Attributable to:
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Equity holders of the parent −17,532 1,077 955
--------------------------------------------------------------------------------
Non-controlling interests -23 −12 −24
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, EUR 1,000
Profit for the period −17,555 1,059 931
--------------------------------------------------------
Other comprehensive income
--------------------------------------------------------
Change in translation difference -16 24 58
--------------------------------------------------------
COMPREHENSIVE INCOME FOR THE PERIOD −17,571 1,083 988
--------------------------------------------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION, EUR 1,000
ASSETS 30.9.2012 30.9.2011 31.12.2011
--------------------------------------------------------------------------------
NON-CURRENT ASSETS
--------------------------------------------------------------------------------
Goodwill 14,447 23,647 23,647
--------------------------------------------------------------------------------
Other intangible assets 3,090 5,266 5,138
--------------------------------------------------------------------------------
Property, plant and equipment 3,863 3,595 3,391
--------------------------------------------------------------------------------
Deferred tax assets 1,853 33 27
--------------------------------------------------------------------------------
Available-for-sale investments 19 110 110
--------------------------------------------------------------------------------
TOTAL NON-CURRENT ASSETS 23,273 32,652 32,314
--------------------------------------------------------------------------------
CURRENT ASSETS
--------------------------------------------------------------------------------
Trade and other receivables 12,944 22,291 19,190
--------------------------------------------------------------------------------
Cash and cash equivalents 526 822 1,466
--------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 13,470 23,112 20,657
--------------------------------------------------------------------------------
TOTAL ASSETS 36,743 55,764 52,970
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES 30.9.2012 30.9.2011 31.12.2011
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
--------------------------------------------------------------------------------
Share capital 585 585 585
--------------------------------------------------------------------------------
Share premium reserve 219 219 219
--------------------------------------------------------------------------------
Invested non-restricted equity fund 20,277 20,343 20,313
--------------------------------------------------------------------------------
Retained earnings 8,185 7,131 7,177
--------------------------------------------------------------------------------
Profit for the period −17,532 1,077 955
--------------------------------------------------------------------------------
Equity attributable to equity holders of the 11,734 29,355 29,248
parent
--------------------------------------------------------------------------------
Non-controlling interests 177 216 200
--------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 11,911 29,571 29,448
--------------------------------------------------------------------------------
LIABILITIES
--------------------------------------------------------------------------------
Non-current liabilities 9,035 5,399 4,400
--------------------------------------------------------------------------------
Current liabilities 15,797 20,794 19,122
--------------------------------------------------------------------------------
TOTAL LIABILITIES 24,832 26,193 23,522
--------------------------------------------------------------------------------
TOTAL EQUITY AND LIABILITIES 36,743 55,764 52,970
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY, EUR 1,000
A: Share capital
B: Share premium reserve
C: Share issue
D: Invested non-restricted equity fund
E: Translation difference
F: Retained earnings
G: Total equity attributable to equity holders of the parent
H: Non-controlling interests
I: Total equity
A B C D E F G H I
--------------------------------------------------------------------------------
Shareholders' equity at 585 219 0 20,343 29 7,058 28,234 224 28,457
1 January 2011
--------------------------------------------------------------------------------
Profit for the review 1,077 1,077 −18 1,059
period
--------------------------------------------------------------------------------
Other comprehensive
income:
--------------------------------------------------------------------------------
Change in translation 24 24 24
difference
--------------------------------------------------------------------------------
Transactions with
shareholders:
--------------------------------------------------------------------------------
Rights issue 50 50 50
--------------------------------------------------------------------------------
Share-based 20 20 20
remuneration
--------------------------------------------------------------------------------
Management incentive −50 −50 10 −40
plan
--------------------------------------------------------------------------------
Shareholders' equity at 585 219 0 20,343 53 8,155 29,355 216 29,571
30 September 2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity at 585 219 0 20,313 86 8,045 29,248 200 29,448
1 January 2012
--------------------------------------------------------------------------------
Profit for the review −17,53 −17,53 −23 −17,55
period 2 2 5
--------------------------------------------------------------------------------
Other comprehensive
income:
--------------------------------------------------------------------------------
Change in translation -16 -16 -16
difference
--------------------------------------------------------------------------------
Transactions with
shareholders:
--------------------------------------------------------------------------------
Expenses for equity −36 −36 −36
procurement
--------------------------------------------------------------------------------
Share-based 70 70 70
remuneration
--------------------------------------------------------------------------------
Shareholders' equity at 585 219 0 20,276 70 −10,15 11,733 177 11,911
30 September 2012 8
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000
1.1.-30.9. 1.1.-30.9. 1.1.-31.12
2012 2011 .2011
--------------------------------------------------------------------------------
Cash flow from operating activities
--------------------------------------------------------------------------------
Profit for the period −17,555 1,058 931
--------------------------------------------------------------------------------
Adjustments to cash flow from operating
activities
--------------------------------------------------------------------------------
Tax -1,881 499 478
--------------------------------------------------------------------------------
Depreciation and impairment 13,644 3,072 4,209
--------------------------------------------------------------------------------
Financial income and expenses 392 376 528
--------------------------------------------------------------------------------
Other adjustments 33 -74 −36
--------------------------------------------------------------------------------
1,640
--------------------------------------------------------------------------------
Cash flow from operating activities before -3,726 4,932 6,110
change in working capital
--------------------------------------------------------------------------------
Change in working capital 2,877 -1,637 196
--------------------------------------------------------------------------------
Interest received 76 2 10
--------------------------------------------------------------------------------
Interest paid -493 -390 −599
--------------------------------------------------------------------------------
Tax paid -324 -1,060 −606
--------------------------------------------------------------------------------
Net cash flow from operating activities -1,590 1,848 5,110
--------------------------------------------------------------------------------
Cash flow from investing activities
--------------------------------------------------------------------------------
Investments in tangible and intangible -1,168 -1,379 −2,207
assets
--------------------------------------------------------------------------------
Dividends received 4 8 8
--------------------------------------------------------------------------------
Net cash flow from investing activities -1,164 -1,371 −2,199
--------------------------------------------------------------------------------
Net cash flow before financing 2,754 477 2,911
--------------------------------------------------------------------------------
Cash flow from financing activities
--------------------------------------------------------------------------------
Increase in long-term borrowings 4,415 0 0
--------------------------------------------------------------------------------
Repayment of long-term borrowings -1,520 -1,919 −2,825
--------------------------------------------------------------------------------
Increase in short-term borrowings 315 2,071 1,548
--------------------------------------------------------------------------------
Repayment of short-term borrowings -1,363 -1,043 −1,391
--------------------------------------------------------------------------------
Proceeds from share issues 0 10 0
--------------------------------------------------------------------------------
Expenses for equity procurement −36 0 −30
--------------------------------------------------------------------------------
Net cash flow from financing activities 1,811 881 −2,699
--------------------------------------------------------------------------------
Change in cash and cash equivalents -944 -404 240
--------------------------------------------------------------------------------
Liquid assets at the beginning of the period 1,466 1,226 1,226
--------------------------------------------------------------------------------
Liquid assets at the end of the period 526 822 1,466
--------------------------------------------------------------------------------
CONSOLIDATED INCOME STATEMENT, QUARTERLY, EUR 1,000
Q3/2012 Q2/2012 Q1/2012 Q4/2011 Q3/2011
1.7.-30. 1.4.-30. 1.1.-31. 1.10.-31.1 1.7.-30.
9.12 6.12 3.11 2.11 9.11
--------------------------------------------------------------------------------
Turnover 9,977 16,428 17,661 19,537 18,916
--------------------------------------------------------------------------------
Operating expenses -17,216 -17,766 -18,928 -19,535 -18,088
--------------------------------------------------------------------------------
OPERATING PROFIT BEFORE -7,239 -1,338 -1,267 3 829
GOODWILL IMPAIRMENT
--------------------------------------------------------------------------------
Goodwill impairment 0 0 -9,200 0 0
--------------------------------------------------------------------------------
OPERATING PROFIT -7,239 -1,338 -10,467 3 829
--------------------------------------------------------------------------------
Financial income and -183 -116 -93 -152 -167
expenses
--------------------------------------------------------------------------------
Profit before tax -7,422 -1,454 -10,560 -149 661
--------------------------------------------------------------------------------
Income tax 1,190 367 323 21 407
--------------------------------------------------------------------------------
PROFIT FOR THE PERIOD -6,232 -1,087 -10,236 -128 414
--------------------------------------------------------------------------------
CHANGES IN FIXED ASSETS, EUR 1,000
Goodwi Intangible Property, plant Available-for-s Total
ll assets and equipment ale investments
--------------------------------------------------------------------------------
Carrying amount at 23,647 5,580 4,210 110 33,547
1 January 2011
--------------------------------------------------------------------------------
Additions 1,575 568 2,143
--------------------------------------------------------------------------------
Changes in −16 −15 −31
exchange rates
--------------------------------------------------------------------------------
Depreciation for -1,889 -1,183 -3,072
the period
--------------------------------------------------------------------------------
Carrying amount at 23,647 5,266 3,595 110 32,619
30 September 2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Carrying amount at 23,647 5,138 3,391 110 32,286
1 January 2012
--------------------------------------------------------------------------------
Additions 990 1,887 2,877
--------------------------------------------------------------------------------
Changes in 1 4 5
exchange rates
--------------------------------------------------------------------------------
Disposals -13 -91 -104
--------------------------------------------------------------------------------
Impairment -9,200 -9,200
--------------------------------------------------------------------------------
Depreciation for -3,039 -1,405 -4,444
the period
--------------------------------------------------------------------------------
Carrying amount at 14,447 3,090 3,863 19 21,420
30 September 2012
--------------------------------------------------------------------------------
FINANCIAL RATIOS
1.1.-30.9.201 1.1.-30.9.201 1.1.-31.12.2
2 1 011
--------------------------------------------------------------------------------
Earnings per share, diluted, EUR -1.16 0.07 0.06
--------------------------------------------------------------------------------
Earnings per share, EUR -1.16 0.07 0.06
--------------------------------------------------------------------------------
Equity per share, EUR 0.78 1.94 1.94
--------------------------------------------------------------------------------
Operating cash flow per share, -0.11 0.12 0.34
diluted, EUR
--------------------------------------------------------------------------------
Return on investment, per cent -78.2 6.8 5.4
--------------------------------------------------------------------------------
Return on equity, per cent -113.2 4.9 3.2
--------------------------------------------------------------------------------
Operating profit ∕ turnover, per -43.2 3.1 2.4
cent
--------------------------------------------------------------------------------
Net gearing, per cent 104.2 34.7 27.5
--------------------------------------------------------------------------------
Equity ratio, per cent 32.5 53.2 55.6
--------------------------------------------------------------------------------
OTHER INFORMATION
1.1.-30.9.20 1.1.-30.9.20 1.1.-31.12.20
12 11 11
--------------------------------------------------------------------------------
PERSONNEL 891 1,135 1,118
Number of employees, average
--------------------------------------------------------------------------------
Number of employees, at the end of 683 1,110 1,031
the period
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMITMENTS, EUR 1,000 30.9.2012 30.9.2011 31.12.2011
--------------------------------------------------------------------------------
Collateral for own commitments
--------------------------------------------------------------------------------
Corporate mortgages 19,800 9,900 19,900
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Leasing and other rental commitments
--------------------------------------------------------------------------------
Falling due within 1 year 3,813 4,676 5,665
--------------------------------------------------------------------------------
Falling due within 1-5 years 3,354 3,355 3,403
--------------------------------------------------------------------------------
Falling due after 5 years 0 0 0
--------------------------------------------------------------------------------
Total 7,167 8,031 9,068
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Nominal value of interest rate swap
agreement
--------------------------------------------------------------------------------
Falling due within 1 year 906 0 1,375
--------------------------------------------------------------------------------
Falling due within 1-5 years 1,086 4,071 1,493
--------------------------------------------------------------------------------
Falling due after 5 years 0 0 0
--------------------------------------------------------------------------------
Total 1,992 4,071 2,868
--------------------------------------------------------------------------------
Fair value -30 -58 −23
--------------------------------------------------------------------------------
CALCULATION OF KEY FIGURES
Diluted earnings per share = profit for the period ∕ number of shares, adjusted
for issues and dilution, average
Earnings per share = profit for the period ∕ number of shares, adjusted for
issues, average
Shareholders' equity per share = shareholders' equity ∕ number of shares,
undiluted, on the closing date
Cash flow from operating activities, per share, diluted = net cash flow from
operating activities ∕ number of shares, adjusted for issues and dilution,
average
Return on investment = (profit before taxes + interest expenses + other
financial expenses) ∕ (balance sheet total − non-interest-bearing liabilities,
average) × 100
Return on equity = net profit ∕ shareholders' equity, average × 100
Gearing = (interest-bearing liabilities - liquid assets) ∕ shareholders' equity
× 100
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