2013-02-01 08:00:06 CET
2013-02-01 08:00:18 CET
REGULATED INFORMATION
Digia Oyj - Financial Statement Release
DIGIA’S FOURTH QUARTER 2012: OPERATING PROFIT SLIGHTLY BETTER THAN EXPECTED, DESPITE EFFECTS OF QT ACQUISITION AND ONE-OFF COSTS OF FINALISED PERSONNEL NEGOTIATIONS
Helsinki, 2013-02-01 08:00 CET (GLOBE NEWSWIRE) -- DIGIA PLC FINANCIAL
STATEMENT RELEASE, 1 FEBRUARY 2013 at 09:00
DIGIA'S FOURTH QUARTER 2012: OPERATING PROFIT SLIGHTLY BETTER THAN EXPECTED,
DESPITE EFFECTS OF QT ACQUISITION AND ONE-OFF COSTS OF FINALISED PERSONNEL
NEGOTIATIONS
SUMMARY
January-December
- Consolidated net sales: EUR 100.4 (121.9) million, down 17.6 per cent
- Operating profit before extraordinary items: EUR 8.2 (8.1) million, up 1.4
per cent
- Extraordinary items comprise EUR 1.3 million restructuring costs for
reorganisation and personnel negotiations (1-12/2011: restructuring costs EUR
4.9 million and goodwill writedown EUR 25.4 million)
- Operating profit after extraordinary items: EUR 6.9 (−22.2) million
- Profitability (EBIT%): 8.2 (6.6) per cent before extraordinary items and 6.9
(−18.2) per cent after extraordinary items
- Product business accounted for 36.4 (21.0) per cent
- Earnings per share: EUR 0.26 (0.32) before extraordinary items and EUR 0.19
(−1.08) after extraordinary items
October-December
- Consolidated net sales EUR 25.5 (30.2) million, down 15.7 per cent
- Operating profit before extraordinary items: EUR 1.0 (2.5) million, down 60.7
per cent
- Extraordinary items comprise EUR 0.7 million restructuring costs for
reorganisation and personnel negotiations (Q4/2011: restructuring costs EUR 1.1
million)
- Operating profit after extraordinary items: EUR 0.2 (1.4) million
- Profitability (EBIT%): 3.8 (8.2) per cent before extraordinary items and 1.0
(4.6) per cent after extraordinary items
- Product business accounted for 35.8 (25.3) per cent
- Earnings per share: EUR 0.03 (0.11) before extraordinary items and EUR −0.01
(0.06) after extraordinary items
On 8 August the company made a deal to buy Qt software technology and the
related business from Nokia Plc. The acquisition became effective on 18
September and included a net income sum of EUR 9.2 million related to rights of
use granted to Nokia. Of this, EUR 4.2 was allocated to the fourth quarter,
bringing a significant temporary injection into the company's consolidated net
sales.
Even without the aforementioned Qt deal, the company's Qt product business was
successful in the review period. Thanks to the Qt business, the share of
product business and international business in the company's operations grew
significantly year on year. They now form a major part of the company's overall
business.
Despite the positive effect on net sales of the Qt deal, the company's overall
net sales fell during the review period and during the fourth quarter compared
to the corresponding periods in the previous year. This was due to the major
decline in demand for mobile contract engineering services which began in
Q2/2011 and continued throughout 2012.
After those changes, the company has consistently and successfully adjusted its
operations and organisation to correspond to the new operating environment. On
18 September 2012, the company initiated personnel negotiations with the aim of
reorganising. The negotiations apply to the personnel of the Qt business and
the remaining mobile contract engineering business in the Helsinki, Tampere,
Jyväskylä and Oulu offices. With the finalisation of the negotiations on 30
October 2012, the company concluded its adjustment measures in relation to the
mobile contract engineering business. The negotiations resulted in the laying
off of 52 employees.
In spite of the aforementioned adjustment measures, the decline in consolidated
net sales led to an increase in the proportion of fixed costs, which in turn
hindered the growth of operational profitability during the review period.
Profitability in the review period was also negatively affected by an
exceptional loss provision of EUR 0.8 million related to two customer
deliveries.
In the fourth quarter, the company's results were also impacted by increased
personnel expenses arising from the acquisition of new personnel through the Qt
deal, the cost of the adoption of the acquired business, and one-off expenses
of EUR 0.7 million related to the reorganisation and completed personnel
negotiations. Despite all this, the result of the fourth quarter was somewhat
better than expected.
The company expects its operating profit to remain slightly below normal, at
most slightly on the positive side through the first quarter of 2013, with
improvement after that. Profitability is expected to return to a good level in
the second half of 2013, thanks to completed streamlining measures and the
development of the Qt business.
Company predicts that its revenue for 2013 will be approximately on 2012 level.
Development of the revenue compared to 2012 is burdened by the termination of
the mobile contract engineering business.
Proposal for dividend distribution
At the end of 2012, the distributable shareholders' equity of Digia Plc was EUR
36,643,688.90, of which EUR 3,558,364.21 was the net profit for the year. At
the Annual General Meeting, the Board of Directors will propose that a dividend
of EUR 0.10 per share be paid according to the confirmed statement of financial
position for the fiscal year ending 31 December 2012. Shareholders listed in
the shareholder register maintained by Euroclear Finland Oy on the dividend
reconciliation date, 15 March 2013, will be eligible for the payment of
dividend. Dividends will be paid on 22 March 2013.
GROUP KEY FIGURES AND RATIOS
10-12/2 10-12/2 Change, 1-12/20 1-12/20 Change,
012 011 % 12 11 %
--------------------------------------------------------------------------------
Net sales 25,451 30,197 -15.7% 100,448 121,940 -17.6%
--------------------------------------------------------------------------------
Operating profit before 977 2,482 -60.7% 8,196 8,084 1.4%
extraordinary items
--------------------------------------------------------------------------------
- % of net sales 3.8% 8.2% 8.2% 6.6%
--------------------------------------------------------------------------------
Operating profit 244 1,386 -82.4% 6,884 -22,168
--------------------------------------------------------------------------------
- % of net sales 1.0% 4.6% 6.9% -18.2%
--------------------------------------------------------------------------------
Net profit -125 1,217 4,024 -22,452
--------------------------------------------------------------------------------
- % of net sales -0.5% 4.0% 4.0% -18.4%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Return on equity,% -1.2% 12.5% 9.8% -41.9%
--------------------------------------------------------------------------------
Return on capital 1.6% 9.6% 11.3% -28.7%
invested, %
--------------------------------------------------------------------------------
Interest-bearing 19,849 21,872 -9.2% 19,849 21,872 -9.2%
liabilities
--------------------------------------------------------------------------------
Cash and cash equivalents 8,283 8,170 1.4% 8,283 8,170 1.4%
--------------------------------------------------------------------------------
Net gearing 27.5% 34.5% 27.5% 34.5%
--------------------------------------------------------------------------------
Equity ratio 52.6% 47.8% 52.6% 47.8%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR, -0.01 0.06 0.19 -1.08
undiluted
--------------------------------------------------------------------------------
Earnings per share, EUR, -0.01 0.06 0.19 -1.08
diluted
--------------------------------------------------------------------------------
MARKETS AND DIGIA'S BUSINESS OPERATIONS
The current weak economic prospects have from time to time caused delays in
customers' decision-making and therefore in the start-up of new projects.
Additionally, constant cost pressures on customers are reflected in their
procurement decisions.
The human resources situation has two quite different aspects. On the one hand,
a large number of experts were released onto the job market from various
contract engineering projects; on the other, there is a shortage of experienced
architecture and business experts, which is causing lengthened recruitment
processes and pressure for pay rises.
The company's new organisation took effect at the beginning of 2012. It proved
to be effective and worked according to plan. In some areas, operational
efficiency will be enhanced further to improve profitability and develop the
service portfolio.
The increased cost pressure on Digia's customers particularly affected demand
for customer-specific solutions and services, especially in the private sector.
Demand for ERP systems and other operational systems was fair during the review
period, although increased caution was evident in customers' purchasing
behaviour and sales cycles have become longer. The order intake book is still
at a normal, healthy level.
The Qt business increased its net sales, with operations progressing according
to plan during the period. The high profitability of the business fell towards
the end of the review period, as expected, due to the Nokia Qt deal increasing
the costs of the business. During the period the company revised some of its
previously published plans related to Qt product development and its areas of
focus. The new Qt message was positively received by the market and has opened
significant new business opportunities, especially in the large customer
segment.
The focus of development of Digia's Russian unit was on ERP system solutions
for local customers within the retail value chain. Besides offering services
locally, the Russian unit also supports the company's business in Finland by
providing near shore services, particularly within ERP system solutions.
The focus of development of the Chinese unit was increasingly on Qt licence and
consulting services offered to the local Chinese market. The completed Qt
acquisition reinforced the company's competitiveness in this area.
CONSOLIDATED NET SALES
Digia's consolidated net sales for the reporting period totalled EUR 100.4
(121.9) million, down 17.6 per cent from the same period in 2011.
The decrease was due to a sharp fall in demand for mobile contract engineering
services in Q2 2011, which continued through 2012. Net sales generated by the
Qt business grew significantly from the comparison period, reaching EUR 18.3
million during the period under review. Of that figure, EUR 4.2 million came
from the granting of rights of use of Qt technology to Nokia as part of the Qt
business acquisition.
During the reporting period, the product business accounted for EUR 36.5 (25.7)
million or 36.4 (21.0) per cent of consolidated net sales.
International operations accounted for EUR 20.6 (14.7) million or 20.5 (12.1)
per cent of consolidated net sales.
Digia's consolidated net sales for the fourth quarter were EUR 25.5 (30.2)
million, down 15.7 per cent from the same period in 2011.
During the fourth quarter, the product business accounted for EUR 9.1 (7.6)
million of consolidated net sales, or 35.8 (25.3) per cent.
In the same period, the international business accounted for EUR 5.2 (5.1)
million of consolidated net sales, or 20.6 (17.0) per cent.
PROFIT PERFORMANCE AND PROFITABILITY
Digia's consolidated operating profit before extraordinary items for the
reporting period was EUR 8.2 (8.1) million, up 1.4 per cent year on year.
Profitability (EBIT%) before extraordinary items was 8.2 (6.6) per cent.
Digia's consolidated operating profit after extraordinary items for the review
period was EUR 6.9 (-22.2) million. Profitability (EBIT%) after extraordinary
items was 6.9 (-18.2) per cent. Extraordinary items comprise a EUR 1.3 million
restructuring cost related to the personnel negotiations and reorganisations
conducted during the year.
Digia's consolidated fourth-quarter operating profit before extraordinary items
was EUR 1.0 (2.5) million, representing a year-on-year decrease of 60.7 per
cent. Profitability (EBIT%) before extraordinary items was 3.8 (8.2) per cent.
Digia's consolidated operating profit after extraordinary items for the quarter
came to EUR 0.2 (1.4) million, down 82.4 per cent year on year. Profitability
(EBIT%) after extraordinary items was 1.0 (4.6) per cent.
Operating profit and profitability were positively affected in the review
period by income from the granting of rights of use of Qt technology to Nokia
as part of the Qt deal. Conversely, the company's operating cost structure and
profitability were negatively affected during the period by investments into
the international product business and a relative increase in the proportion of
fixed operating costs. There were also temporary negative effects from the
additional costs caused by increased personnel turnover at the beginning of the
year, and by loss provisions related to two customer projects in the third
quarter. The profitability of the Solutions and Services business was lower
than expected throughout the period.
Consolidated earnings before tax for the period totalled EUR 5.6 (−23.1)
million, and net profit was EUR 4.0 (−22.5) million. Consolidated earnings
before tax for the fourth quarter were EUR −0.02 (1.1) million, and net profit
totalled EUR −0.1 (1.2) million.
Consolidated earnings per share for the review period totalled EUR 0.26 (0.32)
before extraordinary items and EUR 0.19 (-1.08) after extraordinary items.
Consolidated earnings per share for the fourth quarter were EUR 0.03 (0.11)
before extraordinary items and EUR −0.01 (0.06) after extraordinary items.
The Group's net financial expenses for the reporting period were EUR 1.3 (1.0)
million and for the fourth quarter EUR 0.3 (0.3) million.
FINANCIAL POSITION AND EXPENDITURE
At the end of the reporting period, Digia Group's consolidated balance sheet
total stood at EUR 92.4 million (12/2011: EUR 87.8 million), and the equity
ratio was 52.6 (12/2011: 47.8) per cent. Net gearing was 27.5 (12/2011: 34.5)
per cent. Period-end cash and cash equivalents totalled EUR 8.3 (12/2011: 8.2)
million.
Interest-bearing liabilities amounted to EUR 19.8 (12/2011: 21.9) million at
the period end. These consisted of EUR 18.5 million in loans from financial
institutions and EUR 1.3 million in financial leasing liabilities.
The Group's cash flow from operations for the period was positive by EUR 19.9
(8.8) million, cash flow from investments was negative by EUR 16.2 (2.7)
million, and cash flow from financing was negative by EUR 3.6 (7.6) million.
Billing of EUR 12.2 million from Nokia in relation to the Qt acquisition deal
had a positive impact on operational cash flow. Cash flow from financing was
negatively affected by the repayment of loans for a total sum of EUR 5.5
million, as well as the payment of EUR 2.1 million in dividends. Additionally,
a long-term loan of EUR 4.0 million was taken out during the period for the Qt
acquisition.
The Group's investments in fixed assets during the review period totalled EUR
0.8 (2.7) million. Acquisitions of tangible fixed assets totalled EUR 0.7 (2.3)
million.
Return on investment (ROI) for the period was 11.3 (−28.7) per cent, and return
on equity (ROE) was 9.8 (−41.9) per cent.
The Group carries out quarterly impairment testing of goodwill and intangible
assets with an indefinite useful life. The table below shows the distribution
of goodwill and values subject to testing at the end of the reporting period:
EUR Specified Amortisations during Goodwi Other Total value
1,000 intangible the reporting period ll items subject to
assets testing
--------------------------------------------------------------------------------
Group 9,820 1,539 51,105 7,515 68,440
total
--------------------------------------------------------------------------------
Present values were calculated for the forecast period based on the following
assumptions: consolidated net sales and operating profit for 2013 according to
budget; after this, annual growth in net sales of 3.0 per cent and in operating
profit of 10.0 per cent, and a pre-tax discount rate of 9.4 per cent. Cash
flows after the forecast period were estimated by means of cash-flow
extrapolation, applying the assumptions given above.
According to a completed sensitivity analysis, the goodwill requires either net
sales to remain at the current level with profitability of 5.9 per cent, or a
3.0 per cent growth in net sales with profitability of 3.4 per cent. The
management sees no risk of goodwill impairment.
PERSONNEL, MANAGEMENT AND ADMINISTRATION
At the end of the period, the total number of Group personnel was 982,
representing a decrease of 193 employees or 16.4 per cent compared to the end
of 2011 (1,175). During the reporting period the number of employees averaged
1,025, a decrease of 428 employees or 29.5 per cent from the 2011 average
(1,453).
Employees by function at the end of the period:
Business units 96%
----------------------------------
Administration and management 4%
----------------------------------
As of the end of the period, 195 (12/2011: 161) employees were working abroad.
The Digia Plc Annual General Meeting of 13 March 2012 re-elected Robert Ingman,
Kari Karvinen, Pertti Kyttälä and Tommi Uhari as members of the Board. Päivi
Hokkanen, Seppo Ruotsalainen and Leena Saarinen were elected as new members. 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.
Anja Wasenius started as Acting CFO in June 2012.
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.
Contrary to previous years, the company no longer has any business risk related
to mobile contract engineering services. Instead, 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.
If the Eurozone debt crisis and global economic recession continue, they may
affect customers' investment decisions and liquidity, and thereby the company's
sales and profits. Increased uncertainty has already been detected in
customers' investment decisions, having delayed planned project schedules for a
while, but recent developments have not been in any way alarming.
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
The company is focusing heavily on paving the way for growth. Besides organic
growth, the company will actively pursue opportunities to make carefully
considered business acquisitions that support its strategy. The main
cornerstones of the company's operations are still high profitability and a
positive cash flow.
The company expects the IT market to remain at roughly the previous year's
level in 2013.
Efforts will continue to be made to develop the company's 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, operational systems and
integration services to remain good, although increased caution on the customer
side and lengthening sales cycles may have an effect on future order intake.
The company continues to seek growth in the expanding Russian market. The
Chinese unit will focus on Qt licence sales and supporting service.
The company expects net sales from the Qt business to continue growing.
Operating profit is predicted to remain slightly below normal or at most
slightly positive through the first quarter of 2013, after which it should
improve. Profitability is expected to return to a good level in the second half
of 2013, thanks to completed streamlining measures and the development of the
Qt business.
Company predicts that its revenue for 2013 will be approximately on 2012 level.
Development of the revenue compared to 2012 is burdened by the termination of
the mobile contract engineering business.
OTHER EVENTS DURING THE REVIEW PERIOD
Convening on 13 March 2012, the Digia Plc Annual General Meeting (AGM) approved
the financial statements for 2011, released the Board members and the CEO from
liability, determined Board emoluments, resolved to keep the number of Board
members at seven, and elected the Board of Directors for the new term.
With regard to profit distribution for 2011, the AGM approved the Board's
proposal to make a repayment of capital of EUR 0.10 per share to all
shareholders listed in the shareholder register maintained by Euroclear Finland
Ltd on the reconciliation date of 16 March 2012. The date for the repayment of
capital was 23 March 2012.
The AGM granted the following authorisations to the Board:
Authorisation of the Board of Directors to decide on buying back own shares
and/or accepting them as collateral
The AGM authorised the Board to decide on the buyback and/or acceptance as
collateral of not more than 2,000,000 shares in the company. This buyback can
only be executed by means of the company's unrestricted equity. The Board shall
decide on how these shares are to be bought. Own shares may be bought back in
disproportion to the holdings of the shareholders. The authorisation also
includes acquisition of shares through public trading organised by NASDAQ OMX
Helsinki Oy in accordance with the rules and instructions of NASDAQ OMX
Helsinki and Euroclear Finland Ltd, or through offers made to shareholders.
Shares may be acquired in order to improve the company's capital structure, to
fund acquisitions or other business transactions, for offering share-based
incentive schemes, to sell on, or to be annulled. The shares must be acquired
at the market price in public trading. This authorisation supersedes that
granted by the AGM of 16 March 2011 and is valid for 18 months, i.e. until 13
September 2013.
Authorising the Board of Directors to decide on a share issue and granting of
special rights
The AGM authorised the Board to decide on an ordinary or bonus issue of shares
and the granting of special rights (as defined in Section 1, Chapter 10 of the
Limited Liability Companies Act) in one or more instalments, as follows: The
issue may total, at a maximum, 4,000,000 shares. The authorisation applies both
to new shares and to treasury shares held by the company. By virtue of the
authorisation, the Board has the right to decide on share issues and the
granting of special rights, in deviation from the pre-emptive subscription
rights of the shareholders (a directed issue). The authorisation may be used to
fund or complete acquisitions or other business transactions, for offering
share-based incentive schemes, to develop the company's capital structure, or
for other purposes. The Board was authorised to decide on all terms related to
the share issue or special rights, including the subscription price, its
payment in cash or (partly or wholly) in capital contributed in kind or its
being written off against the subscriber's receivables, and its recognition in
the company's balance sheet. This authorisation supersedes that granted by the
AGM of 16 March 2011 and is valid for 18 months, i.e. until 13 September 2013.
SHARE CAPITAL AND SHARES
On 31 December 2012, the number of Digia Plc shares totalled 20,875,645.
At the end of the period, according to Finnish Central Securities Depository
Ltd, Digia had 5,770 shareholders.
The 10 biggest shareholders were:
Shareholder Shares and votes
--------------------------------------------------------------
Ingman Group Oy Ab 16.8%
--------------------------------------------------------------
Jyrki Hallikainen 10.2%
--------------------------------------------------------------
Pekka Sivonen 8.8%
--------------------------------------------------------------
Kari Karvinen 6.3%
--------------------------------------------------------------
Matti Savolainen 6.1%
--------------------------------------------------------------
Ilmarinen Mutual Pension Insurance Company 4.8%
--------------------------------------------------------------
Varma Mutual Pension Insurance Company 3.6%
--------------------------------------------------------------
Nordea Bank Finland Plc (nominee-registered) 1.6%
--------------------------------------------------------------
Etola Oy 1.0%
--------------------------------------------------------------
Rausanne Oy 0.9%
--------------------------------------------------------------
Distribution of holdings by number of shares held on 31 December 2012
Number of shares Shareholders Shares and votes
---------------------------------------------------
1-100 22.4% 0.4%
---------------------------------------------------
101-1000 58.7% 7.4%
---------------------------------------------------
1,001-10,000 17.4% 12.9%
---------------------------------------------------
10,001-100,000 1.1% 8.8%
---------------------------------------------------
100,001-1,000,000 0.4% 22.4%
---------------------------------------------------
1,000,001-4,000,000 0.1% 48.1%
---------------------------------------------------
Shareholding by sector on 31 December 2012
Shareholders Shares
--------------------------------------------------------------------
Non-financial corporations 4.5% 22.0%
--------------------------------------------------------------------
Financial and insurance corporations 0.2% 4.8%
--------------------------------------------------------------------
General government 0.1% 8.4%
--------------------------------------------------------------------
Not-for-profit institutions serving households 0.2% 0.5%
--------------------------------------------------------------------
Households 94.6% 63.2%
--------------------------------------------------------------------
Rest of the world 0.4% 1.1%
--------------------------------------------------------------------
The weighted average number of shares during the reporting period, adjusted for
share issues, was 20,763,388. The number of outstanding shares was 20,772,523
in total at the end of the review period.
The company held a total of 103,122 treasury shares at the end of the reporting
period. The accounting counter value of these treasury shares is EUR 0.10 per
share. The company held about 0.5 per cent of the capital stock as of 31
December 2012. In relation to the company's performance-based incentive system,
Digia has financed the acquisition of 300,000 treasury shares. At the end of
the review period, 12,424 of these shares remained undistributed and were under
the management of Evli Alexander Management Ltd.
REPORTED SHARE PERFORMANCE ON THE HELSINKI STOCK EXCHANGE
Digia Plc shares are listed on the Nordic Exchange under ‘Information
Technology IT Services'. The company's short name is DIG1V. The lowest reported
share quotation was EUR 2.28 and the highest was EUR 3.30. The share officially
closed at EUR 2.62 on the last trading day. The trade-weighted average was EUR
2.82. The Group's market capitalisation totalled EUR 54,694,190 at the end of
the period.
The company received no flagging notifications during the reporting period.
STOCK OPTION SCHEMES
Digia Plc had no outstanding options.
Helsinki, 1 February 2013
Digia Plc
Board of Directors
COMMUNICATIONS
Digia will hold a briefing on its Financial Statement for analysts on Friday 1
February 2013 at 11 am, in meeting room 2 of WTC Sodexo in the World Trade
Center, Aleksanterinkatu 17, 00100 Helsinki, Finland. All are welcome.
FURTHER INFORMATION
Juha Varelius, President and CEO, Mobile: +358 400 855 849, email:
juha.varelius@digia.com
The Interim Report and access to the related live briefing for the media and
analysts (in Finnish) 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 interim report was prepared in compliance with IFRS and the IAS 34 standard.
These financial statements are unaudited.
CONSOLIDATED INCOME STATEMENT, EUR 1,000
10-12/201 10-12/201 Change 1-12/2012 1-12/2011 Change
2 1 , % , %
--------------------------------------------------------------------------------
Net sales 25,451.2 30,197.3 -15.7% 100,448.2 121,939.9 -17.6%
--------------------------------------------------------------------------------
Other operating 380.2 261.0 45.7% 1,090.4 360.7 202.3%
income
--------------------------------------------------------------------------------
Materials and -2,502.1 -2,568.9 -2.6% -9,194.4 -10,721.0 -14.2%
services
--------------------------------------------------------------------------------
Depreciation, -886.3 -1,095.9 -19.1% -3,318.6 -29,267.9 -88.7%
amortisation and
impairment
--------------------------------------------------------------------------------
Other operating -22,198.5 -25,407.6 -12.6% -82,141.3 -104,479.7 -21.4%
expenses
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EBIT 244.4 1,385.9 -82.4% 6,884.2 -22,168.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial expenses -265.2 -318.3 -16.7% -1,280.9 -963.1 33.0%
(net)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings before tax -20.8 1,067.7 5,603.3 -23,131.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -103.9 149.8 -1,579.0 679.5
--------------------------------------------------------------------------------
NET PROFIT -124.7 1,217.5 4,024.3 -22,451.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive
income:
--------------------------------------------------------------------------------
Exchange -274.7 153.1 345.4 42.1
differences on
translation of
foreign operations
--------------------------------------------------------------------------------
Total comprehensive -399.4 1,370.6 4,369.7 -22,409.5
income
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of net
profit:
--------------------------------------------------------------------------------
Parent-company -124.7 1,217.5 4,024.3 -22,451.6
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of
total
comprehensive
income:
--------------------------------------------------------------------------------
Parent-company -399.4 1,370.6 4,369.7 -22,409.5
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, -0.01 0.06 0.19 -1.08
EUR
--------------------------------------------------------------------------------
Earnings per share -0.01 0.06 0.19 -1.08
(diluted), EUR
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET, EUR 1,000
ASSETS 31.12.2012 31.12.2011 Change, %
----------------------------------------------------------------------
----------------------------------------------------------------------
Non-current assets
----------------------------------------------------------------------
Intangible assets 61,265.0 48,486.7 26.4%
----------------------------------------------------------------------
Tangible assets 2,152.3 3,156.5 -31.8%
----------------------------------------------------------------------
Financial assets 627.0 627.0 0.0%
----------------------------------------------------------------------
Inventories 25.3 0.0
----------------------------------------------------------------------
Long-term receivables 69.5 60.3 15.4%
----------------------------------------------------------------------
Deferred tax assets 535.0 789.9 -32.3%
----------------------------------------------------------------------
----------------------------------------------------------------------
Total non-current assets 64,674.0 53,120.3 21.8%
----------------------------------------------------------------------
----------------------------------------------------------------------
Current assets
----------------------------------------------------------------------
Current receivables 19,418.5 26,523.0 -26.8%
----------------------------------------------------------------------
Available-for-sale financial assets 318.7 303.5 5.0%
----------------------------------------------------------------------
Cash and cash equivalents 7,964.5 7,866.5 1.2%
----------------------------------------------------------------------
----------------------------------------------------------------------
Total current assets 27,701.7 34,693.0 -20.2%
----------------------------------------------------------------------
----------------------------------------------------------------------
Total assets 92,375.7 87,813.3 5.2%
----------------------------------------------------------------------
Shareholders' equity and liabilities 31/12/2012 31/12/2011 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 35,525.0 -5.8%
--------------------------------------------------------------------------------
Translation difference 553.8 208.4 165.7%
--------------------------------------------------------------------------------
Retained earnings -11,153.7 11,279.9
--------------------------------------------------------------------------------
Net profit 4,024.3 -22,451.6
--------------------------------------------------------------------------------
Equity attributable to parent-company 42,063.1 39,752.6 5.8%
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total shareholders' equity 42,063.1 39,752.6 5.8%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities
--------------------------------------------------------------------------------
Long-term interest-bearing liabilities 13,026.6 15,441.7 -15.6%
--------------------------------------------------------------------------------
Received long-term advances 4,192.7 0.0
--------------------------------------------------------------------------------
Other long-term liabilities 0.0 674.0
--------------------------------------------------------------------------------
Deferred tax liabilities 639.4 772.0 -17.2%
--------------------------------------------------------------------------------
Total long-term liabilities 17,858.7 16,887.7 5.7%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Short-term interest-bearing liabilities 6,822.5 6,430.2 6.1%
--------------------------------------------------------------------------------
Other short-term liabilities 25,631.4 24,742.8 3.6%
--------------------------------------------------------------------------------
Total short-term liabilities 32,453.9 31,173.0 4.1%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total liabilities 50,312.6 48,060.7 4.7%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity and liabilities 92,375.7 87,813.3 5.2%
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000
1/1/2012-31/12/201 1/1/2011-31/12/201
2 1
--------------------------------------------------------------------------------
Cash flow from operations:
--------------------------------------------------------------------------------
Net profit 4,024 -22,452
--------------------------------------------------------------------------------
Adjustments to net profit 8,176 34,780
--------------------------------------------------------------------------------
Change in working capital 8,072 2,791
--------------------------------------------------------------------------------
Interest paid -728 -781
--------------------------------------------------------------------------------
Interest income 7 35
--------------------------------------------------------------------------------
Taxes paid 395 -5,532
--------------------------------------------------------------------------------
Net cash flow from operations 19,946 8,842
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from investments:
--------------------------------------------------------------------------------
Purchases of tangible and intangible -16,210 -2,733
assets
--------------------------------------------------------------------------------
Cash flow from investments -16,210 -2,733
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from financing:
--------------------------------------------------------------------------------
Proceeds from share issue 0 0
--------------------------------------------------------------------------------
Acquisition of own shares 0 0
--------------------------------------------------------------------------------
Repayment of current loans -5,544 -19,044
--------------------------------------------------------------------------------
Repayments of non-current loans 0 0
--------------------------------------------------------------------------------
Withdrawals of current loans 500 3,500
--------------------------------------------------------------------------------
Withdrawals of non-current loans 3,500 13,500
--------------------------------------------------------------------------------
Dividends paid and other profit -2,078 -5,577
distribution
--------------------------------------------------------------------------------
Cash flow from financing -3,623 -7,621
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in liquid assets 113 -1,512
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liquid assets at beginning of period 8,170 9,682
--------------------------------------------------------------------------------
Change in fair value
--------------------------------------------------------------------------------
Change in liquid assets 113 -1,512
--------------------------------------------------------------------------------
Liquid assets at end of period 8,283 8,170
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, EUR 1,000
2011 a) b) c) d) e) f) g) h)
--------------------------------------------------------------------------------
Shareholders' equity, 1 2,086 40 7,899 35,486 5,204 166 16,529 67,411
January 2011
--------------------------------------------------------------------------------
Net profit -22,452 -22,452
--------------------------------------------------------------------------------
Other comprehensive 42 42
income
--------------------------------------------------------------------------------
Dividends -5,577 -5,577
--------------------------------------------------------------------------------
Share-based payments 1 -40 39 171 171
recognised against
equity
--------------------------------------------------------------------------------
Other items 157 157
--------------------------------------------------------------------------------
Shareholders' equity, 2,088 0 7,899 35,525 5,204 208 -11,172 39,753
31 December 2011
--------------------------------------------------------------------------------
2012 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 345 345
income
--------------------------------------------------------------------------------
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 = 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 2011 Financial
Statements. The accounting principles and formulas for the calculation of key
figures and ratios are unchanged and are presented in the 2011 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 2,077,252.30.
Related-party transactions:
Digia Group's related parties include the CEO and the members of the Board of
Directors and Group Management Team. Digia Group had no significant
transactions with related parties during the reporting period.
M&A transactions completed:
On 8 August the company made a deal to buy Qt software technology and the
related business from Nokia Plc. With the acquisition, 88 employees in Norway,
Germany and Finland were transferred to the company's employ. The deal became
effective on 18 September 2012 and the net acquisition price was EUR 4.0
million, comprising the sale price of EUR 16.2 million related to the assets
and business transferred, minus a bill of EUR 12.2 million from Digia to Nokia.
Of the sale price of EUR 16.2 million, EUR 6.6 million of goodwill pertained to
intangible rights, EUR 2.9 million to the brand, EUR 4.1 million to technology
and EUR 1.0 million to the customer relationship with Nokia. In line with the
Finnish financial reporting standard, the recorded depreciation from goodwill
is tax-deductible. Additionally, EUR 0.2 million was recorded as an expense and
EUR 1.5 million as a loan repayment related to an expense from 2012 covered as
a part of the deal.
The aforementioned bill from Digia to Nokia related to the granting to Nokia of
the right to continue using Qt in its own business, to a three-year competition
and transfer restriction applying to the technology acquired by Digia, and to
Nokia's fixed-term obligation to provide Digia with services facilitating the
takeover of the acquired business, which were valued in total at EUR 12.2
million. Of the total sum, EUR 9.2 million was related to the right of use
granted to Nokia and is considered to make up income for the company; of this,
EUR 3.8 million was allocated to the third quarter and the other EUR 5.4
million will be recognised evenly over the next three years.
Subsidiary merger:
Digia Plc's wholly owned subsidiary Digia Partners Oy merged into the parent
company during the review period. The merger came into effect on 31 October
2012.
Consolidated income statement by quarter:
EUR 1,000 10-12/201 7-9/2012 4-6/2012 1-3/2012 10-12/201
2 1
--------------------------------------------------------------------------------
Net sales 25,451.2 24,439.2 24,493.4 26,064.4 30,197.3
--------------------------------------------------------------------------------
Other operating income 380.2 256.4 251.6 202.2 261.0
--------------------------------------------------------------------------------
Materials and services -2,502.1 -1,963.1 -2,184.9 -2,544.3 -2,568.9
--------------------------------------------------------------------------------
Depreciation, -886.3 -1,086.8 -697.5 -648.0 -1,095.9
amortisation and
impairment
--------------------------------------------------------------------------------
Other operating expenses -22,198.5 -17,100.8 -21,186.2 -21,655.8 -25,407.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EBIT 244.4 4,544.9 676.4 1,418.5 1,385.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial expenses (net) -265.2 -378.9 -289.1 -347.7 -318.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings before tax -20.8 4,166.0 387.3 1,070.8 1,067.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
INCOME TAXES -103.9 -1,094.4 -107.6 -273.1 149.8
--------------------------------------------------------------------------------
Net profit -124.7 3,071.6 279.7 797.7 1,217.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Allocation:
--------------------------------------------------------------------------------
Parent-company -124.7 3,071.6 279.7 797.7 1,217.5
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR -0.01 0.15 0.01 0.04 0.06
--------------------------------------------------------------------------------
Earnings per share -0.01 0.15 0.01 0.04 0.06
(diluted), EUR
--------------------------------------------------------------------------------
Group key figures and ratios:
EUR 1,000 1-12/2012 1-11/2011
--------------------------------------------------------------------------------
Extent of business:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 100,448 121,940
--------------------------------------------------------------------------------
- change from previous year -17.6% -6.8%
--------------------------------------------------------------------------------
Average capital invested 61,768 76,176
--------------------------------------------------------------------------------
Personnel at period end 982 1,175
--------------------------------------------------------------------------------
Average number of personnel 1,025 1,453
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profitability:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit before extraordinary items and impairment 8,154 8,084
--------------------------------------------------------------------------------
- % of net sales 8.1% 6.6%
--------------------------------------------------------------------------------
EBIT 6,884 -22,168
--------------------------------------------------------------------------------
- % of net sales 6.9% -18.2%
--------------------------------------------------------------------------------
Earnings before tax 5,603 -23,131
--------------------------------------------------------------------------------
- % of net sales 5.6% -19.0%
--------------------------------------------------------------------------------
Net profit 4,024 -22,452
--------------------------------------------------------------------------------
% of net sales 4.0% -18.4%
--------------------------------------------------------------------------------
Return on equity, % 9.8% -41.9%
--------------------------------------------------------------------------------
Return on investment, % 11.3% -28.7%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financing and financial standing:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Interest-bearing liabilities 19,849 21,872
--------------------------------------------------------------------------------
Short-term investments & cash and bank receivables 8,283 8,170
--------------------------------------------------------------------------------
Net gearing 27.5% 34.5%
--------------------------------------------------------------------------------
Equity ratio 52.6% 47.8%
--------------------------------------------------------------------------------
Net cash flow from operations 20,251 8,842
--------------------------------------------------------------------------------
Earnings per share, undiluted (EUR) 0.19 -1.08
--------------------------------------------------------------------------------
Earnings per share, diluted (EUR) 0.19 -1.08
--------------------------------------------------------------------------------
Equity/share, EUR 2.01 1.90
--------------------------------------------------------------------------------
Lowest share trading price, EUR 2.28 2.30
--------------------------------------------------------------------------------
Highest share trading price, EUR 3.30 5.79
--------------------------------------------------------------------------------
Average share price, EUR 2.82 3.88
--------------------------------------------------------------------------------
Market capitalisation 54,694 50,519
--------------------------------------------------------------------------------
Formulae for key figures and ratios are presented in the 2011 financial
statements. These formulae remained unchanged during the reporting period.
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