2014-02-07 08:00:01 CET
2014-02-07 08:00:06 CET
REGULATED INFORMATION
Digia Oyj - Financial Statement Release
DIGIA’S FOURTH QUARTER 2013: GROWTH IN CONSOLIDATED NET SALES AND IMPROVEMENT IN OPERATING PROFIT; LOSS DUE TO EXTRAORDINARY ITEMS
Helsinki, 2014-02-07 08:00 CET (GLOBE NEWSWIRE) -- DIGIA PLC FINANCIAL
STATEMENTS RELEASE, 7 FEBRUARY 2014 AT 09:00
DIGIA'S FOURTH QUARTER 2013: GROWTH IN CONSOLIDATED NET SALES AND IMPROVEMENT
IN OPERATING PROFIT; LOSS DUE TO EXTRAORDINARY ITEMS
SUMMARY
January-December
- Consolidated net sales: EUR 99.7 (100.4) million, down 0.7 per cent
- Operating profit before extraordinary items: EUR 4.5 (8.2) million
- Extraordinary items comprise a EUR 7.0 million writedown and EUR 0.4 million
in restructuring costs for reorganisation purposes (1-12/2012: restructuring
costs EUR 0.7 million). Of the writedown, EUR 0.4 million applies to itemised
intangible assets and EUR 6.6 million to goodwill
- Operating profit after extraordinary items: EUR -2.8 (6.9) million
- Profitability (EBIT%): 4.6 (8.2) per cent before extraordinary items and -2.8
(6.9) per cent after extraordinary items
- Product business accounted for 41.1 (36.4) per cent
- Earnings per share: EUR 0.15 (0.26) before extraordinary items and -0.20
(0.19) after extraordinary items
October-December
- Consolidated net sales: EUR 26.8 (25.5) million, up 5.2 per cent
- Operating profit before extraordinary items: EUR 2.1 (1.0) million
- Extraordinary items comprise a EUR 7.0 million writedown and EUR 0.4 million
in restructuring costs for reorganisation purposes (1-12/2012: restructuring
costs EUR 0.7 million). Of the writedown, EUR 0.4 million applies to itemised
intangible assets and EUR 6.6 million to goodwill
- Operating profit after extraordinary items: EUR -5.3 (0.2) million
- Profitability (EBIT%): 7.8 (3.8) per cent before extraordinary items and
-19.7 (1.0) per cent after extraordinary items
- Product business accounted for 37.1 (35.8) per cent
- Earnings per share: EUR 0.09 (0.03) before extraordinary items and -0.26
(-0.01) after extraordinary items
During the reporting period, the group's consolidated net sales fell slightly
from the previous year's comparison figure. This was due to the fact that in
2012 the company had EUR 4.5 million in accrued income from the mobile contract
engineering business, which no longer existed in 2013 as the business unit was
closed down at the end of 2012. The comparison figures for 2012 also include an
exceptional net sales item of EUR 4.2 million related to a Qt business
acquisition licensing deal made in the third quarter of 2012. Excluding the
effect of the aforementioned factors, the company's like-for-like consolidated
net sales increased by 6.7 per cent during the period. Net sales grew also
during the fourth quarter.
Operating profit for the review period as well as for the fourth quarter was
negative, after the company's board decided in its meeting on 6 February 2014
to make a writedown of EUR 7.0 million applicable to the fourth quarter. The
writedown derives from a change in the company's estimate of the long-term
profit forecast for its domestic business operations, on which evaluations must
be based according to standards. Investments in international operations also
had a negative impact on the result for the review period, pushing down the
review period's operating profit before extraordinary items compared to 2012.
In the fourth quarter operating profit clearly improved compared to the same
period in the previous year.
The Qt business progressed well and its like-for-like net sales grew by 25.0
per cent for the review period and 23.7 per cent for the fourth quarter
compared to the previous year. Demand and bid volumes were both good. No major
individual deals were made during the fourth quarter, however. The
profitability of the operations was low during the review period due to
significant growth-oriented investments.
The company gave up its loss-making Russian operations during the last quarter
of 2013. In future, the Russian unit will focus on Qt licence sales.
For 2014, the company predicts organic growth of its net sales exceeding the
general market growth rate. The company expects its overall profitability to
rise from last year's levels, although further investments in growing the Qt
business will continue holding back the whole company's profitability.
Proposal for dividend distribution
At the end of 2013, the distributable shareholders' equity of Digia Plc was EUR
32,893,730.71, of which EUR 1,850,830.89 was the net loss for the year. At the
Annual General Meeting, the Board of Directors will propose that a repayment of
capital totalling EUR 0.10 per share be paid according to the confirmed
statement of financial position for the fiscal year ending 31 December 2013.
Shareholders listed on the shareholder register maintained by Euroclear Finland
Oy on the reconciliation date, 14 March 2014, will be eligible for the capital
repayment. The repayment date is 21 March 2014.
GROUP KEY FIGURES AND RATIOS
10-12/2 10-12/2 Change, 1-12/2 1-12/20 Change,
013 012 % 013 12 %
--------------------------------------------------------------------------------
Net sales 26,782 25,451 5.2% 99,740 100,448 -0.7%
--------------------------------------------------------------------------------
Operating profit before 2,093 977 114.3% 4,549 8,196 -44.5%
extraordinary items
--------------------------------------------------------------------------------
- % of net sales 7.8% 3.8% 4.6% 8.2%
--------------------------------------------------------------------------------
Operating profit -5,278 244 -2,822 6,884
--------------------------------------------------------------------------------
- % of net sales -19.7% 1.0% -2.8% 6.9%
--------------------------------------------------------------------------------
Net profit -5,396 -125 4,228.1% -4,067 4,024
--------------------------------------------------------------------------------
- % of net sales -20.1% -0.5% -4.1% 4.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Return on equity, % -55.5% -1.2% -10.4% 9.8%
--------------------------------------------------------------------------------
Return on capital -36.1% 1.6% -4.4% 11.3%
invested, %
--------------------------------------------------------------------------------
Interest-bearing 16,883 19,849 -14.9% 16,883 19,849 -14.9%
liabilities
--------------------------------------------------------------------------------
Cash and cash equivalents 6,454 8,283 -22.1% 6,454 8,283 -22.1%
--------------------------------------------------------------------------------
Net gearing 28.9% 27.5% 28.9% 27.5%
--------------------------------------------------------------------------------
Equity ratio, % 49.9% 52.6% 49.9% 52.6%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, -0.26 -0.01 -0.20 0.19
undiluted (EUR)
--------------------------------------------------------------------------------
Earnings per share, -0.26 -0.01 -0.20 0.19
diluted (EUR)
--------------------------------------------------------------------------------
MARKETS AND DIGIA'S BUSINESS OPERATIONS
Caution arising from the global economic situation lengthened customers'
decision-making processes and caused cost pressure as customers opened their
purchases to competitive tendering.
Digia has invested significantly in growing its integration business. The
delivery capacity of this business area was reinforced during the review period
with personnel increase through external recruitment and internal transfers,
training and with productisation efforts. Growth was higher than expected
thanks to these efforts and good customer demand. The growth trend continued
strong through the last quarter.
Demand for ERP systems was good in the review period. There were clear
differences in demand from different sectors, customers continued displaying
caution in their purchasing behaviour, and sales cycles remained long. Order
and bid volumes were at a healthy level. Net sales grew compared to the
previous year, meeting the targets set for the review period. Profitability
remained at the previous year's level.
During the review period, the company reassessed the position of Russia in its
growth strategy with regard to future growth potential, business risks and
overall investment management. As a result, the company gave up its loss-making
Russian operations during the last quarter, focusing in the future on Qt
licence sales in Russia.
The Qt business progressed well and its like-for-like net sales grew by 25.0
per cent for the review period and 23.7 per cent for the fourth quarter
compared to the previous year. Demand and bid volumes were both good. No major
individual deals were made during the fourth quarter, however.
The profitability of the operations was low during the review period; this was
due to significant, target-oriented investments aimed at developing the
business.
The focus of Qt operations was primarily on licence sales, which meant that the
product business accounted for more than the target level of 75% of net sales.
During the period, the company continued fulfilling previously reported plans
related to Qt product development and areas of focus. In December the company
launched a new version of the Qt development environment intended for mobile
developers, including Android and iOS support. New mobile platforms will be
incorporated in coming versions.
NET SALES
Digia's consolidated net sales for the reporting period totalled EUR 99.7
(100.4) million, down 0.7 per cent from the same period in 2012.
The operating profit for the period fell slightly from the comparison
figures.This was due to the fact that in 2012 the company had EUR 4.5 million
in accrued income from the mobile contract engineering business, which no
longer existed in 2013 as the business unit was closed down at the end of
2012.The comparison figures for 2012 also include an exceptional net sales item
of EUR 4.2 million related to a Qt business acquisition licensing deal made in
the third quarter of 2012.Excluding the effect of this licensing deal, the
accrued income of the Qt business grew both in the review period (25.0 per
cent) and in Q4 (23.7 per cent).Thanks to this growth, the whole company's net
sales grew like-for-like, both in the review period (6.7 per cent) and in Q4
(7.2 per cent).Besides the Qt business, net sales were positively affected by
other operations, especially an individual third-party software maintenance
deal with low margins worth EUR 2.4 million, made in Q2.
During the reporting period, the product business accounted for EUR 41.0
(1-12/2012: 36.5) million or 41.1 (36.4) per cent of consolidated net sales.
International operations accounted for EUR 21.1 (1-12/2012: 20.6) million or
21.2 (20.5) per cent of consolidated net sales.
The Qt business accounted for EUR 19.9 (1-12/2012: 18.7) million of
consolidated net sales.
Digia's consolidated net sales for the fourth quarter were EUR 26.8
(10-12/2012: 25.5) million, up 5.2 per cent on the same period in 2012.
During the fourth quarter, the product business accounted for EUR 9.9
(10-12/2012: 9.1) million of consolidated net sales, or 37.1 (35.8) per cent.
In the same period, the international business accounted for EUR 5.3
(10-12/2012: 5.2) million of consolidated net sales, or 19.9 (20.6) per cent.
The Qt business accounted for EUR 5.0 (10-12/2012: 4.1) million of consolidated
net sales in the fourth quarter.
PROFIT PERFORMANCE AND PROFITABILITY
Digia's consolidated operating profit before extraordinary items for the review
period was EUR 4.5 (8.2) million, down 44.5 per cent year-on-year.
Profitability (EBIT%) before extraordinary items was 4.6 (8.2) per cent.
Digia's consolidated operating profit after extraordinary items for the review
period was EUR -2.8 (6.9) million. Profitability (EBIT%) after extraordinary
items was -2.8 (6.9) per cent.
Digia's consolidated fourth-quarter operating profit before extraordinary items
was EUR 2.1 (1.0) million, representing a year-on-year increase of 114.3 per
cent. Profitability (EBIT%) before extraordinary items was 7.8 (3.8) per cent.
Digia's consolidated operating profit after extraordinary items for the fourth
quarter was EUR -5.3 (0.2) million. Profitability (EBIT%) after extraordinary
items was -19.7 (1.0) per cent.
Investments in international business had a negative impact on cost structure
and profitability during the period under review.
Consolidated earnings before tax for the period totalled EUR -3.6 (5.6)
million, and net profit was EUR -4.1 (4.0) million. Consolidated earnings
before tax for the fourth quarter were EUR -5.5 (-0.0) million, and net profit
EUR -5.4 (-0.1) million.
Consolidated earnings per share for the review period totalled EUR 0.15 (0.26)
before extraordinary items and -0.20 (0.19) after extraordinary items.
Consolidated earnings per share for the fourth quarter totalled EUR 0.09 (0.03)
before extraordinary items and -0.26 (-0.01) after extraordinary items.
The Group's net financial expenses for the review period were EUR 0.8 (1.3)
million and for the fourth quarter EUR 0.2 (0.3) million.
FINANCIAL POSITION AND EXPENDITURE
At the end of the reporting period, Digia Group's consolidated balance sheet
total stood at EUR 83.3 million (12/2012: EUR 92.4 million), and the equity
ratio was 49.9 (12/2012: 52.6) per cent. Net gearing was 28.9 (12/2012: 27.5)
per cent. Period-end cash and cash equivalents totalled EUR 6.5 (12/2012: 8.3)
million.
Interest-bearing liabilities amounted to EUR 16.9 (12/2012: 19.8) million at
the period end. These consisted of EUR 15.5 million in loans from financial
institutions and EUR 1.4 million in financial leasing liabilities.
The Group's cash flow from business operations for the period was positive by
EUR 4.9 (19.9) million. In 2012, cash flow from operations included EUR 12.2
million in cash flow related to the Qt acquisition. Cash flow from investments
for the review period was negative by EUR 1.6 (16.2) million. In 2012, cash
flow from investments included EUR 14.5 million in cash flow related to the Qt
acquisition. Cash flow from finance for the review period was negative by EUR
5.1 (3.6) million. The cash flow from finance was negatively affected by
repayment of company loans.
The Group's investments in fixed assets during the review period totalled EUR
1.6 (0.8) million.
Return on investment (ROI) for the period was -4.4 (11.3) per cent, and return
on equity (ROE) was -10.4 (9.8) per cent.
On 19 December 2013, Digia renewed the company's three-year loan plan,
replacing the company's old loans, 15 MEUR. The new loan plan totals 25 MEUR,
of which the company drew out 15 MEUR. Nordea Bank Finland Plc and Pohjola Bank
Plc continued as the company's financing institutions.
The Group carries out quarterly impairment testing on goodwill and intangible
assets with an indefinite useful life.The tables below show 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, 1,313 656 37,987 6,227 45,528
domestic
operations
--------------------------------------------------------------------------------
EUR 1,000 Specified Amortisations during Goodwi Other Total value
intangible the reporting period ll items subject to
assets testing
--------------------------------------------------------------------------------
Digia, Qt 6,843 862 6,562 1,367 14,773
business
--------------------------------------------------------------------------------
EUR Specified Amortisations during Goodwi Other Total value
1,000 intangible the reporting period ll items subject to
assets testing
--------------------------------------------------------------------------------
Group 8,157 1,519 44,550 7,594 60,300
total
--------------------------------------------------------------------------------
The group has made a EUR 0.4 million writedown related to itemised intangible
assets allocated to the fourth quarter. After this, the company found it
necessary to make a EUR 6.6 million writedown related to the goodwill of its
domestic operations. The writedown derives from a change in the company's
estimate of the long-term profit forecast for its domestic business operations,
on which evaluations must be based according to standards.
Present values for domestic operations were calculated for the five-year
forecast period based on the following assumptions: consolidated net sales and
operating profit for 2014 according to budget; after this, annual growth in net
sales of 0.8 per cent and in operating profit of 3.6 per cent, and a pre-tax
discount rate of 8.9 per cent.
Present values for the Qt business were calculated for the five-year forecast
period based on the following assumptions: consolidated net sales and operating
profit for 2014 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 for both the tested units were extrapolated
using the same assumptions as for the forecast period.
According to a completed sensitivity analysis, Qt business requires either net
sales to remain at the current level with profitability of 3.9 per cent, or a
5.0 per cent growth in net sales with profitability of 1.2 per cent.
PERSONNEL, MANAGEMENT AND ADMINISTRATION
At the end of the period, the total number of Group personnel was 938,
representing a decrease of 44 employees or 4.5 per cent since the end of 2012
(982). During the reporting period the number of employees averaged 939, a
decrease of 86 employees or 8.4 per cent from the 2012 average (1,025).
Employees by function at the end of the period:
Business units 95%
----------------------------------
Administration and management 5%
----------------------------------
As of the end of the period, 170 (12/2012: 195) employees were working abroad.
The Digia Plc Annual General Meeting of 12 March 2013 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, 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.
RISKS AND UNCERTAINTIES
Short-term uncertainties are related to any major changes occurring in the
company's core business areas.
The company made a significant investment into Qt technology and related
business opportunities with the Qt business acquisition completed in 2012. If
the Qt business fails to develop according to the company's expectations, the
investments and related costs may have a significant impact on the company's
short-term profitability. Possible changes in the competitive scenario or
market for that business may also impact the company's future net sales and
profitability.
In addition, the general economic recession may affect customers' investment
decisions and liquidity, and thereby the company's sales and profits. Signs of
the impact of the global economy on customers' investment decisions and the
schedules of planned projects were seen steadily throughout the period under
review.
Furthermore, the growth in customer project sizes increases the risks related
to projects and their profitability.
Risks and their management are described on the company's website at
www.digia.com.
FUTURE PROSPECTS
With the structural reorganisation that took effect at the beginning of 2014,
Digia hopes to enhance the focus of its business units and investments in order
to improve efficiency. Within the Qt business, the emphasis is clearly on
creating the foundations for growth. At the same time, the company works to
maintain the profitability of the business. In domestic operations, the company
will look to bring profitability to a good level and to achieve organic growth
that at least matches the general market rates. Besides organic growth, the
company will actively pursue opportunities to make carefully considered
business acquisitions that support its strategy.
The company expects the Finnish IT market to remain at roughly the previous
year's level in 2014.
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.
The company expects demand for its ERP systems to remain at a good level,
although increased caution on the customer side and lengthening sales cycles
may have an effect on future order intake and requests for tenders.
Demand for integration services is also expected to stay at a good level. The
company predicts that the net sales for this business unit will continue to
grow, although at a slightly slower rate than in 2013 due to customers'
cost-saving pressures.
The company believes that the cost pressures felt by customers and the
resulting caution will have an impact mostly on demand for solutions and
services, where decision-making may be delayed, especially in larger projects.
The Qt order book is healthy, considering the time of year and general market
situation, and the company expects demand to continue growing even in the large
enterprises customer segment. Contract lead times are very long in this
segment, however - typically 6-18 months - which can cause significant
fluctuations between quarters in terms of net sales and, particularly,
profitability.
In future the Chinese and Russian units will form part of the Qt segment and
will focus on Qt licence sales.
The company predicts a continued strong growth of income generated by the Qt
business in 2014. Significant investments will continue to be made in
developing the Qt business and Qt technology, while the company will further
reinforce its sales network, especially in Asia. Investments made with the aim
of securing growth will have a negative impact on profitability, which is why
the company expects the profitability of the Qt business to be only slightly
positive in 2014.
Overall, the company predicts its consolidated net sales for 2014 to grow
organically at a rate exceeding that of the general market. Overall
profitability is expected to rise from last year's levels, but further
investments in growing the Qt business will continue to hold back the whole
company's profitability.
OTHER EVENTS DURING THE REVIEW PERIOD
Convening on 12 March 2013, Digia Plc's Annual General Meeting (AGM) adopted
the financial statements for 2012, released the Board members and the CEO from
liability, determined Board emoluments, resolved to raise the number of Board
members to seven (7), and elected the company's Board of Directors for a new
term.
With regard to profit distribution for 2012, the AGM approved the Board's
proposal to pay a dividend of EUR 0.10 per share to all shareholders listed in
the shareholder register maintained by Euroclear Finland Ltd on the
reconciliation date of 15 March 2013.The dividend payment date was 22 March
2013.
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 a maximum of 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 13 March 2012 and is valid for 18 months - i.e.
until 12 September 2014.
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 a maximum of 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 13 March 2012 and is valid for 18 months - i.e. until 12 September 2014.
Based on the authorisation received, the Board decided on 12 March 2013 to make
a directed share issue of 33,326 to the company's management, in accordance
with Section 4 of Chapter 9 of the Limited Liability Companies Act, as part of
the payments related to the share-based incentive scheme for 2012.
SHARE CAPITAL AND SHARES
On 31 December 2013, the number of Digia Plc shares totalled 20,875,645.
At the year-end, according to Finnish Central Securities Depository Ltd, Digia
had 5,034 shareholders.
The 10 biggest shareholders were
Shareholder Shares and votes
---------------------------------------------------------------
Ingman Group Oy Ab 19.6%
---------------------------------------------------------------
Jyrki Hallikainen 10.2%
---------------------------------------------------------------
Ilmarinen Mutual Pension Insurance Company 9.6%
---------------------------------------------------------------
Kari Karvinen 6.0%
---------------------------------------------------------------
Matti Savolainen 5.8%
---------------------------------------------------------------
NASDAQ OMXBS/Skandinaviska Enskilda Banken AB 4.6%
---------------------------------------------------------------
Varma Mutual Pension Insurance Company 3.6%
---------------------------------------------------------------
Nordea Bank Finland Plc (nominee-registered) 1.4%
---------------------------------------------------------------
Etola Oy 1.0%
---------------------------------------------------------------
Juha Varelius 0.9%
---------------------------------------------------------------
Distribution of holdings by number of shares held on 31 December 2013
Number of shares Shareholders Shares and votes
-----------------------------------------------------
1 - 100 23.2% 0.4%
-----------------------------------------------------
101 - 1,000 58.8% 6.4%
-----------------------------------------------------
1,001 - 10,000 16.2% 10.4%
-----------------------------------------------------
10,001 - 100,000 1.3% 9.7%
-----------------------------------------------------
100,001 - 1,000,000 0.4% 21.9%
-----------------------------------------------------
1,000,001 - 4,000,000 0.1% 51.2%
-----------------------------------------------------
Shareholding by sector on 31 December 2013
Shareholders Shares
--------------------------------------------------------------------
Non-financial corporations 4.2% 24.1%
--------------------------------------------------------------------
Financial and insurance corporations 0.2% 2.5%
--------------------------------------------------------------------
General government 0.1% 13.2%
--------------------------------------------------------------------
Not-for-profit institutions serving households 0.3% 0.9%
--------------------------------------------------------------------
Households 94.7% 51.8%
--------------------------------------------------------------------
Rest of the world 0.6% 7.5%
--------------------------------------------------------------------
Adjusted for share issues, the weighted average number of shares during the
reporting period totalled 20,808,855. The number of outstanding shares came to
20,818,273 in total at the end of the review period.
The company held a total of 57,372 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 0.3 per cent of the capital stock as of 31
December 2013.
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 2.65 and the highest was EUR 4.34. The share
officially closed at EUR 3.91 on the last trading day. The trade-weighted
average was EUR 3.19. The Group's market capitalisation totalled EUR 81,623,772
at the end of the period.
The company received the following flagging notifications during the reporting
period:
- Ilmarinen Mutual Pension Insurance Company announced on 22 February 2013
that its holding in the company had risen above the 5% flagging threshold, to
9.12% of all shares and votes in the company.
- Pekka Päiviö Sivonen announced on 25 February 2013 that his holding in the
company had fallen below the 5% flagging threshold, to 0.85% of the company's
shares and votes.
STOCK OPTION SCHEMES
Digia Plc had no outstanding options.
Helsinki, 7 February 2014
Digia Plc
Board of Directors
COMMUNICATIONS
Digia will hold a briefing on its Financial Statement for analysts on Friday 7
February 2014 at 11 am, in the Roba 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 financial statements and the related PowerPoint presentation will be
available in the Investors section at www.digia.com from 11 am.
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 financial statements were prepared in compliance with IFRS and the IAS 34
standard.
These financial statements are unaudited.
CONSOLIDATED INCOME STATEMENT, EUR 1,000
EUR 1,000 10-12/201 10-12/201 Change, % 1-12/2013 1-12/2012 Change
3 2 , %
--------------------------------------------------------------------------------
NET SALES 26,781.8 25,451.2 5.2% 99,740.5 100,448.2 -0.7%
--------------------------------------------------------------------------------
Other operating 504.2 380.2 32.6% 1,542.7 1,090.4 41.5%
income
--------------------------------------------------------------------------------
Materials and -3,033.5 -2,502.1 21.2% -11,989.4 -9,194.4 30.4%
services
--------------------------------------------------------------------------------
Depreciation, -7,761.9 -886.3 775.7% -9,977.0 -3,318.6 200.6%
amortisation and
impairment
--------------------------------------------------------------------------------
Other operating -21,768.2 -22,198.5 -1.9% -82,138.8 -82,141.3 0.0%
expenses
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit -5,277.6 244.4 -2,822.0 6,884.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial -247.3 -265.2 -6.7% -784.0 -1,280.9 -38.8%
expenses (net)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings before -5,524.9 -20.8 26,489.0% -3,605.9 5,603.3
tax
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes 128.6 -103.9 -461.2 -1,579.0 -70.8%
--------------------------------------------------------------------------------
NET PROFIT -5,396.3 -124.7 4,228.1% -4,067.1 4,024.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other
comprehensive
income:
--------------------------------------------------------------------------------
Items which may
subsequently be
reclassified to
profit or loss :
--------------------------------------------------------------------------------
Exchange -48.8 -274.7 -36.2 345.4
differences on
translation of
foreign
operations
--------------------------------------------------------------------------------
TOTAL -5,445.1 -399.4 1,263.4% -4,103.3 4,369.7
COMPREHENSIVE
INCOME
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of
net profit:
--------------------------------------------------------------------------------
Parent-company -5,396.3 -124.7 4,228.1% -4,067.1 4,024.3
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of
total
comprehensive
income:
--------------------------------------------------------------------------------
Parent-company -5,445.1 -399.4 1,263.4% -4,103.3 4,369.7
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per -0.26 -0.01 -0.20 0.19
share (EUR)
--------------------------------------------------------------------------------
Earnings per -0.26 -0.01 -0.20 0.19
share, diluted
(EUR)
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET, EUR 1,000
Assets 31/12/2013 31/12/2012 Change, %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Intangible assets 53,327.2 61,265.0 -13.0%
--------------------------------------------------------------------------------
Tangible assets 1,986.0 2,152.3 -7.7%
--------------------------------------------------------------------------------
Financial assets 627.0 627.0 0.0%
--------------------------------------------------------------------------------
Inventories 0.6 25.3 -97.8%
--------------------------------------------------------------------------------
Long-term receivables 64.6 69.5 -7.1%
--------------------------------------------------------------------------------
Deferred tax assets 370.9 535.0 -30.7%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total non-current assets 56,376.2 64,674.0 -12.8%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Current receivables 20,447.8 19,418.5 5.3%
--------------------------------------------------------------------------------
Available-for-sale financial assets 324.0 318.7 1.7%
--------------------------------------------------------------------------------
Cash and cash equivalents 6,129.8 7,964.5 -23.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total current assets 26,901.7 27,701.7 -2.9%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total assets 83,277.9 92,375.7 -9.8%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity and liabilities 31/12/2013 31/12/2012 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 33,447.8 33,447.8 0.0%
--------------------------------------------------------------------------------
Translation difference 517.6 553.8 -6.5%
--------------------------------------------------------------------------------
Retained earnings -9,028.6 -11,153.7 -19.1%
--------------------------------------------------------------------------------
Net profit -4,067.1 4,024.3
--------------------------------------------------------------------------------
Equity attributable to parent-company 36,060.6 42,063.1 -14.3%
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total shareholders' equity 36,060.6 42,063.1 -14.3%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities
--------------------------------------------------------------------------------
Long-term interest-bearing liabilities 12,741.9 13,026.6 -2.2%
--------------------------------------------------------------------------------
Received long-term advances 2,876.5 4,192.7 -31.4%
--------------------------------------------------------------------------------
Other long-term liabilities 0.0 0.0
--------------------------------------------------------------------------------
Deferred tax liabilities 461.0 639.4 -27.9%
--------------------------------------------------------------------------------
Total long-term liabilities 16,079.4 17,858.7 -10.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Short-term interest-bearing liabilities 4,140.9 6,822.5 -39.3%
--------------------------------------------------------------------------------
Other short-term liabilities 26,996.9 25,631.4 5.3%
--------------------------------------------------------------------------------
Total short-term liabilities 31,137.8 32,453.9 -4.1%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total liabilities 47,217.3 50,312.6 -6.2%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity and liabilities 83,277.9 92,375.7 -9.8%
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000
1/1/2013-31/12/201 1/1/2012-31/12/201
3 2
--------------------------------------------------------------------------------
Cash flow from operations:
--------------------------------------------------------------------------------
Net profit -4,067 4,024
--------------------------------------------------------------------------------
Adjustments to net profit 8,162 8,176
--------------------------------------------------------------------------------
Change in working capital 1,312 8,072
--------------------------------------------------------------------------------
Interest paid -571 -728
--------------------------------------------------------------------------------
Interest income 0 7
--------------------------------------------------------------------------------
Taxes paid 19 395
--------------------------------------------------------------------------------
Net cash flow from operations 4,855 19,946
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from investments:
--------------------------------------------------------------------------------
Purchases of tangible and intangible -1,602 -16,210
assets
--------------------------------------------------------------------------------
Cash flow from investments -1,602 -16,210
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from financing:
--------------------------------------------------------------------------------
Proceeds from share issue 0 0
--------------------------------------------------------------------------------
Acquisition of own shares 0 0
--------------------------------------------------------------------------------
Repayment of current loans -11,500 -5,544
--------------------------------------------------------------------------------
Repayments of non-current loans -9,500 0
--------------------------------------------------------------------------------
Withdrawals of current loans 6,000 500
--------------------------------------------------------------------------------
Withdrawals of non-current loans 12,000 3,500
--------------------------------------------------------------------------------
Dividends paid and other profit -2,082 -2,078
distribution
--------------------------------------------------------------------------------
Cash flow from financing -5,082 -3,623
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in liquid assets -1,829 113
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liquid assets at beginning of period 8,283 8,170
--------------------------------------------------------------------------------
Change in fair value
--------------------------------------------------------------------------------
Change in liquid assets -1,829 113
--------------------------------------------------------------------------------
Liquid assets at end of period 6,454 8,283
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, EUR 1,000
a b c d e f g h
--------------------------------------------------------------------------------
Shareholders' equity, 1 2,088 0 7,899 35,525 5,204 208 -11,172 39,753
January 2012
--------------------------------------------------------------------------------
Net profit 4,024 4,024
--------------------------------------------------------------------------------
Other comprehensive income 345 345
--------------------------------------------------------------------------------
Repayment of capital -2,077 -2,077
--------------------------------------------------------------------------------
Share-based payments 33 33
recognised against equity
--------------------------------------------------------------------------------
Other items -15 -15
--------------------------------------------------------------------------------
Shareholders' equity, 31 2,088 0 7,899 33,448 5,204 554 -7,129 42,063
December 2012
-------------------------------------------------------------------------------- a b c d e f g h
--------------------------------------------------------------------------------
Shareholders' equity, 1 2,088 0 7,899 33,448 5,204 554 -7,129 42,063
January 2013
--------------------------------------------------------------------------------
Net profit -4,067 -4,067
--------------------------------------------------------------------------------
Other comprehensive income -36 -36
--------------------------------------------------------------------------------
Dividends -2,082 -2,082
--------------------------------------------------------------------------------
Share-based payments 183 183
recognised against equity
--------------------------------------------------------------------------------
Shareholders' equity, 31 2,088 0 7,899 33,448 5,204 518 -13,096 36,061
December 2013
--------------------------------------------------------------------------------
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 Financial Statement has been drafted in line with IFRS. In other respects,
the same accounting principles have been applied as in the 2012 Financial
Statements. The accounting principles and formulas for the calculation of key
figures and ratios are unchanged and are presented in the 2012 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 during the reporting period totalled EUR 2,081,827.30.
Events after the reporting period:
In a board meeting of 6 February 2014, the board of Digia decided that from the
beginning of 2014 the company will report its figures according to two business
segments, which are Qt and Domestic.
The Qt segment comprises the company's international Qt software operations.
The Domestic segment covers all of the company's other operations in Finland
and Sweden.
A separate stock exchange release on this decision was published today, 7
February 2014.
In January the company made a distribution agreement with a Korean partner to
increase Qt sales in South Korea.
Related-party transactions:
The Digia Group's related parties include the members of the Board of
Directors, the CEO and Group Management Team. Digia Group had no significant
transactions with related parties during the reporting period.
Consolidated income statement by quarter:
EUR 1,000 10-12/201 7-9/2013 4-6/2013 1-3/2013 10-12/201
3 2
--------------------------------------------------------------------------------
Net sales 26,781.8 21,435.2 28,010.6 23,512.9 25,451.2
--------------------------------------------------------------------------------
Other operating income 504.2 305.9 441.0 291.7 380.2
--------------------------------------------------------------------------------
Materials and services -3,033.5 -1,871.3 -4,772.7 -2,311.8 -2,502.1
--------------------------------------------------------------------------------
Depreciation, -7,761.9 -708.5 -775.0 -731.5 -886.3
amortisation and
impairment
--------------------------------------------------------------------------------
Other operating expenses -21,768.2 -18,163.8 -20,972.8 -21,234.0 -22,198.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit -5,277.6 997.4 1,931.0 -472.8 244.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial expenses (net) -247.3 -264.9 -4.3 -267.5 -265.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings before tax -5,524.9 732.5 1,926.8 -740.2 -20.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes 128.6 -278.2 -580.2 268.6 -103.9
--------------------------------------------------------------------------------
Net profit -5,396.3 454.3 1,346.5 -471.7 -124.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Allocation:
--------------------------------------------------------------------------------
Parent-company -5,396.3 454.3 1,346.5 -471.7 -124.7
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share (EUR) -0.26 0.02 0.04 -0.02 -0.01
--------------------------------------------------------------------------------
Earnings per share, -0.26 0.02 0.04 -0.02 -0.01
diluted (EUR)
--------------------------------------------------------------------------------
Group key figures and ratios:
EUR 1,000 1-12/2013 1-12/2012
--------------------------------------------------------------------------------
Extent of business:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 99,740 100,448
--------------------------------------------------------------------------------
- change from previous year -0.7% -17.6%
--------------------------------------------------------------------------------
Average capital invested 57,428 61,768
--------------------------------------------------------------------------------
Personnel at period end 938 982
--------------------------------------------------------------------------------
Average number of personnel 939 1,025
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profitability:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit before extraordinary items and impairment 4,549 8,154
--------------------------------------------------------------------------------
- % of net sales 4.6% 8.2%
--------------------------------------------------------------------------------
Operating profit -2,822 6,884
--------------------------------------------------------------------------------
- % of net sales -2.8% 6.9%
--------------------------------------------------------------------------------
Earnings before tax -3,606 5,603
--------------------------------------------------------------------------------
- % of net sales -3.6% 5.6%
--------------------------------------------------------------------------------
Net profit -4,067 4,024
--------------------------------------------------------------------------------
% of net sales -4.1% 4.0%
--------------------------------------------------------------------------------
Return on equity, % -10.4% 9.8%--------------------------------------------------------------------------------
Return on investment, % -4.4% 11.3%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financing and financial standing:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Interest-bearing liabilities 16,883 19,849
--------------------------------------------------------------------------------
Short-term investments & cash and bank receivables 6,454 8,283
--------------------------------------------------------------------------------
Net gearing 28.9% 27.5%
--------------------------------------------------------------------------------
Equity ratio 49.9% 52.6%
--------------------------------------------------------------------------------
Net cash flow from operations 4,855 20,251
--------------------------------------------------------------------------------
Earnings per share, undiluted (EUR) -0.20 0.19
--------------------------------------------------------------------------------
Earnings per share, diluted (EUR) -0.20 0.19
--------------------------------------------------------------------------------
Equity/share (EUR) 1.73 2.01
--------------------------------------------------------------------------------
Lowest share trading price (EUR) 2.65 2.28
--------------------------------------------------------------------------------
Highest share trading price (EUR) 4.34 3.30
--------------------------------------------------------------------------------
Average share price (EUR) 3.19 2.82
--------------------------------------------------------------------------------
Market capitalisation 81,624 54,694
--------------------------------------------------------------------------------
Formulae for key figures and ratios are presented in the 2012 financial
statements. These remained unchanged during the reporting period.
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