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2007-08-06 08:30:00 CEST 2007-08-06 08:30:00 CEST REGULATED INFORMATION Affecto Oyj - Quarterly reportAFFECTO PLC'S INTERIM REPORT 1-6/2007AFFECTO PLC STOCK EXCHANGE RELEASE 6 AUGUST 2007 at 09:30 AFFECTO PLC'S INTERIM REPORT 1-6/2007 GROUP KEY FIGURES MEUR 4-6/2007 4-6/2006 1-6/2007 1-6/2006 2006 Net sales 20.2 12.3 37.8 22.7 50.2 Operating result before 3.2 1.1 5.5 0.9 4.1 IFRS3 items % of net sales 15.8 8.9 14.7 4.0 8.1 Operating result 2.9 1.0 4.9 0.8 3.6 % of net sales 14.5 8.4 13.0 3.5 7.3 Result before taxes 2.9 1.0 4.7 0.7 3.5 Result for the period 2.0 0.7 3.5 0.4 2.6 Equity ratio, % 49.9 62.4 49.9 62.4 52.0 Net gearing, % 31.0 5.6 31.0 5.6 35.2 Earnings per share, eur 0.12 0.05 0.20 0.03 0.16 Earnings per share (diluted), eur 0.12 0.05 0.20 0.03 0.16 Equity per share, eur 2.39 2.14 2.39 2.14 2.30 CEO Pekka Eloholma comments the second quarter 2007: "I am very satisfied with the developments in second quarter. Our net sales grew by 65%. The quarter was the best in group history regarding both net sales and operating profit." "Our net sales grew to 20.2 MEUR (12.3 MEUR). The growth was especially strong in Baltic (81%), but it was also good in Finland (24%). The acquisitions done in late 2006 (ZenPark & Intellibis) created a good foundation for growth, but the business grew also organically. The Swedish business generated 3.3 MEUR net sales. The quarter had very good profitability and EBIT was 2.9 MEUR i.e. 14% of net sales. Profitability improved especially in the Baltic. " "The demand for our solutions has remained good in Finland. The Baltic business has grown significantly and during the second quarter we increased our Baltic delivery capacity by hiring approx. 15 new employees. The Swedish business has also developed positively." "Positive development is expected to continue during year 2007. Based on the acquisitions done in 2006 and good order backlog the company seeks to reach net sales of approx. 70 MEUR in 2007 (Affecto without Component Software). The profitability is also expected to improve from year 2006. However, as a normal seasonality effect, the summer vacations will clearly weaken net sales and profitability in the third quarter. The possible completion of the public tender offer for Component Software will have an impact on the year 2007 earnings, but both the completion and the timing are still uncertain." Additional information: CEO Pekka Eloholma, +358 205 777 737 CFO Satu Kankare, +358 205 777 202 SVP, M&A, Hannu Nyman, +358 205 777 761 This report is unaudited. The amounts in this report have been rounded from exact numbers. INTERIM REPORT 1-6/2007 Affecto builds versatile IT solutions for companies and organizations in Finland, Sweden and the Baltic States to improve their efficiency in business and to support the related decision-making. The company's IT solutions are always customised to meet the specific needs of each customer. Affecto offers business intelligence (BI) solutions that enable an efficient way of utilizing and refining the data from ERP systems. The company develops also geographic information systems (GIS) solutions and enterprise content management (ECM) solutions that help companies to collect, organise and analyse digital information in support of their business processes. Affecto is headquartered in Helsinki, with other offices in Finland located in Joensuu, Jyväskylä, Rauma, Tampere and Turku. The company has subsidiaries in Estonia, Lithuania, Latvia and Sweden. NET SALES AND PROFIT Affecto's net sales in 4-6/2007 was 20.2 MEUR (4-6/2006 12.3 MEUR). Net sales in Finland was 11.3 MEUR (4-6/2006 9.2 MEUR), in Baltic area 5.6 MEUR (3.1 MEUR) and 3.3 MEUR in Nordic (0.0 MEUR). Sales growth was 65%. In Finland growth was 24% and in Baltic it was 81%. Sales of geographical segments based on location of assets Total sales, MEUR 4-6/2007 4-6/2006 1-6/2007 1-6/2006 2006 Finland 11.3 9.2 21.1 17.4 36.3 Baltic 5.6 3.1 10.2 5.3 13.1 Nordic 3.3 0.0 6.5 0.0 0.9 Eliminations 0.0 0.0 0.0 0.0 0.0 Group total 20.2 12.3 37.8 22.7 50.2 The sales growth was based on good demand for services in all our market areas. Especially the Baltic business developed very positively compared to last year. Intellibis in Sweden, acquired in December 2006, forms the Nordic segment. During the corresponding period last year Affecto did not have operations in Sweden. In 4-6/2007 net sales of BI segment were 8.4 MEUR (2.4 MEUR), Operational solutions 8.9 MEUR (7.0 MEUR) and Cartographic solutions 2.9 MEUR (2.9 MEUR). The acquisitions done in 2006 had impact mostly on the BI segment. Affecto's EBIT was 2.9 MEUR (1.0 MEUR). EBIT in Finland was 1.6 MEUR (1.2 MEUR), Baltic EBIT was 1.4 MEUR (0.1 MEUR) and Nordic EBIT was 0.3 MEUR. Operating result of geographical segments based on location of assets Operating result, MEUR 4-6/2007 4-6/2006 1-6/2007 1-6/2006 2006 Finland 1.6 1.2 2.5 1.8 4.6 Baltic 1.4 0.1 2.5 -0.4 0.5 Nordic 0.3 0.0 0.7 0.0 0.0 Group management -0.4 -0.3 -0.7 -0.7 -1.5 Group total 2.9 1.0 4.9 0.8 3.6 According to IFRS requirements, 1-6/2007 EBIT includes 0.6 MEUR (0.1 MEUR) of depreciation of intangible assets related to acquisitions. A significant part of the depreciation is related to Nordic segment. In whole year 2006, such depreciation totaled 0.4 MEUR. In year 2007, such depreciation is estimated to amount to 1.2 MEUR excluding the possible acquisition of Component Software. The profitability developed positively during the second quarter both in Finland and in the Baltic countries. The profit in Baltic improved significantly thanks to good resource utilization rate. The profit improved also in Finland. R&D expenditure in 1-6/2007 totaled 0.3 MEUR (0.3 MEUR), i.e. 0.7% of net sales (1.2%). The expenditure has been booked as costs. Taxes for the period have been booked as taxes. Net profit for the period was 3.5 MEUR, while it was 0.4 MEUR last year. Order backlog totaled 20.3 MEUR at the end of period (17.1 MEUR in 30 June 2006 and 24.2 MEUR in 31 December 2006). FINANCE AND INVESTMENTS At the end of the reporting period, Affecto's balance sheet totaled 84.3 MEUR (Q2/2006: 60.4 MEUR). Significant part of the growth is due to the acquisition of Intellibis AB at the end of 2006. Equity ratio was 49.9% (62.4%) and net gearing was 31.0% (5.6%). The financial loans were 18.6 MEUR as at 30 June 2007. The interest-bearing net debt was 12.6 MEUR. For the Component Software acquisition, the company has negotiated a financing package for 48.5 MEUR, which also includes the rearrangement of the previous debts. The company's cash and liquid assets were 6.1 MEUR (Q2/2006: 8.8 MEUR), of which cash and cash equivalents were 6.0 MEUR and available-for-sale financial assets 0.1 MEUR. Cash flow from operating activities for the reported period was 3.8 MEUR (1.6 MEUR) and cash flow from investments was -0.8 MEUR (-1.9 MEUR). Investments in non-current assets excluding acquisitions were 0.8 MEUR (0.6 MEUR) during the period. Affecto has distributed dividends of 1.7 MEUR (previous year 1.5 MEUR) from the profit of the year 2006. Dividend was paid on 11 April 2007. EMPLOYEES The number of employees was 816 persons at the end of the reporting period (590 persons). The average number during the period was 784 persons (566). 442 employees, i.e. 54% of the employees are located outside of Finland. Personnel have grown in second quarter in Finland, in Baltic and in Sweden. BUSINESS REVIEW The group's business is managed through three country units. Finland, Baltic and Nordic are the primary IFRS segments. Finland In 4-6/2007 net sales in Finland was 11.3 MEUR (9.2 MEUR) and it grew by 24%. EBIT was 1.6 MEUR (1.2 MEUR). The year has started somewhat better than the previous year. The business developed steadily during the quarter and the demand for various services was reasonably good and was increasing especially regarding BI services. The unit prices of consultant work have remained stable or even slightly increased. The number of employees has grown by 15 during the period 4-6/2007. The growth of IT services market in Finland is rather slow, but the growth of our specialty segments (BI, ECM, GIS) is expected to exceed the average market growth. The customers' activity has continued to be good. We received new orders from, among others, Nokia, Finnair, ABB, the Finnish Road Administration and various ministries. Baltic (Lithuania, Latvia, Estonia) The Baltic business mostly consists of projects related to large customer- specific systems. Projects are typically larger and tender processes longer than in Finland or in Nordic. The business is mostly classified to Operational solutions, but also includes BI solutions. In 4-6/2007 the Baltic net sales grew 81% and was 5.6 MEUR (3.1 MEUR). Baltic EBIT was 1.4 MEUR (0.1 MEUR). The business has developed very favorably compared to last year, and the resource utilization rate and profitability is high in all three countries. The steady continuing work on large projects has helped to keep the utilization rate very high during the whole period. The order backlog offers stable resource utilization for the next few months. The company is actively recruiting more employees. During the second quarter, the number of employees in Baltic grew by approx. 15 persons. The Baltic countries enjoy a high demand for competent workforce, which is predicted to increase salary levels during the year. EITO (European Information Technology Observatory) forecasts that the IT services will grow by over 13% p.a. in the next few years in all three Baltic countries. Nordic (Sweden) Affecto has expanded its business to the other Nordic countries by acquiring Intellibis AB in Sweden in December 2006. In 4-6/2007 the net sales in Sweden was 3.3 MEUR and EBIT 0.3 MEUR. Year ago, Affecto did not have business in Sweden. The business in Sweden has developed positively during the early part of 2007. The price development has been positive and the utilization rate has remained high. New customers like Fortum, Stockholm Water and Moderna Försäkringar have been obtained. The delivery capacity has been increased by recruitments and we aim to continue increasing number of employees during the year. Business review by secondary segments 4-6/2007 In the beginning of 2007 the secondary segments were modified by separating BI (Business Intelligence), which previously was included in XBI, to its own segment. GIS and ECM, which were included in XBI, were combined with Customized solutions, which was renamed Operational solutions. Business intelligence (BI) net sales was 8.4 MEUR (2.4 MEUR). The growth is largely explained by the acquisitions of ZenPark and Intellibis in late 2006, but the also the organic growth has been good. Customers' interest is increasingly focusing on larger solutions and continuous service. Demand for BI services has continuously grown and the utilization rate of project work improved compared to last year. Also the public sector entities in Finland and Sweden show growing interest for BI solutions. The research reports by various research companies speak about the growing significance of BI as an IT investment target for organizations. For example, Gartner expects the BI license market to grow by 10% p.a. during the next few years. Net sales of Operational Solutions grew by 28% and was 8.9 MEUR (7.0 MEUR). The growth is explained by the strong growth of the Baltic operations, where large projects continued steadily. The insurance solution projects in South Africa and Sweden continued. Affecto is establishing a subsidiary in Poland in order to be able to offer its insurance sector related services also there. In Finland, the demand for solutions was good and the utilization rate of project resources was good. The demand for services remained moderately good in Baltic and in Finland. Cartographic Solutions businesses net sales was 2.9 MEUR (2.9 MEUR). The demand for digital geographic content and related services grew. The Finnish Road Administration has selected Affecto as the operator of the national road and street database, Digiroad, for the next three years. The sales of maps and other printed products remained roughly at the level of last year. CHANGES IN GROUP STRUCTURE The Annual General Meeting held on 28 March 2007 decided to change the name of the parent company to Affecto Plc. The wholly owned subsidiary ZenPark Oy has merged to Affecto Finland Oy at 30 June 2007. Zenpark Media Oy has been liquidated on 20.6.2007. In line with the strategy, the company has continued to evaluate M&A prospects. During the review period, the company has published its intention to make a public tender offer for Component Software. ANNUAL GENERAL MEETING AND GOVERNANCE The Annual General Meeting of AffectoGenimap Plc, which was held on March 28, 2007, adopted the financial statements for 1.1.-31.12.2006 and discharged the members of the Board of Directors and the CEO from liability. The Annual General Meeting decided that a dividend of EUR 0.10 per share be distributed for the year 2006. The record date of the dividend payment was April 2, 2007 and the dividend was paid on April 11, 2007. Aaro Cantell, Heikki Lehmusto, Pasi Mäenpää, Jukka Norokorpi and Esko Rytkönen were re-elected and Pyry Lautsuo was elected as members of the Board of Directors. Immediately after the Annual General Meeting the organization meeting of the Board of Directors was held and Aaro Cantell was re-elected Chairman of the Board. The APA firm PricewaterhouseCoopers Oy was re-elected auditor of the company with Merja Lindh, APA, as auditor in charge. The Annual General Meeting accepted the Board's proposal for changing the company name and Articles of Association. The name of the company and the Article 1 of the Articles of Association were changed. The new name of the company is Affecto Oyj in Finnish, Affecto Abp in Swedish and Affecto Plc in English. The current Articles of Association were amended so that Article 3, which concerns the minimum and maximum share capital, Article 4, which concerns the nominal value of the shares, Article 6, which concerns the transfer of the shares into the book-entry system, were removed and Article 5 and the last sentence of the second paragraph of Article 12 were amended. The Article 9 concerning the right to represent the company was amended to reflect the terminology in the Companies Act and the requirement of a deputy auditor was abolished and consequently Articles 11 and 13 were amended. In addition, the numbering of Articles of Association was amended. The changes were registered at the Finnish trade register on 2 April 2007. The Annual General Meeting accepted the Board's proposals for the authorizations given to the Board of Directors. 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. THE AUTHORIZATIONS GIVEN TO THE BOARD OF DIRECTORS During 1-3/2007 the Board did not use the authorizations given by the previous Annual General Meeting. Those authorizations ended on 28 March 2007. The complete contents of the new authorizations given by the Annual General Meeting held on 28 March 2007 have been published in the stock exchange release regarding the Meetings' decisions. The Annual General Meeting decided to authorize 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 payment or without consideration on terms to be determined by the Board of Directors and in relation to a share issue against payment at a price to be determined by the Board of Directors. A maximum of 3 400 000 new shares may be issued. A maximum of 1 700 000 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. The Annual General Meeting decided to authorize the Board of Directors to decide to acquire the company's own shares with distributable funds. A maximum of 1 700 000 shares may be acquired. The authorization shall be in force until the next Annual General Meeting. In addition, the Extraordinary General Meeting held after the review period on 10 July 2007 authorized the Board to decide on the directed share issue (max. 4 800 000 shares) needed for the acquisition of Component Software. SHARES AND TRADING The company has only one share series, and all shares have similar rights. As at 30 June 2007, Affecto Plc's share capital consisted of 17 016 521 shares and the share capital was EUR 5 104 956.30. The company owns 36 738 treasury shares, which corresponds to 0.2% of all shares. In 1-6/2007, the highest share price was 4.81 euro, lowest price 2.90 euro, average price 3.69 euro and closing price 4.52 euro. Trading volume was 6.5 million shares, corresponding to 77 % (annualized) of the number of shares at the end of period. The market value of shares was 76.7 MEUR at the end of the period. SHAREHOLDERS The company has received a flagging announcement that the ownership of Mr. Mika Laine has exceeded 5% on 5 April 2007. The company had total of 1129 owners on 30 June 2007 and the foreign ownership was 20%. The list of the largest owners can be viewed in the company's web site. OPTIONS During the review period, 268 900 options 2006B have been given to key personnel. The share subscription price with 2006B options is 3.24 eur per share after the dividends paid in April 2007. PUBLIC TENDER OFFER FOR COMPONENT SOFTWARE GROUP ASA Affecto published on 11 June 2007 that the company had made a combination agreement with Component Software and had intention to make a public tender offer for Component Software's shareholders. After the review period, the Extraordinary General Meeting held on 10 July 2007 authorized the Board to decide on the directed share issue (max. 4 800 000 shares) needed for the acquisition of Component Software. The Meeting also elected Mr. Haakon Skaarer as a new board member with effective date from the closing date of the tender offer. The election is conditional upon the completion of the tender offer. Oslo Börs approved the Offer document and the Finnish Financial Supervision approved the prospectus on 20 July 2007. The public tender offer period began on 25 July 2007. The public tender offer will end on 22 August 2007, assuming that the offer period is not prolonged. If the tender offer is completed on planned schedule, Component Software will be consolidated to Affecto most likely as of 1 September 2007. EVENTS AFTER THE REVIEW PERIOD The events after the review period related to the acquisition of Component Software have been described above in "PUBLIC TENDER OFFER FOR COMPONENT SOFTWARE GROUP ASA". STRATEGIC OBJECTIVES The company has two strong business lines: the strongest growth expectations are focused on the growing business intelligence market but at the same time the company wants to further strengthen its position in delivering demanding and customer specific operational IT solutions. The company aims to be the leading business intelligence solution provider in the Nordic, Baltic and CEE regions. Furthermore, the company aims to be the most competent and quality focused provider of geographic information systems (GIS), enterprise content management (ECM) and other operational solutions in selected industries and regions. The growth target for the company for 2007-2009 is that net sales exceed 100 million euros in 2009. The growth target will be reached through organic growth supplemented by acquisitions. At the same time the company seeks to be one of the most profitable IT services company within its market region. FUTURE OUTLOOK Positive development is expected to continue during year 2007. Based on the acquisitions done in 2006 and good order backlog the company seeks to reach net sales of approx. 70 MEUR in 2007 (Affecto without Component Software). The profitability is also expected to improve from year 2006. However, as a normal seasonality effect, the summer vacations will clearly weaken net sales and profitability in the third quarter. The possible completion of the public tender offer for Component Software will have an impact on the year 2007 earnings, but both the completion and the timing are still uncertain. 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 It is possible to order Affecto's stock exchange releases to be delivered automatically by e-mail. Please visit the Investor pages of the company website: http://www.affecto.com A briefing for analysts and media will be arranged at 11:00 at Restaurant G.W.Sundmans, Eteläranta 16, Helsinki. ----- Financial information: 1. Income statement, balance sheet, cash flow statement and statement of changes in shareholders' equity 2. Notes 3. Key figures 4. Calculation of key figures 1. Income statement, balance sheet, cash flow statement and statement of changes in shareholders' equity CONSOLIDATED INCOME STATEMENT (1 000 EUR) 4-6/07 4-6/06 1-6/07 1-6/06 2006 Net sales 20 227 12 264 37 803 22 707 50 194 Other operating income 61 16 61 101 138 Changes in inventories of -27 151 146 291 287 finished goods and work in progress Materials and services -4 023 -3 560 -6 712 -6 504 -13 177 Personnel expenses -9 615 -5 510 -19 133 -11 302 -23 996 IFRS3 depreciation -280 -60 -639 -110 -409 Other depreciation, amortization -295 -228 -571 -447 -963 and impairment charges Other operating expenses -3 122 -2 044 -6 022 -3 939 -8 432 Operating result 2 926 1 029 4 932 798 3 642 Finance costs (net) -70 -56 -217 -117 -184 Result before income tax 2 856 974 4 715 682 3 458 Income tax -843 -246 -1 264 -236 -824 Result for the period 2 013 727 3 451 446 2 633 Attributable to: Equity holders of the Company 2 013 727 3 451 446 2 633 Minority interest 0 0 0 0 0 Earnings per share for result attributable to the equity holders of the Company (expressed in EUR per share) Basic 0.12 0.05 0.20 0.03 0.16 Diluted 0.12 0.05 0.20 0.03 0.16 CONSOLIDATED BALANCE SHEET (1 000 EUR) 6/2007 6/2006 12/2006 Non-current assets Tangible assets 2 351 2 022 2 110 Goodwill 45 847 31 036 43 579 Other intangible assets 6 796 3 175 7 550 Deferred tax assets 630 560 594 Available-for-sale financial assets 53 57 57 Other non-current receivables 47 87 93 55 724 36 937 53 983 Current assets Inventories 2 640 2 292 2 095 Trade receivables 12 378 7 072 11 508 Other receivables 6 057 4 858 4 230 Current income tax receivables 944 404 1 036 Available-for-sale financial assets 108 0 578 Financial assets at fair value through 176 0 24 profit or loss Restricted cash 225 6 381 Cash and cash equivalents 6 042 8 791 4 906 28 570 23 423 24 758 Total assets 84 294 60 360 78 741 Equity attributable to equity holders of the Company Share capital 5 105 4 941 5 105 Share premium 25 404 25 404 25 404 Reserve of invested non-restricted 1 960 0 1 960 equity Other reserves 32 1 11 Treasury shares -106 -212 -106 Retained earnings 8 203 4 929 6 717 40 598 35 062 39 092 Minority interest 0 0 0 Total shareholders' equity 40 598 35 062 39 092 Non-current liabilities Borrowings 12 355 8 859 14 014 Deferred tax liabilities 1 836 503 2 007 Other long-term liabilities 226 35 2 232 14 417 9 397 18 252 Current liabilities Borrowings 6 260 1 848 5 032 Trade payables 3 090 3 027 2 627 Other liabilities 18 682 10 878 12 580 Current income tax liabilities 1 247 147 1 158 29 279 15 901 21 397 Total liabilities 43 696 25 297 39 649 Total shareholders' equity and 84 294 60 360 78 741 liabilities CONSOLIDATED CASH FLOW STATEMENT (1 000 EUR) 1-6/07 1-6/06 2006 Cash flows from operating activities Result for the period 3 451 446 2 633 Adjustments to profit for the period 2 789 837 2 442 6 240 1 283 5 076 Change in working capital Decrease (+) / increase (-) in trade and -2 401 -1 000 -1 814 other receivables Decrease (+) / increase (-) in inventories -546 -168 30 Decrease (-) / increase (+) in trade and 1 927 1 730 475 other payables Change in working capital -1 020 562 -1 309 Interest and other finance cost paid -440 -207 -429 Interest and dividend received 87 172 289 Income taxes paid -1 099 -208 -1 024 Net cash generated by operating activities 3 768 1 602 2 604 Cash flows from investing activities Acquisition of subsidiaries, net of cash -107 -1 424 -13 262 acquired Purchases of tangible and intangible assets -795 -556 -1 118 Proceeds from sale of tangible assets 22 30 41 Sale of business/subsidiaries 44 0 45 Proceeds from sale of financial assets 0 39 39 Increase of other non-current 0 35 30 receivables/liabilities Net cash used in investing activities -836 -1 875 -14 225 Cash flow from financing activities Proceeds from issue of share capital 0 0 2 Increase of interest-bearing liabilities 0 2 415 12 447 Repayments of interest-bearing liabilities -432 -4 263 -5 938 Purchase of treasury shares 0 -187 -509 Change in other long-term liabilities 8 0 0 Dividends paid to company's shareholders -1 698 -1 540 -1 540 Net cash generated in financing activities -2 130 -3 575 4 462 (Decrease)/increase in cash and cash 802 -3 848 -7 159 equivalents Cash and cash equivalents at the beginning 5 485 12 639 12 639 of the period Translation adjustment -17 0 -1 Change in fair value of financial assets 0 0 6 Cash and cash equivalents at the end of the 6 271 8 791 5 485 period STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (1 000 EUR) Share Share Reserve of Other Trea- Ret. Mino- Total capital premium invested reserve sury earn- rity equity non- s shares ings & inte- restricted trans- rest equity lat. diff. Shareholders' 5 105 25 404 1 960 11 -106 6 717 0 39 092 equity 1 January 2007 Translation -267 -267 differences Share options 26 26 Available-for- -5 -5 sale financial assets Result for the 3 451 3 451 period Dividends -1 698 -1 698 Shareholders' 5 105 25 404 1 960 32 -106 8 203 0 40 598 equity 30 June 2007 (1 000 EUR) Share Share Reserve of Other Trea- Ret. Mino- Total capital premium invested reserve sury earn- rity equity non- s shares ings & inte- restricted trans- rest equity lat. diff. Shareholders' 4 619 22 856 0 55 0 6 023 20 33 573 equity 1 January 2006 Translation 1 1 differences Share options -54 55 1 Result for the 446 446 period Dividends -1 540 -1 540 Purchase of -212 -212 treasury shares Issue of share 322 2 548 2 870 capital Acquisition of -20 -20 minority Put/Call -56 -56 treatment Shareholders' 4 941 25 404 0 1 -212 4 929 0 35 062 equity 30 June 2006 2. Notes 2.1. Basis of preparation This condensed interim financial information has been prepared in accordance with IAS 34, Interim financial reporting. The condensed interim financial report should be read in conjunction with the annual financial statements for the year ended 31 December 2006. 2.2. Accounting policies The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 December 2006, as described in the annual financial statements for the year ended 31 December 2006. The group has adopted the following standards and interpretations from the beginning of 2007: IFRS 7 Financial instruments - Disclosures, and Amendment to IAS 1 - Capital disclosures. The adoption of IFRS 7 and the amendment to IAS 1 will expand disclosures presented in the annual financial statements. 2.3. Segment information Primary reporting format - geographical segments based on location of assets Segment result: (1 000 EUR) 4-6/07 4-6/06 1-6/07 1-6/06 1-12/06 Total sales Finland 11 326 9 167 21 080 17 424 36 267 Baltic countries 5 607 3 100 10 177 5 294 13 083 Nordic 3 297 0 6 547 0 881 Eliminations -3 -3 -1 -11 -36 Group total 20 227 12 264 37 803 22 707 50 194 Segment result (operating result) Finland 1 560 1 246 2 492 1 808 4 641 Baltic countries 1 424 66 2 470 -350 497 Nordic 305 0 703 0 -22 Group management -363 -283 -733 -660 -1 474 Group total 2 926 1 029 4 932 798 3 642 Secondary reporting format - business segments Segment revenue: (1 000 EUR) 4-6/07 4-6/06 1-6/07 1-6/06 1-12/06 Total sales BI 8 406 2 404 15 822 4 898 11 863 Operational Solutions 8 922 6 970 17 198 12 948 28 715 Cartographic Solutions 2 903 2 893 4 785 4 872 9 652 Other (incl. -3 -3 -1 -11 -36 eliminations) Group total 20 227 12 264 37 803 22 707 50 194 The Baltic revenue is classified to both BI and Operational solutions segments. Nordic revenue is classified to the BI segment. 2.4. Changes in intangible and tangible assets (1 000 EUR) 1-6/07 1-6/06 1-12/06 Carrying amount at the beginning of period 53 239 35 652 35 652 Acquisition of subsidiaries 1 237 18 522 Additions 3 250 548 1 093 Disposals -9 -648 -651 Depreciation and amortization for the period -1 210 -557 -1 372 Translation differences -277 0 -6 Carrying amount at the end of period 54 994 36 233 53 239 2.5. Share capital, share premium, reserve of invested non-restricted equity and treasury shares (1 000 EUR) Number of Share Share Reserve of Treasury out- capital premium invested shares standing non- shares restricted equity 1 January 2006 15 396 373 4 619 22 856 0 0 Directed share issue 1 074 148 322 2 548 0 0 Treasury shares -90 400 0 0 0 -212 purchased 30 June 2006 16 380 121 4 941 25 404 0 -212 1 January 2007 16 979 783 5 105 25 404 1 960 -106 30 June 2007 16 979 783 5 105 25 404 1 960 -106 At the end of reporting period the company owned 36 738 treasury shares. The amount of registered shares was 17 016 521 shares. 2.6. Interest-bearing liabilities (1 000 EUR) 1-6/07 1-6/06 At the beginning of period 19 046 12 554 Acquisition of subsidiaries 0 0 Increase of liabilities 0 2 415 Repayments of liabilities -432 -4 263 At the end of period 18 615 10 707 2.7. Earnings per share Calculation of earnings per share and diluted earnings per share is based on the figures below. 4-6/07 4-6/06 1-6/07 1-6/06 1-12/06 Profit attributable to equity 2 013 727 3 451 446 2 633 holders of the company (1 000 EUR) Weighted average number of shares(1 000): In calculation of earnings per share 16 980 16 051 16 980 15 726 16 058 Dilution effect of share options 0 0 0 0 0 In calculation of diluted earnings 16 980 16 051 16 980 15 726 16 058 per share 2.8. Contingencies and commitments The group has a contingent asset of 87 thousand Latvian lats (EUR 123 thousand) relating to a court case in Latvia. Riga Regional Court published a judgement, according to which adverse party was sentenced to pay 87 thousand Latvian lats to a group company of Affecto (Mebius IT). The adverse party has appealed to the Supreme court of the Republic of Latvia and demanded to change the decision. The adverse party has demanded a compensation of 51 thousand Latvian lats (EUR 72 thousand) from Mebius IT. In respect of the acquisitions of Intellibis AB and ZenPark Oy, additional consideration of up to 4.7 MEUR may be payable. The additional consideration of ZenPark Oy (maximum 0.7 MEUR) is payable in 2007 and the additional consideration of Intellibis AB (maximum 4.0 MEUR) in 2008. At the end of the reporting period an additional consideration has been estimated to amount to 4.7 MEUR, which has been recorded as liability. The future aggregate minimum lease payments under non-cancelable operating leases as of 30 June 2007: 1 000 EUR 30.6.2007 31.12.2006 Not later than one (1) year 2 184 2 346 Later than one (1) year, but not later than 3 677 3 792 five (5) years Later than five (5) years 6 0 5 867 6 138 Guarantees: 1 000 EUR 30.6.2007 31.12.2006 Debt secured by a mortgage Financial loans 18 614 19 031 Mortgages 14 367 14 367 Other securities given on own behalf: Pledges 786 696 Pledges given on own behalf are secured by restricted cash of 0.2 MEUR (0.4 MEUR), time deposits of 0.3 MEUR (0.0 MEUR) and short term receivables at an amount of 0.3 MEUR (0.3 MEUR). Derivative contracts 1 000 EUR 30.6.2007 31.12.2006 Interest rate swaps: Nominal value 5 000 5 000 Fair value 176 24 2.9. Related party transactions (1 000 EUR) 1-6/07 1-6/06 Salaries and other short-term employee 853 678 benefits Post-employment benefits 129 102 Share-based payments 4 1 986 781 4. Key figures IFRS 4-6/07 4-6/06 1-6/07 1-6/06 2006 Net sales, 1 000 eur 20 227 12 264 37 803 22 707 50 194 EBITDA, 1 000 eur 3 501 1 317 6 143 1 355 5 014 Operating result before IFRS3 3 205 1 089 5 571 908 4 051 depreciation, 1 000 eur Operating result, 1 000 eur 2 926 1 029 4 932 798 3 642 Result before taxes, 1 000 eur 2 856 974 4 715 682 3 458 Net income for equity holders 2 012 727 3 451 446 2 633 of the parent company, 1 000 eur EBITDA, % 17.3 % 10.7 % 16.2 % 6.0 % 10.0 % Operating profit before IFRS3 15.8 % 8.9 % 14.7 % 4.0 % 8.1 % depreciation, % Operating result, % 14.5 % 8.4 % 13.0 % 3.5 % 7.3 % Result before taxes, % 14.1 % 7.9 % 12.5 % 3.0 % 6.9 % Net income for equity holders 10.0 % 5.9 % 9.1 % 2.0 % 5.2 % of the parent company, % Equity ratio, % 49.9 % 62.4 % 49.9 % 62.4 % 52.0 % Net gearing, % 31.0 % 5.6 % 31.0 % 5.6 % 35.2 % Interest-bearing net debt, 12 572 1 951 12 572 1 951 13 743 1 000 eur Gross investment in non-current 423 365 795 641 1 118 assets (excl. acquisitions), 1 000 eur Gross investments, % of sales 2.1 % 3.0 % 2.1 % 2.8 % 2.2 % Research and development costs, 117 130 274 266 476 1 000 eur R&D -costs, % of sales 0.6 % 1.1 % 0.7 % 1.2 % 0.9 % Order backlog, 1 000 eur 20 298 17 127 20 298 17 127 24 167 Average number of employees 802 574 784 566 605 Earnings per share, eur 0.12 0.05 0.20 0.03 0.16 Earnings per share (diluted), 0.12 0.05 0.20 0.03 0.16 eur Equity per share, eur 2.39 2.14 2.39 2.14 2.30 Average number of shares, 1 000 16 980 16 051 16 980 15 726 16 058 shares Number of shares at the end of 16 980 16 380 16 980 16 380 16 980 period, 1 000 shares Calculation of key figures EBITDA = Earnings before interest, taxes, depreciation and amortization Equity ratio, % = Shareholders' equity + minority *100 interest -------------------------------- Total assets - advances received Gearing, % = Interest-bearing liabilities - *100 cash, bank receivables and securities held as financial asset -------------------------------- Shareholders' equity + minority interest Interest-bearing net debt = Interest-bearing liabilities - cash and bank receivables Earnings per share (EPS) = Result for the period to equity holders of the Company --------------------------------------- Adjusted average number of shares during the period Equity per share = Shareholders' equity ---------------------------------------- Adjusted number of shares at the end of the period Market capitalization = Number of shares at the end of period (excluding treasury shares) x share price at closing date ----- |
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