2015-04-29 10:00:03 CEST
2015-04-29 10:00:07 CEST
REGULATED INFORMATION
Affecto Oyj - Interim report (Q1 and Q3)
Affecto Plc's Interim Report 1-3/2015
Helsinki, 2015-04-29 10:00 CEST (GLOBE NEWSWIRE) -- AFFECTO PLC -- INTERIM
REPORT -- 29 APRIL 2015 at 11.00
Affecto Plc's Interim Report 1-3/2015
Group key figures
MEUR 1-3/15 1-3/14 2014 last 12m
Net sales 29.1 31.2 122.7 120.6
Operational segment result 2.1 0.1 10.0 12.0
% of net sales 7.2 0.4 8.2 9.9
Operating profit 2.1 -0.4 0.8 3.4
% of net sales 7.2 -1.4 0.7 2.8
Profit before taxes 2.0 -0.6 0.3 2.9
Profit for the period 1.4 -0.6 -1.6 0.4
Equity ratio, % 59.2 56.0 54.6 -
Net gearing, % 0.9 14.1 1.8 -
Earnings per share, eur 0.07 -0.03 -0.07 0.02
Earnings per share (diluted), eur 0.07 -0.03 -0.07 0.02
Equity per share, eur 2.90 3.11 2.80 -
CEO Juko Hakala comments:
In the first quarter Affecto's net sales decreased by 7% to 29.1 MEUR (31.2
MEUR). Net sales decreased in all Nordic countries. Net sales grew in Baltic,
where especially the insurance business performed well thanks to the positive
impact on resource utilization from a few projects at their end stages.
The quarter's operational result clearly improved from the previous year.
Operational segment result was 2.1 MEUR (0.1 MEUR). Baltic had excellent 26%
profitability. Norway improved to 11% profitability, while Finland decreased to
5% profitability. We reached 2% profitability in Sweden. Profitability in
Denmark decreased to 2%.
Our business area and our customers' industries are under transformation due to
the rapid technological changes and we are developing our operations to be able
to fulfill the changing needs of our customers. We published an update to our
strategic direction in February. Since then we have been actively working with
refocusing our employees and operations according to the new strategic
direction and also with engaging our customers. Based on direct feedback from
customers, I believe that we are developing Affecto to the right direction.
Customers show active interest in the new business technology solutions, but
their needs are still in forming up in this market. Uncertainty and customers'
preference for smaller projects continued on the IT market.
Our sales performance in the first quarter was not good enough. Order intake
was smaller than year ago, and caused the order backlog of 41.5 MEUR to be
clearly lower than year ago (47.5 MEUR).
Net sales and operating profit are estimated to grow in 2015, but there is
uncertainty especially related to the net sales development.
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 1-3/2015 were 29.1 MEUR (1-3/2014: 31.2 MEUR). Net sales
in Finland were 12.1 MEUR (12.6 MEUR), in Norway 5.4 MEUR (6.3 MEUR), in Sweden
4.6 MEUR (5.8 MEUR), in Denmark 2.9 MEUR (3.5 MEUR) and 5.1 MEUR (4.1 MEUR) in
Baltic.
Net sales by reportable segments
Net sales, MEUR 1-3/15 1-3/14 2014 last 12m
Finland 12.1 12.6 50.6 50.1
Norway 5.4 6.3 25.0 24.2
Sweden 4.6 5.8 20.0 18.7
Denmark 2.9 3.5 12.0 11.4
Baltic 5.1 4.1 19.0 20.0
Other -1.1 -1.1 -4.0 -3.9
------------------------------------------------
------------------------------------------------
Group total 29.1 31.2 122.7 120.6
Net sales decreased by 7% in the first quarter. Largest decreases were seen in
Denmark and Sweden. Baltic grew by 23% mainly thanks to the insurance business.
Resource utilization was low especially in Denmark and also in Finland. Net
sales in the Nordic countries decreased mainly regarding consultant work, while
license sales were at last year's level.
Net sales of Information Management Solutions business in 1-3/2015 were 27.2
MEUR (29.1 MEUR) and net sales of Karttakeskus GIS business were 2.9 MEUR (3.0
MEUR).
Affecto's customers in the IT market continued to show interest mainly in
shorter and smaller projects, especially true for mid-sized customers, and
investment decisions took a long time. Customers' show more active interests in
the new business technology solutions, but their needs are still forming up,
and we can observe numerous activities inside the customers to find the
determination and direction. Affecto's development to serve this market has
started well, but is still ongoing. Due to these reasons, there is uncertainty
related to turning interest into concrete projects. The order intake remained
below last year and the order backlog decreased to 41.5 MEUR (47.5 MEUR).
PROFIT
Affecto's operating profit in 1-3/2015 was 2.1 MEUR (-0.4 MEUR) and the
operational segment result was 2.1 MEUR (0.1 MEUR). Operational segment result
was in Finland 0.6 MEUR (0.9 MEUR), in Norway 0.6 MEUR (-0.3 MEUR), in Sweden
0.1 MEUR (-0.3 MEUR), in Denmark 0.1 MEUR (0.3 MEUR) and in Baltic 1.3 MEUR
(0.2 MEUR).
Operational segment result by reportable segments
Operational segment 1-3/15 1-3/14 2014 last 12m
result, MEUR
Finland 0.6 0.9 5.4 5.2
Norway 0.6 -0.3 2.0 2.8
Sweden 0.1 -0.3 0.3 0.7
Denmark 0.1 0.3 0.9 0.6
Baltic 1.3 0.2 2.9 4.1
Other -0.6 -0.6 -1.5 -1.5
----------------------------------------------------------
----------------------------------------------------------
Operational segment result 2.1 0.1 10.0 12.0
IFRS3 Amortization - -0.5 -1.8 -1.2
Impairment of goodwill - - -7.4 -7.4
----------------------------------------------------------
Operating profit 2.1 -0.4 0.8 3.4
Operational result in 1-3/2015 was moderately good. Operational segment result
2.1 MEUR was clearly above the previous year's result (0.1 MEUR, including
approx. 0.9 MEUR non-recurring streamlining costs). Profitability in Baltic
improved to 26%. Profitability in Finland decreased to 5% due to low
utilization rate. Norway improved to 11% profitability. Largest negative change
was seen in Denmark, where profitability decreased to 2% due to low
utilization. Sweden reached 2% profitability.
Taxes corresponding to the profit of the period have been entered as tax
expense. Net profit for the period was 1.4 MEUR, while it was -0.6 MEUR last
year.
FINANCE AND INVESTMENTS
At the end of the reporting period Affecto's balance sheet totaled 118.2 MEUR
(12/2014: 124.8 MEUR). Equity ratio was 59.2% (12/2014: 54.6%) and net gearing
was 0.9% (12/2014: 1.8%).
The financial loans were 22.5 MEUR (12/2014: 22.5 MEUR) at the end of reporting
period. The company's cash and liquid assets were 21.9 MEUR (12/2014: 21.4
MEUR). The interest-bearing net debt was 0.5 MEUR (12/2014: 1.1 MEUR).
Cash flow from operating activities for the reported period was 0.4 MEUR (-4.4
MEUR) and cash flow from investing activities was -0.2 MEUR (-0.1 MEUR).
Investments in tangible and intangible assets were 0.2 MEUR (0.1 MEUR).
EMPLOYEES
The number of employees was 1014 persons at the end of the reporting period
(1068). 426 employees were based in Finland (442), 88 in Norway (120), 120 in
Sweden (143), 68 in Denmark (68) and 312 in the Baltic countries (295). The
average number of employees during the period was 1017 (1078).
Julius Manni started as the country director for Finland on 1 March 2015.
Hellen Wohlin Lidgard, the country director for Sweden, and Rene Lykkeskov, the
chief strategy officer, are leaving Affecto.
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. Strategy workshops for employees have been organised in
most of the offices, in order to activate employees for taking development
actions in line with the strategy. Recruitment of persons, both from inside and
outside Affecto, to the new hybrid roles at the junction of business and
technology has also been started. We have received direct positive feedback
from the customers on the increased focus on industry verticals and customer
value in the practical customer work.
In Finland and Sweden the development of IoT capabilities has continued, and so
has also the development of capabilities for B-to-C industry solutions in
Sweden. A new "Affecto Industrial" growth program is being launched for
Finland, Sweden and Denmark focusing on developing the IoT and analytics
capabilities for manufacturing, technology, energy and process industries.
Development of capabilities in design, user interface and usability solutions
have been intensified in the Nordic countries.
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 1-3/2015 net sales in Finland decreased by 4% to 12.1 MEUR (12.6 MEUR).
Operational segment result was 0.6 MEUR (0.9 MEUR) and profitability was 5%.
Resource utilization remained low, which negatively affected both net sales and
result. General mood is still cautious in Finland and customers are slow with
their investment decisions. Order backlog is below last year's level.
In 1-3/2015 net sales of Karttakeskus GIS business, reported as part of
Finland, decreased by 3% to 2.9 MEUR (3.0 MEUR) and its profitability was good.
In 1-3/2015 net sales in Norway were 5.4 MEUR (6.3 MEUR) and operational
segment result was 0.6 MEUR (-0.3 MEUR). Net sales decreased by 13% to which
both the decreased amount of employees and the weakened NOK have contributed.
Profitability was 11%. Streamlining actions done last year have helped to
decrease the cost base and have improved profitability. Order backlog is below
last year's level.
In 1-3/2015 net sales in Sweden were 4.6 MEUR (5.8 MEUR) and operational
segment result 0.1 MEUR (-0.3 MEUR). Net sales decreased by 21%, to which both
the decreased amount of employees and the weakened SEK have contributed. Sweden
had slightly positive 2% profitability. Resource utilisation has been on a
reasonably good level, but there has been some employee churn and the decreased
amount of employees has increased the negative impact from fixed costs.
Development actions in Sweden will continue and the search for the new country
director is ongoing. Order backlog is above last year's level.
In 1-3/2015 net sales in Denmark were 2.9 MEUR (3.5 MEUR) and operational
segment result was 0.1 MEUR (0.3 MEUR). Net sales decreased by 17% mainly due
to low resource utilization. Profitability decreased to 2%. Competition in
Denmark is tight. Order backlog is below last year's level.
In 1-3/2015 net sales in Baltic (Lithuania, Latvia, Estonia, Poland, South
Africa) were 5.1 MEUR (4.1 MEUR). Operational segment result was 1.3 MEUR (0.2
MEUR). Net sales increased by 23% and profitability increased to 26%. A few
large projects are in final stages, which has increased resource utilisation
and has also impacted positively on profit. The insurance business and Estonia
are performing well. The local business in Lithuania has recovered somewhat,
although the slow preparation of new EU funded projects still negatively
impacts the public sector market. 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
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 the highest share price was 3.84 euro, the lowest
price 2.91 euro, the average price 3.43 euro and the closing price 3.61 euro.
The trading volume was 1.3 million shares, corresponding to 23% (annualised) of
the number of shares at the end of the period. The market value of shares was
77.9 MEUR at the end of the period excluding the treasury shares.
SHAREHOLDERS
The company had a total of 3 023 owners on 31 March 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 utilisation rate of
resources.
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.
Affecto sells third party software licenses 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 Annual General Meeting, held on 8 April 2015, has been reported in this
interim report.
Affecto signed in April a 2.3 MEUR agreement with a Scandinavian public sector
customer regarding the maintenance and development of their Business
Intelligence and Data Warehouse solutions during the next four years. The
agreement includes option for development projects to be agreed separately.
FUTURE OUTLOOK
Net sales and operating profit are estimated to grow in 2015, but there is
uncertainty especially related to the net sales development.
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 12.30 at Restaurant
Savoy, 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) 1-3/15 1-3/14 2014 last
12m
-----------------------------------
-----------------------------------
Net sales 29 062 31 187 122 693 120 568
Other operating income 0 0 27 27
Changes in inventories of finished 41 9 -83 -51
goods and work in progress
Materials and services -4 856 -5 999 -26 560 -25 416
Personnel expenses -17 564 -20 134 -67 630 -65 059
Other operating expenses -4 298 -4 625 -17 221 -16 894
Other depreciation and amortisation -278 -312 -1 218 -1 184
IFRS3 amortisation - -549 -1 753 -1 204
Impairment - - -7 423 -7 423
Operating profit 2 107 -424 833 3 363
Financial income and expenses -120 -180 -563 -503
Profit before income tax 1 987 -604 270 2 861
Income tax -547 53 -1 861 -2 461
Profit for the period 1 440 -551 -1 591 400
Profit for the period
attributable to:
Owners of the parent company 1 440 -551 -1 591 400
Earnings per share
(EUR per share):
Basic 0.07 -0.03 -0.07 0.02
Diluted 0.07 -0.03 -0.07 0.02
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
(1 000 EUR) 1-3/15 1-3/14 2014 last
12m
-----------------------------------
-----------------------------------
Profit for the period 1 440 -551 -1 591 400
Other comprehensive income
Items that may be reclassified subsequently
to the statement of income:
Translation difference 696 -43 -2 141 -1 401
Total Comprehensive income 2 136 -594 -3 732 -1 002
for the period
Total Comprehensive income
attributable to:
Owners of the parent company 2 136 -594 -3 732 -1 002
CONSOLIDATED BALANCE SHEET
(1 000 EUR) 3/2015 3/2014 12/2014
-------------------------------------------------------------
-------------------------------------------------------------
Non-current assets
Property, plant and equipment 1 456 1 777 1 505
Goodwill 63 391 72 117 62 814
Other intangible assets 226 1 519 254
Deferred tax assets 1 188 1 649 1 263
Trade and other receivables - 2 -
66 261 77 064 65 836
Current assets
Inventories 536 622 493
Trade and other receivables 28 757 35 039 36 736
Current income tax receivables 731 1 063 393
Cash and cash equivalents 21 914 17 054 21 380
51 938 53 779 59 002
-------------------------------------------------------------
-------------------------------------------------------------
Total assets 118 199 130 844 124 838
Equity attributable to owners
of the parent Company
Share capital 5 105 5 105 5 105
Reserve of invested non-restricted 47 718 47 516 47 718
equity
Other reserves 852 784 835
Treasury shares -2 111 -2 165 -2 111
Translation differences -3 573 -2 172 -4 269
Retained earnings 14 598 17 633 13 159
-------------------------------------------------------------
-------------------------------------------------------------
Total equity 62 590 66 701 60 437
Non-current liabilities
Loans and borrowings 18 460 22 428 18 452
Deferred tax liabilities 185 397 190
18 645 22 824 18 642
Current liabilities
Loans and borrowings 4 000 4 000 4 000
Trade and other payables 31 516 35 150 40 254
Current income tax liabilities 997 1 631 927
Provisions 451 537 578
36 964 41 318 45 759
Total liabilities 55 609 64 143 64 401
-------------------------------------------------------------
-------------------------------------------------------------
Equity and liabilities 118 199 130 844 124 838
SUMMARY CONSOLIDATED CASH FLOW STATEMENT
(1 000 EUR) 1-3/2015 1-3/2014 2014
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash flows from operating activities
Profit for the period 1 440 -551 -1 591
Adjustments to profit for the period 874 973 12 878
2 314 423 11 287
Change in working capital -1 024 - 3 991 348
Interest and other financial cost paid -78 -104 -418
Interest and other financial income received 17 22 68
Income taxes paid -784 -736 -2 946
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net cash from operating activities 445 - 4 386 8 339
Cash flows from investing activities
Acquisition of tangible and intangible assets -193 -135 -740
Proceeds from sale of tangible and - - 1
intangible assets
Net cash from investing activities -193 -135 -739
----------------------------------------------------------------------------
Cash flows from financing activities
Repayments of non-current borrowings - - -4 000
Proceeds from share options exercised - 68 262
Dividends paid to the owners - - -3 434
of the parent company
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net cash from financing activities - 68 -7 172
(Decrease)/increase in cash and cash equivalents 252 -4 453 429
Cash and cash equivalents 21 380 21 469 21 469
at the beginning of the period
Foreign exchange effect on cash 282 38 -518
Cash and cash equivalents 21 914 17 054 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
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit 1 440 1 440
Translation 696 696
difference
s
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 696 1 440 2 136
compre-hen
sive income
Share-based 17 17
payments
Equity at 5 105 47 718 852 -2 111 -3 573 14 598 62 590
31 March
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 -551 -551
Translation -43 -43
difference
s
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total -43 -551 -594
compre-hen
sive income
Share-based 21 21
payments
Exercise of 68 68
share
options
Equity at 5 105 47 516 784 -2 165 -2 172 17 633 66 701
31 March
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) 1-3/15 1-3/14 2014 last 12m
----------------------------------
----------------------------------
Total net sales
Finland 12 140 12 582 50 564 50 122
Norway 5 436 6 274 25 028 24 190
Sweden 4 588 5 827 19 985 18 746
Denmark 2 862 3 458 12 038 11 442
Baltic 5 087 4 135 19 032 19 985
Other -1 051 -1 090 -3 954 -3 916
Group total 29 062 31 187 122 693 120 568
-------------------------------------------------------------------
Operational segment result
Finland 638 861 5 441 5 218
Norway 585 -293 1 966 2 844
Sweden 114 -279 304 697
Denmark 60 294 865 631
Baltic 1 309 160 2 944 4 093
Other -600 -618 -1 511 -1 493
-------------------------------------------------------------------
-------------------------------------------------------------------
Total operational segment result 2 107 125 10 009 11 990
IFRS3 amortisation - -549 -1 753 -1 204
Impairment of goodwill - - -7 423 -7 423
-------------------------------------------------------------------
-------------------------------------------------------------------
Operating profit 2 107 -424 833 3 363
Financial income and expenses -120 -180 -563 -503
-------------------------------------------------------------------
-------------------------------------------------------------------
Profit before income tax 1 987 -604 270 2 861
In 2014, the impairment of goodwill allocated to assets of Sweden segment.
Net sales by business lines
(1 000 EUR) 1-3/15 1-3/14 2014 last 12m
----------------------------------
----------------------------------
Information Management Solutions 27 162 29 055 114 008 112 115
Karttakeskus GIS business 2 876 2 965 11 868 11 780
Other -976 -832 -3 183 -3 327
-------------------------------------------------------------------
-------------------------------------------------------------------
Group total 29 062 31 187 122 693 120 568
2.3. Changes in intangible and tangible assets
(1 000 EUR) 1-3/2015 1-3/2014 1-12/2014
------------------------------
------------------------------
Carrying amount at the beginning of period 64 573 76 185 76 185
Additions 193 135 740
Disposals - - -1
Depreciation and amortization for the period -278 -861 -2 971
Impairments - - -7 423
Exchange rate differences 584 -46 -1 957
Carrying amount at the end of period 65 073 75 413 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
----------------------------------------------------------------
----------------------------------------------------------------
1.1.2014 21 431 052 5 105 47 448 -2 165
Exercise of 31 617 - 66 -
share options - - 2 -
Payment for
share options
31.3.2014 21 462 669 5 105 47 516 -2 165
1.1.2015 21 583 526 5 105 47 718 -2 111
31.3.2015 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) 31.3.2015 31.12.2014
Interest-bearing non-current liabilities
Loans from financial institutions, 18 460 18 452
non-current portion
Loans from financial institutions, 4 000 4 000
current portion
---------------------------------------------------------------
---------------------------------------------------------------
22 460 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.
2.6. Contingencies and commitments
The future aggregate minimum lease payments under non-cancelable operating
leases:
(1 000 EUR) 31.3.2015 31.12.2014
Not later than one (1) year 3 317 3 333
Later than one (1) year, 3 112 3 421
but not later than five (5) years
Later than five (5) years - -
Total 6 429 6 755
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Guarantees given:
(1 000 EUR) 31.3.2015 31.12.2014
Liabilities secured by a mortgage
Financial loans 22 500 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) 31.3.2015 31.12.2014
Pledges 37 33
Other guarantees 1 971 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) 1-3/2015 1-3/2014 1-12/2014
Salaries and other short-term employee benefits 700 645 2 312
Post-employment benefits 88 77 283
Termination benefits 121 - 80
Share-based payments 1 2 3
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Total 909 724 2 678
Purchases from related party:
(1 000 EUR) 1-3/20 1-3/20 1-12/2
15 14 014
Purchases from the entity that are controlled by key - - 3
management personnel of the group
3. Key figures
1-3/15 1-3/14 2014 last 12m
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Net sales, 1 000 eur 29 062 31 187 122 693 120 568
EBITDA, 1 000 eur 2 384 437 11 227 13 174
Operational segment result, 2 107 125 10 009 11 990
1 000 eur
Operating result, 1 000 eur 2 107 -424 833 3 363
Result before taxes, 1 000 eur 1 987 -604 270 2 861
Profit attributable to the owners 1 440 -551 -1 591 400
of the parent company, 1 000 eur
EBITDA, % 8.2 % 1.4 % 9.2 % 10.9 %
Operational segment result, % 7.2 % 0.4 % 8.2 % 9.9 %
Operating result, % 7.2 % -1.4 % 0.7 % 2.8 %
Result before taxes, % 6.8 % -1.9 % 0.2 % 2.4 %
Net income for equity holders 5.0 % -1.8 % -1.3 % 0.3 %
of the parent company, %
Equity ratio, % 59.2 % 56.0 % 54.6 %
Net gearing, % 0.9 % 14.1 % 1.8 %
Interest-bearing net debt, 546 9 373 1 071
1 000 eur
Gross investment in non-current 193 135 740
assets (excl. acquisitions),
1 000 eur
Gross investments, % of net sales 0.7 % 0.4 % 0.6 %
Order backlog, 1 000 eur 41 527 47 523 49 645
Average number of employees 1 017 1 078 1 041
Earnings per share, eur 0.07 -0.03 -0.07 0.02
Earnings per share (diluted), 0.07 -0.03 -0.07 0.02
eur
Equity per share, eur 2.90 3.11 2.80
Average number of shares, 21 584 21 437 21 519 21 555
1 000 shares
Number of shares at the end of 21 584 21 463 21 584 21 584
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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