AFFECTOGENIMAP PLC STOCK EXCHANGE RELEASE 14 FEBRUARY 2007 at 10:00
FINANCIAL STATEMENTS BULLETIN 2006
GROUP KEY FIGURES
MEUR 10-12/2006 10-12/2005 2006 2005
Net sales 16.6 12.5 50.2 46.7
Operating result 1.7 2.0 3.6 5.2
% of net sales 10.5 15.6 7.3 11.0
Result before taxes 1.7 1.9 3.5 4.8
Result for the period 1.4 1.5 2.6 3.7
Equity ratio, % 52.0 56.9 52.0 56.9
Net gearing, % 35.2 9.9 35.2 9.9
Earnings per share, eur 0.09 0.10 0.16 0.25
Earnings per share
(diluted), eur 0.09 0.10 0.16 0.24
Equity per share, eur 2.30 2.18 2.30 2.18
Dividend proposal, eur 0.10 0.10
CEO Pekka Eloholma comments the fourth quarter and year 2006:
"The fourth quarter was the best quarter in 2006 regarding both the net sales
of 16.6 MEUR (growth 33%) and EBIT of 1.7 MEUR (10% of net sales). The net
sales grew by 60% in Baltic countries and by 15% also in Finland."
"During year 2006 the company's net sales grew by 7% to 50.2 MEUR and there
was growth both in Finland and especially in the Baltics. EBIT was 3.6 MEUR
and it was approx. 7% of net sales. The early part of the year was difficult
for us, but our business developed positively during the second half of the
year. The company's order backlog grew strongly during the year and was
highest ever 24 MEUR at the end of year."
"In Finland the net sales were 36.3 MEUR (growth 2%) and EBIT was 4.6 (13% of
net sales). The business developed smoothly and positively during the latter
part of the year. Demand for Business intelligence (BI) services has developed
positively, and we have increased our delivery capacity by acquiring ZenPark."
"In the Baltic countries, the business grew 19% during the year and was
clearly profitable during the second half of the year. The fourth quarter net
sales were 4.6 MEUR and EBIT was 0.7 MEUR (15% of net sales). The business has
developed positively after the loss-making first quarter. The orders received
and tenders won during the year create possibilities for a favorable business
development in the Baltic markets. Order backlog has grown significantly and
we are actively increasing our capacity by recruiting people."
"Our business was expanded to Sweden during the fourth quarter. The
acquisition did not yet have time to have any significant impact on 2006
results, but we believe in good business development in 2007 thanks to
continuously strong demand for BI services in Sweden.
"Positive development is expected to continue during year 2007. Based on the
recent acquisitions and good order backlog the company seeks to reach net
sales of approx. 70 MEUR in 2007. The profitability is also expected to
improve from year 2006. The first quarter will be significantly better than
Q1/2006."
Additional information:
CEO Pekka Eloholma, +358 205 777 737
CFO Satu Kankare, +358 205 777 202
Director, M&A, Hannu Nyman, +358 205 777 761
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The consolidated group accounts have been prepared in accordance to IFRS
standards accepted in the European Union and applying the same accounting
policies as in the 2005 annual consolidated financial statements.
The group has adopted the following standards and interpretations from the
beginning of 2006: IAS 19 (Amendment) Employee Benefits, IAS 21 (Amendment)
Net Investment in a Foreign Operation, IAS 39 (Amendment) Cash Flow Hedge
Accounting of Forecast Intragroup Transactions, IAS 39 (Amendment) Fair value
Option, IAS 39 (Amendment) Financial Instruments: Recognition and measurement
and IFRS 4 (Amendment) Insurance Contracts-Financial Guarantee Contracts, IFRS
6 Exploration for and Evaluation of Mineral Resources, Amendment to IFRS 1 and
IFRS 6, IFRIC 4 Determining whether an Arrangement contains a Lease, IFRIC 7
Applying the restatement approach under IAS 29, Financial reporting in
hyperinflationary economies, IFRIC 6 Liabilities arising from participating in
a specific market Waste electrical and electronic equipment, IFRIC 9
Reassessment of Embedded Derivatives, IFRIC 8 Scope of IFRS 2 and IFRIC 5
Rights to Interests arising from Decommissioning, Restoration and
Environmental Rehabilitation Funds. The adoption of these standards and
interpretations did not have a material effect on the consolidated financial
statements.
This report is unaudited. The amounts in this report have been rounded from
exact numbers.
BUSINESS DEVELOPMENT DURING 10-12/2006
Sales of geographical segments based on location of assets (primary reporting
format)
Total sales, MEUR 10-12/2006 10-12/2005 1-12/2006 1-12/2005
Finland 11.1 9.6 36.3 35.7
Baltic 4.6 2.9 13.1 11.0
Nordic 0.9 0.0 0.9 0.0
Eliminations 0.0 0.0 0.0 0.0
Group total 16.6 12.5 50,2 46.7
Net sales in the fourth quarter was 16.6 MEUR, while it was 12.5 MEUR last
year. Net sales in Finland was 11.1 MEUR (10-12/2005 9.6 MEUR), in Baltic area
4.6 MEUR (2.9 MEUR) and 0.9 MEUR in Nordic (0.0 MEUR). Net sales grew 33% in
the whole group, 15% in Finland and 60% in Baltic area.
Net sales of XBI segment were 8.0 MEUR (6.2 MEUR), Customized solutions 6.1
MEUR (4.6 MEUR) and Cartographic solutions 2.5 MEUR (1.8 MEUR). The effect of
the small resource transfer from XBI to Cartogrpahic in early 2006 was approx
0.7 MEUR. The acquisitions done had impact mostly on the XBI segment.
Operating result of geographical segments based on location of assets (primary
reporting format)
Operating result, MEUR 10-12/2006 10-12/2005 1-12/2006 1-12/2005
Finland 1.6 1.7 4.6 4.3
Baltic 0.7 0.6 0.5 1.2
Nordic 0.0 0.0 0.0 0.0
Group management -0.5 -0.4 -1.5 -0.3
Group total 1.7 2.0 3.6 5.2
EBIT was 1.7 MEUR in fourth quarter. EBIT in Finland was 1.6 MEUR, EBIT in
Baltic area was 0.7 MEUR and EBIT in Nordic area was 0.0 MEUR. Unallocated
costs were 0.5 MEUR.
EBIT in Finland includes 0.1 MEUR non-recurring income booked in Q1/2006. The
Q4/2005 EBIT in Finland was improved by a 0.4 MEUR capital gain.
According to IFRS requirements, Q4/2006 EBIT includes 0.2 MEUR (0.0 MEUR) of
depreciation of intangible assets related to acquisitions. In year 2006, such
depreciation totaled 0.4 MEUR (0.4 MEUR)
The profitability developed positively during the last quarter both in Finland
and in the Baltic countries. In Finland, project work deliveries grew from
previous year. In line with the normal annual cycle, the sales of third-party
licenses also grew compared with previous quarters and were approximately on
same level as in Q4/2005.
The profit in Baltics improved clearly compared to the previous quarters, as
the net sales grew significantly. Order backlog grew during the quarter in
Baltics.
Intellibis Ab was acquired in December in order to begin offering business
intelligence solutions also in Sweden. The acquired company did not have any
significant impact of results.
YEAR 2006
AffectoGenimap builds versatile IT solutions for companies and organizations
in Finland, Sweden and the Baltic States to improve their efficiency in
business and to support the related decision-making. The company's IT
solutions are always customised to meet the specific needs of each customer.
AffectoGenimap offers business intelligence solutions that enable an efficient
way of utilizing and refining the data from ERP systems. The company develops
also geographic information systems solutions and enterprise content
management solutions that help companies to collect, organise and analyse
digital information in support of their business processes.
AffectoGenimap is headquartered in Helsinki, with other offices in Finland
located in Jyväskylä, Rauma, Tampere and Turku. The company has subsidiaries
in Estonia, Lithuania, Latvia and Sweden.
NET SALES AND PROFIT
AffectoGenimap's net sales in 2006 was 50.2 MEUR (1-12/2005 46.7 MEUR). Sales
growth was 7%. In Finland it was 2% and in Baltics it was 19%.
AffectoGenimap's EBIT was 3.6 MEUR (5.2 MEUR). EBIT in Finland was 4.6 MEUR
(4.3 MEUR) and Baltic EBIT was 0.5 MEUR (1.2 MEUR). EBIT in Finland includes
0.1 MEUR non-recurring income booked in Q1. The Q4/2005 EBIT in Finland was
improved by a 0.4 MEUR capital gain.
R&D expenditure in the review period totaled 0.5 MEUR (0.8 MEUR), i.e. 0.9% of
net sales (1.6%). The expenditure has been booked as costs. Taxes for the
period have been booked as taxes.
AffectoGenimap's net profit for the period was 2.6 MEUR, while it was 3.7 MEUR
last year.
Order backlog totaled 24.2 MEUR at the end of period (21.6 MEUR in 30
September 2006 and 13.0 MEUR in 31 December 2005). During the year the order
backlog has increased especially in the Baltics due to several large long-term
projects.
AffectoGenimap has a well diversified client base. No single client
corresponds to over 10% of revenue. 10 biggest clients generated approx. 25%
of group revenue in 2006. Six of these biggest clients were also among the
Top10 in year 2005. Ten biggest clients include 7 from Finland, 2 from
Lithuania and 1 from other countries.
FINANCE AND INVESTMENTS
At the end of the reporting period, AffectoGenimap's balance sheet totaled
78.7 MEUR (62.4 MEUR). Equity ratio was 52.0% (56.9%) and net gearing was
35.2% (9.9%).
The financial loans were 19.0 MEUR as at 31 December 2006. The interest-
bearing net debt is 13.7 MEUR.
Investments in non-current assets excluding acquisitions were 1,1 MEUR (0.8
MEUR) during the period.
AffectoGenimap has paid dividends of 1.5 MEUR (previous year 0.8 MEUR) from
the profit of the year 2005. Dividend was paid on 19 April 2006.
EMPLOYEES
The number of employees was 745 persons at the end of the reporting period
(534 persons). The average number during the period was 605 persons (526). 390
employees, i.e. 52% of the employees are located outside of Finland.
Mr. Pekka Eloholma, M.Sc(Eng.), has been the company's CEO as of 1 September
2006. The previous CEO Antti Halila has retired.
AffectoGenimap implemented on 1 October 2006 a management model, where the
group management and country management for Finland were combined. The
directors responsible for operations in Finland report directly to CEO Pekka
Eloholma. Mr Jaakko Hirvola, who served as the country manager for Finland and
the managing director for AffectoGenimap Finland, left the company.
Mrs. Hilkka Remes-Hyvärinen, M.Sc.(Econ.), has been the group HR director as
of 1 October 2006 and Mrs. Tuula Wäyrynen, M.A., the director of corporate
communications as of 1 November 2006.
Mrs. Satu Kankare, M.Sc(Econ.), has been the CFO as of 1 November 2006, as
Timo Lehtinen has left the company to join another employer.
BUSINESS REVIEW
During 2006 AffectoGenimap has carried out its growth strategy both by further
organically developing its business structure and by a few selected
acquisitions.
During 2006, AffectoGenimap launched business operations in Estonia, acquired
a document management solution company in Lithuania and business intelligence
(BI) solution companies in Finland and Sweden.
The group organization and management model was changed during the year as a
consequence of change of the CEO and of acquisitions. The group's business is
managed through three country units. Finland, Baltic and Nordic are the
primary IFRS segments.
Finland
Net sales in AffectoGenimap Finland was 36.3 MEUR (35.7 MEUR) and it increased
by 2%. EBIT was 4.6 MEUR (4.3 MEUR). The financial development was weak during
first year-half, as certain projects progressed slower than planned and
warranty-type of work was done for fixing customers' problems related to a new
version of a third-party software. The billable utilization rate improved
during the second half, which improved net sales and profitability. The growth
of IT services market in Finland is slow and the price competition continues
tight. Of orders received during the year, some of noteworthy are orders from,
among others, Nokia, Valmet, YTK, Finnish Air Force and City of Helsinki.
Extended business intelligence's (XBI) net sales was 19.0 MEUR (21.2 MEUR).
The reported sales were negatively affected by a transfer of resources to the
Cartographic segment. Customers' interest is increasingly focusing for larger
solutions and continuous service. Demand for BI services has grown during the
second year-half and price level has stabilized. We have increased our Cognos
solution delivery capacity by acquiring ZenPark, and the company's BI offering
has also been expanded towards SAP technologies during the year. Sales of
third-party licenses as part of solutions remained below previous year. The
utilization rate of project work improved in the second year-half. XBI
business had a lower profitability in 2006 than the other business areas in
Finland.
AffectoGenimap acquired 100% of share capital of ZenPark Oy in September,
which acquisition strengthens AffectoGenimap's position as the leading
business intelligence (BI) solution provider in Finland. The main part of
ZenPark's revenue is generated through BI solutions built on Cognos
technology. In addition the company delivers BI and .NET solutions based on
Microsoft technology. ZenPark had 36 employees, located mainly in Espoo and
Jyväskylä. In the financial year ended in June 2006, revenue was approx. 3.2
MEUR and EBIT 0.4 MEUR. The company has customers like Alko, Fortum and
Huhtamäki.
Net sales of Customized Solutions were 7.6 MEUR (7.2 MEUR). Deliveries of
WebMarela hospital medicine logistics solution continued and new orders were
received from hospital districts. The multi-year PortOpera port operating
system project was finished. In addition, projects related to other customized
solutions were also delivered. The demand for services remained moderate.
Cartographic Solutions businesses net sales was 9.7 MEUR (7.4 MEUR). Part of
sales growth is explained by a transfer of resources from the XBI segment.
Especially the demand for digital geographic content and related services grew
well. The demand for printed maps and other such products developed more
moderately.
Baltic (Lithuania, Latvia, Estonia)
The Baltic business mostly consists of projects related to large customer-
specific systems. Projects are typically larger and tender processes longer
than in Finland.
The Baltic net sales grew 19% and were 13.1 MEUR (11.0 MEUR). Baltic EBIT was
0.5 MEUR (1.2 MEUR). The business was loss-making in the early part of the
year as certain projects were delayed, but profitability returned to a good
level after the project deliveries normalized in the second year-half. The new
insurance sector projects were started during the autumn. The resource
utilization rate was good in the latter part of the year.
During the year the company has won several public sector tenders, the project
delivery related to which has started. During the year, new orders were
received, among others, from Mazeikui Nafta, Mutual & Federal Insurance,
National Paying Agency, SODRA, City of Vilnius, Lithuanian State Patient Fund,
Latvian Ministry of Interior and Trygg Hansa.
The business operations in Estonia were launched in 2006. The Estonian
business has started positively and the company has current approx. 40
employees. The Estonian key employees have been bound in July by directing
them shares in the Estonian company. During 2006 AffectoGenimap strengthened
its document management solution offering in Baltic area by acquiring a
Lithuanian company called UAB Dokumentu valdymo sistemos.
The order backlog contains an increased amount of long-term projects, which
fact is estimated to increase stability and predictability of the business.
Due to the good growth of order backlog, the company is actively recruiting
more employees. The Baltic countries have a high demand for experienced
workforce, which is predicted to lead to higher salary levels in 2007.
Nordic
AffectoGenimap has expanded its business to the other Nordic countries by
acquiring Intellibis AB from Sweden in December 2006. Intellibis is the
leading specialised supplier of business intelligence (BI) solutions in
Sweden. The acquisition of Intellibis will open the Swedish BI market to
AffectoGenimap and enables a wider service to the Nordic customers.
The main part of Intellibis revenue is generated through BI solutions built on
Microsoft and Cognos technologies. In addition the company has partners like
Business Objects, Lawson, Outlooksoft and CorpSoft. The company has customers
like Apoteket, Folksam, SEB and Sandvik. Intellibis has approx. 90 employees,
most of which are located in Stockholm. The company also has offices in
Göteborg and Malmö.
In 2006, Intellibis had approx. 10.9 MEUR net sales in 2006 and EBIT was
approx. 1.5 MEUR before non-recurring items. The company has been consolidated
to AffectoGenimap since December 2006.
The business of Intellibis has developed positively during year 2006. The
price development has been positive and the utilization rate has remained
high. The delivery capacity has been increased by reqruitment upto the year-
end and the workforce is expected to grow also in year 2007.
CHANGES IN GROUP STRUCTURE
Affecto Ltd, Domasoft Ltd and Genimap Ltd were merged into AffectoGenimap
Finland Ltd, as decided on 17 March 2006. The mergers were executed in order
to simplify the group structure. The mergers were implemented on 31 December
2006.
The company has used the call option related to the group's Baltic subsidiary
UAB Informacines Technologijos ("ITG") and currently owns 100% of ITG. 1 074
148 AffectoGenimap shares were issued to the shareholders of ITG on 5 May 2006
in a directed share issue.
In April 2006 AffectoGenimap strengthened its document management solution
offering in Baltics by acquiring a Lithuanian company called UAB Dokumentu
valdymo sistemos. The company has been combined to the group's Baltic business
and has been consolidated to group figures since May. The acquired company was
merged to UAB Informacines Technologijos in December 2006
AffectoGenimap has on 29 September 2006 acquired 100% of the share capital of
ZenPark Oy. In the financial year ended in June 2006, ZenPark's revenue was
approx. 3.2 MEUR and EBIT 0.4 MEUR. The debt-free value of the transaction
paid now was approx. 2.4 MEUR. In addition, an earn-out of max. 0.7 MEUR based
on earnings development can be paid during year 2007.
AffectoGenimap has on 11 December acquired 100% of the share capital of
Intellibis AB in Sweden. In 2006, Intellibis had approx. 10.9 MEUR net sales
and EBIT was approx. 1.5 MEUR before non-recurring items. The debt-free value
of the transaction paid now was 12.0 MEUR. Based on Intellibis performance in
2007, an earn-out of max. 4.0 MEUR can be paid. Of the transaction price,
approx. 10 MEUR was paid in cash and approx. 2 MEUR in AffectoGenimap shares.
In line with the strategy, the company has continued to evaluate M&A
prospects.
ANNUAL GENERAL MEETING AND GOVERNANCE
The Annual General Meeting of AffectoGenimap Plc was held on 4 April 2006. The
General Meeting decided that a dividend of 0.10 eur per share be distributed
for the year 2005.
Aaro Cantell, Pasi Mäenpää and Jukka Mäkinen were re-elected and Heikki
Lehmusto, Jukka Norokorpi and Esko Rytkönen were elected as new members of the
Board of Directors. The Board re-elected Aaro Cantell as the Chairman of the
Board. The Authorised Public Accountants PricewaterhouseCoopers Oy was re-
elected as the auditor of the company with Merja Lindh, APA, as the auditor in
charge and Maria Nikus, APA, as the deputy auditor.
The General Meeting also decided on a stock option program and authorized the
board of directors to decide on issuing new shares, on acquiring own shares
and on conveying own shares.
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.
OPTION PROGRAM
The Annual General Meeting decided to issue stock options to the key personnel
of the group, as well as to a wholly owned subsidiary of the Company. The
details of the option rights are explained in the summons to the AGM dated 8
March 2006. The maximum total number of stock options issued shall be 824 700.
Of the stock options, 234 900 shall be marked with the symbol 2006A, 274 900
shall be marked with the symbol 2006B and 314 900 shall be marked with the
symbol 2006C.
The share subscription price for stock option 2006A shall be the offer price
of the Company share in the Initial Public Offering, EUR 4.80, for stock
option 2006B, the trade volume weighted average quotation of the share on the
Helsinki Stock Exchange during 1 January - 31 March 2007, and for stock option
2006C, the trade volume weighted average quotation of the share on the
Helsinki Stock Exchange during 1 January - 31 March 2008. From the share
subscription price of stock options shall, as per the dividend record date, be
deducted the amount of the dividend decided after the beginning of the period
for determination of the subscription price but before share subscription.
The share subscription period shall be: for stock options 2006A, 1 April 2009
- 31 December 2010, for stock options 2006B, 1 April 2010 - 31 December 2011
and for stock options 2006C, 1 April 2011 - 31 December 2012.
206 000 of 2006A stock options have been given to key personnel.
THE AUTHORIZATIONS GIVEN TO THE BOARD OF DIRECTORS
The Annual General Meeting decided to authorise the Board of Directors to
decide to increase the share capital in one or more tranches by a new issue
and/or by taking a convertible loan and/or by issuing option rights so that
based on the new issue, the convertible bonds and the option rights the share
capital may be increased by a maximum of EUR 900,000 by issuing for
subscription a maximum of 3,000,000 new shares with a par value of EUR 0.3 at
a price and on other terms to be determined by the Board of Directors. The
authorisation comprises the right to deviate from the shareholders' pre-
emptive subscription right provided that the Company has a weighty financial
reason for the deviation. The authorisation shall be in force until the next
Annual General Meeting. Based on the authorization, 1 620 148 new shares have
been issued by 31 December 2006.
The Annual General Meeting decided to authorise the Board of Directors to
decide to acquire the Company's own shares with funds distributable as profit.
The Company's own shares may be acquired in order to develop the Company's
capital structure, to be used as payment in corporate acquisitions or when the
Company acquires assets related to its business and as part of the Company's
incentive programmes in a manner and to the extent decided by the Board of
Directors, and to be transferred for other purposes or to be cancelled. A
maximum of 1,500,000 own shares with a par value of EUR 0.3 are proposed to be
acquired. The Company's own shares will be acquired in accordance with the
Board of Directors' decision either through public trading or by public offer
at their market price at the time of purchase. The authorisation shall be in
force until the next Annual General Meeting. Based on the authorization, 202
700 shares have been repurchased by 31 December 2006.
The Annual General Meeting decided to authorise the Board of Directors to
convey the Company's own shares held by the Company at any one time. The
authorisation is proposed to encompass no more than 1,500,000 shares with a
par value of EUR 0.3. The authorisation comprise the right to decide to whom
and in which order own shares held are conveyed, and to decide on conveyance
of own shares in an order deviating from the shareholders' pre-emptive right
to acquire own shares provided that the Company has an important financial
reason for the deviation. The authorisation may be used in order to develop
the Company's capital structure, to broaden the Company's ownership, to be
used as payment in corporate acquisitions or when the Company acquires assets
relating to its business, as part of the Company's incentive programmes and
for other similar purposes. The shares may also be conveyed in public trading.
The shares shall be conveyed at a price at least equal to their market price
at the time of conveyance as determined in public trading. Otherwise, the
Board of Directors is authorised to decide the price and the basis for
determining the price of the own shares, the conveyance of the own shares
against other than monetary consideration or using the right of set-off as
well as all other matters related to the conveyance of own shares. The
authorisation shall be in force until the next Annual General Meeting. Based
on the authorization, 165 962 shares have been conveyed by 31 December 2006.
SHARES AND TRADING
The company has only one share series, and all shares have similar rights. As
at 1 January 2006, the company's share capital consisted of 15 396 373 shares.
The company did not own any treasury shares.
Based on the authorization given by the General meeting on 4 April 2006, 1 074
148 new shares were issued on 5 May 2006 as payment for shares in UAB
Informacines Technologijos, and 546 000 new shares were issued on 11 December
2006 as payment for shares in Intellibis AB.
Between 30 May and 30 September 2006 the company has purchased 202 700 own
shares from stock market with average price of 2.51 eur/share and has used 0.5
MEUR for the purchase. 165 962 of these shares have been conveyed as payment
for shares in Intellibis AB at the price of 3.02 eur/share.
As at 31 December 2006, AffectoGenimap Plc's share capital consisted of 17 016
521 shares and the share capital is EUR 5 104 956.30. The company owns 36 738
treasury shares, which corresponds to 0.2% of all shares.
In 2006, the highest share price was 4.02 euro, lowest price 2.20 euro,
average price 3.06 euro and closing price 3.47 euro. Trading volume was 14.6
million shares, corresponding to 86 % of the number of shares at the end of
period. The market value of shares was 58.9 MEUR at the end of the period.
OWNERS
There have been no flagging announcements during 2006.
The company had total of 1344 owners on December 31, 2006 and the foreign
ownership was 22%. The list of the biggest owners can be viewed in the
company's web site.
EVENTS AFTER THE REVIEW PERIOD
The Board of directors will propose to the Annual General Meeting to be held
on 28 March 2007 that the company's name is changed to Affecto Plc. Affecto
has been implemented as a marketing name in Finland as of 1 February 2007 and
the name of the Finnish subsidiary has been changed to Affecto Finland Oy.
DIVIDEND PROPOSAL
The board of directors proposes to the Annual General Meeting that dividend
for year 2006 would be 0.10 eur per share (0.10 eur in 2005).
STRATEGIC OBJECTIVES
The company has two strong business lines: the strongest growth expectations
are focused on the growing business intelligence market but at the same time
the company wants to further strengthen its position in delivering demanding
and customer specific operational IT solutions.
The company aims to be the leading business intelligence solution provider in
the Nordic, Baltic and CEE regions. Furthermore, the company aims to be the
most competent and quality focused provider of geographic information system
(GIS), document management (DM) and other operational solutions in selected
industries and regions.
The growth target for the company for 2007-2009 is that net sales exceed EUR
100 million in 2009. The growth target will be reached through organic growth
supplemented by acquisitions. At the same time the company seeks to be one of
the most profitable IT services company within its market region.
FUTURE OUTLOOK
Positive development is expected to continue in 2007. Based on the recent
acquisitions and good order backlog the company seeks to reach net sales of
approx. 70 MEUR in 2007. The profitability is also expected to improve from
year 2006. The first quarter is expected to be significantly better than
Q1/2005.
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.
AffectoGenimap Plc
Board of Directors
It is possible to order AffectoGenimap's stock exchange releases to be
delivered automatically by e-mail. Please visit the Investor pages of the
company website: http://www.affecto.com
A briefing for analysts and media will be arranged at 11:00 at G.W.Sundmans,
Eteläranta 16, Helsinki.
AffectoGenimap will arrange a telephone conference for analysts, media and
investors at 16:00 Finnish time (14:00 UK time). CEO Pekka Eloholma will
present the results. The conference call will be organized in English.
Participants are requested to call +44 (0) 20 7162 0025, using the code
"AffectoGenimap", a few minutes before the beginning of the conference.
The telephone conference will be taped and will be available for listening for
7 days from the number: +44 (0) 20 7031 4064, access code: 735860.
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Financial information:
1. Income statement, balance sheet and cash flow statement
2. Segment information
3. Notes
4. Key figures
1. Income statement, balance sheet and cash flow statement
CONSOLIDATED INCOME STATEMENT
(1 000 EUR) 10-12/06 10-12/05 1-12/06 1-12/05
Net sales 16 566 12 498 50 194 46 699
Other operating income 28 436 138 864
Changes in inventories of -107 67 287 97
finished goods and work in
progress
Materials and services -3 668 -3 809 -13 177 -13 926
Personnel expenses -7 847 -5 076 -23 996 -20 235
Depreciation, amortization and -515 -267 -1 372 -1 095
impairment charges
Other operating expenses -2 723 -1 894 -8 432 -7 251
Operating result 1 736 1 953 3 642 5 153
Finance costs (net) -26 -78 -184 -364
Result before income tax 1 710 1 875 3 458 4 789
Income tax -307 -381 -824 -1 089
Result for the period 1 403 1 494 2 633 3 700
Attributable to:
Equity holders of the Company 1 403 1 492 2 633 3 695
Minority interest 0 2 0 5
Earnings per share for result
attributable to the equity
holders of the Company
(expressed in EUR per share)
Basic 0.09 0.10 0.16 0.25
Diluted 0.09 0.10 0.16 0.24
CONSOLIDATED BALANCE SHEET
(1 000 EUR) 12/2006 12/2005
Non-current assets
Property, plant and equipment 2 110 1 900
Goodwill 43 579 30 860
Other intangible assets 7 550 2 892
Deferred tax assets 594 487
Available-for-sale financial assets 57 99
Other non-current receivables 93 70
53 983 36 308
Current assets
Inventories 2 095 2 125
Trade receivables 11 508 7 121
Other receivables 4 230 3 190
Current income tax receivables 1 036 421
Available-for-sale financial assets 578 0
Financial assets at fair value through 24 0
profit or loss
Restricted cash 381 550
Cash and cash equivalents 4 906 12 639
24 758 26 046
Total assets 78 741 62 354
Equity attributable to equity holders
of the Company
Share capital 5 105 4 619
Share premium 25 404 22 856
Reserve of invested non-restricted 1 960 0
equity
Other reserves 11 55
Treasury shares -106 0
Retained earnings 6 717 6 023
39 092 33 553
Minority interest 0 20
Total shareholders' equity 39 092 33 573
Non-current liabilities
Borrowings 14 014 8 858
Deferred tax liabilities 2 007 503
Other long-term liabilities 2 232
18 252 9 361
Current liabilities
Borrowings 5 032 3 696
Trade payables 2 627 2 426
Other liabilities 12 580 13 143
Current income tax liabilities 1 158 155
21 397 19 420
Total liabilities 39 649 28 781
Total shareholders' equity and 78 741 62 354
liabilities
CONSOLIDATED CASH FLOW STATEMENT
(1 000 EUR) 1-12/2006 1-12/2005
Cash flows from operating activities
Result for the period 2 633 3 700
Adjustments for:
Tax 824 1 089
Depreciation and amortization 1 372 1 095
Other non-cash income and expenses 118 -265
Interest income -275 -206
Dividend income -39 -1
Interest expense 498 571
Profit/loss from sale of property, plant -56 -16
and equipment
5 076 5 967
Change in working capital
Decrease/(increase) in trade and other -1 814 418
receivables
Decrease/(increase) in inventories 30 -813
(Decrease)/increase in trade and other 475 -1 995
payables
Change in working capital -1 309 -2 390
Interest and other finance cost paid -429 -550
Interest received 250 204
Dividend received 39 1
Income taxes paid -1 024 -1 451
Net cash generated by operating activities 2 604 1 781
Cash flows from investing activities
Acquisition of subsidiaries, net of cash -13 262 -1 219
acquired
Purchases of property, plant and equipment -892 -606
Purchases of intangible assets -226 -213
Proceeds from sale of property, plant and 41 22
equipment
Sale of business/subsidiaries 45 824
Investments to financial assets 0 -19
Proceeds from sale of financial assets 39 0
Increase of other non-current receivables 30 0
Net cash used in investing activities -14 225 -1 211
Cash flow from financing activities
Proceeds from issue of share capital 2 8 671
Increase of interest-bearing liabilities 12 447 0
Repayments of interest-bearing liabilities -5 938 -3 696
Purchase of treasury shares -509 0
Dividends paid to company's shareholders -1 540 -798
Net cash generated in financing activities 4 462 4 177
(Decrease)/increase in cash and cash -7 159 4 747
equivalents
Cash and cash equivalents at the beginning 12 639 7 892
of the period
Translation adjustment -1 0
Change in fair value of financial assets 6 0
Cash and cash equivalents at the end of the 5 485 12 639
period
2. Segment information
Primary reporting format geographical segments based on location of assets
Segment result:
(1 000 EUR) 10-12/06 10-12/05 1-12/06 1-12/05
Total sales
Finland 11 073 9 633 36 267 35 713
Baltic 4 628 2 896 13 083 11 022
Nordic 881 0 881 0
Eliminations -16 -29 -36 -36
Group total 16 566 12 498 50 194 46 699
Segment result (operating
result)
Finland 1 612 1 741 4 641 4 281
Baltic 673 565 497 1 218
Nordic -22 0 -22 0
Group management * -527 -352 -1 474 -346
Group total 1 736 1 953 3 642 5 153
* The costs of group management have been reported separately since Q4/2005.
The costs were previously reported as part of Finland.
Secondary reporting format business segments
Segment revenue:
(1 000 EUR) 10-12/06 10-12/05 1-12/06 1-12/05
Total sales
XBI 8 025 6 195 21 518 21 160
Customized Solutions 6 074 4 570 19 061 18 255
Cartographic Solutions 2 483 1 782 9 652 7 383
Other (incl. -16 -49 -36 -99
eliminations)
Group total 16 566 12 498 50 194 46 699
Since Q2/2006 the Baltic revenue is classified to both XBI and Customised
Solutions segments. XBI sales in Baltic area was approx 1.6 MEUR during 2006.
Nordic revenue is classified to the XBI segment.
3. Notes
Consolidated statement of changes in shareholders' equity 1-12/2006 and
1-12/2005
(1 000 EUR) Share Share Reserve of Other Trea- Ret. Mino- Total
capital premium invested reserve sury earn- rity equity
non- s shares ings & inte-
restricted trans- rest
equity lat.
diff.
Shareholders' 4 619 22 856 0 55 0 6 023 20 33 573
equity 1
January 2006
Translation 5 5
differences
Share options -48 55 7
Available-for- 4 4
sale financial
assets
Result for the 2 633 2 633
period
Dividends -1 540 -1 540
Purchase of -509 -509
treasury shares
Sell of 476 403 -403 476
treasure shares
Share issues 486 2 548 1 485 4 519
Put/Call -56 -56
treatment
Acquisition of -20 -20
minority
Shareholders' 5 105 25 404 1 960 11 -106 6 717 0 39 092
equity 31
December 2006
(1 000 EUR) Share Share Reserve of Other Trea- Ret. Mino- Total
capital premium invested reserve sury earn- rity equity
non- s shares ings & inte-
restricted trans- rest
equity lat.
diff.
Shareholders' 4 300 14 240 0 0 -352 3 717 15 21 920
equity 1
January 2005
Translation 3 3
differences
Share options 55 55
Result for the 3 695 5 3 700
period
Dividends -798 -798
Reduction of -311 311 352 -352 0
share capital
Share issue 630 8 305 8 935
Put/Call -243 -243
treatment
Shareholders' 4 619 22 856 0 55 0 6 023 20 33 573
equity 31
December 2005
Contingencies and commitments
The group has a contingent asset of 87 thousand Latvian lats (EUR 125
thousand) relating to a court case in Latvia. Riga Regional Court published a
judgement, according to which adverse party was sentenced to pay 87 thousand
Latvian lats to a group company of AffectoGenimap (Mebius IT). The adverse
party has appealed to supreme court of the republic of Latvia and demanded to
change the decision. The adverse party has demanded a compensation of 51
thousand Latvian lats (EUR 73 thousand) from Mebius IT.
In respect of the acquisitions of Intellibis AB and ZenPark Oy, additional
consideration of up to 4.7 MEUR may be payable. The additional consideration
of ZenPark Oy (maximum 0.7 MEUR) is payable in 2007 and the additional
consideration of Intellibis AB (maximum 4.0 MEUR) in 2008. In the financial
statements for 2006 an additional consideration has been estimated to amount
to 2.3 MEUR, which has been recorded as liability.
The future aggregate mimimum lease payments under non-cancelable operating
leases as of 31 December 2006:
1 000 EUR
Not later than one (1) year 2 346
Later than one (1) year, but not later than 3 792
five (5) years
Later than five (5) years 0
6 138
Guarantees:
Debt secured by a mortgage 1 000 EUR
Financial loans 19 031
Mortgages 14 367
Other securities given on own behalf: 1 000 EUR
Pledges 696
Pledges given on own behalf are secured by restricted cash of 0.4 MEUR and
trade receivables at an amount of 0.3 MEUR.
Derivative contracts
1 000 EUR Nominal Fair value
value
Interest rate swaps 5 000 24
4. Key figures
IFRS 10-12/06 10-12/05 1-12/06 1-12/05
Net sales, 1 000 eur 16 566 12 498 50 194 46 699
EBITDA, 1000 eur 2 251 2 220 5 014 6 247
Operating result, 1 000 eur 1 736 1 953 3 642 5 153
Result before extraordinary 1 710 1 875 3 458 4 789
items, 1 000 eur
Result before taxes, 1 000 eur 1 710 1 875 3 458 4 789
Net income for equity holders 1 403 1 492 2 633 3 695
of the parent company, 1 000
eur
EBITDA, % 13.6 % 17.8 % 10.0 % 13.4 %
Operating result, % 10.5 % 15.6 % 7.3 % 11.0 %
Result before extraordinary 10.3 % 15.0 % 6.9 % 10.3 %
items, %
Result before taxes, % 10.3 % 15.0 % 6.9 % 10.3 %
Net income for equity holders 8.5 % 11.9 % 5.2 % 7.9 %
of the parent company, %
Equity ratio, % 52.0 % 56.9 % 52.0 % 56.9 %
Net gearing, % 35.2 % 9.9 % 35.2 % 9.9 %
Interest-bearing net debt, 13 743 3 340 13 743 3 340
1 000 eur
Gross investment in non-current 322 110 1 118 819
assets (excl. acquisitions),
1 000 eur
Gross investments, % of sales 1.9 % 0.9 % 2.2 % 1.8 %
Research and development costs, 123 200 476 761
1000 eur
R&D costs, % of sales 0.7 % 1.6 % 0.9 % 1.6 %
Order backlog, 1 000 eur 24 167 13 027 24 167 13 027
Average number of employees 688 527 605 526
Earnings per share, eur 0.09 0.10 0.16 0.25
Equity per share, eur 2.30 2.18 2.30 2.18
Average number of shares, 1 000 16 430 15 396 16 058 14 556
shares
Number of shares at the end of 16 980 15 396 16 980 15 396
period, 1 000 shares
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