Affecto Plc's Interim Report 1-6/2014

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| Source: Affecto Oyj
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Helsinki, 2014-08-04 10:00 CEST (GLOBE NEWSWIRE) -- AFFECTO PLC  --  INTERIM REPORT --  4 AUGUST 2014 at 11.00

 

Affecto Plc's Interim Report 1-6/2014

Group key figures

 

MEUR 4-6/14 4-6/13 1-6/14 1-6/13 2013 last 12m
             
Net sales 33.0 34.8 64.2 69.2 132.9 127.9
Operational segment result 3.0 2.5 3.1 5.0 10.3 8.4
% of net sales 9.2 7.1 4.9 7.3 7.7 6.5
Operating profit 2.5 2.0 2.1 4.0 8.3 6.3
% of net sales 7.5 5.7 3.2 5.8 6.2 4.9
Profit before taxes 2.3 1.8 1.7 3.9 8.0 5.8
Profit for the period 1.8 1.2 1.3 2.7 5.6 4.1
             
Equity ratio, % 56.0 53.5 56.0 53.5 53.0 -
Net gearing, % 15.7 21.1 15.7 21.1 7.4 -
             
Earnings per share, eur 0.09 0.05 0.06 0.13 0.26 0.19
Earnings per share (diluted), eur 0.09 0.05 0.06 0.13 0.26 0.19
Equity per share, eur 2.99 3.10 2.99 3.10 3.14 -
             

 

 

CEO Lars Wahlström comments:

Our profit increased in the second quarter despite a decrease in net sales. Net sales decreased by 5% to 33.0 MEUR (34.8 MEUR). We grew in Baltic, but net sales of our other units decreased. The decrease in the number of employees contributed to the decrease in consulting revenue. On the positive side, license sales improved.

The streamlining actions done earlier this year in Norway and Sweden impacted positively on the second quarter's profit. Operating profit grew to 2.5 MEUR (2.0 MEUR) and profitability improved to 7.5% (5.7%). Baltic with 13% had the highest profitability and also Norway as well as Finland reached 10% profitability. Also Sweden made a clearly positive profit.

We are actively working to modify our offering to correspond to the customer needs that are changing along the rapid technology changes. Both cloud and appliance based solutions are getting more common also in our field. Also the generic Digitalisation and Internet of Things trends create new business opportunities for us.

The order backlog was 48.1 MEUR, somewhat below last year (48.8 MEUR) due to Finland and Norway. Customers are still cautious in their investment decision making which slows down sales.

Year 2014 net sales and operating profit are estimated to be below last year's level.

 

 

Additional information:
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
CFO Satu Kankare, +358 205 777 202


 

This release is unaudited. The amounts in this report have been rounded from exact numbers.

NET SALES

Affecto's net sales in 1-6/2014 were 64.2 MEUR (1-6/2013: 69.2 MEUR). Net sales in Finland were 26.4 MEUR (27.0 MEUR), in Norway 13.3 MEUR (16.1 MEUR), in Sweden 11.3 MEUR (12.3 MEUR), in Denmark 6.6 MEUR (8.1 MEUR) and 8.8 MEUR (8.2 MEUR) in Baltic.

Net sales by reportable segments

 

Net sales, MEUR 4-6/14 4-6/13 1-6/14 1-6/13 2013 last 12m
             
Finland 13.8 14.3 26.4 27.0 53.2 52.5
Norway 7.0 7.6 13.3 16.1 29.6 26.8
Sweden 5.5 6.2 11.3 12.3 23.2 22.2
Denmark 3.1 4.3 6.6 8.1 15.4 13.9
Baltic 4.7 3.9 8.8 8.2 16.0 16.7
Other -1.1 -1.4 -2.2 -2.4 -4.4 -4.1
Group total 33.0 34.8 64.2 69.2 132.9 127.9

 

 

Net sales decreased by 5% in the second quarter. Net sales decreased in all other areas except Baltic. Weaker NOK and SEK contributed to the decrease. Resource utilization was low especially in Finland and Denmark. The number of employees decreased especially in Norway, which decreased consultancy revenue. There were about 5% less working days in the quarter than one year ago.

Net sales of Information Management Solutions business in 1-6/2014 were 59.6 MEUR (64.7 MEUR) and net sales of Karttakeskus GIS business were 6.2 MEUR (5.7 MEUR).

Customers continue to show interest mainly in shorter and smaller projects, and investment decisions take a long time. The general market sentiment continues cautious especially in Finland. The order backlog decreased to 48.1 MEUR (48.8 MEUR).

PROFIT

Affecto's operating profit in 1-6/2014 was 2.1 MEUR (4.0 MEUR) and the operational segment result was 3.1 MEUR (5.0 MEUR). Operational segment result was in Finland 2.2 MEUR (3.2 MEUR), in Norway 0.4 MEUR (1.7 MEUR), in Sweden 0.0 MEUR (-0.3 MEUR), in Denmark 0.6 MEUR (0.8 MEUR) and in Baltic 0.8 MEUR (0.4 MEUR).

Operational segment result by reportable segments

 

Operational segment
result, MEUR
4-6/14 4-6/13 1-6/14 1-6/13 2013 last 12m
             
Finland 1.4 1.7 2.2 3.2 6.9 5.9
Norway 0.7 0.8 0.4 1.7 2.7 1.4
Sweden 0.3 -0.2 0.0 -0.3 -0.2 0.1
Denmark 0.3 0.5 0.6 0.8 1.9 1.7
Baltic 0.6 0.1 0.8 0.4 0.2 0.6
Other -0.2 -0.4 -0.8 -0.7 -1.2 -1.3
Operational segment result 3.0 2.5 3.1 5.0 10.3 8.4
IFRS3 Amortization -0.5 -0.5 -1.1 -1.0 -2.0 -2.0
Operating profit 2.5 2.0 2.1 4.0 8.3 6.3

 

 

In 4-6/2014 operating profit increased to 2.5 MEUR (2.0 MEUR) and profitability increased to 8% (6%). Finland and Norway had 10% profitability. Profitability improved to 6% in Sweden. Denmark's profitability decreased to 8% due to decreased net sales and low utilization rate. Profitability in Baltic improved to 13% thanks to the insurance business.

According to the IFRS3 requirements, operating profit includes 1.1 MEUR (1.0 MEUR) of amortization on intangible assets related to acquisitions. The other intangible assets impacting in the IFRS3 amortization totaled 0.7 MEUR at the end of the reporting period and the amortization will end during year 2014.

Taxes corresponding to the profit of the period have been entered as tax expense. Net profit for the period was 1.3 MEUR, while it was 2.7 MEUR last year.

FINANCE AND INVESTMENTS                                                            

At the end of the reporting period Affecto's balance sheet totaled 126.0 MEUR (12/2013: 139.5 MEUR). Equity ratio was 56.0% (12/2013: 53.0%) and net gearing was 15.7% (12/2013: 7.4%).

The financial loans were 24.5 MEUR (12/2013: 26.5 MEUR) at the end of reporting period. The company's cash and liquid assets were 14.3 MEUR (12/2013: 21.5 MEUR). The interest-bearing net debt was 10.1 MEUR (12/2013: 5.0 MEUR).

Cash flow from operating activities for the reported period was -1.5 MEUR (1.1 MEUR) and cash flow from investing activities was -0.4 MEUR (-1.1 MEUR). Investments in tangible and intangible assets were 0.4 MEUR (1.1 MEUR).

EMPLOYEES

The number of employees was 1040 persons at the end of the reporting period (1082). 424 employees were based in Finland (430), 101 in Norway (126), 138 in Sweden (140), 66 in Denmark (67) and 311 in the Baltic countries (319). The average number of employees during the period was 1059 (1082).

Board member Lars Wahlström has been the interim CEO since 1 January 2014 and serves in that position during the CEO recruitment process.

REVIEW OF MARKET DEVELOPMENTS

Weak economic development in our operating area continued to affect Affecto's business negatively. Customers' decision-making pace was slow and they are ordering short and small projects. Order backlog has decreased in Finland and in Norway compared to last year, but it has grown in Denmark and Baltic.

Market development in our BI/EIM market segments is twofold: some technology and solution areas grow well, but some see only very slow growth. E.g. demand for basic data warehouse services is not growing much, while demand for appliances and other next-generation data warehouse solutions is growing more rapidly. We are shifting our offerings and resources to match the changing needs. The streamlining actions we took in Q1 in Norway and Sweden are part of that adjustment process.

Cloud adoption is also finally progressing in the Business Intelligence & Data Warehouse markets. In addition to cloud solutions built for customers, we are also building our own cloud-based industry-specific solution for the utilities industry.

The industrial internet / "Internet of things" will create huge new analysis possibilities for our customers. We are actively looking into development of new solutions to satisfy the changing customer needs.

BUSINESS REVIEW BY AREAS

The group's business is managed through five country units. Finland, Norway, Sweden, Denmark and Baltic are also the reportable segments.

In 4-6/2014 the net sales in Finland decreased by 3% to 13.8 MEUR (14.3 MEUR). Operational segment result was 1.4 MEUR (1.7 MEUR) and profitability was 10%. General mood is still cautious and customers are slow with their investment decisions. Order backlog is below last year.

In 4-6/2014 the net sales of Karttakeskus GIS business, reported as part of Finland, increased by 10% to 3.3 MEUR (3.0 MEUR) and its profitability was moderate.

In 4-6/2014 the net sales in Norway were 7.0 MEUR (7.6 MEUR) and operational segment result was 0.7 MEUR (0.8 MEUR). Net sales in euros decreased by 8% mostly due to the weakened NOK. Profitability was at last year's level of 10%. Streamlining actions have helped to decrease the cost base and have improved profitability. Order backlog is below last year.

In 4-6/2014 the net sales in Sweden were 5.5 MEUR (6.2 MEUR) and operational segment result 0.3 MEUR (-0.2 MEUR). Net sales decreased by 12%, to which the weakened SEK contributed. Profitability was clearly positive 6%, partially thanks to the streamlining actions taken earlier this year. Development actions continue and the goal is to achieve normal profitability, but structural and operational changes for the business will take some time. Order backlog is at last year's level.

In 4-6/2014 the net sales in Denmark were 3.1 MEUR (4.3 MEUR) and operational segment result was 0.3 MEUR (0.5 MEUR). Net sales decreased by 27% due to less third-party subcontracting work and a lower utilisation rate of own consultants. Profitability decreased to 8%. Market situation in Denmark is rather normal with tight competition. Order backlog is above last year's level.

In 4-6/2014 the net sales in Baltic (Lithuania, Latvia, Estonia, Poland, South Africa) were 4.7 MEUR (3.9 MEUR). Operational segment result was 0.6 MEUR (0.1 MEUR). Net sales increased by 20% and profitability increased to 13%. The Lithuanian public sector, a key market for us, has not yet recovered, but the situation in Lithuania is expected to improve later this year due to the entrance of Lithuania into the Euro zone in January 2015. Estonian market situation is normal. The insurance business is running well. Order backlog is above last year's level.

ANNUAL GENERAL MEETING AND GOVERNANCE

The Annual General Meeting of Affecto Plc, held on 10 April 2014, adopted the financial statements for 1.1.-31.12.2013 and discharged the members of the Board of Directors and the CEO from liability. Approximately 33 percent of Affecto's shares and votes were represented at the Meeting. The Annual General Meeting decided on a dividend distribution of EUR 0.16 per share for the year 2013.

Aaro Cantell, Magdalena Persson, Jukka Ruuska, Olof Sand, Tuija Soanjärvi and Lars Wahlström were elected as members of the Board of Directors. The organization meeting of the Board of Directors re-elected Aaro Cantell as Chairman and Jukka Ruuska as Vice-Chairman. KPMG Oy Ab was elected as the auditor of the company.

The Meeting approved the Board's proposal for appointing a Nomination Committee to prepare proposals concerning members of the Board of Directors and their remunerations for the following Annual General Meeting. The Nomination Committee will consist of the representatives of the three largest shareholders and the Chairman of the Board of Directors, acting as an expert member, if he/she is not appointed representative of a shareholder. The members representing the shareholders will be appointed by the three shareholders whose share of ownership of the shares of the company is largest on 31 October preceding the Annual General Meeting.

According to the Articles of Association, the General Meeting of Shareholders annually elects the Board of Directors by a majority decision. The term of office of the board members expires at the end of the next Annual General Meeting of Shareholders following their election. The Board appoints the CEO. The Articles of Association do not contain any special rules for changing the Articles of Association or for issuing new shares.

THE AUTHORIZATIONS GIVEN TO THE BOARD OF DIRECTORS

The Board has not used in the review period the authorizations given by the Annual General Meeting in 2013, that expired on 10 April 2014.

The complete contents of the new authorizations given by the Annual General Meeting held on 10 April 2014 have been published in the stock exchange release regarding the Meetings' decisions. Key facts about the authorizations:

The Annual General Meeting decided to authorize the Board of Directors to decide to acquire the company's own shares with distributable funds. A maximum of 2 100 000 shares may be acquired. The authorization shall be in force until the next Annual General Meeting.

The Annual General Meeting decided to authorize the Board of Directors to decide to issue new shares and to convey the company's own shares held by the company in one or more tranches. The share issue may be carried out as a share issue against consideration or without consideration on terms to be determined by the Board of Directors and in relation to a share issue against consideration at a price to be determined by the Board of Directors. A maximum of 4 200 000 new shares may be issued. A maximum of 2 100 000 own shares held by the company may be conveyed. In addition, the authorization includes the right to decide on a share issue without consideration to the company itself so that the amount of own shares held by the company after the share issue is a maximum of one-tenth (1/10) of all shares in the company. The authorization shall be in force until the next Annual General Meeting.

SHARES AND TRADING

During the review period a total of 132 141 new shares have been subscribed with the 2008C options.

The company has one share series and all shares have similar rights. At the end of the review period Affecto Plc's share capital consisted of 22 450 745 shares. The company owned directly 64 552 shares and a fully owned subsidiary Affecto Management Oy owned 823 000 shares. Thus there are 887 552 treasury shares in total, approx. 4 % of the total amount of the shares.

In 1-6/2014 the highest share price was 4.62 euro, the lowest price 2.90 euro, the average price 3.43 euro and the closing price 3.00 euro. The trading volume was 2.3 million shares, corresponding to annualized 21% of the number of shares at the end of the period. The market value of shares was 64.7 MEUR at the end of the period excluding the treasury shares.

2008C options' exercise period ended on 31 May 2014. A total of 306 000 shares were subscribed with the options.

SHAREHOLDERS

The company had a total of 3 018 owners on 30 June 2014 and the foreign ownership was 11%. The list of the largest owners can be found in the company's web site. Information about the ownership structure and option programs is included as a separate section in the financial statements. The ownership of the board members, CEO and their controlled corporations totaled approx. 10.4%.

According to the flagging announcement made on 21 May 2014, the ownership of Evli Pankki and funds managed by Evli Rahastoyhtiö has decreased below 5%.

ASSESSMENT OF RISKS AND UNCERTAINTIES

Affecto's order backlog has traditionally been only for a few months, which decreases the reliability of longer-term forecasts. The changes in the general economic conditions and the operating environment of customers have direct impact in Affecto's markets. The uncertain economy may affect Affecto's customers negatively, and their slower investment decision making, postponing or cancellation of IT investments may have negative impact on Affecto. Slower decision making by customers may decrease the predictability of the business and may decrease the utilisation rate of resources.

Affecto’s balance sheet includes a material amount of goodwill. Goodwill has been allocated to cash generating units. Cash generating units, to which goodwill has been allocated, are tested for impairment both annually and whenever there is an indication that the unit may be impaired. Potential impairment losses may have material effect on reported profit and value of assets. The greatest uncertainty is related to Sweden, where impartment testing has been done on the basis of 30 June 2014 and the recoverable amount exceeds the carrying amount only by a narrow margin.

Affecto sells third party software licenses as part of its solutions. Typically the license sales have most impact on the last month of each quarter and especially in the fourth quarter. This increases the fluctuation in net sales between quarters and increases the difficulty of accurately forecasting the quarters. Affecto had license sales of approx. 10 MEUR in 2013.

Affecto's success depends also on good customer relationships. Affecto has a well-diversified customer base. In 2013 the largest customer generated 3% of Affecto's net sales, while the 10 largest together generated 17%. Although none of the customers is critically large for the whole group, there are large customers in various countries who are significant for local business in the country.

Approximately a 40% of Affecto's net sales is generated in Sweden and Norway, thus the development of the currencies of these countries (SEK and NOK) may have impact on Affecto's profitability. The main part of the companies' income and costs are within the same currency, which decreases the risks.

FUTURE OUTLOOK

Year 2014 net sales and operating profit are estimated to be below last year's level.

The company does not provide exact guidance for net sales or EBIT development, as single projects and timing of license sales may have large impact on quarterly sales and profit.

Affecto Plc
Board of Directors

 

 

You can order Affecto's stock exchange releases to be delivered automatically by e-mail.
Please visit the Investors section of the company website: www.affecto.com

A briefing for analysts and media will be arranged at 12.30 at Restaurant Savoy, Eteläesplanadi 14, Helsinki.

www.affecto.com

-----


 

Financial information:

1. Consolidated income statement, consolidated comprehensive income statement, balance sheet, cash flow statement and statement of changes in equity
2. Notes
3. Key figures

1. Consolidated income statement, consolidated comprehensive income statement, balance sheet, cash flow statement and statement of changes in equity

CONSOLIDATED INCOME STATEMENT

 

(1 000 EUR) 4-6/14 4-6/13 1-6/14 1-6/13 2013 last 12m
             
Net sales 33 018 34 810 64 205 69 203 132 896 127 898
Other operating income 23 6 23 7 65 82
Changes in inventories of finished
goods and work in progress
17 -79 26 358 306 -26
Materials and services -8 172 -7 357 -14 171 -15 201 -29 952 -28 922
Personnel expenses -17 081 -19 992 -37 216 -39 774 -74 031 -71 472
Other operating expenses -4 472 -4 587 -9 096 -8 936 -17 803 -17 964
Other depreciation and amortisation -309 -314 -622 -608 -1 230 -1 243
IFRS3 amortisation -549 -517 -1 098 -1 040 -1 989 -2 047
Operating profit 2 475 1 971 2 051 4 008 8 262 6 305
Financial income and expenses -183 -150 -363 -123 -289 -529
Profit before income tax 2 292 1 821 1 688 3 885 7 973 5 776
Income tax -445 -616 -392 -1 143 -2 407 -1 656
Profit for the period 1 847 1 205 1 297 2 742 5 566 4 120
             
Profit for the period
attributable to:
           
Owners of the parent company 1 847 1 113 1 297 2 660 5 493 4 129
Non-controlling interest - 92 - 82 73 -9
             
Earnings per share
(EUR per share):
           
Basic 0.09 0.05 0.06 0.13 0.26 0.19
Diluted 0.09 0.05 0.06 0.13 0.26 0.19
             
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
           
(1 000 EUR) 4-6/14 4-6/13 1-6/14 1-6/13 2013 last 12m
             
Profit for the period 1 847 1 205 1 297 2 742 5 566 4 120
Other comprehensive income            
Items that may be reclassified subsequently to the statement of income:            
Translation difference -765 -1 961 -809 -1 817 -3 074 -2 066
Total Comprehensive income
for the period
1 082 -756 488 926 2 491 2 054
             
Total Comprehensive income
attributable to:
           
Owners of the parent company  1 082 -849 488 843  2 419  2 063
Non-controlling interest - 92 - 82 73 -9

 

 


 

CONSOLIDATED BALANCE SHEET           

 

(1 000 EUR) 6/2014 6/2013 12/2013
       
Non-current assets      
Property, plant and equipment 1 745 2 037 1 947
Goodwill 71 377 73 157 72 166
Other intangible assets 988 3 091 2 072
Deferred tax assets 1 588 1 500 1 606
Trade and other receivables 2 7 4
  75 701 79 792 77 795
       
Current assets      
Inventories 628 677 622
Trade and other receivables 34 749 37 193 38 969
Current income tax receivables 599 579  615
Cash and cash equivalents 14 308 14 566 21 469
  50 284 53 015 61 675
       
Total assets 125 985 132 807 139 470
       
Equity attributable to owners
of the parent Company
     
Share capital 5 105 5 105 5 105
Reserve of invested non-restricted
equity
 
47 710
 
47 300
47 448
Other reserves 800 718 763
Treasury shares -2 165 -2 202 -2 165
Translation differences -2 937 -871 -2 128
Retained earnings 16 046 14 996 18 184
  64 559 65 046 67 207
Non-controlling interest - 394 -
Total equity 64 559 65 439 67 207
       
Non-current liabilities      
Loans and borrowings 20 436 24 403 22 420
Deferred tax liabilities 185 707 505
  20 621 25 110 22 924
Current liabilities      
Loans and borrowings 4 000 4 000 4 000
Trade and other payables 34 753 35 940 42 788
Current income tax liabilities 1 467 2 068 1 913
Provisions 585 249 638
  40 805 42 257 49 339
       
Total liabilities 61 426 67 367 72 264
Equity and liabilities 125 985 132 807 139 470

 

 

 


 

SUMMARY CONSOLIDATED CASH FLOW STATEMENT

 

(1 000 EUR) 1-6/2014 1-6/2013 2013
Cash flows from operating activities      
Profit for the period 1 297 2 742 5 566
Adjustments to profit for the period 2 471 3 100 6 271
  3 767 5 842 11 837
       
Change in working capital -3 543 -2 904 2 863
       
Interest and other financial cost paid -228 -289 -566
Interest and other financial income received 35 100 123
Income taxes paid -1 511 -1 660 -3 343
Net cash from operating activities -1 479 -1 089 10 915
       
Cash flows from investing activities      
Acquisition of tangible and intangible assets  
-440
-1 063 -1 566
Proceeds from sale of tangible and
intangible assets
 
-
 
1
1
Net cash used in investing activities -440 -1 061 -1 564
       
Cash flows from financing activities      
Repayments of non-current borrowings -2 000 -2 000 -4 000
Proceeds from share options exercised 262 657 781
Acquisition of non-controlling interest - - -30
Dividends paid to the owners
of the parent company
-3 434  
-3 444
-3 444
Net cash from financing activities -5 172 -4 788  -6 694
       
(Decrease)/increase in cash and cash equivalents -7 092 -4 760 2 657
       
Cash and cash equivalents
at the beginning of the period
21 469  
19 767
19 767
Foreign exchange effect on cash -70 -440 -954
Cash and cash equivalents
at the end of the period
14 308  
14 566
21 469
       

 

 

 


 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

  Equity attributable to owners of the parent
company
   
(1 000 EUR) Share capital Reserve of invested non-restricted equity Other reserves Treasury shares  Trans
lat. diff.
Ret. earnings Non-controlling interest Total equity
Equity at 1 January 2014 5 105 47 448 763 -2 165 -2 128 18 184 - 67 207
Profit            1 297 - 1 297
Translation differences         -809     -809
Total compre-hensive income          -809 1 297 - 488
Share-based payments     36         36
Exercise of share options   262           262
Dividends paid           -3 434   -3 434
Equity at 30 June 2014 5 105 47 710 800 -2 165 -2 937 16 046 - 64 559

 

 

 

  Equity attributable to owners of the parent
company
   
(1 000 EUR) Share capital Reserve of invested non-restricted equity Other reserves Treasury shares  Trans
lat. diff.
Ret. earnings Non-controlling interest Total equity
Equity at 1 January 2013 5 105 46 643 693 -2 202 946 15 781 311 67 277
Profit           2 660 82 2 742
Translation differences         -1 817     -1 817
Total compre-hensive income         -1 817 2 660 82 926
Share-based payments     25         25
Exercise of share options   657           657
Dividends paid           -3 444   -3 444
Equity at 30 June 2013 5 105 47 300 718 -2 202 -871 14 996 394 65 439

 

 

 

 

 

 

 

 

 

 

2. Notes       

2.1. Basis of preparation

This interim report has been prepared in accordance with the IFRS recognition and measurement principles and in accordance with IAS 34, Interim Financial reporting. The interim report should be read in conjunction with the annual financial statements for the year ended 31 December 2013. In material respects, the same accounting policies have been applied as in the 2013 annual consolidated financial statements.  The amendments to and interpretations of IFRS standards that entered into force on 1 January 2014 had no material impact on this interim report.

2.2. Segment information

Affecto's reporting segments are based on geographical locations and are Finland, Norway, Sweden, Denmark and Baltic.

Segment net sales and result

 

(1 000 EUR) 4-6/14 4-6/13 1-6/14 1-6/13 2013 last 12m
             
Total net sales            
Finland 13 810 14 253 26 393 27 034 53 175 52 534
Norway 7 005 7 609 13 279 16 074 29 554 26 759
Sweden 5 452 6 206 11 278 12 273 23 152 22 157
Denmark 3 127 4 263 6 585 8 097 15 363 13 852
Baltic 4 696 3 912 8 831 8 166 16 018 16 682
Other -1 072 -1 433 -2 162 -2 441 -4 366 -4 086
Group total 33 018 34 810 64 205 69 203 132 896 127 898
             
Operational segment result            
Finland 1 359 1 747 2 220 3 164 6 863 5 919
Norway 714 766 421 1 710 2 718 1 429
Sweden 311 -187 33 -330 -229 134
Denmark 260 471 554 781 1 884 1 656
Baltic 597 74 757 388 193 562
Other -217 -384 -835 -664 -1 177 -1 348
Total operational segment result 3 024 2 488 3 149 5 048 10 251 8 352
             
IFRS3 amortisation -549 -517 -1 098 -1 040 -1 989 -2 047
Operating profit 2 475 1 971 2 051 4 008 8 262 6 305
Financial income and expenses -183 -150 -363 -123 -289 -529
Profit before income tax 2 292 1 821  1 688 3 885 7 973 5 776

 

 

Net sales by business lines

 

(1 000 EUR) 4-6/14 4-6/13 1-6/14 1-6/13 2013 last 12m
             
Information Management Solutions 30 526 32 575 59 581 64 740 123 608 118 449
Karttakeskus GIS business 3 264 2 964 6 229 5 732 12 239 12 736
Other -773 -728 -1 605 -1 269 -2 950 -3 287
Group total 33 018 34 810 64 205 69 203 132 896 127 898


 

 

2.3. Changes in intangible and tangible assets          

 

(1 000 EUR) 1-6/2014 1-6/2013 1-12/2013
       
Carrying amount at the beginning of period 76 185 80 460 80 460
Additions 440 1 063 1 566
Disposals - -1 -1
Depreciation and amortization for the period -1 719 -1 648 - 3 219
Exchange rate differences -796 -1 558 -2 621
Carrying amount at the end of period 74 110 78 285 76 185

 

 

2.4. Share capital, reserve of invested non-restricted equity and treasury shares

 

(1 000 EUR) Number of shares outstanding Share capital Reserve of invested non-restricted equity  
 
 
Treasury shares
         
1.1.2013 20 641 641 5 105 46 643 -2 202
Exercise of share options 349 667 - 657 -
30.6.2013 20 991 308 5 105 47 300 -2 202
         
1.1.2014 21 431 052 5 105 47 448 -2 165
Exercise of share options 132 141 - 260 -
Payment for share options - - 2 -
30.6.2014 21 563 193 5 105 47 710 -2 165

 

 

At the end of reporting period Affecto Plc owned 64 552 treasury shares. In addition to that Affecto Management Oy, a fully owned subsidiary, owned 823 000 shares in Affecto Plc. In total these 887 552 shares correspond to 4.0% of the total amount of the shares. The amount of registered shares was 22 450 745 shares.

2.5. Interest-bearing liabilities

 

(1 000 EUR) 30.6.2014 31.12.2013
Interest-bearing non-current liabilities    
Loans from financial institutions,
non-current portion
20 436 22 420
Loans from financial institutions,
current portion
4 000 4 000
  24 436 26 420

 

 

Affecto's loan facility agreement includes financial covenants, breach of which might lead to an increase in cost of debt or cancellation of the facility agreement. The covenants are based on total net debt to earnings before interest, taxes, depreciation and amortization and total net debt to total equity. The covenants will be measured quarterly, and these terms and conditions of covenants were met at the end of the reporting period.

2.6. Contingencies and commitments

The future aggregate minimum lease payments under non-cancelable operating leases:

 

(1 000 EUR) 30.6.2014 31.12.2013
Not later than one (1) year 3 339 3 675
Later than one (1) year,
but not later than five (5) years
4 109 3 719
Later than five (5) years - -
Total 7 448 7 394

 

 

Guarantees given:

 

(1 000 EUR) 30.6.2014 31.12.2013
Liabilities secured by a mortgage    
Financial loans 24 500 26 500

 

 

The above-mentioned liabilities are secured by bearer bonds with a nominal value of 52.5 million euro. The bonds are held by Nordea Pankki Suomi Oyj and secured by a mortgage on company assets of the group companies. In addition, the shares in Affecto Finland Oy and Affecto Norway AS have been pledged to secure the financial liabilities above.

Other securities given on own behalf:

 

(1 000 EUR) 30.6.2014 31.12.2013
Pledges 36 36
Other guarantees 3 000 2 836

 

 

Other guarantees are mostly securities issued for customer projects. These guarantees include both bank guarantees secured by parent company of the group and guarantees issued by the parent company and subsidiaries.

2.7. Related party transactions

Key management compensation and remunerations to the board of directors:

 

(1 000 EUR) 1-6/2014 1-6/2013 1-12/2013
       
Salaries and other short-term employee benefits  
1 203
 
1 061
 
2 017
Post-employment benefits 138 152 288
Termination benefits 80 6 85
Share-based payments 1 2 6
Total 1 422 1 221 2 395

 

 

Loans to related party:

 

 

(1 000 EUR) 30.6.2014 30.6.2013 31.12.2013
Loans to key management of the group - 1 600 -

 

 

 

Purchases from related party:

 

 

(1 000 EUR) 1-6/2014 1-6/2013 1-12/2013
Purchases from the entity that are controlled by key management personnel of the group -  
5
5


 

 

 

3. Key figures

 

  4-6/14 4-6/13 1-6/14 1-6/13 2013 last 12m
             
Net sales, 1 000 eur 33 018 34 810 64 205 69 203 132 896 127 898
EBITDA, 1 000 eur  3 333 2 802 3 771 5 657 11 481 9 595
Operational segment result,
1 000 eur
3 024 2 488 3 149 5 048 10 251 8 352
Operating result, 1 000 eur 2 475 1 971 2 051 4 008 8 262 6 305
Result before taxes, 1 000 eur 2 292 1 821 1 688 3 885 7 973 5 776
Profit attributable to the owners
of the parent company, 1 000 eur
1 847 1 113 1 297 2 660 5 493 4 129
             
EBITDA, % 10.1 % 8.1 % 5.9 % 8.2 % 8.6 % 7.5 %
Operational segment result, % 9.2 % 7.1 % 4.9 % 7.3 % 7.7 % 6.5 %
Operating result, % 7.5 % 5.7 % 3.2 % 5.8 % 6.2 % 4.9 %
Result before taxes, % 6.9 % 5.2 % 2.6 % 5.6 % 6.0 % 4.5 %
Net income for equity holders
of the parent company, %
5.6 % 3.2 % 2.0 % 3.8 % 4.1 % 3.2 %
             
Equity ratio, % 56.0 % 53.5 % 56.0 % 53.5 % 53.0 %  
Net gearing, % 15.7 % 21.1 % 15.7 % 21.1 % 7.4 %  
Interest-bearing net debt,
1 000 eur
10 128 13 837 10 128 13 837 4 950  
             
Gross investment in non-current
assets (excl. acquisitions),
1 000 eur
305 568 440 1 063 1 566  
Gross investments, % of net sales 0.9 % 1.6 % 0.7 % 1.5 % 1.2 %  
 
Order backlog, 1 000 eur
48 113 48 824 48 113 48 824 48 682  
Average number of employees 1 040 1 081 1 059 1 082 1 081  
             
Earnings per share, eur 0.09 0.05 0.06 0.13 0.26 0.19
Earnings per share (diluted),
eur
0.09 0.05 0.06 0.13 0.26 0.19
Equity per share, eur 2.99 3.10 2.99 3.10 3.14  
             
Average number of shares,
1 000 shares
21 479 20 768 21 458 20 706 20 906 21 279
Number of shares at the end of
period, 1 000 shares
21 563 20 991 21 563 20 991 21 431 21 563
             

 

 

 


 

Calculation of key figures

 

     
EBITDA = Earnings before interest, taxes,
depreciation, amortization and impairment losses
                       
Operational segment result = Operating profit before amortizations on
fair value adjustments due to business
combinations (IFRS3) and goodwill
impairments
     
Equity ratio, % = Total equity
________________________________
*100
    Total assets – advance payments  
       
Gearing, % = Interest-bearing liabilities – cash
and cash equivalents
__________________________________
*100
    Total equity
     
Interest-bearing net debt = Interest-bearing liabilities – cash and
cash equivalents
     
Earnings per share (EPS) = Profit attributable to owners of the parent company
______________________________________
    Weighted average number of ordinary shares in issue during the period
     
Equity per share = Total equity
______________________________________
    Adjusted number of shares at the end of
the period
     
     
Market capitalization = Number of shares at the end of period
(excluding company’s own shares held by
the company) x share price at closing date
     

 

 

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         Additional information:
         SVP, M&A, IR, Hannu Nyman, +358 205 777 761
         CFO Satu Kankare, +358 205 777 202