2012-02-03 08:35:00 CET
2012-02-03 08:35:16 CET
REGULATED INFORMATION
Digia Oyj - Financial Statement Release
DIGIA’s FOURTH QUARTER 2011: BUSINESS READJUSTMENT AND REORGANISATION FINALISED
Helsinki, 2012-02-03 08:35 CET (GLOBE NEWSWIRE) -- DIGIA PLC FINANCIAL
STATEMENT RELEASE, 3 FEBRUARY 2012 at 09:35
DIGIA's FOURTH QUARTER 2011: BUSINESS READJUSTMENT AND REORGANISATION FINALISED
SUMMARY
January-December
- Consolidated net sales: EUR 121.9 (130.8) million, down 6.8 per cent
- Operating profit before extraordinary items: EUR 8.1 (17.2) million, down
52.9 per cent
- Extraordinary items include a restructuring provision of EUR 4.9 million and
a writedown of EUR 25.4 million for customer relationships and goodwill
- Operating profit after extraordinary items: EUR -22.2 (17.2) million
- Profitability (EBIT%): 6.6 (13.1) per cent before extraordinary items and
-18.2 (13.1) per cent after extraordinary items
- Product business accounted for 21.0 (15.1) per cent
- Earnings per share: EUR 0.32 (0.56) before extraordinary items and EUR -1.08
(0.56) after extraordinary items
- Board proposes a capital return of EUR 0.10 per share to be paid
October-December
- Consolidated net sales: EUR 30.2 (36.0) million, down 16.2 per cent
- Operating profit before extraordinary items: EUR 2.5 (4.8) million, down 48.1
per cent
- Extraordinary items include a restructuring provision of EUR 1.1 million
related to personnel negotiations concluded in the quarter
- Operating profit after extraordinary items: EUR 1.4 (4.8) million, down 71.0
per cent
- Profitability (EBIT%): 8.2 (13.3) per cent before extraordinary items and 4.6
(13.3) per cent after extraordinary items
- Product business accounted for 25.3 (13.8) per cent
- Earnings per share: EUR 0.11 (0.16) before extraordinary items and EUR 0.06
(0.16) after extraordinary items
Net sales for Enterprise Solutions segment grew slightly in the review period.
Taking into account the Qt business acquired in March, the segment's growth
rate exceeded market growth. Operational profitability also increased towards
the end of the period, flattening out at the high level previously encountered.
The fourth quarter's profitability (EBIT-%), not including the Qt business or
the non-recurrent expenses related to the personnel negotiations, was 10.8 per
cent.
Realigned technology-platform strategies and changes in the competitive
situation for phone manufacturers markedly changed the business environment for
the Mobile Solutions segment. As a result of these changes and the ensuing
reduction in contract engineering business, the Mobile Solutions segment's
consolidated net sales and profitability fell significantly throughout the
review period. This had a major negative impact on the whole company's
consolidated net sales and operating profit compared to the previous year.
This negative impact strengthened as the period progressed. For this reason,
the company conducted four rounds of personnel negotiations during the period,
leading to the closure of the Pori and Lappeenranta offices and the dismissal
of 344 employees.
As a consequence of the change in the operating environment of the Mobile
Solutions segment, and of the downward revision of long-term profit
expectations for mobile operations in general, the company made a one-off
writedown of EUR 25.4 million in relation to the segment's customer relations
and goodwill.
At the end of the review period, the company carried out a reorganisation with
the aim of ensuring the continuity of its solid core business and promoting the
development of its scalable product business as part of its overall product
selection. The new organisation took effect at the beginning of 2012. From that
time, the company will transfer to single-segment reporting.
The company predicts that demand for contract engineering services will
continue to fall in the first quarter of 2012, reducing consolidated net sales
compared to the fourth quarter of 2011. This reduction in net sales and the
start-up of the new organisation will also tax the company's profitability,
which is also expected to fall temporarily from the fourth quarter's level.
The new organisation is expected to begin impacting on efficiency from the
second quarter of 2012. By then, it should have a positive impact on the
company's net sales and profitability.
The company expects its commercial Qt licensing and service business to grow in
2012 compared to the previous year, while maintaining a good profitability
level. Digia's Russian operations are also expected to develop favourably, with
an even greater impact on the positive development of consolidated net sales
and profitability during 2012.
On the whole, the company predicts an improvement in operational profitability
as the year progresses, reaching a good level in the second half of 2012.
Proposal for Dividend Distribution
The unrestricted equity in the balance sheet of the Company as per December 31,
2011 amounted to EUR 35 142 569,13 of which the net result for the financial
year amounts to EUR -1 409 098,31. The Board proposes to the Annual General
Meeting that based on the balance sheet to be adopted for the accounting period
ended December 31, 2011 a capital return of EUR 0,10 per share will be paid
from the parent company's invested unrestricted equity fund. The capital return
will be paid to shareholders registered in the Register of Shareholders held by
Euroclear Finland Ltd on the record date March 16, 2012. The capital return
will be paid on March 23, 2012.
The company's loan covenants were changed under the new loan arrangements. In
future, this means that the company can distribute a maximum of 50 per cent
(previously 30%) of the Group's net profit for the year without separate
agreement. This does not affect 2012, when a maximum of EUR 3 million can be
distributed.
GROUP KEY FIGURES AND RATIOS
10-12/2 10-12/2 Change, 1-12/2 1-12/20 Change,
011 010 % 011 10 %
--------------------------------------------------------------------------------
Net sales 30,197 36,025 -16.2% 121,94 130,825 -6.8%
0
--------------------------------------------------------------------------------
Operating profit before 2,482 4,781 -48.1% 8,084 17,164 -52.9%
extraordinary items
--------------------------------------------------------------------------------
- % of net sales 8.2% 13.3% 6.6% 13.1%
--------------------------------------------------------------------------------
Operating profit 1,386 4,781 -71.0% -22,16 17,164
8
--------------------------------------------------------------------------------
- % of net sales 4.6% 13.3% -18.2% 13.1%
--------------------------------------------------------------------------------
Net profit 1,217 3,274 -62.8% -22,45 11,474
2
--------------------------------------------------------------------------------
- % of net sales 4.0% 9.1% -18.4% 8.8%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Return on equity, % 12.5% 19.9% -41.9% 18.3%
--------------------------------------------------------------------------------
Return on capital invested, 9.6% 21.7% -28.7% 19.3%
%
--------------------------------------------------------------------------------
Interest-bearing 21,872 23,316 -6.2% 21,872 23,316 -6.2%
liabilities
--------------------------------------------------------------------------------
Cash and cash equivalents 8,170 9,682 -15.6% 8,170 9,682 -15.6%
--------------------------------------------------------------------------------
Net gearing, % 34.5% 20.2% 34.5% 20.2%
--------------------------------------------------------------------------------
Equity ratio, % 47.8% 58.8% 47.8% 58.8%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR, 0.06 0.16 -63.3% -1.08 0.56
undiluted
--------------------------------------------------------------------------------
Earnings per share, EUR, 0.06 0.16 -63.3% -1.08 0.56
diluted
--------------------------------------------------------------------------------
The figures for 2011 include extraordinary items comprising
a writedown for customer relationships and goodwill of the Mobile Solutions
segment of EUR 25.4 million, as well as a restructuring provision of EUR 4.9
million.
MARKETS AND DIGIA'S BUSINESS
The company conducted four rounds of personnel negotiations during the period,
leading to the closure of the Pori and Lappeenranta offices and the dismissal
of 344 employees. This was due to the radical change in the operating
conditions of the Mobile Solutions segment. In turn, this change was caused by
the realignment of technology platform strategies and changes in the
competitive scenario among phone manufacturers. These negatively affected the
entire company's contract engineering operations.
The last round of personnel negotiations ended on 3 November 2011. They
reflected the company's aim of adapting its organisation, cost structure and
operations to the new market situation and to its long-term strategic
objectives.
The personnel negotiations caused non-recurrent costs totalling around EUR 4.9
million during the review period. Of these, approximately EUR 1.1 million were
incurred in the fourth quarter.
Digia's Chinese unit generates product development and maintenance services.
This enables the company to serve customers at various points in their product
development cycle. The unit's capacity is utilised both in projects within
China and for global customer relationships. Demand for contract engineering
services fell sharply due to changes in the operating environment, which will
also affect the Chinese unit. The company aims to realign its Chinese
operations to correspond better to local sales and international delivery
contracts.
The Russian unit operates as a near-shore resource for Digia's Finnish
customers. It also sells services directly to local customers, an operation
that Digia is working actively to develop and enhance. During the review
period, the Russian unit's operations progressed as expected.
ENTERPRISE SOLUTIONS:
Demand for ERP systems continued at a moderate level during the period. Demand
for e-business and financial sector systems was lower than expected.
The start-up and development of the Qt licensing and service business acquired
in March went according to plan. Taking into account the Qt business, the
Enterprise Solutions segment is growing faster than the IT market in general.
During the review period, the company continued to focus on developing
international sales and licence-based business.
MOBILE SOLUTIONS:
Due to major changes in the operating environment, the Mobile Solutions
segment's contract engineering business shrank significantly compared to the
previous year. Because the effect of the changes was permanent, during the
period the company revised the entire segment and its long-term profit
expectations. The result was a writedown of EUR 25.4 million in relation to the
segment's customer relations and goodwill.
In the future the company aims to expand its clientele by leveraging its
wireless systems competencies within the area of multichannel business
solutions.
NET SALES
During the reporting period, Digia's consolidated net sales totalled EUR 121.9
(130.8) million, down 6.8 per cent from the same period in 2010.
The Enterprise Solutions segment's net sales for the period totalled EUR 82.7
(75.7) million, up 9.2 per cent. The Mobile Solutions segment posted net sales
of EUR 39.3 (55.2) million, down 28.8 per cent. The segment's growth in net
sales was mainly thanks to the Qt business, which accumulated EUR 6.0 million
in net sales starting in the second quarter. Total net sales were negatively
affected, especially at the beginning of the period, by lower licence sales
than expected, which had an impact on billing. In Mobile Solutions, net sales
fell because of a sudden and considerable decline in demand for services,
following a change in the business environment.
During the reporting period, the product business accounted for EUR 25.7 (19.7)
million or 21.0 (15.1) per cent of consolidated net sales.
International operations accounted for EUR 14.7 (10.6) million, or 12.1 (8.1)
per cent of consolidated net sales.
For the fourth quarter, Digia's consolidated net sales came to EUR 30.2 (36.0)
million, down 16.2 per cent year on year.
Fourth-quarter net sales for the Enterprise Solutions segment totalled EUR 22.9
(20.7) million, up 10.5 per cent. The Qt business accounted for EUR 2.7 million
of this. Fourth-quarter net sales for Mobile Solutions totalled EUR 7.3 (15.3)
million, down 52.4 per cent.
During the fourth quarter, the product business accounted for EUR 7.6 (5.0)
million of consolidated net sales, or 25.3 (13.8) per cent.
International operations accounted for EUR 5.1 (2.6) million of consolidated
net sales in the fourth quarter, or 17.0 (7.3) per cent.
PROFIT PERFORMANCE AND PROFITABILITY
Major non-recurrent extraordinary items had a major impact on Digia Group's
result and profitability during the review period. These extraordinary items
included a restructuring provision of EUR 4.9 million and a writedown of EUR
25.4 million for customer relationships and goodwill. Such items were related
to the Mobile Solutions segment, except for a EUR 0.5 million expense incurred
by Enterprise Solutions in the fourth quarter, in relation to personnel
negotiations. Operating profit before extraordinary items is an indicator of
the company's operational profitability.
Digia's consolidated operating profit before extraordinary items for the
reporting period was EUR 8.1 (17.2) million, down 52.9 per cent in year-on-year
terms. The reduction was mainly due to the negative development in net sales of
Mobile Solutions. Profitability (EBIT%) before extraordinary items was 6.6
(13.1) per cent.
During the reporting period, Digia's consolidated operating profit after
extraordinary items came to EUR -22.2 (17.2) million, down 229.2 per cent year
on year. Profitability (EBIT%) after extraordinary items was -18.2 (13.1) per
cent.
During the period, the operating profit of the Enterprise Solutions segment was
EUR 8.3 (11.0) million, down 24.0 per cent, while profitability (EBIT%) came to
10.1 per cent. Excluding the Qt business, the Enterprise Solutions segment's
operating profit totalled EUR 8.4 million and profitability (EBIT%) stood at
11.0 per cent. The decrease in the Enterprise Solutions segment's net sales was
caused by lower-than-expected Finnish licence sales, combined with higher
operating expenses. During the period, the cost structure was particularly
burdened by personnel turnover. Recruitment, subcontracting and training
expenses related to resolving resource shortages in certain competence areas,
and the launch expenses for the QT business, were also major costs.
For the Mobile Solutions segment, operating profit before extraordinary items
totalled EUR -0.3 (6.2) million, down 104.5 per cent, with profitability
(EBIT%) being -0.7 per cent. Lower profitability in the Mobile Solutions
segment was due to a sudden, major and unpredicted change in the operating
environment at the beginning of the review period. As a consequence of this
change, throughout the period the segment had excess personnel in relation to
the continuously falling demand for its services. The cost of keeping employees
without work caused a financial strain.
Digia's consolidated fourth-quarter operating profit before extraordinary items
was EUR 2.5 (4.8) million, representing a year-on-year decrease of 48.1 per
cent. Profitability (EBIT%) was 8.2 (13.3) per cent.
After extraordinary items, Digia's consolidated operating profit for the
quarter came to EUR 1.4 (4.8) million, down 71.0 per cent year on year.
Profitability (EBIT%) was 4.6 (13.3) per cent.
During the period, the operating profit of the Enterprise Solutions segment was
EUR 2.3 (2.8) million, down 16.9 per cent, while profitability (EBIT%) came to
10.1 per cent. Not including the Qt business, the segment's operating profit in
the fourth quarter was EUR 2.2 million and its profitability (EBIT%) 10.8 per
cent. The operating profit before extraordinary items of the Mobile Solutions
segment was EUR 0.2 (2.0) million, down 91.5 per cent, and profitability
(EBIT%) was 2.3 per cent.
Consolidated earnings before tax for the period totalled EUR -23.1 (15.7)
million, and net profit was EUR -22.5 (11.5) million. Consolidated earnings
before tax for the fourth quarter were EUR 1.1 (4.5) million, and net profit
totalled EUR 1.2 (3.3) million.
Consolidated earnings per share for the period came to EUR -1.08 (0.56) after
extraordinary items and 0.32 (0.56) before extraordinary items. For the fourth
quarter, consolidated earnings per share were EUR 0.06 (0.16) after
extraordinary items and EUR 0.11 (0.16) before extraordinary items.
The Group's net financial expenses for the reporting period were EUR 1.0 (1.4)
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 87.8 million (12/2010: EUR 115.4 million) and the equity
ratio was 47.8 (12/2010: 58.8) per cent. Net gearing was 34.5 (12/2010: 20.2)
per cent. Period-end cash and cash equivalents totalled EUR 8.2 (12/2010: 9.7)
million.
Interest-bearing liabilities amounted to EUR 21.9 (12/2010: 23.3) million.
These consisted of EUR 20.0 million in loans from financial institutions and
EUR 1.9 million in financial leasing liabilities.
On 31 October 2011, Digia revised its three-year loan arrangements, replacing
the company's old loan portfolio totalling EUR 17 million. The loan agreement
is financed by Pohjola Bank and Nordea Bank. The total sum of the new loan was
EUR 22 million, of which the company withdrew EUR 17 million. As part of the
financing package, the company committed to covenants concerning the
maintenance of the company's financial standing and liquidity, which were
similar to the previous package. One difference lies in the fact that the
company can now distribute a maximum of 50 per cent (previously 30%) of the
Group's net profit for the year, without separate agreement.
The Group's cash flow from operations for the period was positive by EUR 8.8
(11.1) million, cash flow from investments was negative by EUR 2.7 (2.0)
million, and cash flow from financing was negative by EUR 7.6 (9.9) million.
Cash flow from financing was negatively affected by the repayment of loans for
a total sum of EUR 2.0 million, as well as the payment of EUR 5.6 million in
dividends.
The Group's investments in fixed assets during the review period totalled EUR
2.7 (2.3) million. Acquisitions of tangible fixed assets totalled EUR 2.3 (2.0)
million.
Return on investment (ROI) for the period was -28.7 (19.3) per cent, and return
on equity (ROE) was -41.9 (18.3) per cent.
The Group carries out quarterly impairment testing of goodwill and intangible
assets with an indefinite useful life. The table below shows, by business
segment, the 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
--------------------------------------------------------------------------------
Mobile 0 4,941 1,299 2,803 4,102
Solutions
--------------------------------------------------------------------------------
Enterprise 3,419 920 43,244 6,975 53,638
Solutions
--------------------------------------------------------------------------------
Group total 3,419 5,861 44,543 9,779 57,740
--------------------------------------------------------------------------------
In the second quarter, the company recorded a EUR 25.4 million
goodwill writedown for its Mobile Solution segment's customer relationships and
goodwill. This writedown was based on the company's revision of the segment's
long-term income expectations, as the applicable legislation requires. The
revised expectation is due to a sudden and radical transition in the business
environment for contract engineering services. In the company's view, this has
markedly and permanently reduced demand for Symbian and MeeGo services.
Present values for the Enterprise Solutions segment were calculated for the
forecast period on the following assumptions: net sales for 2012 according to
the latest estimate, after which annual growth of 3 per cent; operating profit
for 2012 in accordance with the latest estimate and after that 10 per cent,
with discount rates of 8.9 per cent. Cash flows after the forecast period are
estimated by means of cash-flow extrapolation that applies the assumptions
given above.
According to the sensibility test the amount of goodwill for Enterprise
Solutions requires average annual growth of 0.9 per cent for business
operations and 4.0 per cent profitability. The management sees no need of
goodwill impairment for Enterprise Solutions.
Present values for the Mobile Solutions segment were calculated for the
forecast period on the following assumptions: net sales for 2012 according to
the latest estimate, after which annual growth of 2 per cent; operating profit
for 2012 in accordance with the latest estimate and after that 10 per cent,
with discount rates of 10.9 per cent. Cash flows after the forecast period are
estimated by means of cash-flow extrapolation that applies the assumptions
given above.
According to the sensibility test the amount of goodwill for Mobile Solutions
requires the net sales to remain at level of 2012 and 3.7 per cent
profitability. The management sees no need of goodwill impairment for Mobile
Solutions.
HUMAN RESOURCES, MANAGEMENT, AND ADMINISTRATION
At the end of the period, the total number of Group personnel was 1,175,
representing a decrease of 383 employees, or 24.6 per cent, since the end of
2010 (when there were 1,558). During the reporting period, the number of
employees averaged 1,453, a decrease of 55 employees or 3.6 per cent from the
2010 average (1,508).
Employees, by function, at the end of the period:
Enterprise Solutions 68%
----------------------------------
Mobile Solutions 28%
----------------------------------
Administration and management 4%
----------------------------------
As of the end of the period, 161 employees were working abroad (12/2010: 196).
The Digia Plc Annual General Meeting of 16 March 2011 re-elected Robert Ingman,
Kari Karvinen, Pertti Kyttälä, Martti Mehtälä, Pekka Sivonen, Tommi Uhari, and
Marjatta Virtanen as members of the Board. At the organisational meeting of the
Board, Kyttälä was elected Chairman of the Board and Mehtälä as Vice Chairman.
Juha Varelius has been Digia Plc 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 business risk associated with the mobile market was realised during the
period, fundamentally changing the operating environment. However, this mostly
eliminated the company's business risk associated with the mobile market.
In addition, the Eurozone debt crisis has deepened and the risk of economic
recession has grown, which may affect customers' investment decisions and
liquidity, and thereby the company's sales and profits. There have already been
signs that the greater uncertainty is affecting customers' investment
decisions, and some planned projects have been delayed. However, these signs
have not assumed alarming proportions in recent weeks.
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 main objective for 2012 is to grow the scalable product business's share of
the overall product selection. This will mainly be achieved organically, but
carefully planned strategic acquisitions are also possible. Digia will continue
developing its international operations, particularly in Russia. The main
cornerstone of the company's operations remains the maintenance of high
profitability and a positive cash flow.
The company expects the IT market to remain at roughly the previous year's
level in 2012. However, risks associated with the Eurozone debt crisis and
general inflation may affect demand for IT services and the development of
business profitability. Slightly greater uncertainty is therefore related to
the economic prospects for 2012.
With regard to its own operations, the company expects demand for contract
engineering services to continue falling in the first quarter of 2012. This
will cause the company's first-quarter net sales to fall from the level of the
last quarter of 2011. The reduction in net sales and the start-up of the new
organisation will also tax the company's profitability, which is expected to
fall temporarily from the fourth quarter's level.
The company expects the new organisation to begin impacting on efficiency from
the second quarter of 2012, upon which it will have a positive impact on the
company's net sales and profitability.
The company expects its commercial Qt licensing and service business to grow in
2012 compared to the previous year, while maintaining a good profitability
level. The Russian functions are also expected to develop favourably and to
have an even greater impact on positive development of consolidated net sales
and profitability during 2012.
On the whole, the company predicts that its operational profitability will
improve as the year progresses, reaching a good level in the second half of
2012.
OTHER EVENTS DURING THE REVIEW PERIOD
Convening on 16 March 2011, the Digia Plc Annual General Meeting (AGM) approved
the financial statements for 2010, released the Board members and the CEO from
liability, determined Board emoluments, resolved to raise the number of Board
members to seven, and elected the Board of Directors for a new term.
With regard to profit distribution for 2010, the AGM approved the Board's
proposal to pay a dividend of EUR 0.27 per share to all shareholders listed on
the shareholder list maintained by Euroclear Finland Ltd on the reconciliation
date of 21 March 2011. The dividend payment date was 28 March 2011.
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 Shareholders' Meeting on 3 March 2010 and is valid for 18 months
- i.e., until 16 September 2012.
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
Shareholders' Meeting on 3 March 2010 and is valid for 18 months - i.e., until
16 September 2012.
SHARE CAPITAL AND SHARES
On 31 December 2011, the total number of Digia Plc shares was 20,875,645.
At the end of the period, according to Finnish Central Securities Depository
Ltd, Digia had 6,296 shareholders.
The 10 biggest shareholders were:
Shareholder Shares and votes
--------------------------------------------------------------
Ingman Group Oy Ab 16.0%
--------------------------------------------------------------
Jyrki Hallikainen 10.2%
--------------------------------------------------------------
Pekka Sivonen 8.8%
--------------------------------------------------------------
Kari Karvinen 6.5%
--------------------------------------------------------------
Matti Savolainen 6.1%
--------------------------------------------------------------
Ilmarinen Mutual Pension Insurance Company 3.8%
--------------------------------------------------------------
Varma Mutual Pension Insurance Company 3.6%
--------------------------------------------------------------
Nordea Bank Finland Plc (nominee-registered) 1.4%
--------------------------------------------------------------
Etola Oy 1.0%
--------------------------------------------------------------
Olli Ahonen 0.9%
--------------------------------------------------------------
Distribution of holdings by number of shares held on 31 December 2011
Number of shares Shareholders Shares and votes
---------------------------------------------------
1-100 22.2% 0.5%
---------------------------------------------------
101-1,000 58.9% 8.1%
---------------------------------------------------
1,001-10,000 17.4% 14.4%
---------------------------------------------------
10,001-100,000 1.0% 9.9%
---------------------------------------------------
100,001-1,000,000 0.3% 19.6%
---------------------------------------------------
1,000,001-3,000,000 0.1% 47.6%
---------------------------------------------------
Shareholding by sector on 31 December 2011
Shareholders Shares
--------------------------------------------------------------------
Non-financial corporations 4.6% 21.4%
--------------------------------------------------------------------
Financial and insurance corporations 0.2% 3.9%
--------------------------------------------------------------------
General government 0.0% 7.5%
--------------------------------------------------------------------
Not-for-profit institutions serving households 0.3% 0.5%
--------------------------------------------------------------------
Households 94.4% 65.6%
--------------------------------------------------------------------
Rest of the world 0.4% 1.1%
--------------------------------------------------------------------
The weighted average number of shares during the reporting period, adjusted
for share issues, came to 20,701,877. The number of outstanding shares came to
20,716,069 in total at the end of the review period.
The company held, in total, 159,576 treasury shares at period end. The
accounting counter value of these treasure shares is EUR 0.10 per share. In
relation to the company's performance-based incentive system, Digia has
financed the acquisition of 300,000 own shares. At the end of the review
period, some of these shares remained undistributed and Evli Alexander
Management Ltd held 29,612 shares. The company held about 0.8 per cent of the
capital stock as of 30 December 2011.
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 2.30 and the highest was EUR 5.79. The share officially
closed at EUR 2.42 on the last trading day. The trade-weighted average was EUR
3.88. The Group's market capitalisation totalled EUR 50,519,061 at the end of
the period.
The company received the following flagging notifications during the reporting
period:
The Ingman Group announced on 16 August 2011 that the total holding of said
group and entities under its control had grown to exceed the 15% flagging
threshold and was 15.15% of the company's shares and votes.
Pekka Päiviö Sivonen announced on 19 December 2011 that his holding in the
company had fallen below the 10% flagging threshold and amounted to 8.77% of
the company's shares and votes.
STOCK OPTION SCHEMES
Digia Plc had no outstanding options.
Helsinki, 3 February 2012
Digia Plc
Board of Directors
BRIEFING FOR ANALYSTS
Digia will hold a briefing on its Financial Statement Bulletin for analysts on
Friday 3 February 2012 at 11 am, at WTC Sodexo in the Marski cabinet of the
World Trade Center, Aleksanterinkatu 17, 00100 Helsinki, Finland. All are
welcome.
SOURCES OF FURTHER INFORMATION
President and CEO Juha Varelius, mobile number +358 400 855 849, e-mail address
juha.varelius@digia.com
The Financial Statement Bulletin and the presentation material will be
available via www.digia.com, in the ‘Investors' section, 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.
The financial statement release is unaudited but the figures herein are drawn
from audited financial statements.
CONSOLIDATED INCOME STATEMENT, EUR 1,000
10-12/ 10-12/ Change 1-12/2 1-12/2 Change
2011 2010 , % 011 010 , %
--------------------------------------------------------------------------------
NET SALES 30,197 36,025 -16.2% 121,93 130,82 -6.8%
.3 .4 9.9 5.2
--------------------------------------------------------------------------------
Other operating income 261.0 32.3 708.0% 360.7 317.5 13.6%
--------------------------------------------------------------------------------
Materials and services -2,568 -2,749 -6.6% -10,72 -10,15 5.6%
.9 .0 1.0 6.9
--------------------------------------------------------------------------------
Depreciation, amortisation, and -1,095 -954.6 14.8% -29,26 -3,719 687.0%
impairment .9 7.9 .1
--------------------------------------------------------------------------------
Other operating expenses -25,40 -27,57 -7.9% -104,4 -100,1 4.4%
7.6 3.3 79.7 02.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit 1,385. 4,780. -71.0% -22,16 17,164
9 9 8.0 .4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial expenses (net) -318.3 -286.5 11.1% -963.1 -1,438 -33.1%
.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings before tax 1,067. 4,494. -76.2% -23,13 15,725
7 3 1.2 .7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes 149.8 -1,220 679.5 -4,251
.3 .3
--------------------------------------------------------------------------------
NET PROFIT 1,217. 3,274. -62.8% -22,45 11,474
5 1 1.6 .3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive income:
--------------------------------------------------------------------------------
Exchange differences on 153.1 -2.1 42.1 292.3 -85.6%
translation of foreign
operations
--------------------------------------------------------------------------------
TOTAL COMPREHENSIVE INCOME 1,370. 3,271. -58.1% -22,40 11,766
6 9 9.5 .6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of net profit:
--------------------------------------------------------------------------------
Parent-company shareholders 1,217. 3,274. -62.8% -22,45 11,474
5 1 1.6 .3
--------------------------------------------------------------------------------
Minority interest 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Distribution of total
comprehensive income:
--------------------------------------------------------------------------------
Parent-company shareholders 1,370. 3,271. -58.1% -22,40 11,766
6 9 9.5 .6
--------------------------------------------------------------------------------
Minority interest 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR 0.06 0.16 -63.3% -1.08 0.56
--------------------------------------------------------------------------------
Earnings per share (diluted), 0.06 0.16 -63.3% -1.08 0.56
EUR
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET, EUR 1,000
Assets 31/12/2011 31/12/2010 Change, %
----------------------------------------------------------------------
----------------------------------------------------------------------
Non-current assets
----------------------------------------------------------------------
Intangible assets 48,486.7 74,514.2 -34.9%
----------------------------------------------------------------------
Tangible assets 3,156.5 2,925.9 7.9%
----------------------------------------------------------------------
Financial assets 627.0 628.0 -0.2%
----------------------------------------------------------------------
Long-term receivables 60.3 14.0 330.5%
----------------------------------------------------------------------
Deferred tax assets 789.9 875.7 -9.8%
----------------------------------------------------------------------
----------------------------------------------------------------------
Total non-current assets 53,120.3 78,957.8 -32.7%
----------------------------------------------------------------------
----------------------------------------------------------------------
Current assets
----------------------------------------------------------------------
Current receivables 26,523.0 26,798.9 -1.0%
----------------------------------------------------------------------
Available-for-sale financial assets 303.5 299.6 1.3%
----------------------------------------------------------------------
Cash and cash equivalents 7,866.5 9,382.1 -16.2%
----------------------------------------------------------------------
----------------------------------------------------------------------
Total current assets 34,693.0 36,480.5 -4.9%
----------------------------------------------------------------------
----------------------------------------------------------------------
Total assets 87,813.3 115,438.3 -23.9%
----------------------------------------------------------------------
Shareholders' equity and liabilities 31/12/2011 31/12/2010 Change, %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Share capital 2,087.6 2,086.5 0.1%
--------------------------------------------------------------------------------
Rights issue 0.0 39.7 -100.0%
--------------------------------------------------------------------------------
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 35,525.0 35,486.4 0.1%
--------------------------------------------------------------------------------
Translation difference 208.4 166.3 25.3%
--------------------------------------------------------------------------------
Retained earnings 11,279.9 5,054.4 123.2%
--------------------------------------------------------------------------------
Net profit -22,451.6 11,474.3
--------------------------------------------------------------------------------
Equity attributable to parent-company 39,752.6 67,411.0 -41.0%
shareholders
--------------------------------------------------------------------------------
Minority interest 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total shareholders' equity 39,752.6 67,411.0 -41.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities
--------------------------------------------------------------------------------
Long-term interest-bearing liabilities 15,441.7 16,609.4 -7.0%
--------------------------------------------------------------------------------
Other long-term liabilities 674.0 0.0
--------------------------------------------------------------------------------
Deferred tax liabilities 772.0 2,177.6 -64.5%
--------------------------------------------------------------------------------
Total long-term liabilities 16,887.7 18,786.9 -10.1%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Short-term interest-bearing liabilities 6,430.2 6,706.2 -4.1%
--------------------------------------------------------------------------------
Other short-term liabilities 24,742.8 22,534.1 9.8%
--------------------------------------------------------------------------------
Total short-term liabilities 31,173.0 29,240.4 6.6%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total liabilities 48,060.7 48,027.3 0.1%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders' equity and liabilities 87,813.3 115,438.3 -23.9%
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000
1/1/2011-31/12/201 1/1/2010-31/12/201
1 0
--------------------------------------------------------------------------------
Cash flow from operations:
--------------------------------------------------------------------------------
Net profit -22,452 11,474
--------------------------------------------------------------------------------
Adjustments to net profit 34,780 9,409
--------------------------------------------------------------------------------
Change in working capital 2,791 -5,828
--------------------------------------------------------------------------------
Interest paid -781 -703
--------------------------------------------------------------------------------
Interest income 35 21
--------------------------------------------------------------------------------
Taxes paid -5,532 -3,306
--------------------------------------------------------------------------------
Net cash flow from operations 8,842 11,066
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from investments:
--------------------------------------------------------------------------------
Purchases of tangible and intangible -2,733 -1,965
assets
--------------------------------------------------------------------------------
Cash flow from investments -2,733 -1,965
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from financing:
--------------------------------------------------------------------------------
Proceeds from share issue 0 79
--------------------------------------------------------------------------------
Acquisition of own shares 0 0
--------------------------------------------------------------------------------
Repayment of current loans -19,044 -6,082
--------------------------------------------------------------------------------
Repayments of non-current loans 0 -1,000
--------------------------------------------------------------------------------
Withdrawals of current loans 3,500 0
--------------------------------------------------------------------------------
Withdrawals of non-current loans 13,500 0
--------------------------------------------------------------------------------
Dividends paid and other profit -5,577 -2,885
distribution
--------------------------------------------------------------------------------
Cash flow from financing -7,621 -9,887
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Change in liquid assets -1,512 -786
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liquid assets at beginning of period 9,682 10,469
--------------------------------------------------------------------------------
Change in fair value
--------------------------------------------------------------------------------
Change in liquid assets -1,512 -786
--------------------------------------------------------------------------------
Liquid assets at end of period 8,170 9,682
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, EUR 1,000
2010 a) b) c) d) e) f) g) h)
--------------------------------------------------------------------------------
Shareholders' equity, 1 2,085 0 7,899 35,448 5,204 -126 7,673 58,184
January 2010
--------------------------------------------------------------------------------
Net profit 11,474 11,474
--------------------------------------------------------------------------------
Other comprehensive 292 292
income
--------------------------------------------------------------------------------
Dividends -2,885 -2,885
--------------------------------------------------------------------------------
Share-based payments 1 40 39 267 346
recognised against
equity
--------------------------------------------------------------------------------
Shareholders' equity, 31 2,086 40 7,899 35,486 5,204 166 16,529 67,411
December 2010
--------------------------------------------------------------------------------
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 -22,45 -22,45
2 2
--------------------------------------------------------------------------------
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, 31 2,088 0 7,899 35,525 5,204 208 -11,17 39,753
December 2011 2
--------------------------------------------------------------------------------
a = share capital
b = rights issue
c = share premium
d = unrestricted invested shareholders' equity
e = other reserves
f = currency translation differences
g = retained earnings
h = total shareholders' equity
NOTES TO THE ACCOUNTS
Accounting principles:
The interim report has been drawn up in line with IFRS, applying the same
accounting principles as in the 2010 financial statements. The accounting
principles and formulae for the calculation of key figures and ratios are
unchanged and are presented in the 2010 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 5,576,834.34.
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 7 March 2011, Digia concluded an agreement with Nokia Plc for the
acquisition of its commercial Qt business. The acquisition came into effect on
22 March 2011. This transaction included a right to sell commercial software
licences for Qt technology, as exclusive supplier for the first three years.
The purchase price for the business acquired includes fixed and variable
components. Fixed components amount to EUR 150,000, which was paid with the
company's cash reserves. In addition to fixed components, the seller is
entitled to an additional purchase price in the event that the sales targets
agreed upon for said business for 2011-2013 are met. For 2011 the additional
purchase price came to EUR 1.0 million, which is EUR 0.8 million higher than
the original estimate. The additional price will be paid in cash as agreed. Due
to the higher-than-expected sales of 2011, the additional purchase price is now
estimated to total EUR 1.5 million.
On the basis of the initial purchase price allocation, the majority of the
acquisition price (EUR 0.8 million) is related to the exclusive sales rights
and customer relationships acquired. The transaction carried no goodwill.
Segment information:
Digia's business operations are divided into two main business segments:
Enterprise Solutions and Mobile Solutions. Enterprise Solutions is divided into
ERP and Financial Administration, Digital Services, and Integration Solutions.
The Mobile Solutions segment is divided into Contract Engineering Services and
User Experience Services.
NET SALES, EUR 10-12/201 10-12/201 Change, % 1-12/201 1-12/201 Change, %
1,000 1 0 1 0
--------------------------------------------------------------------------------
Enterprise 22,931 20,744 10.5% 82,659 75,674 9.2%
Solutions
--------------------------------------------------------------------------------
Mobile Solutions 7,267 15,281 -52.4% 39,281 55,152 -28.8%
--------------------------------------------------------------------------------
Digia Group 30,197 36,025 -16.2% 121,940 130,825 -6.8%
--------------------------------------------------------------------------------
OPERATING PROFIT BEFORE 10-12/2 10-12/2 Change 1-12/2 1-12/2 Change
EXTRAORDINARY ITEMS, EUR 011 010 , % 011 010 , %
1,000
--------------------------------------------------------------------------------
Enterprise Solutions 2,312 2,782 -16.9% 8,365 11,001 -24.0%
--------------------------------------------------------------------------------
Mobile Solutions 170 1,999 -91.5% -280 6,164
--------------------------------------------------------------------------------
Digia Group 2,482 4,781 -48.1% 8,084 17,164 -52.9%
--------------------------------------------------------------------------------
OPERATING PROFIT, 10-12/20 10-12/20 Change, 1-12/201 1-12/201 Change,
EUR 1,000 11 10 % 1 0 %
--------------------------------------------------------------------------------
Enterprise Solutions 1,843 2,782 -33.8% 7,895 11,001 -28.2%
--------------------------------------------------------------------------------
Mobile Solutions -457 1,999 -30,063 6,164
--------------------------------------------------------------------------------
Digia Group 1,386 4,781 -71.0% -22,168 17,164
--------------------------------------------------------------------------------
ASSETS, EUR 1,000 31/12/2011 31/12/2010
--------------------------------------------
Enterprise Solutions 69,744 63,762
--------------------------------------------
Mobile Solutions 8,422 40,491
--------------------------------------------
Unallocated 9,647 11,185
--------------------------------------------
Digia Group 87,813 115,438
--------------------------------------------
Consolidated income statement by quarter:
EUR 1,000 10-12/20 7-9/2011 4-6/2011 1-3/201 10-12/20
11 1 10
--------------------------------------------------------------------------------
Net sales 30,197.3 26,027.5 32,358.3 33,356. 36,025.4
7
--------------------------------------------------------------------------------
Other operating income 261.0 47.0 28.5 24.2 32.3
--------------------------------------------------------------------------------
Materials and services -2,568.9 -1,761.9 -3,906.6 -2,483. -2,749.0
6
--------------------------------------------------------------------------------
Depreciation, amortisation, and -1,095.9 -858.1 -26,387. -926.8 -954.6
impairment 2
--------------------------------------------------------------------------------
Other operating expenses -25,407. -21,381. -29,979. -27,711 -27,573.
6 8 1 .1 3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit 1,385.9 2,072.7 -27,886. 2,259.5 4,780.9
1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial expenses (net) -318.3 -116.6 -185.6 -342.7 -286.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings before tax 1,067.7 1,956.2 -28,071. 1,916.8 4,494.3
8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes 149.8 -810.5 1,809.2 -468.9 -1,220.3
--------------------------------------------------------------------------------
Net profit 1,217.5 1,145.6 -26,262. 1,447.9 3,274.1
6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Allocation:
--------------------------------------------------------------------------------
Parent-company shareholders 1,217.5 1,145.6 -26,262. 1,447.9 3,274.1
6
--------------------------------------------------------------------------------
Minority interest 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR 0.06 0.06 -1.27 0.07 0.16
--------------------------------------------------------------------------------
Earnings per share (diluted), 0.06 0.06 -1.27 0.07 0.16
EUR
--------------------------------------------------------------------------------
Group key figures and ratios:
1-12/2011 1-12/2010
--------------------------------------------------------------------------------
Extent of business:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 121,940 130,825
--------------------------------------------------------------------------------
- change from previous year -6.8% 8.7%
--------------------------------------------------------------------------------
Average capital invested 76,176 89,700
--------------------------------------------------------------------------------
Personnel at period end 1,175 1,558
--------------------------------------------------------------------------------
Average number of personnel 1,453 1,508
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profitability:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit before extraordinary items and impairment 8,084 17,164
--------------------------------------------------------------------------------
- % of net sales 6.6% 13.1%
--------------------------------------------------------------------------------
Operating profit -22,168 17,164
--------------------------------------------------------------------------------
- % of net sales -18.2% 13.1%
--------------------------------------------------------------------------------
Earnings before tax -23,131 15,726
--------------------------------------------------------------------------------
- % of net sales -19.0% 12.0%
--------------------------------------------------------------------------------
Net profit -22,452 11,474
--------------------------------------------------------------------------------
% of net sales -18.4% 8.8%
--------------------------------------------------------------------------------
Return on equity, % -41.9% 18.3%
--------------------------------------------------------------------------------
Return on investment, % -28.7% 19.3%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financing and financial standing:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Interest-bearing liabilities 21,872 23,316
--------------------------------------------------------------------------------
Short-term investments, cash and bank receivables 8,170 9,682
--------------------------------------------------------------------------------
Net gearing 34.5% 20.2%
--------------------------------------------------------------------------------
Equity ratio 47.8% 58.8%
--------------------------------------------------------------------------------
Net cash flow from operations 8,842 11,066
--------------------------------------------------------------------------------
Earnings per share, undiluted (EUR) -1.08 0.56
--------------------------------------------------------------------------------
Earnings per share, diluted (EUR) -1.08 0.56
--------------------------------------------------------------------------------
Equity per share 1.90 3.23
--------------------------------------------------------------------------------
Lowest share price 2.30 3.36
--------------------------------------------------------------------------------
Highest share price 5.79 5.89
--------------------------------------------------------------------------------
Average share price 3.88 5.01
--------------------------------------------------------------------------------
Market capitalisation 50,519 104,949
--------------------------------------------------------------------------------
Formulae for key figures and ratios are presented in the 2010 financial
statements. These formulae remained unchanged during the reporting period.
© 2024 Nasdaq, Inc. All Rights Reserved |