M-Brain Oy, Financial Statement 31.3.2015 02:00 pm
M-Brain Oy Financial Statements from Year 2014
January - December 2014:
* Revenue EUR 23,518 (January 1 - December 31, 2013: 19,785) thousand -
increase 18.9% from the corresponding period last year.
* EBITDA was EUR 922.5 (January 1 - December 31, 2013: 2,669.3) thousand -
decrease 65.4% from the corresponding period last year.
* Balance sheet total as of 31 December, 2014 EUR 35,329.8 (as of 31 December
2013: 16,508.7) thousand.
July - December 2014:
* Revenue EUR 14,015.9 (July 1 - December 31, 2013: 9,856.1) thousand -
increase 42.2% from the corresponding period last year.
* EBITDA was EUR 27.1 (July 1 - 31 December, 2013: 1,391.5) thousand -
decrease 98.1% from the corresponding period last year.
EXECUTIVE CHAIRMAN KIM NYBERG'S COMMENTS
M-Brain is a global information, technology and consulting services company. We
help our clients to navigate the turbulent and ever expanding business
environment. We offer crucial external business information, and advise in its
efficient management and utilisation. We turn information into actionable
insights for daily decision-making and strategic planning. We call it Informed
Leadership.
M-Brain's industry is undergoing a drastic renewal phase driven by the rapid
increase in especially social media related information and the overall
globalization. As the globalization of companies continues its growth, the
provider of information solutions has to be able to respond to the challenges
brought about by these two developments. In future, success oriented companies
operating in M-Brain's field of business will have to be able to act fast and
provide their clients with such relevant information for their business
operations that can be converted into knowledge and thereby growth.
The revenue of the group increased from last year due to the acquisition of GIA.
However, the increase of the revenue was smaller than the company had targeted.
The pressures on M-Brain's revenue have mainly been due to the challenging
economic situation in Finland and the impact of the media revolution on the
traditional media monitoring services. Approximately 60% of the decline in
revenue in Finland is due to the gradual decrease in the traditional clipping
business. Approximately 40 % percent of the decline is due to a decrease in the
average purchases within certain client groups in the transfer from the purchase
of services to the use of tools.
The 15 million bond issued by the company was listed to the First North Bond
Market Finland market place. As a part of the company's financial arrangements
the company successfully executed a share issue in which 2,622 new shares were
subscribed. The company stated that it would use the funds from the bond for
new acquisitions. With the received funds the company acquired the whole share
capital of Global Intelligence Alliance Group Oy (GIA) by a share purchase in
September 4, 2014. The latter part of the year was marked by the tight actions
aiming to merge the companies and the reorganization of the entity.
REVENUE AND RESULT DEVELOPMENT
The revenue of M-Brain Group in 2014 was EUR 23,518 thousand. The operating
profit of the company was EUR -26 thousand.
The integration of made acquisitions and the improvement of operational
efficiency were continued during the financial period. These operations helped
to achieve significant cost savings by removing overlapping actions and
improving the production. The improving impact of these operations will though
not appear until the year 2015 while their non-recurring cost effects decreased
the operating profit of 2014 compared to the previous year. The profitability in
2014 was negatively impacted by decreased revenue development in the Finnish
markets. The main reason for the decrease in revenue was the decline in the
traditional business caused by the media revolution in Finland as well as the
decrease in the average purchase price paid by the client due to the general
economic situation in the domestic market. The sales of the new technology
products that the company had launched did not fully cover the lost revenue
caused by the decline in the traditional clipping business in the review period.
The total revenue was increased due to the acquisition of GIA Group. GIA Group
figures are consolidated into M-Brain Group starting from September.
M-Brain's EBITDA was EUR 922.5 thousand (January 1 - December
31, 2013: 2,669.3) i.e. 3.9% of the net sales (13.5%). The decline in EBITDA is
mainly due to the challenging situation on the home market, the decrease in the
demand of the print media based business operations as well as non-recurring
items in connection to the acquisition, efficiency enhancement measures and
obtaining financing. The depreciations for the financial period were EUR 948.8
thousand and operating profit EUR -26.3 thousand (January 1 - December
31, 2013: depreciations 732.2 and operating profit 1,937.1).
FINANCING AND INVESTMENTS
On June 25, 2014, M-Brain listed a bond on First North Bond Market Finland
market place. The 15 million unsecured bond is subject to a fixed interest rate
of 8 percent and its due date is June 17, 2017. The company stated that it would
use the funds for new acquisitions.
M-Brain has, with a purchase agreement signed 4 September 2014, acquired the
whole share capital of Global Intelligence Alliance Group Oy (GIA). The sellers
are funds managed by CapMan, as well as GIA's management and other individual
shareholders.
M-Brain's investments, EUR 1,137 thousand, are mainly related to the internal
product development. The intangible assets resulting from the internal
development activities will be recognized in the balance sheet once the expenses
of the development phase can be calculated reliably, once the completion of the
product can be implemented technically, once the Group can use or sell the
product, once the Group can prove how the product will generate likely future
financial benefit, and once the Group has both the intention and the resources
to complete the development work and to sell the product. After initial
recognition, capitalized development costs are measured at cost less accumulated
depreciation/amortization and impairment losses. Depreciation/amortization is
recognized from the date the asset is ready for use.
PERSONNEL, MANAGEMENT AND ADMINISTRATION
The average number of personnel in the Group during the review period was 345
full-time employees (in year 2013 the Group had 302 employees, and in year
2012 306 employees).
Kim Nyberg (Chairman of the Board), Marjukka Nyberg, Petri Laine, Pirjo Ståhle,
Robert Ingman and Tage Lindberg were members of the Board of Directors of the
mother company during the whole financial year. In addition, Matti Rusanen has
been a member of the Board starting from June 30, 2014. Tuomo Räsänen was
Managing Director of the parent company until June 30, 2014 and since that Kimmo
Valtonen.
M-Brain Oy's auditor is Deloitte & Touche Oy, principal auditor Authorized
Public Accountant Hannu Mattila. The Group's Finnish subsidiaries have the same
auditor.
GENERAL MEETINGS
The Annual General Meeting of the Company was held on June 17, 2014. The Annual
General Meeting decided on the adoption of the financial statements and the
discharge of liability to the members of the Board of Directors and the CEO. The
Annual General Meeting decided that the result for the fiscal year January 1 -
December 31, 2013 be recorded in the profit and loss account and that no
dividends be distributed. The Annual General Meeting decided that no change be
made to the fees of the members of the Board of Directors. The fee of the Board
members is EUR 1,200 per month.
DIVIDEND PROPOSAL BY THE BOARD OF DIRECTORS
Profit for the period of the mother company of the Group, M-Brain Oy was
1,406,992.42 euros and distributable funds 13,371,562.28 euros. The Board of
Directors proposes to the Annual General Meeting that the distributable funds
are uses as follows: dividends are not distributed and the profit for the period
is booked to the retained earnings.
SHARES
On December 31, 2013, the company had 20,971 registered shares. On June
3, 2014, the shareholders of M-Brain Oy unanimously decided to authorize the
Board of Directors to make a decision on a directed share issue of a maximum of
2,622 new shares. The new shares were registered by the end of the review
period. On December 31, 2014, the Company had a total of nine shareholders. On
July 1, 2014, the Company acquired 100 of its own shares.
SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
The process to merge Global Intelligence Alliance Group Oy into its sister
company M-Brain Insight Oy has been started.
Sirpa Ojala was elected as a Managing Director of M-Brain Oy on March 16, 2015.
MAJOR RISKS AND UNCERTAINTIES
Technological development in the Company's field of business is extremely fast.
In accordance with its strategy, the Company has made significant investments in
its own product development to improve its competitiveness compared to its
competitors.
The core operations of the Group are insured against accidental damages and
interruptions.
Accounts receivables is significant balance sheet item. Credit risk related to
accounts receivables is managed by consistent credit policy and efficient credit
management. Credit risk is also reduced by the large number of clients and by
the fact that the receivables are allocated to several businesses.
The Group's loan financing involves special terms agreed with the lender to
which the Company is committed.
OUTLOOK FOR THE YEAR 2015
The revenue for year 2015 is estimated to be approximately EUR 33 - 37 million
and EBITDA approximately EUR 4 - 7 million.
The Company's business involves various risks and uncertainties, and the
statements in this release, other than statements of historical facts, are
forward looking statements. These statements are based on the management's best
judgment and belief in light of the information currently available to it. As
such statements involve risks and uncertainties, the actual results may differ
materially from those we expect at the moment.
FINANCIAL INFORMATION FOR YEAR 2015
Financial statements for the period January 1, 2015 - June 30, 2015 will be
published on August 17, 2015.
FINANCIAL INFORMATION
The financial statements of M-Brain Group have been prepared in accordance with
IFRS recognition and measurement principles. More information about the
principles of the preparation of the Group financial statements can be found in
the attachment to the financial statements. The financial statements and the
figures for the financial period have been audited. Other information presented
in this report is unaudited.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
000 euros 1.7.-31.12.2014 1.7.-31.12.2013 1.1.-31.12.2014 1.1.-31.12.2013
--------------------------------------------------------------------------------
Revenue 14 015,9 9 856,1 23 518,1 19 784,6
Other
operating 28,1 35,5 76,1 80,6
income
Materials and
external -1 703,6 -868,2 -2 614,7 -1 640,5
services
Personnel -8 774,2 -5 647,3 -14 710,0 -11 715,6
expenses
Depreciation -569,1 -353,9 -948,8 -732,2
Other
operating -3 539,2 -1 984,6 -5 347,0 -3 839,7
expenses
--------------------------------------------------------------------------------
Operating -542,0 1 037,6 -26,3 1 937,1
profit
Finance 284,7 -20,4 302,1 74,7
income
Finance costs -898,6 -193,6 -1 055,3 -339,5
--------------------------------------------------------------------------------
Finance costs -613,9 -214,0 -753,2 -264,8
(net)
--------------------------------------------------------------------------------
Profit (loss)
before -1 155,9 823,6 -779,5 1 672,3
income tax
Income tax 86,7 -248,5 10,8 -458,9
expense
--------------------------------------------------------------------------------
PROFIT (LOSS)
FOR THE -1 069,2 575,1 -768,7 1 213,4
PERIOD
--------------------------------------------------------------------------------
Other
comprehensive
income, net
of income tax
Items that
may be
reclassified
subsequently
to profit or
loss:
Currency
translation 23,6 15,1 69,4 -3,3
differences
--------------------------------------------------------------------------------
Other
comprehensive
income for 23,6 15,1 69,4 -3,3
the period,
net of tax
--------------------------------------------------------------------------------
TOTAL
COMPREHENSIVE -1 045,6 590,2 -699,3 1 210,1
INCOME FOR
THE PERIOD
--------------------------------------------------------------------------------
Profit
attributable
to:
Owners of the -1 069,2 575,1 -768,7 1 213,4
company
Total
comprehensive
income
attributable
to:
Owners of the -1 045,6 590,2 -699,3 1 210,1
company
GROUP BALANCE SHEET
000 euros 31.12.2014 31.12.2013
---------------------------------------------------------------------
ASSETS
Non-current assets
Goodwill 21 976,5 9 845,3
Development costs 1 339,1 975,3
Other intangible assets 3 530,0 852,6
Tangible assets 719,9 547,6
Available-for-sale financial assets 26,9 24,5
Deferred tax asset 181,5 29,2
---------------------------------------------------------------------
Total non-current assets 27 773,9 12 274,6
Current assets
Trade and other receivables 5 948,6 2 658,5
Other shares 6,5 2,4
Cash and cash equivalents 1 601,0 1 573,1
---------------------------------------------------------------------
Total current assets 7 556,0 4 234,1
---------------------------------------------------------------------
TOTAL ASSETS 35 329,8 16 508,7
---------------------------------------------------------------------
EQUITY AND LIABILITIES
Equity attributable to owners of the company
Share capital 215,5 215,5
Share premium 247,2 247,2
Reserve for invested non-restricted equity 12 292,2 7 495,4
Retained earnings -895,4 -290,6
---------------------------------------------------------------------
Total equity 11 859,5 7 667,5
Non-current liabilities
Borrowings 15 072,1 2 145,4
Deferred tax liability 684,1 144,4
Other liabilities 189,2 127,3
---------------------------------------------------------------------
Total non-current liabilities 15 945,4 2 417,1
Current liabilities
Borrowings 211,8 1 570,7
Advance payments 1 572,2 1 741,9
Trade payables 913,5 444,2
Other current liabilities 1 128,8 907,3
Accrued liabilities 3 698,6 1 760,1
---------------------------------------------------------------------
Total current liabilities 7 524,9 6 424,1
---------------------------------------------------------------------
Total liabilities 23 470,3 8 841,2
---------------------------------------------------------------------
TOTAL EQUITY AND LIABILITIES 35 329,8 16 508,7
1.7.- 1.7.- 1.1.- 1.1.-
31.12.2014 31.12.2013 31.12.2014 31.12.2013
CASH FLOWS FROM
OPERATING ACTIVITIES
Profit (loss) for the -1 069,2 575,1 -768,7 1 213,4
period
Adjustments for:
Depreciation according 569,1 353,9 948,8 732,2
to plan (+)
Other adjustments 344,6 249,9 237,1 448,8
(income - / expenses +)
Financial income 613,9 214,0 753,2 264,8
and expenses
------------ ------------ ------------ -----------
458,4 1 392,9 1 170,4 2 659,2
Changes in working
capital:
Non-current 0,0 70,4 0,0 45,9
operative receivables
Current operative -136,4 -192,6 208,8 -65,2
receivables
Current operative 618,5 -778,5 344,1 -413,4
payables
------------ ------------ ------------ -----------
482,1 -900,7 552,9 -432,7
Interests paid (- -934,8 -192,8 -1 087,6 -334,8
)
Interests received (+) 284,7 -24,0 289,8 52,9
Income taxes paid -391,4 -92,0 -452,2 -263,1
------------ ------------ ------------ -----------
-1 041,5 -308,8 -1 250,0 -545,1
NET CASH GENERATED -101,0 183,5 473,3 1 681,4
BY OPERATING ACTIVITIES
CASH FLOWS FROM
INVESTING ACTIVITIES
Investments on tangible -789,3 -228,9 -1 137,0 -531,2
and intangible assets
Net cash outflow on
acquisition of subsidiaries -15 691,0 -4,5 -15 691,0 -4,5
(-)
------------ ------------ ------------ -----------
NET CASH GENERATED -16 480,3 -233,4 -16 828,0 -535,7
BY INVESTING ACTIVITIES
CASH FLOWS FROM
FINANCING ACTIVITIES
Proceeds from share issue 0,0 0,0 4 913,7 0,0
(+)
Purchase of own shares (- -116,9 0,0 -116,9 0,0
)
Repayments of 0,0 0,0 -1 346,4 0,0
short-term debt (-)
Repayments of 0,0 -1 029,5 -1 805,5 -1 628,8
long-term debt (-)
Withdrawals of 0,0 0,0 14 737,5 0,0
long-term debt (+)
NET CASH USED IN CASH -116,9 -1 029,5 16 382,4 -1 628,8
AND CASH EQUIVALENTS
------------ ------------ ------------ -----------
NET INCREASE IN CASH -16 698,2 -1 079,5 27,8 -483,1
AND CASH EQUIVALENTS
Cash and cash equivalents
at the beginning of the 18 299,1 2 652,6 1 573,1 2 056,2
period
Cash and cash equivalents 1 601,0 1 573,1 1 601,0 1 573,1
at the end of the period
STATEMENT OF
CHANGES IN EQUITY
Reserve for
Note Share Share invested non- Retained Total
capital premium restricted earnings
equity
Balance at July 215,5 247,2 7 495,4 -888,7 7 069,4
1, 2013
Comprehensive
income
Profit for the 575,1 575,1
period
Other
comprehensive
income, net of
income tax
Currency
translation 15,1 15,1
differences
-------------------------------------------------------------------------------
Total
comprehensive 590,2 590,2
income for the
year
Share-based 7,9 7,9
payments
-------------------------------------------------------------------------------
Total
transactions
with owners, 7,9 7,9
recognised
directly in
equity
-------------------------------------------------------------------------------
Balance at
December 215,5 247,2 7 495,4 -290,6 7 667,5
31, 2013
-------------------------------------------------------------------------------
Balance at July 215,5 247,2 12 409,1 125,1 12 996,9
1, 2014
Comprehensive
income
Profit for the -1 069,2 -1 069,2
period
Other
comprehensive
income, net of
income tax
Currency
translation 23,6 23,6
differences
-------------------------------------------------------------------------------
Total
comprehensive -1 045,6 -1 045,6
income for the
year
Share-based 25,0 25,0
payments
Share issue 0,0 0,0
Acquisition by
the company of -118,7 -118,7
its own shares
Financial costs
related to the 1,8 1,8
share issue
-------------------------------------------------------------------------------
Total
transactions
with owners, -116,9 25,0 -91,9
recognised
directly in
equity
-------------------------------------------------------------------------------
Balance at
December 215,5 247,2 12 292,2 -895,4 11 859,5
31, 2014
-------------------------------------------------------------------------------
STATEMENT OF CHANGES
IN EQUITY
Reserve for
Share Share invested non- Retained Total
capital premium restricted earnings
equity
Balance at
January 1, 2013 215,5 247,2 7 495,4 -1 534,6 6 423,5
(IFRS)
Comprehensive
income
Profit for the 1 213,4 1 213,4
period
Other
comprehensive
income, net of
income tax
Currency
translation -3,3 -3,3
differences
-------------------------------------------------------------------------------
Total
comprehensive 1 210,1 1 210,1
income for the
year
Share-based 33,9 33,9
payments
-------------------------------------------------------------------------------
Total
transactions
with owners, 33,9 33,9
recognised
directly in
equity
-------------------------------------------------------------------------------
Balance at
December 215,5 247,2 7 495,4 -290,6 7 667,5
31, 2013
-------------------------------------------------------------------------------
Balance at
January 1, 2014 215,5 247,2 7 495,4 -290,6 7 667,5
(IFRS)
Comprehensive
income
Profit for the -768,7 -768,7
period
Other
comprehensive
income, net of
income tax
Currency
translation 69,4 69,4
differences
-------------------------------------------------------------------------------
Total
comprehensive -699,3 -699,3
income for the
year
Share-based 94,5 94,5
payments
Share issue 5 001,2 5 001,2
Acquisition by
the company of -118,7 -118,7
its own shares
Financial costs
related to the -85,7 -85,7
share issue
-------------------------------------------------------------------------------
Total
transactions
with owners, 4 796,8 94,5 4 891,3
recognised
directly in
equity
-------------------------------------------------------------------------------
Balance at
December 215,5 247,2 12 292,2 -895,4 11 859,5
31, 2014
-------------------------------------------------------------------------------
FINANCIAL STATEMENT AND AUDITOR'S REPORT
The complete financial statement of the Group and the mother company are
attached to this announcement.
Helsinki 31 March 2015
M-BRAIN OY
Further Information
Kim Nyberg, Executive Chairman - Email: kim.nyberg@m-brain.com, Telephone
number: +358-400-430538
Sirpa Ojala, CEO - Email: sirpa.ojala@m-brain.com, Telephone number:
+358-40-5663466
Janne Kärkkäinen, CFO - Email: janne.karkkainen@m-brain.com, Telephone number:
+358-40-5294603
Certified Adviser Evli Bank Plc / Petteri Nurminen: Telephone number
+358-40-5095665
[HUG#1907792]
