2015-08-03 10:30:16 CEST
2015-08-03 10:31:18 CEST
REGULATED INFORMATION
Affecto Oyj - Interim report (Q1 and Q3)
Affecto Plc's Interim Report 1-6/2015
Helsinki, 2015-08-03 10:30 CEST (GLOBE NEWSWIRE) -- AFFECTO PLC -- INTERIM
REPORT -- 3 AUGUST 2015 at 11.30
Affecto Plc's Interim Report 1-6/2015
Group key figures
MEUR 4-6/15 4-6/14 1-6/15 1-6/14 2014 last 12m
Net sales 30.8 33.0 59.9 64.2 122.7 118.4
Operational segment result 2.9 3.0 5.0 3.1 10.0 11.8
% of net sales 9.4 9.2 8.3 4.9 8.2 10.0
Operating profit 2.9 2.5 5.0 2.1 0.8 3.8
% of net sales 9.4 7.5 8.3 3.2 0.7 3.2
Profit before taxes 2.8 2.3 4.8 1.7 0.3 3.4
Profit for the period 2.4 1.8 3.8 1.3 -1.6 0.9
Equity ratio, % 58.4 56.0 58.4 56.0 54.6 -
Net gearing, % 5.4 15.7 5.4 15.7 1.8 -
Earnings per share, EUR 0.11 0.09 0.18 0.06 -0.07 0.04
Earnings per share (diluted), 0.11 0.09 0.18 0.06 -0.07 0.04
EUR
Equity per share, EUR 2.85 2.99 2.85 2.99 2.80 -
CEO Juko Hakala comments:
Our Q2 net sales decreased by 7%. Baltic net sales grew by 20% but net sales
declined in Norway by 21%, in Denmark by 13% and in Finland by 10%. In Denmark
and in Finland especially the license sales were lower and utilization rate
continued to be low.
The Q2 operational segment result was 2.9 MEUR (3.0 MEUR). Profitability in
Baltic was at excellent level 20% (13%). Profitability in Finland was 10%
(10%), Norway 8% (10%) and Sweden 7% (6%). In Denmark the profitability was
poor -3% (8%).
Our order intake continued to be lower than year ago and the order backlog of
43.3 MEUR was clearly lower than year ago (48.1 MEUR). Due to the changing
market demand in Finland and Denmark, we are in the process of reviewing
development and recovery actions. In Finland, also employee co-operation
negotiations about possible reduction of workforce with the entire personnel
will be started.
Year 2015 net sales are estimated to be below last year's level. Operating
profit is estimated to grow in 2015.
Additional information:
CEO Juko Hakala, + 358 205 777 450
CFO Satu Kankare, +358 205 777 202
This release is unaudited. The amounts in this report have been rounded from
exact numbers.
NET SALES
Affecto's net sales in 1-6/2015 were 59.9 MEUR (1-6/2014: 64.2 MEUR). Net sales
in Finland were 24.6 MEUR (26.4 MEUR), in Norway 11.0 MEUR (13.3 MEUR), in
Sweden 10.1 MEUR (11.3 MEUR), in Denmark 5.6 MEUR (6.6 MEUR) and 10.7 MEUR (8.8
MEUR) in Baltic.
Net sales by reportable segments
Net sales, MEUR 4-6/15 4-6/14 1-6/15 1-6/14 2014 last 12m
Finland 12.4 13.8 24.6 26.4 50.6 48.7
Norway 5.5 7.0 11.0 13.3 25.0 22.7
Sweden 5.5 5.5 10.1 11.3 20.0 18.8
Denmark 2.7 3.1 5.6 6.6 12.0 11.0
Baltic 5.6 4.7 10.7 8.8 19.0 20.9
Other -1.1 -1.1 -2.1 -2.2 -4.0 -3.9
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Group total 30.8 33.0 59.9 64.2 122.7 118.4
In the second quarter the net sales decreased by 7%. Net sales decreased in
Norway by 21%, in Denmark by 13% and in Finland by 10%. Especially license
sales halved compared to second quarter 2014 and utilization rate continued to
be low in Denmark and in Finland. Baltic grew by 20% mainly thanks to the
insurance business and Estonia.
Net sales of Information Management Solutions business in 1-6/2015 were 55.7
MEUR (59.6 MEUR) and net sales of Karttakeskus GIS business were 6.2 MEUR (6.2
MEUR).
Our customers in the traditional IT market continued to show interest mainly in
shorter and smaller projects and investment decisions continue to take longer.
Customers continued to show active interest in the business technology
solutions and exciting spearheading projects have started. Customers expect an
updated hybrid business technology skillset. In response to this need, we
develop our operations by following our updated strategic direction and
progressing with a step-by-step evolution program. Business technology market
is an exciting growth area but there continues to be uncertainty related to
timing of significant revenue growth. The order backlog continued to be below
last year's second quarter and decreased to 43.3 MEUR (48.1 MEUR).
PROFIT
Affecto's operating profit in 1-6/2015 was 5.0 MEUR (2.1 MEUR) and the
operational segment result was 5.0 MEUR (3.1 MEUR). Operational segment result
was in Finland 1.9 MEUR (2.2 MEUR), in Norway 1.0 MEUR (0.4 MEUR), in Sweden
0.5 MEUR (0.0 MEUR), in Denmark -0.0 MEUR (0.6 MEUR) and in Baltic 2.4 MEUR
(0.8 MEUR).
Operational segment result by reportable segments
Operational segment 4-6/15 4-6/14 1-6/15 1-6/14 2014 last 12m
result, MEUR
Finland 1.3 1.4 1.9 2.2 5.4 5.1
Norway 0.5 0.7 1.0 0.4 2.0 2.6
Sweden 0.4 0.3 0.5 0.0 0.3 0.8
Denmark -0.1 0.3 -0.0 0.6 0.9 0.3
Baltic 1.1 0.6 2.4 0.8 2.9 4.6
Other -0.3 -0.2 -0,9 -0.8 -1.5 -1.5
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Operational segment result 2.9 3,0 5.0 3.1 10.0 11.8
IFRS3 Amortization - -0.5 - -1.1 -1.8 -0.7
Impairment of goodwill - - - - -7.4 -7.4
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Operating profit 2.9 2.5 5.0 2.1 0.8 3.8
In the second quarter the operational segment result was 2.9 MEUR (3.0 MEUR).
Profitability in Baltic was at excellent level 20% (13%). Profitability in
Finland was 10% (10%), Norway 8% (10%) and Sweden 7% (6%). In Denmark the
profitability was poor -3% (8%) due to low utilization rate and declined
license sales. Affecto's operating profit was 2.9 MEUR (2.5 MEUR).
Taxes corresponding to the profit of the period have been entered as tax
expense. Net profit for the period was 3.8 MEUR, while it was 1.3 MEUR last
year.
FINANCE AND INVESTMENTS
At the end of the reporting period Affecto's balance sheet totaled 116.8 MEUR
(12/2014: 124.8 MEUR). Equity ratio was 58.4% (12/2014: 54.6%) and net gearing
was 5.4% (12/2014: 1.8%).
The financial loans were 20.5 MEUR (12/2014: 22.5 MEUR) at the end of reporting
period. According to the current terms, the loan from financial institution
will be due in June 2016. The company's cash and liquid assets were 17.2 MEUR
(12/2014: 21.4 MEUR). The interest-bearing net debt was 3.3 MEUR (12/2014: 1.1
MEUR).
Cash flow from operating activities for the reported period was 1.4 MEUR (-1.5
MEUR) and cash flow from investing activities was -0.3 MEUR (-0.4 MEUR).
Investments in tangible and intangible assets were 0.3 MEUR (0.4 MEUR).
EMPLOYEES
The number of employees was 1012 persons at the end of the reporting period
(1040). 425 employees were based in Finland (424), 88 in Norway (101), 115 in
Sweden (138), 64 in Denmark (66) and 320 in the Baltic countries (311). The
average number of employees during the period was 1014 (1059).
Julius Manni started as the country managing director for Finland on 1 March
2015. Hellen Wohlin Lidgard, the country managing director for Sweden and Rene
Lykkeskov, the chief strategy officer, left Affecto during second quarter.
Mikko Eerola has been appointed as managing director, B2C and Customer
Front-Office Reinvention and the member of the group management team. Eerola
will lead Affecto's business technology and design services in these growing
areas and he will start on 10 August 2015. CFO Satu Kankare has decided to
resign and she will leave Affecto on 7 August 2015. Sami Lehtinen will be the
interim CFO and will serve in the position during the CFO recruitment process.
Sakari Knuutti has been appointed as the Director, Legal & IR and his
employment started on 27 July 2015.
BUSINESS DEVELOPMENT ACTIONS
Affecto published in February an update to its strategic direction and defined
five themes to guide the development actions. Context for the strategic
direction is the current, digitally transforming world. Affecto will address
this with a focus on increasing value for customers and for their customers.
The company will also actively develop its core business, expand to emerging
new business technology areas, and further develop its people to help customers
succeed.
Actions have been taken during the spring to convert the strategy into
operational changes. Evolution meetings practice with employees has been
implemented in order to activate and continually involve everyone for being
part of the change in line with the strategic direction. Recruitment of people
with new business-technology-hybrid skills has been performed both from inside
and outside Affecto. We have received direct positive feedback from customers
on the increased focus on industry knowledge and customer value oriented
solutions created in our day-to-day services. Development of capabilities in
design, user interface and usability solutions have been intensified in the
Nordic countries.
The Affecto Industrial growth program, which was started in first quarter, has
been well-received by the market. During the second quarter we had exciting
dialogue with new customers in Finland, Sweden and Denmark. This dialogue has
produced new opportunities for us to help our Industrial customers for example
in the way they interact with their customers using Industrial internet
capabilities. We continue building our own expertise in this area decisively.
BUSINESS REVIEW BY AREAS
The group's business is managed through five country units. Finland, Norway,
Sweden, Denmark and Baltic are also the reportable segments.
In 4-6/2015 net sales in Finland decreased by 10% to 12.4 MEUR (13.8 MEUR).
Resource utilization continued to be low and license sales decreased.
Operational segment result was 1.3 MEUR (1.4 MEUR) and profitability was 10%
(10%). The negative effect of lower net sales was partially offset by expected
lower incentives. The order intake continued to decline and the order backlog
is significantly below last year's level.
In 4-6/2015 net sales of Karttakeskus GIS business, reported as part of
Finland, increased by 2% to 3.3 MEUR (3.3 MEUR) and its profitability was good.
In Karttakeskus the order intake continued to decline and the order backlog is
significantly below last year's level.
Especially the Finnish market is experiencing growing interest in new business
technology areas and on the other hand declining trend in new orders related to
traditional IT market. Therefore we are investing in growth capabilities,
streamlining our operations and restructuring our organization and personnel
structure to align with market demand.
In 4-6/2015 net sales in Norway were 5.5 MEUR (7.0 MEUR) and operational
segment result was 0.5 MEUR (0.7 MEUR). Net sales decreased by 21% and
profitability was 8% (10%). Lower number of employees in Norway has partly been
offset by increasing use of group resources. In second quarter the order intake
improved and the order backlog is above last year's level.
In 4-6/2015 net sales in Sweden were 5.5 MEUR (5.5 MEUR) and operational
segment result 0.4 MEUR (0.3 MEUR). Net sales increased by 1% due to a
significant license deal. The lower amount of employees and high people churn
resulted to the lower consulting revenue. Profitability was 7% (6%). Order
backlog is below last year's level. Sweden is participating in a streamlined
leadership pilot where regional leaders are members of the extended group
leadership team. The search for the new country managing director and group
leadership team member is also in process.
In 4-6/2015 net sales in Denmark were 2.7 MEUR (3.1 MEUR) and operational
segment result was -0.1 MEUR (0.3 MEUR). Net sales decreased by 13% due to low
resource utilization and low license sales. The profitability was poor - 3%
(8%). Significant business recovery actions are ongoing including alignment of
customer and industry focus. The order intake continued to decline and the
order backlog is below last year's level.
In 4-6/2015 net sales in Baltic (Lithuania, Latvia, Estonia, Poland, South
Africa) were 5.6 MEUR (4.7 MEUR). Operational segment result was 1.1 MEUR (0.6
MEUR). The net sales increased by 20% and profitability was at excellent level
20% (13%). A few large projects were in final stages which increased resource
utilization and impacted positively on profit. The insurance business and
Estonia are performing well. The slow preparation of new EU funded projects
still negatively impacts the public sector market in Lithuania. Order backlog
is below last year's level.
ANNUAL GENERAL MEETING AND GOVERNANCE
The Annual General Meeting of Affecto Plc, held on 8 April 2015, adopted the
financial statements for 1.1.-31.12.2014 and discharged the members of the
Board of Directors and the CEO from liability. Approximately 48 percent of
Affecto's shares and votes were represented at the Meeting. The Annual General
Meeting decided on a dividend distribution of EUR 0.16 per share for the year
2014.
Aaro Cantell, Magdalena Persson, Jukka Ruuska, Olof Sand, Tuija Soanjärvi and
Lars Wahlström were elected as members of the Board of Directors. The
organization meeting of the Board of Directors elected Aaro Cantell as Chairman
and Olof Sand as Vice-Chairman. Authorised Public Accountants Ernst & Young Oy
was elected as the auditor of the company with Mikko Järventausta, APA, as
auditor in charge.
The Meeting approved the Board's proposal for appointing a Nomination Committee
to prepare proposals concerning members of the Board of Directors and their
remunerations for the following Annual General Meeting. The Nomination
Committee will consist of the representatives of the three largest shareholders
and the Chairman of the Board of Directors, acting as an expert member, if
he/she is not appointed representative of a shareholder. The members
representing the shareholders will be appointed by the three shareholders whose
share of ownership of the shares of the company is largest on 31 October
preceding the Annual General Meeting.
According to the Articles of Association, the General Meeting of Shareholders
annually elects the Board of Directors by a majority decision. The term of
office of the board members expires at the end of the next Annual General
Meeting of Shareholders following their election. The Board appoints the CEO.
The Articles of Association do not contain any special rules for changing the
Articles of Association or for issuing new shares.
THE AUTHORIZATIONS GIVEN TO THE BOARD OF DIRECTORS
The Board has not used in the review period the authorizations given by the
Annual General Meeting in 2014 that expired on 8 April 2015.
The complete contents of the new authorizations given by the Annual General
Meeting held on 8 April 2015 have been published in the stock exchange release
regarding the Meetings' decisions. Key facts about the authorizations:
The Annual General Meeting authorized the Board of Directors to decide to
acquire the company's own shares with distributable funds. A maximum of 2 100
000 shares may be acquired. The authorization shall be in force until the next
Annual General Meeting.
The Annual General Meeting authorized the Board of Directors to decide to issue
new shares and to convey the company's own shares held by the company in one or
more tranches. The share issue may be carried out as a share issue against
consideration or without consideration on terms to be determined by the Board
of Directors and in relation to a share issue against consideration at a price
to be determined by the Board of Directors. A maximum of 4 200 000 new shares
may be issued. A maximum of 2 100 000 own shares held by the company may be
conveyed. In addition, the authorization includes the right to decide on a
share issue without consideration to the company itself so that the amount of
own shares held by the company after the share issue is a maximum of one-tenth
(1/10) of all shares in the company. The authorization shall be in force until
the next Annual General Meeting.
SHARES AND TRADING
2013 options have been listed on Nasdaq OMX Helsinki since 11 May 2015. During
the review period no shares have been subscribed with the 2013 options.
The company has one share series and all shares have similar rights. At the end
of the review period Affecto Plc's share capital consisted of 22 450 745
shares. The company owned 867 219 treasury shares, approx. 3.9 % of the total
amount of the shares.
During the review period 1-6/2015 the highest share price was 3.84 euro, the
lowest price 2.91 euro, the average price 3.43 euro and the closing price 3.15
euro. The trading volume was 2.0 million shares, corresponding to 18%
(annualised) of the number of shares at the end of the period. The market value
of shares was 68.0 MEUR at the end of the period excluding the treasury shares.
SHAREHOLDERS
The company had a total of 3 165 owners on 30 June 2015 and the foreign
ownership was 14%. The list of the largest owners can be found in the company's
web site. Information about the ownership structure and option programs is
included as a separate section in the financial statements. The ownership of
the board members, CEO and their controlled corporations totaled approx. 10.6%.
ASSESSMENT OF RISKS AND UNCERTAINTIES
The changes in the general economic conditions and the operating environment of
customers have direct impact in Affecto's markets. The uncertain economy may
affect Affecto's customers negatively. Slower IT investment decision making and
uncertainty on starting investments to new business technology solutions may
have negative impact on Affecto. Affecto's order backlog has traditionally been
only for a few months. Slower decision making by customers decreases the
predictability of the business and may decrease the utilization rate.
Affecto's success depends also on good customer relationships. Affecto has a
well-diversified customer base. In 2014 the largest customer generated 3% of
Affecto's net sales, while the 10 largest together generated 17%. Although none
of the customers is critically large for the whole group, there are large
customers in various countries who are significant for local business in the
country. On the other hand, too large amount of customers can decrease the
effectiveness of the sales and delivery efforts.
Affecto also needs to be seen as an interesting employer in order to recruit
skilled employees. If Affecto is not seen as progressive and modern enough, the
potential to recruit right employees and future builders may decrease. High
people churn may create inefficiencies in the business and temporarily decrease
the utilization rate.
Affecto sells third party software licenses and maintenance as part of its
solutions. Typically the license sales have most impact on the last month of
each quarter and especially in the fourth quarter. This increases the
fluctuation in net sales between quarters and increases the difficulty of
accurately forecasting the quarters. Additionally the increase of cloud
services and other similar market trends may affect the license sales
negatively. Affecto had license sales of approx. 9 MEUR in 2014.
Affecto's balance sheet includes a material amount of goodwill. Goodwill has
been allocated to cash generating units. Cash generating units, to which
goodwill has been allocated, are tested for impairment both annually and
whenever there is an indication that the unit may be impaired. Potential
impairment losses may have material effect on reported profit and value of
assets.
Approximately 35% of Affecto's net sales is generated in Sweden and Norway,
thus the development of the currencies of these countries (SEK and NOK) may
have impact on Affecto's profitability. The main part of the companies' income
and costs are within the same currency, which decreases the risks.
EVENTS AFTER THE REVIEW PERIOD
The company announced on 3 August that the Finnish business activities will be
streamlined and employee co-operation negotiations about possible reduction of
workforce with the entire personnel will be started.
FUTURE OUTLOOK
Year 2015 net sales are estimated to be below last year's level. Operating
profit is estimated to grow in 2015.
The company does not provide exact guidance for net sales or EBIT development,
as single projects and timing of license sales may have large impact on
quarterly sales and profit.
Affecto Plc
Board of Directors
You can order Affecto's stock exchange releases to be delivered automatically
by e-mail.
Please visit the Investors section of the company website: www.affecto.com
A briefing for analysts and media will be arranged at 13.00 at RestaurantSavoy, Eteläesplanadi 14, Helsinki.
www.affecto.com
-----
Financial information:
1. Consolidated income statement, consolidated comprehensive income statement,
balance sheet, cash flow statement and statement of changes in equity
2. Notes
3. Key figures
1. Consolidated income statement, consolidated comprehensive income statement,
balance sheet, cash flow statement and statement of changes in equity
CONSOLIDATED INCOME STATEMENT
(1 000 EUR) 4-6/201 4-6/201 1-6/201 1-6/201 2014 last
5 4 5 4 12m
-----------------------------------------------------
-----------------------------------------------------
Net sales 30 812 33 018 59 874 64 205 122 693 118 361
Other operating income 1 23 1 23 27 5
Changes in inventories of 69 17 110 26 -83 1
finished
goods and work in progress
Materials and services -6 611 -8 172 -11 467 -14 171 -26 560 -23 856
Personnel expenses -16 765 -17 081 -34 329 -37 216 -67 630 -64 743
Other operating expenses -4 354 -4 472 -8 653 -9 096 -17 221 -16 777
Other depreciation and -271 -309 -549 -622 -1 218 -1 145
amortisation
IFRS3 amortisation - -549 - -1 098 -1 753 -655
Impairment - - - - -7 423 -7 423
Operating profit 2 881 2 475 4 988 2 051 833 3 769
Financial income and -83 -183 -202 -363 -563 -402
expenses
Profit before income tax 2 798 2 292 4 785 1 688 270 3 367
Income tax -446 -445 -993 -392 -1 861 -2 462
Profit for the period 2 353 1 847 3 792 1 297 -1 591 905
Profit for the period
attributable to:
Owners of the parent 2 353 1 847 3 792 1 297 -1 591 905
company
Earnings per share
(EUR per share):
Basic 0.11 0.09 0.18 0.06 -0.07 0.04
Diluted 0.11 0.09 0.18 0.06 -0.07 0.04
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
(1 000 EUR) 4-6/201 4-6/201 1-6/201 1-6/201 2014 last
5 4 5 4 12m
-----------------------------------------------------
-----------------------------------------------------
Profit for the period 2 353 1 847 3 792 1 297 -1 591 905
Other comprehensive income
Items that may be
reclassified subsequently
to the statement of
income:
Translation difference -36 -765 661 -809 -2 141 -672
Total Comprehensive income 2 317 1 082 4 453 488 -3 732 233
for the period
Total Comprehensive income
attributable to:
Owners of the parent 2 317 1 082 4 453 488 -3 732 233
company
CONSOLIDATED BALANCE SHEET
(1 000 EUR) 6/2015 6/2014 12/2014
-------------------------------------------------------------
-------------------------------------------------------------
Non-current assets
Property, plant and equipment 1 349 1 745 1 505
Goodwill 63 384 71 377 62 814
Other intangible assets 192 988 254
Deferred tax assets 1 061 1 588 1 263
Trade and other receivables - 2 -
65 986 75 701 65 836
Current assets
Inventories 610 628 493
Trade and other receivables 32 040 34 749 36 736
Current income tax receivables 1 039 599 393
Cash and cash equivalents 17 161 14 308 21 380
50 849 50 284 59 002
-------------------------------------------------------------
-------------------------------------------------------------
Total assets 116 835 125 985 124 838
Equity attributable to owners
of the parent Company
Share capital 5 105 5 105 5 105
Reserve of invested non-restricted 47 718 47 710 47 718
equity
Other reserves 858 800 835
Treasury shares -2 111 -2 165 -2 111
Translation differences -3 609 -2 937 -4 269
Retained earnings 13 497 16 046 13 159
-------------------------------------------------------------
-------------------------------------------------------------
Total equity 61 459 64 559 60 437
Non-current liabilities
Loans and borrowings - 20 436 18 452
Deferred tax liabilities 95 185 190
95 20 621 18 642
Current liabilities
Loans and borrowings 20 468 4 000 4 000
Trade and other payables 33 709 34 753 40 254
Current income tax liabilities 706 1 467 927
Provisions 398 585 578
55 281 40 805 45 759
Total liabilities 55 376 61 426 64 401
-------------------------------------------------------------
-------------------------------------------------------------
Equity and liabilities 116 835 125 985 124 838
SUMMARY CONSOLIDATED CASH FLOW STATEMENT
(1 000 EUR) 1-6/2015 1-6/2014 2014
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Cash flows from operating activities
Profit for the period 3 792 1 297 -1 591
Adjustments to profit for the period 1 692 2 471 12 878
5 485 3 767 11 287
Change in working capital -2 199 - 3 543 348
Interest and other financial cost paid -169 -228 -418
Interest and other financial income received 35 35 68
Income taxes paid -1 768 -1 511 -2 946
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Net cash from operating activities 1 384 - 1 479 8 339
Cash flows from investing activities
Acquisition of tangible and intangible assets -325 -440 -740
Proceeds from sale of tangible and - - 1
intangible assets
----------------------------------------------------------------------------
Net cash from investing activities -325 -440 -739
Cash flows from financing activities
Repayments of non-current borrowings -2 000 -2 000 -4 000
Proceeds from share options exercised - 262 262
Dividends paid to the owners -3 453 -3 434 -3 434
of the parent company
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net cash from financing activities -5 453 -5 172 -7 172
(Decrease)/increase in cash and cash equivalents -4 395 -7 092 429
Cash and cash equivalents 21 380 21 469 21 469
at the beginning of the period
Foreign exchange effect on cash 175 -70 -518
Cash and cash equivalents 17 161 14 308 21 380
at the end of the period
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to owners of the parent
company
-------------------------------------------------------------
-------------------------------------------------------------
(1 000 EUR) Share Reserve of Other Treasur Trans Ret. Total
capita invested reserve y lat. earnin equity
l non-restricted s shares diff. gs
equity
Equity at 1 5 105 47 718 835 -2 111 -4 269 13 159 60 437
January
2015
--------------------------------------------------------------------------------
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Profit 3 792 3 792
Translation 661 661
difference
s
--------------------------------------------------------------------------------
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Total 661 3 792 4 453
compre-hen
sive income
Share-based 23 23
payments
Dividends -3 453 -3 453
paid
--------------------------------------------------------------------------------
Equity at 5 105 47 718 858 -2 111 -3 609 13 497 61 459
30 June
2015
Equity attributable to owners of the parent
company
-------------------------------------------------------------
-------------------------------------------------------------
(1 000 EUR) Share Reserve of Other Treasur Trans Ret. Total
capita invested reserve y lat. earnin equity
l non-restricted s shares diff. gs
equity
Equity at 1 5 105 47 448 763 -2 165 -2 128 18 184 67 207
January
2014
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit 1 297 1 297
Translation -809 -809
difference
s
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total -809 1 297 488
compre-hen
sive income
Share-based 36 36
payments
Exercise of 262 262
share
options
Dividends -3 434 -3 434
paid
--------------------------------------------------------------------------------
Equity at 5 105 47 710 800 -2 165 -2 937 16 046 64 559
30 June
2014
2. Notes
2.1. Basis of preparation
This financial statement bulletin has been prepared in accordance with the IFRS
recognition and measurement principles and in accordance with IAS 34, Interim
Financial reporting. The interim report should be read in conjunction with the
annual financial statements for the year ended 31 December 2014. In material
respects, the same accounting policies have been applied as in the 2014 annual
consolidated financial statements. The amendments to and interpretations of
IFRS standards that entered into force on 1 January 2015 had no material impact
on this interim report.
2.2. Segment information
Affecto's reporting segments are based on geographical locations and are
Finland, Norway, Sweden, Denmark and Baltic.
Segment net sales and result
(1 000 EUR) 4-6/201 4-6/201 1-6/201 1-6/20 2014 last
5 4 5 14 12m
----------------------------------------------------
----------------------------------------------------
Total net sales
Finland 12 439 13 810 24 579 26 393 50 564 48 750
Norway 5 540 7 005 10 976 13 279 25 028 22 725
Sweden 5 526 5 452 10 114 11 278 19 985 18 820
Denmark 2 734 3 127 5 596 6 585 12 038 11 049
Baltic 5 639 4 696 10 727 8 831 19 032 20 928
Other -1 067 -1 072 -2 118 -2 162 -3 954 -3 911
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Group total 30 812 33 018 59 874 64 205 122 693 118 361
Operational segment result
Finland 1 281 1 359 1 920 2 220 5 441 5 141
Norway 455 714 1 040 421 1 966 2 586
Sweden 366 311 481 33 304 752
Denmark -80 260 -21 554 865 290
Baltic 1 129 597 2 437 757 2 944 4 625
Other -270 -217 -870 -835 -1 511 -1 546
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Total operational segment 2 881 3 024 4 988 3 149 10 009 11 847
result
IFRS3 amortisation - -549 - -1 098 -1 753 -655
Impairment of goodwill - - - - -7 423 -7 423
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Operating profit 2 881 2 475 4 988 2 051 833 3 769
Financial income and -83 -183 -202 -363 -563 -402
expenses
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Profit before income tax 2 798 2 292 4 785 1 688 270 3 367
In 2014, the impairment of goodwill allocated to assets of Sweden segment.
Net sales by business lines
(1 000 EUR) 4-6/201 4-6/201 1-6/201 1-6/20 2014 last 5 4 5 14 12m
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----------------------------------------------------
Information Management 28 522 30 526 55 684 59 581 114 008 110 110
Solutions
Karttakeskus GIS business 3 338 3 264 6 214 6 229 11 868 11 853
Other -1 048 -773 -2 024 -1 605 -3 183 -3 602
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Group total 30 812 33 018 59 874 64 205 122 693 118 361
2.3. Changes in intangible and tangible assets
(1 000 EUR) 1-6/2015 1-6/2014 1-12/2014
------------------------------
------------------------------
Carrying amount at the beginning of period 64 573 76 185 76 185
Additions 325 440 740
Disposals -2 - -1
Depreciation and amortization for the period -549 -1 719 -2 971
Impairments - - -7 423
Exchange rate differences 577 -796 -1 957
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Carrying amount at the end of period 64 926 74 110 64 573
In 2014, an impairment of 7 423 thousand euro has been recognized on assets
allocated to Sweden cash-generating unit. The impairment has been fully
recognized on goodwill.
2.4. Share capital, reserve of invested non-restricted equity and treasury
shares
(1 000 EUR) Number of shares Share Reserve of invested Treasury
outstanding capital non-restricted equity shares
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1.1.2014 21 431 052 5 105 47 448 -2 165
Exercise of 132 141 - 260 -
share options - - 2 -
Payment for
share options
30.6.2014 21 563 193 5 105 47 710 -2 165
1.1.2015 21 583 526 5 105 47 718 -2 111
30.6.2015 21 583 526 5 105 47 718 -2 111
Affecto Plc owns 867 219 treasury shares, which correspond to 3.9% of the total
amount of the shares. The amount of registered shares is 22 450 745 shares.
2.5. Interest-bearing liabilities
(1 000 EUR) 30.6.2015 31.12.2014
Interest-bearing non-current liabilities
Loans from financial institutions, - 18 452
non-current portion
Loans from financial institutions, 20 468 4 000
current portion
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20 468 22 452
Affecto's loan facility agreement includes financial covenants, breach of which
might lead to an increase in cost of debt or cancellation of the facility
agreement. The covenants are based on total net debt to earnings before
interest, taxes, depreciation and amortization and total net debt to total
equity. The covenants will be measured quarterly, and these terms and
conditions of covenants were met at the end of the reporting period. According
to the current terms, the loan from financial institution will be due in June
2016.
2.6. Contingencies and commitments
The future aggregate minimum lease payments under non-cancelable operating
leases:
(1 000 EUR) 30.6.2015 31.12.2014
Not later than one (1) year 3 313 3 333
Later than one (1) year, 2 741 3 421
but not later than five (5) years
Later than five (5) years - -
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Total 6 053 6 755
Guarantees given:
(1 000 EUR) 30.6.2015 31.12.2014
Liabilities secured by a mortgage
Financial loans 20 500 22 500
The above-mentioned liabilities are secured by bearer bonds with a nominal
value of 52.5 million euro. The bonds are held by Nordea Pankki Suomi Oyj and
secured by a mortgage on company assets of the group companies. In addition,
the shares in Affecto Finland Oy and Affecto Norway AS have been pledged to
secure the financial liabilities above.
Other securities given on own behalf:
(1 000 EUR) 30.6.2015 31.12.2014
Pledges 36 33
Other guarantees 1 943 2 118
Other guarantees are mostly securities issued for customer projects. These
guarantees include both bank guarantees secured by parent company of the group
and guarantees issued by the parent company and subsidiaries.
2.7. Related party transactions
Key management compensation and remunerations to the board of directors:
(1 000 EUR) 1-6/2015 1-6/2014 1-12/2014
Salaries and other short-term employee benefits 1 334 1 203 2 312
Post-employment benefits 162 138 283
Termination benefits 134 80 80
Share-based payments 1 1 3
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Total 1 631 1 422 2 678
Purchases from related party:
(1 000 EUR) 1-6/20 1-6/20 1-12/2
15 14 014
Purchases from the entity that are controlled by key 63 - 3
management personnel of the group
3. Key figures
4-6/201 4-6/201 1-6/201 1-6/201 2014 last
5 4 5 4 12m
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Net sales, 1 000 eur 30 812 33 018 59 874 64 205 122 693 118 361
EBITDA, 1 000 eur 3 152 3 333 5 536 3 771 11 227 12 992
Operational segment 2 881 3 024 4 988 3 149 10 009 11 847
result,
1 000 eur
Operating result, 1 000 2 881 2 475 4 988 2 051 833 3 769
eur
Result before taxes, 1 000 2 798 2 292 4 785 1 688 270 3 367
eur
Profit attributable to the 2 353 1 847 3 792 1 297 -1 591 905
owners
of the parent company, 1
000 eur
EBITDA, % 10.2 % 10.1 % 9.2 % 5.9 % 9.2 % 11.0 %
Operational segment 9.4 % 9.2 % 8.3 % 4.9 % 8.2 % 10.0 %
result, %
Operating result, % 9.4 % 7.5 % 8.3 % 3.2 % 0.7 % 3.2 %
Result before taxes, % 9.1 % 6.9 % 8.0 % 2.6 % 0.2 % 2.8 %
Net income for equity 7.6 % 5.6 % 6.3 % 2.0 % -1.3 % 0.8 %
holders
of the parent company, %
Equity ratio, % 58.4 % 56.0 % 58.4 % 56.0 % 54.6 %
Net gearing, % 5.4 % 15.7 % 5.4 % 15.7 % 1.8 %
Interest-bearing net debt, 3 307 10 128 3 307 10 128 1 071
1 000 eur
Gross investment in 132 305 325 440 740
non-current
assets (excl.
acquisitions),
1 000 eur
Gross investments, % of 0.4 % 0.9 % 0.5 % 0.7 % 0.6 %
net sales
Order backlog, 1 000 eur 43 327 48 113 43 327 48 113 49 645
Average number of 1 010 1 040 1 014 1 059 1 041
employees
Earnings per share, eur 0.11 0.09 0.18 0.06 -0.07 0.04
Earnings per share 0.11 0.09 0.18 0.06 -0.07 0.04
(diluted),
eur
Equity per share, eur 2.85 2.99 2.85 2.99 2.80
Average number of shares, 21 584 21 479 21 584 21 458 21 519 21 581
1 000 shares
Number of shares at the 21 584 21 563 21 584 21 563 21 584 21 584
end of
period, 1 000 shares
Calculation of key figures
EBITDA = Earnings before interest, taxes,
depreciation, amortization and impairment losses
Operational segment result = Operating profit before amortizations on
fair value adjustments due to business
combinations (IFRS3) and goodwill
impairments
Equity ratio, % = Total equity *100
________________________________
Total assets - advance payments
Gearing, % = Interest-bearing liabilities - cash *100
and cash equivalents
__________________________________
Total equity
Interest-bearing net debt = Interest-bearing liabilities - cash and
cash equivalents
Earnings per share (EPS) = Profit attributable to owners of the parent
company
______________________________________
Weighted average number of ordinary shares in
issue during the period
Equity per share = Total equity
______________________________________
Adjusted number of shares at the end of
the period
Market capitalization = Number of shares at the end of period
(excluding company's own shares held by
the company) x share price at closing date
-----
Additional information:
CEO Juko Hakala, + 358 205 777 450
CFO Satu Kankare, +358 205 777 202
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