2016-02-18 08:00:02 CET
2016-02-18 08:00:02 CET
REGULATED INFORMATION
Ixonos - Financial Statement Release
Financial statements release for the period January 1 - December 31, 2015
Helsinki, Finland, 2016-02-18 08:00 CET (GLOBE NEWSWIRE) -- Ixonos Plc
Stock Exchange Release 18 February 2016 at 09:00
Financial statements release for the period January 1 - December 31, 2015
COMPANY BALANCE SHEET STRENGTHENED SIGNIFICANTLY THROUGH FINANCING ARRANGEMENT
Fourth quarter 2015 in brief:
- Turnover in the third quarter was EUR 4.3 million (2014: 5.9 million), a
change of -26.6 per cent.
- Earnings before interest, taxes, depreciation and amortization (EBITDA)
were EUR -1.8 million,
-42.8 percent of turnover (2014: EUR -0.8 million, -13.8 percent of turnover).
- Operating result was EUR -2.3 million, -52.9 percentage of turnover
(2014: EUR -1.8 million, -31.0 percent of turnover).
- Net result was EUR 1.5 million, 34.9 percent of turnover (2014: EUR
-2.8 million, -47.5 percent of turnover) due the partial debt relief of the
Company’s debts with the total value EUR 4 million.
- Earnings per share were EUR 0.01 (2014: EUR -0.03).
Review period in brief (last year’s reference figures inside brackets):
- Turnover for the review period was EUR 17.0 million (2014: EUR 23.9
million), a change of -29.0 per cent.
- Earnings before interest, taxes, depreciation and amortization (EBITDA)
were EUR -7.4 million, - 43.5 per cent of turnover, (2014: EUR -4.6 million,
-19.4 percent of turnover).
- Operating result was EUR -8.7 million, -51.2 per cent of turnover
(2014: EUR -7.4 million, -31.0 per cent of turnover).
- Net result was EUR -10.6 million (2014: EUR -8.3 million), including
write-off of deferred tax assets EUR -4.9 million.
- Earnings per share were EUR -0,05 (2014: EUR -0.09).
- Net cash flow from operating activities was EUR -11.5 million (2014:
EUR -5.8.million).
- The financing position and balance sheet were strengthened in February
through EUR 5.8 million directed share issue and in December through a rights
issue EUR 8.2 million and a directed share issue EUR 0.4 million. Financial
loans were rearranged in February and in December. In December the financial
institutions granted partial waiver of the company’s debts with the total value
of the waiver approximately EUR 4.0 million. The loans from the Company main
owner, totaling EUR 4.5 million, were paid back in December.
- After the execution of the Arrangement, the Company has amount of EUR
0.8 million financial institution loan from Nordea Bank Finland Plc, to which
loan have been granted a directly enforceable guarantee by Tremoko and its
owners Turret Oy Ab and Holdix Oy Ab and a guarantee by Finnvera Plc.
- Company has received approximately amount of EUR 7.2 million new loans
from Tremoko.
- Loan agreements related to the Arrangement include covenants regarding
equity ratio, EBITDA and net debts/EBITDA which will be considered at the first
time on 31 December, 2016.
- On September 2, 2015 the company made a share based acquisition of
Cresense Oy, a company which specializes in user oriented design.
Future prospects
The operating profit of the company is expected to improve compared to 2015.
Changes in the management of the group
The company has reduced the size of the Management Team to three members. Chief
Executive
Officer Sami Paihonen is a member of the Management Team together with
Executive Vice
President Teppo Kuisma and Chief Financial Officer Kristiina Simola, who joined
Ixonos on October 1, 2015.
Sami Paihonen, President and CEO:
Although the year has been challenging we determinedly continue to bring new
services alongside the ones that we already have. In the new organisation the
core of the production is formed by Design and Technology and alongside them
Consulting Services was founded to unite them and to produce consultative
services. Through this we can offer our customers innovative solutions that
respects their business. This also allows us to more efficiently generate all
the work needed for the entire production.
The interest that both new and existing customers show in our offering is
encouraging and we do our best to turn this interest into profitable business.
We continue to improve the efficiency and determinedly work towards a company
that combine new innovative design, versatile technology and profound
consulting.”
OPERATIONS
Ixonos is a service company that combine design and technology in a versatile
way. We offer creative and versatile digital solutions and consulting services
for several customer segments. The most important part of our services is a
deep understanding of and our employees’ high knowledge in our customer’s
digital challenges, such as utilising digitalisation in their business and
operations.
We create new digital services for our customers. These services are based on
the latest technologies and trends that affect their business. Premium user
experience requires design and technology to work seamlessly together and
Ixonos strive to be the leading expert on that.
We have updated our Dream – Design – Deliver vision to Discover – Design –
Deliver in order to match the user research in the initial phases, strategic
design and defining feasible technology. The basic idea is to find the right
components that are needed to build the customer delivery, in order to ensure a
premium user experience.
Our operations are centralised in Finland, USA and United Kingdom and
increasingly in Singapore. The software development is mostly based in Finland
but it has been strengthened also in the other locations. There are
Design-functions in all locations.
Our Design services consists of digital-, mobile- and web design as well as
service- and industrial design. We offer design services all the way from
design strategy and user research to designing visuals and interaction and
further to workshops, designing prototypes and usability testing. All our
design innovations are implemented on different devices and platforms, always
striving for the best possible implementation that can be done within the time
frame requested by the customer.
As a technology company we have a deep knowledge in developing creative
software solutions for embedded systems and software. We use open standardised
technologies (like Linux, Android, iOS, Windows). We combine knowledge in
software development with world-class technology competence, deep knowledge in
user interface- and usability design and top class project management skills.
Our technology expertise comprise for example of wireless connectivity, RF-,
audio-, imaging-, cloud- and video technologies.
As a new unit and service we have founded the Consulting Services-unit that
generates specifications for end-to-end solutions to meet our customer’s
challenges. Concurrently we help our customers to understand new kinds of
business models and competition and how these can be met on the long term.
Our customer segments can be divided into following:
- Industrial Internet
- Media and Online services
- Smart devices
- Cloud services
- Consultative services
Organisation
Our organisation consist of the following functions:
- Design, that is responsible of holistic design capabilities that
generate strategic service design, deep understanding of users and innovative
design of user interfaces and product design.
- Technology, that is responsible of implementing technical solutions,
software development and customer projects and delivering them cost
efficiently.
- Consulting services, that is responsible of the specification of
end-to-end projects and steering them as a consultative service
- New sales, marketing and Regions that is responsible of new sales, new
customers, marketing and steering the foreign operations.
Group Services that is supporting the entire organisation consists of Finance,
HR, It and Legal functions.
Locations
Our offices are situated in our main markets Finland, USA, Great Britain and
Singapore.
- Our Technology development sites are mainly located in Finland.
Additionally we have customer-facing technical personnel in USA and Great
Britain.
- Our Design Studios are located in Finland, USA, Great Britain and
Singapore.
- Our Sales offices are located in Finland, USA and Great Britain.
SEGMENT REPORTING
Ixonos reports its operations as a single segment.
TURNOVER
The turnover in the fourth quarter was EUR 4.3 million (2014: EUR 5.9 million),
which is 26.6 per cent lower compared to the corresponding period.
The company’s turnover during the review period was EUR 17.0 million (2014: EUR
23.9 million), which is 29.0 percent lower than in the comparison period.
The lower turnover was mainly caused by challenges in the domestic market and
there has been delays in project continuations.
During the review period, no single customer generated a dominating share of
the turnover or exceeded one fourth of the total turnover.
RESULT
The operating result for the fourth quarter was EUR -2.3 million (2014: EUR -
1.8 million) and the result before taxes was EUR 1.5 million (2014: EUR -2.1
million). The result for the fourth quarter was EUR 1.5 (2014: -2.8 MEUR). The
fourth quarter earnings per share were EUR 0.01 (2014: EUR -0.03). Cash flow
from operating activities per share in the fourth quarter was EUR -0.02 (2014:
EUR -0.00).
The operating result for the review period was EUR –8.7 million (2014: EUR -7.4
million) and result before tax was EUR -5.7 million (2014: EUR -8.5 million).
The result for the review period was -10.6 million (2014:-8.3 million) Earnings
per share were EUR -0.05 (2014: EUR -0.09). Cash flow per share from operating
activities in the review period was EUR -0.03 (2014: EUR -0.06).
The result of the financial period decreased due to capitalization of deferred
tax assets by -4.9 MEUR made Q2/2015 and lower than estimated turnover. The
result of the financial period strengthened because of the partial waiver
granted from the financiers, value 4.0 million euro during Q4/2015.
RETURN ON CAPITAL
The group’s total shareholders’ equity was 2.7 MEUR and return-on-equity ratio
was -1421.9 percent. Due to negative value of total shareholders’ equity the
return-on-equity ratio has not been provided for the year 2014.
Return on investment (ROI) was -29.9 per cent (2014: -46.4 per cent).
INVESTMENTS
Investments during the fourth quarter was 0.0 MEUR (2014:0.3 MEUR).
Gross investments during the review period totalled to EUR 1.5 million (2014:
EUR 1.1 million). Investments consisted of capitalisation of R&D expenditure in
media and industrial internet businesses, investments in fixed assets and
Cresense acquisition.
RESEARCH AND DEVELOPMENT
The group’s R&D expenses during the financial period 2015 were EUR 1.8 million
(2014: EUR 2.4 million). The profit for the financial period includes EUR 1.7
million (2014: EUR 1.6 million) in R&D expenses. A total of EUR 0.1million
(2014: EUR 0.8 million) in R&D expenses was capitalised during the financial
period. The R&D expenses during 2015 were primarily associated to the media and
industrial internet business areas. Based on re-evaluation of R&D projects with
the new strategy EUR -0.2 million of capitalized R&D projects were written down
during the financial year.
BALANCE SHEET AND FINANCING
The balance sheet totalled to EUR 18.3 million (2014: EUR 21.9 million).
Shareholders’ equity was EUR 2.7 million (2014: EUR -1.2 million). The equity
to total assets -ratio was 14.8 per cent (2014: -5.6 per cent). The group’s
liquid assets at the end of the review period amounted to EUR 1.9 million
(2014: EUR 0.3 million). Non-controlling interest of the equity was EUR 0.2
million (2014: EUR 0.2 million).
The change in shareholders’ equity was caused by write-off of company’s
deferred tax assets and the rights issues and the directed share issues
completed during the year.
At the end of the review period, the balance sheet included EUR 3.0 million
(2014: EUR 10.5 million) in loans. This amount covers the overdrafts in use. In
addition to this the company has received approximately amount of EUR 7.2
million new loans from Tremoko. The loan agreements related to the Arrangement
include covenants regarding equity ratio, EBITDA and net debts/EBITDA which
will be considered at the first time on 31 December, 2016.
On February 10, 2015 the company repaid its loans amounting to EUR 2.3 million
to Turret Oy Ab, a related party. At the same time the EUR 3.5 million
long-term convertible bond and its interests were used to pay part of the
directed share issue.
On February 10, 2015 the company also raised a EUR 4.0 million loan guaranteed
by its main owner Tremoko Oy Ab from financial institutions.The company made an
announcement regarding the financing arrangements on February 10, 2015.
On June 10, 2015 the company agreed upon EUR 1.0 million short term bridge loan
with Turret Oy Ab, a related party, for working capital purposes.
On July 13, 2015 the company signed a credit facility agreement of EUR 3.0
million with its main owner Tremoko Oy. The company made an announcement
regarding the financing arrangements on June 23, 2015 and July 14, 2015.
On October 29, 2015 the company has renewed its 1.0 million loan to Turret Oy
Ab.
On October 29, 2015 the company raised a EUR 0.5 million short-term loan with
Turret Oy Ab.
On December 2, 2015 the Board of Directors decided on a rights issue in a
maximum amount of approximately EUR 8.2 million. The rights issue was
subscribed in full. All 136,582,157 new shares were registered with the Finnish
Trade Register on December 30, 2015. Additional information regarding the
rights issue can be found in this interim report in the section “other occurs
during the reporting period”.
On December 22, 2015 the company made a financing agreement with its five
financiers not related to its owners and Tremoko Oy Ab. The following actions
regarding the financing arrangement were carried out:
- The Financial Institutions granted in addition to other arrangements
partial waiver of the Company’s debts with the total value of the waiver
approximately EUR 4 million.
- The company´s borrowed capital was restructed and after the execution
of the Arrangement, the Company has approximately amount of EUR 0.8 million
financial institution loan from Nordea Bank Finland Plc, to which loan have
been granted a directly enforceable guarantee by Tremoko and its owners Turret
Oy Ab and Holdix Oy Ab and a guarantee by Finnvera Plc and the company has
received approximately amount of EUR 7.16 million new loans from Tremoko.
- The Board of Director of the Company decided on a Directed Share Issue
for subscription by financiers not related to the owners. 6,856,345 new
Company shares were subscribed. The shares were registered with the Finnish
Trade Register on December 30, 2015. Additional information regarding the
directed share issue can be found in this interim report in the section “other
occurs during the reporting period”.
The company’s existing working capital may not be sufficient to cover the
company’s funding needs over the next 12 months. The company estimates that its
working capital is expected to be sufficient to fund the company’s operations
over the next 12 months if the sales development is better than the current
forecast or the company is able to make larger cost savings than forecasted. A
possible financial shortage remaining can be filled with bridge financing.
CASH FLOW
Consolidated cash flow from operating activities during the fourth quarter was
-4.0 MEUR (2014: 0.4 MEUR).
Consolidated cash flow from operating activities during the review period was
EUR -11.5 million (2014: EUR -5.8 million).
In order to reduce the turnaround time of its receivables the Group sells most
of its Finnish account receivables. Out of the accounts receivables in the
balance sheet on December 31, 2015, the group sold EUR 0.5 million (2014: EUR
1.3 million) to the financing companies during the beginning of January 2016.
During 2015 EUR 10.0 million (2014: EUR 12.8 million) trade receivables were
sold.
DEFERRED TAX ASSETS
The management assessed during the first half of the year the prerequisites for
capitalizing the deferred tax assets. Due to continuing uncertainties in the
markets, the management concluded that the conditions and certifying future
views that need to be fulfilled to enable the company to continue capitalizing
its deferred tax assets may not be assuredly verified. Based on this change of
management assessment the company decided not to capitalize the deferred tax
assets and decided to write off the existing capitalized values from its
balance sheet, total of EUR -4.9 million.
GOODWILL
On December 31, 2015, the consolidated balance sheet included EUR 12.0 million
in goodwill (2014: EUR 10.8 million). The before mentioned goodwill includes an
addition of EUR 1.2 million as a result of the acquisition of Cresense Oy’s
shares.
The following parameters were used in the goodwill impairment testing:
- The review period of 4 years
- WACC discount rate 10 per cent
- 1 per cent growth estimate used for terminal value calculation
The company made an impairment test on December 31, 2015 confirming that there
is no need for an impairment. The present value of future cash flows exceeded
the carrying value of assets by EUR 15.8 million.
The present value of the cash flow calculation EUR 28 million is lower than the
sum of the company's financial liabilities EUR 10.7 million and the market
price of the shares EUR 24.7 millions of December 31, 2015.
ACQUSITION OF CRESENSE OY
The company has acquired the Finnish privately owned company Cresense Oy in
order to strengthen Ixonos’ position as an innovative digitalization and
transformation partner by enforcing the company’s user research and design
know-how. The corporate transaction was completed on September 2, 2015. As part
of the company’s reorganization, a total of 27 employees joined Ixonos.
In the transaction, all Cresense shares apart from shares owned by the company
itself were transferred to the ownership of Ixonos. Cresense Oy owns 300 own
shares, which represents 14 per cent of the company’s total shares. As
compensation, Ixonos issued a total of 7,142,860 new Ixonos shares in a
directed share issue to be subscribed by the existing owners of Cresense Oy.
The sellers have subscribed all the shares that were offered in the share issue
and Ixonos Board of Directors has approved the subscriptions. The shares
represent 3.4 per cent of Ixonos shares and votes on December 31, 2015. The
shares are registered in the Trade Register and the shareholders’ register of
the company and are entitled to full dividends possibly distributed by Ixonos
and to other distribution of assets as well as carry other shareholder rights
in the company. The shares of the sellers continuing to work for the group are
subject to a selling and transfer restriction during a two (2) year period
starting from the closing date. If certain prerequisites are met, the sellers
will be entitled to an additional purchase price of EUR 380,000 at most. Ixonos
may pay the possible additional purchase price in cash or as Ixonos shares at
its option.
The share issue was carried out by the decision of Ixonos’ Board of Directors
on the authorization of the Annual General Meeting held on April 29, 2015. The
share issue was carried out in order to develop the group’s business and to
finance a corporate transaction therefore there was a weighty financial reason
for the share issue and the deviation from the pre-emptive right of the
shareholders within the meaning of the Finnish Limited Liability Companies Act.
The subscription price of the shares was EUR 0.07 per share. The subscription
price has been defined as the mean price weighted with the trading amounts of
the Ixonos share of the period June 26, 2015 – August 25, 2015. The
subscription took place and Cresense Oy’s shares were transferred to Ixonos in
connection with the execution of the acquisition.
In connection to the acquisition of Cresense Oy’s shares EUR 1.2 million was
written down in goodwill.
The acquisition of Cresense Oy responds to the customer demand to combine user
research knowledge with digitalization. Through the acquisition Ixonos’
Dream-Design-Deliver concept can be better utilized by the customer with the
Discover-Design-Deliver business concept. The increased offer book is believed
to increase the united company’s turnover. In addition synergy advantage will
be obtained by combining office facilities and utilizing the companies’ best
practice and equipment.
PERSONNEL
The average number of employees during the fourth quarter was 203 (2014:269).
The average number of employees during the review period was 217 (2014: 320)
and in the end of the period 200 (2014: 264) employees. In the end of the
review period, the Group had 161 employees (2014: 230) stationed in Finnish
companies, while Group companies in other countries employed 38 (2014: 34).
During review period the number of employees decreased by 64.
SHARES AND SHARE CAPITAL
Share turnover and price
During the financial period, the highest price of the company’s share was EUR
0.11 (2014: EUR 0.16) and the lowest price was EUR 0.05 (2014: EUR 0.05). The
closing price on December 31, 2015 was EUR 0.07 (2014: EUR 0.06). The weighted
average price was EUR 0.06 (2014: EUR 0.11). The number of shares traded during
the review period was 52,023,432 (2014: 40,744,745), which corresponds to 14.7
per cent (2014: 38.3 percent) of the total number of shares at the end of the
review period. The market value of the share capital was EUR 24,749,543 (2014:
EUR 5,953,558) at closing on December 31, 2015.
On February 10, 2015 the company realized a directed share issue. Tremoko Oy
Ab, a related party, subscribed 96,670,000 shares at a price of EUR 0.06 per
share corresponding to approximately EUR 5.8 million.
In March 2015 in connection with Tremoko’s mandatory public takeover bid a
total of 20,454,656 shares and 1,540,000 options were transferred to Tremoko Oy
Ab, whereby its ownership rose to 79.1 percent. With the options right the
ownership percentage may be raised to 79.2 percent.
On September 2, 2015 Ixonos Plc issued a total of 7,142,860 new Ixonos shares
in a directed share issue in connection with the acquisition of Cresense Oy.
The shares were entered into the Trade Register on September 10, 2015 and were
released for subscription in Nasdaq Helsinki on September 30, 2015 equal to the
existing Ixonos shares. Some shares are subject to a lock-up period from six
(6) months to two (2) years counting from the issuing date. After this share
issue Ixonos Plc’s total amount of shares and votes increased to 210,126,396.
On December 2015 the company carried out a rights issue were all issued
136,582,157 new shares were subscribed and a directed share issue were all
issued 6,856,345 new shares were subscribed.
All new shares were registered in with the Finnish Trade Register on December
30, 2015. The new shares were combined with Ixonos’s existing class of shares
and were subject to public trading on the official list of NASDAQ Helsinki Ltd
on January 4, 2016. Ixonos now has a total of 353,564,898 shares and votes.
Share capital
At the beginning of the review period, the company’s registered share capital
was EUR 585,394.16 and the number of shares was 106,313,536. At the end of the
review period, the registered share capital was EUR 585,394.16 and the number
of shares was 353,564,898.
Option plans 2011 and 2014
2011 plan
The Board of Directors of Ixonos Plc decided on November 30, 2011 to grant new
options. This decision was based on the authorisation given by the Annual
General Meeting on March 29, 2011.
The options were issued by December 31, 2011, free of charge, to a subsidiary
wholly owned by Ixonos Plc. This subsidiary will distribute the options, as the
Board decides, to employees of Ixonos Plc and other companies in the Ixonos
Group, to increase their commitment and motivation. Options will not be issued
to members of the Board of Directors of Ixonos Plc or to the Ixonos Group’s
senior management.
The options will be marked IV/A, IV/B and IV/C. A total of 600,000 options will
be issued. According to the terms of the options, the Board of Directors
decides how the options will be divided between option series and, if needed,
how undistributed options will be converted from one series to another.
Each option entitles its holder to subscribe for one new or treasury share in
Ixonos Plc.
The exercise period for the IV/A options began on October 1, 2014, The option
plans for IV/B options have been cancelled and for the IV/C options the
exercise period will begin on October 1, 2016. The exercise periods for all
options will end on December 31, 2018. The exercise price for each option
series is a trade volume weighted average price at NASDAQ OMX Helsinki. The
exercise prices will be reduced by the amount of dividends, and they can also
be adjusted under other circumstances specified in the option terms.
In order to ensure the equal treatment of shareholders and the holders of 2011
stock options, the Board of Directors of Ixonos has, due to the Rights
Offering, adjusted the subscription ratios and the subscription prices of the
Option Rights 2011 in accordance with the terms and conditions of the
aforementioned option rights as follows:
The subscription ratio of stock options IV/A shall be amended to 8.287 and the
subscription price shall be amended to EUR 0.2 per share. As regards stock
options IV/C, the subscription ratio shall be amended to 8.287 and the
subscription price shall be amended to EUR 0.1497 per share.
The total amount of shares is rounded down to full shares in connection with
subscription of the shares and the total subscription price is calculated using
the rounded amount of shares and rounded to the closest cent. Due to the above
mentioned adjustments concerning stock options IV/A, the adjusted maximum total
number of shares to be subscribed for based on the 2011 stock options shall be
4,971,966.
2014 plan
The Board of Directors of Ixonos Plc decided to issue stock options on February
18, 2014, on the basis of the authorization granted by the Extraordinary
General Meeting held on October 30, 2013.
The stock options will be offered to the global management team and certain key
personnel of Ixonos Plc and its subsidiaries for the purpose of improving
commitment and motivation. The stock options will be marked as series 2014A,
2014B and 2014C. The aggregate number of stock options is 5,000,000. The Board
of Directors will, in accordance with the terms and conditions of the stock
options, decide on the allocation of the stock options between different series
and, if necessary, on the conversion of stock options that has not been
allocated into another series of stock options.
Each option entitles its holder to subscribe for one new or treasury share in
Ixonos Plc. The share subscription period with 2014A stock options starts on
March 1, 2016, with 2014B stock options on March 1, 2017 and with 2014C stock
options on March 1, 2018. The share subscription period ends with all stock
options on December 31, 2018. The share subscription price for each series is
the volume weighted average price of the company's share on the Helsinki
Exchange during the period March 1 to May 31, 2014 for 2014A, January 1 to
March 31, 2015 for 2014B and January 1 to March 31, 2016 for 2014C. The
subscription price may be decreased with the amount of dividends paid and may
also otherwise be subject to change in accordance with the terms and conditions
of the stock options among others.
In order to ensure the equal treatment of shareholders and the holders of 2011
stock options, the Board of Directors of Ixonos has, due to the Rights
Offering, adjusted the subscription ratios and the subscription prices of the
Option Rights 2014 in accordance with the terms and conditions of the
aforementioned option rights as follows:
As regards stock options 2014A, the subscription ratio shall be amended to 1.65
and the subscription price shall be amended to EUR 0.0903 per share. As regards
stock options 2014B, the subscription ratio shall be amended to 1.65 and the
subscription price shall be amended to EUR 0.06 per share.
The total amount of shares is rounded down to full shares in connection with
subscription of the shares and the total subscription price is calculated using
the rounded amount of shares and rounded to the closest cent. Due to the above
adjustments concerning the Option Rights 2014, the adjusted maximum total
number of shares to be subscribed for based on the Option Rights 2014 shall be
8,250,000.
Shareholders
On December 31, 2015, the company had 3,035 shareholders (2014: 4,045). Private
persons owned 12.5 per cent (2014: 40.3 per cent) and institutions 87.5 per
cent (2014: 52.8 per cent) and foreigners 0.54 per cent (2014: 1.9 per cent)
and nominee registered ownership was 1.85 per cent (2014: 5.0 per cent) of all
shares.
Tremoko Oy Ab, a related party, owns 82.17 percent of the company’s shares.
With the options held by Tremoko the ownership can be increased to 82.29
percent.
Related-party transactions
On February 10, 2015 in connection with the financing arrangement made the
loans to Turret Oy Ab, a related party, amounting to EUR 2.3 million and the
interests were repaid. In the same arrangement Tremoko Oy Ab, a related party,
used the EUR 3.5 million long term convertible loan, which had been transferred
to it by Turret Oy Ab, and related interests as a partial payment for the
shares subscribed.
On February 10, 2015 the company also withdraw loans of EUR 4.0 million in
total from financial institutes that where secured by the company’s main owner
Tremoko Oy Ab. The company made an announcement concerning its financial
arrangements on February 10, 2015.
On June 10, 2015 Ixonos secured an agreement for short term loan arrangement
with Turret Oy Ab. The loan agreement enables, if necessary, additional
financing for a maximum of 1.0 million Euros until December 31, 2016.
During the reporting period Ixonos Finland Oy sold receivables to Finance Link,
a related party, for a total of EUR 0.9 million.
On July 13, 2015 the company signed a credit facility agreement of EUR 3.0
million with its main owner Tremoko Oy. The company made an announcement
regarding the financing arrangements on June 23, 2015 and July 14, 2015.
On October 29, 2015 the company signed a short term loan agreement of EUR
500,000 with a related party.
On December 22, 2015 the company signed a loan agreement of EUR 7.16 million
with Tremoko Oy Ab in connection with the total financial arrangement. All
earlier withdrawn loans were paid back.
OTHER EVENTS DURING THE REPORTING PERIOD
Market events in the review period
Our customers have clearly two different approaches to the opportunities bought
by digitalisation. The modern “Bi-Modal IT” that’s based on for example
Gartner’s market trend research, is speeding up agile and quick investments
into our customer’s and their stakeholder’s approaches and revenue models. A
more traditional way to benefit from digitalisation is to direct it to
operative systems, where the objectives are more clearly cost related.
Our R&D customers have increased investments into user research and design-led
development and also indicated that they will be increasing them even further
on. Because of this we have strongly strengthened these areas of expertise.
Since the entire industry has become more design oriented, the IxD events that
we organised in Helsinki and San Francisco were popular and will be continued
as a meeting point for design, technology and business.
The most prominent evidence of Ixonos’ transformation is the different
recognitions that we have received within several industries. It’s getting more
and more evident that new customers continue to do business with us because of
our strategy where the delivery covers several vital areas according to our
Discover – Design – Deliver vision.
During the reporting period solutions that Ixonos has developed together with
its clients did win multiple awards and recognitions:
- Al Jazeera Plus (AJ+) “Society of News Design” nomination – Top 10
global news service for mobile devices
- AJ+ nomination in the Webby Awards – mobile applications category
- Al Jazeera America nomination in Webby Awards – online movie and video
category
- CES Innovation of the Year award for Samsung Galaxy Tab S. Samsung
Galaxy Tab S utilises the patent pending Ixonos Super App(TM) innovation.
- Consumer Electronics Show “Best of Show” for Hewlett Packard Sprout.
Innovation honouree at Consumer Electronics Show.
- LG webOS – Ixonos Super App(TM) nomination in the TV Connect Indusrty
Awards 2015 – Best TV Experience Enhancement category
Ixonos Super App(TM), which is for example utilised in the Samsung Galaxy Tab
Pro device, was granted a patent in the USA in the end of 2015. This innovative
and versatile application framework is still interesting our customers because
of the opportunities for enhanced user experience that it provides.
During the year we also released new customer references. Most noted within the
industry were:
- The new IVI system that Honda launched in its vehicles in Europe use
the Ixonos Experience Store for Automotive(TM) and is designed by Ixonos.
- The online store that we developed for Stockmann
- The long-term service design and development work to digitalise the
cruise experience that we have done with Viking Line was launched in the autumn
2015. Especially the design has earned us several awards and honours.
- The multichannel shopping solution that we have done together with
Sherri Hill. When coming up in the spotlight on New York Fashion Week, it will
allow a completely new way for consumers to participate in Fashion Week and in
the different stages of the shopping experience.
Among all these references our way to combine world-class design with a
high-class technical execution did get the most attention.
The new business opportunities brought by digitalisation and mobility increased
our sales opportunities on all markets. However, especially in Europe our
customer’s decision-making concerning new business were lower than we expected.
We did increase our added value and competitiveness by partnering up with
leading actors in the industry
- We partnered with Maxicaster to bring new OTT services to a new level
- Our customer services got a strong partnership in Gigya the cloud
service for social media identity and customer management.
- To respond to the global increase in video distribution, we
strengthened our Media solutions with Brightcove partnership
- Concerning Industrial Internet our strategy is to choose the correct
platform or platforms on top of which we will build our offering. We will
announce our chosen IoT platforms and partnerships during Q1/2016
Ixonos adapted its costs in order to improve efficiency
On January 22, 2015 Ixonos started co-operational negotiations in order to
secure its production efficiency. The negotiations concerned the personnel in
Jyväskylä, excluding those who performed their work at customer’s premises. On
March 9, 2015 Ixonos informed that the negotiations had been concluded and that
a maximum of 20 people will be made redundant. Ixonos continues its operations
in Jyväskylä.
On March24, 2015 Ixonos started co-operational negotiations with the aim of
adjusting the personnel costs. The negotiations concerned the whole personnel
in Finland, excluding the office in Jyväskylä.
On April 8, 2015 Ixonos informed that the negotiations had been concluded. As a
result, 15 persons were temporary laid-off (with maximum duration of 90 working
days). 8 of these temporary lay-offs were part-time in nature. In addition, 4
permanent lay-offs were implemented in roles where there were permanently
diminished grounds for work continuation.
Change in guidance in 2015
Ixonos published new market guidance on October 13, 2015. The company’s
forecast for the full year 2015 turnover was changed to be between 16 – 18
million Euros. The company assessed its operating result to decrease in
comparison to 2014 and its operative cash flow for the year to be negative.
Previously the company assessed that its operating result before non-recurring
items was expected to improve compared to 2014. The cash flow was expected to
remain negative but to improve in the second half of the year 2015 in
comparison to beginning of the year.
Extraordinary general meeting on January 16, 2015
On January 16, 2015 the Board of Directors issued an invitation to Ixonos Plc
extraordinary meeting to be held on February 10, 2015. The proposal of the
Board of Directors was that the Extraordinary General Meeting would authorize
the Board to decide on a paid share issue and on granting option rights and
other special rights entitling to shares that are set out in Chapter 10 Section
1 of the Finnish Limited Liability Companies Act (LLCA) or on the combination
of some of the aforementioned instruments in one or more tranches.
On the same day Ixonos informed about a plan aiming at strengthening its
financial position and the balance sheet. The proposed arrangement included a
directed share issue and a loan facility. The planned measures aimed at
significantly enhancing Ixonos’s equity ratio and liquid assets position.
The general meeting authorized the Board to decide on a paid share issue as per
their proposal.
Directed share issue and financial arrangements on February 10, 2015
On February 10, 2015 the Board of Directors of Ixonos Plc decided to issue in a
directed share issue 96,670,000 new shares to be subscribed for by Tremoko Oy
Ab in derogation from the pre-emptive subscription right of the shareholders on
the authorization of the Extraordinary General Meeting on February 10, 2015.
The subscription price of the shares in the share issue was EUR 0.06 per share.
The subscription price was defined as the mean price weighted with the trading
amounts of the period December 16, 2014 - January 15, 2015 rounded up to the
nearest cent. The funds derived from the share issue, EUR 5.8 million, were
used to maintain and strengthen the financial standing of the Group so there
was weighty financial reasons for the share issue and for deviating from the
pre-emptive right of the shareholders as described in the Finnish Limited
Liability Companies Act. The shares issued and subscribed for in the share
issue were equivalent to approximately 90.9 per cent of all of the company’s
shares and votes before the share issue and approximately 47.6 per cent of all
of the company’s shares and votes after the share issue.
Tremoko Oy Ab subscribed for the share issue in full on February 10, 2015. The
Board of Directors of the company accepted Tremoko’s share subscription. The
shares were registered in the trade register on February 11, 2015.
Furthermore the Board announced that:
- Tremoko had paid the subscription price of the Shares it subscribed for in
connection with the Directed Share Issue by setting off the receivables based
on convertible capital loan that it has from Ixonos approximately for an amount
of EUR 3.86 million.
- Ixonos had been granted a total amount of EUR 4.0 million loans by financial
institutions. Tremoko gave a collateral of EUR 4.0 million for the loans.
Ixonos shall pay a remuneration of 3.5 per cent of the amount of the collateral
per year to Tremoko for giving the collateral.
- Ixonos has repaid its debts worth approximately EUR 2.43 million (incl.
interest) to Turret Oy Ab.
- concerning the arrangement, Ixonos agreed with its creditors on the
restructuring of its funding based on liabilities. The creditors granted the
loans of the Ixonos group taken out before the Arrangement (here in after
collectively the “Loan”) an exemption from amortizations for the period of
March 15, to December 31, 2015 so that only 25 per cent of the capital of the
Loan falling due during the exemption from amortizations will be paid, in
deviation from what has been agreed previously. In addition, the original term
of the Loan is changed so that the total term of the Loan will be extended
until December 31, 2018. The original terms of payment and the instalments have
been altered so that the instalments falling due January 1, 2016 to December
31, 2018 will be equal in size and they will be determined on the basis of the
capital of the Loan that does not fall due as on December 31, 2015. The
provisions concerning the interest and margin will remain as they are despite
the exemption from amortizations, the extension of the term of the loan and
changing the terms of payment and the instalments.
New registration document and securities note on March 3, 2015
The Finnish Financial Supervisory Authority approved on March 3, 2015, the
Ixonos Plc's securities note related to the Company's directed share issue
announced on February 10, 2015.
Public takeover bid of Ixonos Plc’s shares
On February 10, 2015 the new majority owner of Ixonos, Tremoko Oy Ab announced
a public takeover bid. Tremoko Oy Ab, a limited liability company in private
Finnish ownership, acquired on February 10, 2015 altogether 49,008,088 shares
of Ixonos Plc from Turret Oy Ab and Holdix Oy Ab. In addition, Tremoko
subscribed for altogether 96,670,000 new shares of Ixonos in a directed share
issue decided upon by Ixonos’s Board of Directors.
Thereby Tremoko owned altogether 145,678,088 of Ixonos’s shares and, thus,
Tremoko’s share of ownership and votes rose to altogether 71.8 per cent of all
of Ixonos’s shares and votes.
As a result of the share acquisition and the share subscription, an obligation
to launch a public takeover bid for all other shares of Ixonos and for
securities entitling thereto were formed to Tremoko Oy Ab, as referred to in
Chapter 11 Section 19 of the Finnish Securities Markets Act.
The offer of Tremoko was published on March 2, 2015 and was valid until March
24, 2015. The payment offered for the shares was EUR 0.06 in cash per each
share. The payment offered for the options was EUR 0.008 for options marked
with IV/A in the option Scheme 2011 and EUR 0.017 for options marked with IV/C.
The payment offered for options marked with 2014A in the Option Scheme 2014 was
EUR 0.010.
The Board of Directors of the company published their opinion on the mandatory
takeover bid made by Tremoko Oy Ab on March 9, 2015. The opinion was based on
the overall assessment made by the qualified and independent members. Paul
Ehrnrooth, member of the board of the company, did not participate in the
assessment since Turret Oy Ab, which can be described as a company in which
Paul Ehrnrooth exercises control, owns 65 per cent of the bidder’s shares and
votes. In order to assess the takeover bid, the Board of Directors acquired
from an independent expert a Fairness Opinion on the reasonableness in
economic terms of the payment offered for the shares from the perspective of
all shareowners.
The Board of Directors published the following recommendation:
Taking into consideration the bidder’s statements, the views of the company’s
management team, and the contents of the Fairness Opinion, the Board of
Directors assesses that the takeover bid is reasonable and that the company and
its shareholders and option holders would benefit from the realization of the
takeover bid in the way intended by the bidder. On the basis of the
aforementioned assessments and facts, the members of the Board of Directors who
took part in the decision-making unanimously recommend that the shareholders
and option holders accept the takeover bid.
Tremoko Oy Ab announced on March 26, 2015 that the 20,454,656 shares tendered
during the offer period represented approximately 10.1 per cent of all of
Ixonos shares and resulting votes. Tremoko’s share of ownership of the shares
and votes of Ixonos Plc was therefore altogether 166,132,744 shares, i.e.
approximately 81.8 per cent.
Moreover, a total of 1,540,000 options were offered to Tremoko. Tremoko has the
opportunity to raise its ownership to approximately 82.0 per cent of all Ixonos
Shares and votes by using the said options to subscribe for Ixonos Shares.
Annual General Meeting on April 29, 2015
The Annual General Meeting of Ixonos Plc was held on April 29, 2015. Minutes of
the Annual General Meeting and decisions taken are available on the company's
website, www.ixonos.com.
Extraordinary general meeting on December 2, 2015
On November 11, 2015 the board of Ixonos published an invitation of Ixonos
Plc’s extraordinary general meeting to be held on December 2, 2015. The board
of directors proposal was that the extraordinary general meeting authorizes the
Board to decide on a paid share issue and on granting option rights and other
special rights entitling to shares that are set out in Chapter 10 Section 1 of
the Finnish Limited Liability Companies Act (LLCA) or on the combination of
some of the aforementioned instruments in one or more tranches. The total
number of new shares to be issued pursuant to the authorisation may not exceed
210,000,000 shares, which is equivalent to approximately 100 per cent of all
company shares at the time of convening the Extraordinary General Meeting.
The general meeting authorized the Board to decide on a paid share issue as per
their proposal.
Share rights issue on December 2, 2015
On December 2, 2015 the board of Ixonos decided on a rights issue in a maximum
amount of approximately EUR 8.2 million. The subscription price was EUR 0.06
per each share. The largest owner of the company, Tremoko Oy Ab, gave a
commitment to subscribe for shares that are not otherwise subscribed. A total
amount of 136,582,157 shares were subscribed and the gross proceeds raised by
the company were approximately EUR 8.2 million. New shares were registered with
the Finnish Trade Register on December 30, 2015.
New Registration document and securities note on December 3, 2015
The Finnish Financial Supervisory Authority approved on December 3, 2015, the
Ixonos Plc's securities note related to the Company's directed share issue
announced on December 2, 2015. The supplement regarding the registration
document and securities note was approved by the The Finnish Financial
Supervisory Authority on December 22, 2015. The Registration Document is valid
for 12 months after its approval.
A directed share issue and financing arrangement on December 22, 2015
the Board of Director of the Company decided on a Directed Share Issue in
derogation of the shareholders’ pre-emptive subscription right, on the basis of
the authorisation of the Annual General Meeting 29 April 2015, on issuing
6,856,345 new Company shares for subscription by Nordea Bank Finland Plc, Elo
Mutual Pension Insurance and Fennia Mutual Insurance Company for the
subscription price of EUR 0.085 per share, altogether worth approximately EUR
0.58 million. The subscription price of a share was decided by parties as part
of the total financing arrangement. In the Directed Share Issue Nordea Bank
Finland Plc, Elo Mutual Pension Insurance and Fennia Mutual Insurance Company
were entitled to pay the subscription price of the Shares they subscribe for by
setting off claims they have from the Company. All 6,856,645 new shares were
subscribed and new shares were registered with the Finnish Trade Register on
December 30, 2015.
Changes in the management of the group
During the review period the following changes have taken place:
- Sami Paihonen was appointed Chief Executive Officer (CEO) on July 1,
2015. He succeeded Esa Harju who resigned on August 31, 2015.
- Teppo Kuisma was appointed Executive Vice President on July 1, 2015.
- Chief Financial Officer (CFO) Mikael Nyberg resigned on May 23, 2015
and the interim CFO Pekka Pylkäs acted as CFO during June 1 – September 30.
Pekka Pylkäs will continue as a Member of the Board.
- Kristiina Simola was appointed as CFO on October 1, 2015.
- Marko Tiesmäki (SVP, Sales) left the company on July 3, 2015
- Bo Lönnqvist (SVP, Technology) resigned on August 14, 2015.
EVENTS AFTER THE FINANCIAL PERIOD
There is no major events after the financial period.
RISK MANAGEMENT AND NEAR-FUTURE UNCERTAINTY FACTORS
Ixonos Plc’s risk management aims to ensure undisturbed continuity and
development of the company’s operations, support attainment of the commercial
targets set by the company and promote increasing company value. Details on the
risk management organisation and process as well as on recognised risks are
presented on the company’s website at www.ixonos.com.
Changes in key customer accounts may have adverse effects on Ixonos’
operations, earning power and financial position. Should a major customer
switch its purchases from Ixonos to its competitors or make forceful changes to
its own operating model, Ixonos would have limited ability to acquire, in the
short term, new customer volume to compensate for such changes.
The group’s turnover consists primarily of relatively short term customer
contracts. Forecasting the starting dates and scope is from time to time
challenging at the same time the cost structure is fairly rigid. This may
result in unexpected fluctuation in turnover and profitability.
Part of the company’s business operations is based on fixed-price project
deliveries. Fixed-price projects may include risks related to their duration
and content. These risks are being managed by means of contract management as
well as project management.
A significant part of the group’s turnover is invoiced in foreign currency.
Risks related to currency fluctuation are managed through different means.
The company’s balance sheet includes a significant amount of goodwill, which
may still be impaired should internal or external factors reduce the profit
expectations of the company’s cash flow. Goodwill is tested each quarter and,
if necessary, at other times.
The company’s financial agreements have covenants attached to them. A covenant
breach may increase the company’s financial expenses or lead to a call for
swift partial or full repayment of non-equity loans. The main risks related to
covenant breaches are associated with EBITDA fluctuation due to the market
situation and with a potential need to increase the company’s working capital
through non-equity funding. The company manages these risks by negotiating with
financiers and by maintaining readiness for various financing methods.
LONG-TERM GOALS AND STRATEGY
In the long term, Ixonos aims to achieve an operating result of at least 10 per
cent. To reach its long-term goals, Ixonos focuses its strategy on deepening
the company’s service and solution business and combining technology and
design. The company aims to grow with new accounts within different industries
by repeating Ixonos unique way to offer business advantage through
digitalisation and mobility.
THE BOARD OF DIRECTORS’ PROPOSAL TO THE ANNUAL GENERAL MEETING
The Board of Directors of Ixonos Plc proposes to the Annual General Meeting
that the distributable funds will be left in shareholders’ equity and that no
dividend for the financial period 2014 will be paid to shareholders. The parent
company’s distributable funds on December 31, 2015 are EUR 19,344,732
Ixonos Plc's Annual General Meeting will be held on Thursday, April 7, 2016,
in Helsinki, Finland.
NEXT REPORTS
Ixonos' Financial Statements 2015 will be published and posted on the company's
website on Thursday, 17th March 2016.
The financial statement for the period January 1 – March 31, 2016 will be
published on Friday, May, 13, 2016.
IXONOS PLC
Board of Directors
For more information, please contact:
Ixonos Plc
- Sami Paihonen, President and CEO, tel. +358 50 502 1111,
sami.paihonen@ixonos.com
- Kristiina Simola, CFO, tel. +358 40 756 3132, kristiina.simola@ixonos.com
Distribution:
NASDAQ OMX Helsinki
Main media
THE IXONOS GROUP
SUMMARY OF FINANCIAL STATEMENTS AND NOTES TO THE FINANCIAL STATEMENTS January 1
– December 31, 2015
CONSOLIDATED INCOME STATEMENT, EUR 1,000
1.1.-31.1 1.1.-31.1 Change 1.10.-31. 1.10.-31.1 Change
2.15 2.14 % 12.15 2.14 %
--------------------------------------------------------------------------------
Turnover 17 001 23 939 -29.0 4 315 5 876 -26.6
--------------------------------------------------------------------------------
Operating expenses -25 703 -31 363 18.0 -6 597 -7 697 14.3
--------------------------------------------------------------------------------
OPERATING RESULT -8 702 -7 424 -17.2 -2 283 -1 821 -25.4
--------------------------------------------------------------------------------
Financial income 3 047 -1 054 389.0 3 778 -314 1303.3
and expenses
--------------------------------------------------------------------------------
Result before tax -5 655 -8 478 33.3 1 709 -2 135 180.1
--------------------------------------------------------------------------------
Income tax -4 956 210 -2460. 12 -656 101.8
2
--------------------------------------------------------------------------------
RESULT FOR THE -10 612 -8 267 -28.4 1 507 -2 791 154
PERIOD
--------------------------------------------------------------------------------
Attributable to:
--------------------------------------------------------------------------------
Equity holders of -10 599 -8 249 -28.5 1 510 -2 783 154.2
the parent
--------------------------------------------------------------------------------
Non-controlling -12 -18 30.6 -3 -8 67.0
interests
------------------------------------------------------------
Earnings per share
--------------------------------------------------------------------------------
Undiluted, EUR -0,05 -0.09 44.4 0.01 -0.03 133.3
--------------------------------------------------------------------------------
Diluted, EUR -0,05 -0.09 44.4 0.01 -0.03 133.3
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, EUR 1,000
1.1.-31.1 1.1.-31.1 Change 1.10.-31. 1.10.-31.1 Change
2.15 2.14 % 12.15 2.14 %
--------------------------------------------------------------------------------
Result for the -10 612 -8 267 -28.4 1 507 -2 791 154
period
--------------------------------------------------------------------------------
Other comprehensive
income
--------------------------------------------------------------------------------
Change in -187 -138 -36.4 -30 10 -403.6
translation
difference
--------------------------------------------------------------------------------
COMPREHENSIVE -10 799 -8 405 -28.5 1 477 -2 781 153.1
RESULT FOR THE
PERIOD
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION, EUR 1,000
ASSETS 31.12.2015 31.12.2014
---------------------------------------------------------------------------
NON-CURRENT ASSETS
---------------------------------------------------------------------------
Goodwill 12 043 10 847
---------------------------------------------------------------------------
Other intangible assets 548 1 254
---------------------------------------------------------------------------
Property, plant and equipment 372 697
---------------------------------------------------------------------------
Deferred tax assets 0 4 947
---------------------------------------------------------------------------
Available-for-sale investments 23 3
---------------------------------------------------------------------------
TOTAL NON-CURRENT ASSETS 12 987 17 748
---------------------------------------------------------------------------
CURRENT ASSETS
---------------------------------------------------------------------------
Trade and other receivables 3 459 3 894
---------------------------------------------------------------------------
Cash and cash equivalents 1 901 255
---------------------------------------------------------------------------
TOTAL CURRENT ASSETS 5 360 4 149
---------------------------------------------------------------------------
TOTAL ASSETS 18 347 21 897
---------------------------------------------------------------------------
---------------------------------------------------------------------------
EQUITY AND LIABILITIES 31.12.2015 31.12.2014
---------------------------------------------------------------------------
SHAREHOLDERS’ EQUITY
---------------------------------------------------------------------------
Share capital 585 585
---------------------------------------------------------------------------
Share premium reserve 219 219
---------------------------------------------------------------------------
Invested non-restricted equity fund 46 994 32 345
---------------------------------------------------------------------------
Retained earnings -34 712 -26 346
---------------------------------------------------------------------------
Result for the period -10 599 -8 249
---------------------------------------------------------------------------
Equity attributable to equity holders of the parent 2 486 -1 446
---------------------------------------------------------------------------
Non-controlling interests 221 229
---------------------------------------------------------------------------
TOTAL SHAREHOLDERS’ EQUITY 2 708 -1 217
---------------------------------------------------------------------------
LIABILITIES
---------------------------------------------------------------------------
Non-current liabilities 8 095 3 909
---------------------------------------------------------------------------
Current liabilities 7 544 19 204
---------------------------------------------------------------------------
TOTAL LIABILITIES 15 639 23 113
---------------------------------------------------------------------------
TOTAL EQUITY AND LIABILITIES 18 347 21 897
---------------------------------------------------------------------------
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY, EUR 1,000
A: Share capital
B: Share premium reserve
C: Share Issue
D: Invested non-restricted equity fund
E: Translation difference
F: Retained earnings
G: Total equity attributable to equity holders of the parent
H: Non-controlling interests
I: Total equity
A B C D E F G H I
--------------------------------------------------------------------------------
Shareholders’ equity 585 219 0 28 794 67 -26 242 3 423 247 3 670
at January 1, 2014
--------------------------------------------------------------------------------
Result for the period -8 249 -8 249 -18 -8 267
--------------------------------------------------------------------------------
Other comprehensive
income:
--------------------------------------------------------------------------------
Change in translation -138 -138 -138
difference
--------------------------------------------------------------------------------
Transactions with
shareholders:
--------------------------------------------------------------------------------
Share issue 3 655 3 655 3 655
--------------------------------------------------------------------------------
Expenses for equity -104 -104 -104
procurement
--------------------------------------------------------------------------------
Share-based -34 -34 -34
remuneration
--------------------------------------------------------------------------------
Shareholders’ equity 585 219 0 32 345 -71 -34 524 -1 446 229 -1 217
at December 31, 2014
--------------------------------------------------------------------------------
Shareholders’ equity 585 219 0 32 345 -71 -34 524 -1 446 229 -1 217
at January 1, 2015
--------------------------------------------------------------------------------
Other changes 5 5
--------------------------------------------------------------------------------
Result for the period -10 599 -10 599 -12 -10 612
--------------------------------------------------------------------------------
Other comprehensive
income
--------------------------------------------------------------------------------
Change in translation -187 -187 -187
difference
--------------------------------------------------------------------------------
Transactions with
shareholders:
--------------------------------------------------------------------------------
Share issue 15 078 15 078 15 078
--------------------------------------------------------------------------------
Expenses for equity -429 20 -409 -409
procurement
--------------------------------------------------------------------------------
Share-based 50 50 50
remuneration
--------------------------------------------------------------------------------
Shareholders’ equity 585 219 0 46 994 -258 -45 054 2 486 221 2 708
at December 31, 2015
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000
1.1.- 31.12.2015 1.1.-31.12.2014
--------------------------------------------------------------------------------
Cash flow from operating activities
--------------------------------------------------------------------------------
Result for the period -10 588 -8 267
--------------------------------------------------------------------------------
Adjustments to cash flow from operating
activities
--------------------------------------------------------------------------------
Income tax 4 956 -210
--------------------------------------------------------------------------------
Other income and expenses with no payment -4 047 0
relation
--------------------------------------------------------------------------------
Depreciation and impairment 1 310 2 788
--------------------------------------------------------------------------------
Financial income and expenses 871 731
--------------------------------------------------------------------------------
Other adjustments -272 130
--------------------------------------------------------------------------------
Change in provisions 0 -67
--------------------------------------------------------------------------------
Cash flow from operating activities before -7 769 -4 895
change in working capital
--------------------------------------------------------------------------------
Change in working capital -2 339 -113
--------------------------------------------------------------------------------
Interest received -122 181
--------------------------------------------------------------------------------
Interest paid -1 524 -799
--------------------------------------------------------------------------------
Tax paid -7 -141
--------------------------------------------------------------------------------
Net cash flow from operating activities -11 517 -5 767
--------------------------------------------------------------------------------
Cash flow from investing activities
--------------------------------------------------------------------------------
Acquisition of subsidiaries, net of cash -125 0
acquired
--------------------------------------------------------------------------------
Investments in tangible and intangible assets -164 -1 025
--------------------------------------------------------------------------------
Net cash flow from investing activities -288 -1 025
--------------------------------------------------------------------------------
Net cash flow before financing -11 805 -6 793
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flow from financing activities
--------------------------------------------------------------------------------
Increase in long-term borrowings 10 794 4 500
--------------------------------------------------------------------------------
Repayment of long-term borrowings -4 000 -1 133
--------------------------------------------------------------------------------
Increase in short-term borrowings 7 500 3 526
--------------------------------------------------------------------------------
Repayment of short-term borrowings -5 784 -3 732
--------------------------------------------------------------------------------
Proceeds from share issue 5 793 3 655
--------------------------------------------------------------------------------
Expenses for equity procurement -386 -104
--------------------------------------------------------------------------------
Financial leasing payments -466 -159
--------------------------------------------------------------------------------
Net cash flow from financing activities 13 451 6 552
--------------------------------------------------------------------------------
Change in cash and cash equivalents 1 646 -240
--------------------------------------------------------------------------------
Liquid assets at the beginning of the period 255 496
--------------------------------------------------------------------------------
Liquid assets at the end of the period 1 901 255
--------------------------------------------------------------------------------
Accounting principles
This interim report has been prepared in accordance with IAS 34 (Interim
Financial Reporting) and the accounting policies for the annual financial
statement of December 31, 2014. The IFRS amendments and interpretations that
entered into force on January 1, 2015 have not affected the consolidated
financial statements.
Preparing interim reports in accordance with IFRS requires Ixonos’ management
to make estimates and assumptions that affect the amounts of assets and
liabilities on the balance sheet date as well as the amounts of income and
expenses for the financial period. In addition, judgement must be used in
applying the accounting policies. As the estimates and assumptions are based on
views prevailing at the time of releasing the interim report, they involve
risks and uncertainty factors. Actual results may differ from estimates and
assumptions.
The figures in the income statement and balance sheet are consolidated. The
consolidated balance sheet includes all group companies as well as Ixonos
Management Invest Oy, a company owned by members of Ixonos management. The
original interim report is in Finnish. The interim report in English is a
translation of the original report.
As the figures in the report have been rounded, sums of individual figures may
differ from the sums presented. The annual report is unaudited.
Going Concern
This interim report has been prepared according to the going concern principle
taking into account the realized financial arrangements in the beginning of the
financial year and financial estimations made up to the end of year 2016. The
estimations take into consideration probable or foreseeable changes in future
expectations in revenues as well as in costs.
The company’s existing working capital may not be sufficient to cover the
company’s funding needs over the next 12 months. The company estimates that its
working capital is expected to be sufficient to fund the company’s operations
over the next 12 months if the sales development is better than the current
forecast or the company is able to make larger cost savings than forecasted. A
possible financial shortage remaining can be filled with bridge financing.
Loan agreements related to the financing arrangement on December 2015 include
semi-annual covenants regarding equity ratio, EBITDA and net debts/EBITDA which
will be considered at the first time on 31 December, 2016.
Deferred tax assets
The management assessed the prerequisites for capitalizing the deferred tax
assets. Due to continuing uncertainties in the markets, and despite the
expected improvement of the result before onetime items in comparison to the
previous year, the management concluded that the conditions and certifying
future views that need to be fulfilled to enable the group to continue
capitalizing its deferred tax assets may not be assuringly verified. Based on
this change of management assessment the group decided not to capitalize the
deferred tax assets and has decided to write off the existing capitalized
values from its balance sheet.
The write-off of earlier capitalized deferred tax assets from group’s balance
sheet total to EUR -4.9 million. Said write-off had impact on the result of
running period and thus had also impact the reported group’s shareholders’
equity.
Goodwill impairment
Ixonos made an impairment testing for the goodwill value on the balance sheet
on December 30, 2015. The goodwill is attributed to the one cash generating
unit (CGU) starting from November 1, 2013.
The impairment test showed a surplus of EUR 15.8 million based on discounted
cash flow valuation compared to tested amount and no impairment was recognized.
The carrying amount of goodwill is EUR 12.0 million. The present value of the
cash flows calculated, EUR 28.0 million is lower than the sum of the company's
financial liabilities (EUR 10.7 million) and the market price of the shares
(EUR 24.7 million) on December 31, 2015.
The impairment test of the company is based on operative company value. The
forecasting period used in impairment testing at December 30, 2015 was Q1 2016
to Q4 2019.
In the forecast the year 2016 is a year of stabilization with relatively small
growth. For the years 2016-2018 the company expects to reach stronger growth,
on average of 11.0 per cent, as digitalization will impact an ever growing part
of the business community. The forecasted EBIT level is assumed to increase to
on average of 11 per cent. Even though the company’s long term target level for
EBIT is 10 per cent the uncertainty of forecasts has been taken into
consideration and therefore the average, normalized EBIT level has been used in
the calculation.
The impairment test is done by comparing the carrying value of assets to
present value of future cash flow taking into consideration forecasted cash
flows during the forecast period, discount factor and growth rate used in
calculating terminal value. The discount factor used is 10 per cent p.a. and
growth rate used in calculating terminal value is 1 per cent p.a. When
calculating the terminal value the weighted average EBIT percentage level for
the period was used.
The impairment test is most sensitive besides to the cash flow forecast itself
and the assumptions behind it, to the growth rate used when calculating the
terminal value and to the discount factor. If the growth rate -19.5 per cent
had been used instead of 1 per cent, the tested value would have been equal to
the discounted cash flow. If the discount factor had been 20 per cent instead
of 10 per cent, the tested value would have been equal to the discounted cash
flow. If the EBIT percentage used had been 2 per cent instead of 11 per cent,
the tested value would have been equal to the discounted cash flow.
Loan covenants
The Company has a total amount of loans on December 31, 2015 EUR 10.2 million.
The amount of the financing loans that included covenants had a capital of EUR
8.2 million on December 31, 2015 (2014: EUR 6.1 million).
Loan agreements include covenants regarding equity ratio, EBITDA and net
debts/EBITDA which will be considered at the first time on 31 December, 2016.
Should the company not be within the limits of a covenant, the creditors are
entitled to call in the loans to which that covenant applies. The covenant
levels are reviewed semi-annually on a rolling twelve-month basis. Depending on
the point in time, the equity ratio must be 15 per cent – 35 per cent. The
rolling 12 past month EBITDA may not exceed EUR -1.0 million euros on December
31, 2016. Depending on the point in time the ratio of interest-bearing
liabilities (i.e. interest-bearing liabilities in the balance sheet, including
leasing liabilities) to EBITDA may not exceed 3.0 -1.0 on June 30, 2017 onward.
The ratios of interest-bearing liabilities to EBITDA as well as the ratio of
interest-bearing net liabilities to EBITDA are calculated based on IFRS
principles.
On December 31, 2015 the company's equity ratio was 14.8 per cent (2014: -5.6
percent), EBITDA was -7.4 MEUR (2014: -4.6 MEUR) and the ratio of
interest-bearing liabilities and the EBITDA was negative (2014: negative).
Instalment scheme for loans under covenants:
Period Amount of instalment EUR1.000
01.01. - 31.12.2016 253
01.01. - 31.12.2017 253
01.01. - 31.12.2018 1 008
01.01. - 31.12.2019 755
01.01. - 31.12.2020 755
01.01. - 31.12.2021 2 264
CONSOLIDATED INCOME STATEMENT, QUARTERLY, EUR 1,000
Q4/2015 Q3/2015 Q2/2015 Q1/2015 Q4/2014
1.10.-31.1 1.7.-30. 1.4.-30. 1.1.-31. 1.10.-31.
2.15 9.15 6.15 3.15 12.14
--------------------------------------------------------------------------------
Turnover 4 315 3 545 4 557 4 584 5 876
--------------------------------------------------------------------------------
Operating expenses -6 597 -6 061 -6 486 -6 558 -7 697
--------------------------------------------------------------------------------
OPERATING PROFIT BEFORE -2 283 -2 516 -1 929 -1 974 -1 821
GOODWILL IMPAIRMENT
--------------------------------------------------------------------------------
Goodwill impairment 0 0 0 0 0
--------------------------------------------------------------------------------
OPERATING RESULT -2 283 -2 516 -1 929 -1 974 -1 821
--------------------------------------------------------------------------------
Financial income and 3 778 -476 -135 -121 -314
expenses
--------------------------------------------------------------------------------
Result before tax 1 495 -2 992 -2 064 -2 095 -2 135
--------------------------------------------------------------------------------
Income tax 12 -30 -4 938 0 -656
--------------------------------------------------------------------------------
RESULT FOR THE PERIOD 1 507 -3 023 -7 002 -2 095 -2 791
--------------------------------------------------------------------------------
CHANGES IN FIXED ASSETS, EUR 1,000
Goodwi Intangible Property, plant Availab Total
ll assets and equipment le-
for-sal
e
investm
ents
--------------------------------------------------------------------------------
Carrying amount at 10 847 1 585 2 106 14 14 552
January 1, 2014
--------------------------------------------------------------------------------
Additions 0 1 062 77 1 1 139
--------------------------------------------------------------------------------
Changes in exchange 0 0 8 0 8
rates
--------------------------------------------------------------------------------
Disposals and 0 -4 -94 0 -98
transfers
--------------------------------------------------------------------------------
Impairment 0 0 0 -12 -12
--------------------------------------------------------------------------------
Depreciation for the 0 -1 389 -1 399 0 -2 788
period
--------------------------------------------------------------------------------
Carrying amount at 10 847 1 254 697 3 12 801
December 31, 2014
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Carrying amount at 10 847 1 254 697 3 12 801
January 1, 2015
--------------------------------------------------------------------------------
Additions 1 196 109 152 20 1 477
--------------------------------------------------------------------------------
Changes in exchange 0 0 8 0 8
rates
--------------------------------------------------------------------------------
Disposals and 0 -203 0 0 -203
transfers
--------------------------------------------------------------------------------
Impairment 0 0 0 0 0
--------------------------------------------------------------------------------
Depreciation for the 0 -612 -485 0 -1 096
period
--------------------------------------------------------------------------------
Carrying amount at 12 043 548 372 23 12 986
December 31, 2015
--------------------------------------------------------------------------------
FINANCIAL RATIOS
1.1.-31.12.2015 1.1.-31.12.2014
--------------------------------------------------------------------------------
Earnings per share, diluted, EUR -0.05 -0.09
--------------------------------------------------------------------------------
Earnings per share, EUR -0.05 -0.09
--------------------------------------------------------------------------------
Equity per share, EUR 0.01 -0.01
--------------------------------------------------------------------------------
Operating cash flow per share, diluted, EUR -0.06 -0.06
--------------------------------------------------------------------------------
Operating cash flow per share, EUR -0.03 -0.06
--------------------------------------------------------------------------------
Return on investment, per cent -29.9 -46.5
--------------------------------------------------------------------------------
Return on equity, per cent -1421,9 -672.5
--------------------------------------------------------------------------------
Operating result ∕ turnover, per cent -51.2 -31.0
--------------------------------------------------------------------------------
Net gearing from total equity, per cent 324.4 -1 397.7
--------------------------------------------------------------------------------
Equity ratio, per cent 14.8 -5.6
--------------------------------------------------------------------------------
Equity ratio, per cent, excluding 13.6 -6.6
non-controlling interest
--------------------------------------------------------------------------------
EBITDA, 1,000 EUR -7 392 -4 636
--------------------------------------------------------------------------------
OTHER INFORMATION
1.1.-31.12.2015 1.1.- 31.12.2014
--------------------------------------------------------------------------------
PERSONNEL
--------------------------------------------------------------------------------
Employees, average 217 320
--------------------------------------------------------------------------------
Employees, at the end of the period 200 264
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
COMMITMENTS, EUR 1,000
--------------------------------------------------------------------------------
Collateral for own commitments
--------------------------------------------------------------------------------
Corporate mortgages 23 500 23 300
--------------------------------------------------------------------------------
Financial bonds 0 66
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Leasing and other rental commitments
--------------------------------------------------------------------------------
Falling due within 1 year 1 646 2 189
--------------------------------------------------------------------------------
Falling due within 1-5 years 1 632 3 305
--------------------------------------------------------------------------------
Falling due after 5 years 0 0
--------------------------------------------------------------------------------
Total 3 278 5 495
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Nominal value of interest rate swap agreement
--------------------------------------------------------------------------------
Falling due within 1 year 253 0
--------------------------------------------------------------------------------
Falling due within 1-5 years 506 4 941
--------------------------------------------------------------------------------
Falling due after 5 years 0 0
--------------------------------------------------------------------------------
Total 759 4 941
--------------------------------------------------------------------------------
Fair value -13 -60
--------------------------------------------------------------------------------
CALCULATION OF KEY FIGURES
EBITDA = Earnings before Interest, Taxes, Depreciation and Amortization
Diluted earnings per share = result for the period ∕ number of shares, adjusted
for issues and dilution, average
Earnings per share = result for the period ∕ number of shares, adjusted for
issues, average
Shareholders’ equity per share = shareholders’ equity ∕ number of shares,
undiluted, on the closing date
Cash flow from operating activities, per share, diluted = net cash flow from
operating activities ∕ number of shares, adjusted for issues and dilution,
average
Return on investment = (result before taxes + interest expenses + other
financial expenses) ∕ (balance sheet total - non-interest-bearing liabilities,
average) × 100
Return on equity = net result ∕ shareholders’ equity, average × 100
Net gearing from total equity= (interest-bearing liabilities - liquid assets) /
shareholders’ equity × 100
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