Helsinki, 2012-04-26 11:30 CEST (GLOBE NEWSWIRE) -- AFFECTO PLC -- INTERIM REPORT -- 26 APRIL 2012 at 12.30
Affecto Plc's Interim Report 1-3/2012
Group key figures
| MEUR | 1-3/12 | 1-3/11 | 2011 |
| Net sales | 33.5 | 30.1 | 127.3 |
| Operational segment result | 2.5 | 2.1 | 10.2 |
| % of net sales | 7.6 | 7.1 | 8.0 |
| Operating profit | 2.0 | 1.6 | 8.2 |
| % of net sales | 6.1 | 5.4 | 6.4 |
| Profit before taxes | 1.9 | 1.5 | 7.1 |
| Profit for the period | 1.5 | 1.2 | 5.3 |
| Equity ratio, % | 49.7 | 45.5 | 46.1 |
| Net gearing, % | 30.8 | 37.1 | 27.1 |
| Earnings per share, eur | 0.07 | 0.06 | 0.26 |
| Earnings per share (diluted), eur | 0.07 | 0.06 | 0.25 |
| Equity per share, eur | 3.00 | 2.69 | 2.91 |
CEO Pekka Eloholma comments:
Affecto's net sales grew by 11% in the first quarter and reached 33.5 MEUR (30.1 MEUR). Highest growth was achieved in Sweden and Finland. Also Baltic and Denmark grew somewhat. Net sales decreased in Norway mainly due to suboptimal resource usage caused by starting new projects.
Operating profit grew to 2.0 MEUR (1.6 MEUR) being 6% of the net sales. Best results were achieved in Finland, but also Norway, Baltic and Denmark made a reasonable result. The business in Sweden was still somewhat loss-making, but the result has improved from last year.
Affecto's order backlog is 51.3 MEUR, slightly above the order backlog last year (51.2 MEUR). The market has been somewhat soft in Denmark, but elsewhere the demand for our solutions has been good.
In 2012 the main focus continues to be on profitability improvement. Profitability (EBIT-%) is estimated to improve and net sales are estimated to grow in 2012.
Additional information:
CEO Pekka Eloholma, +358 205 777 737
CFO Satu Kankare, +358 205 777 202
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
This release is unaudited. The amounts in this report have been rounded from exact numbers.
INTERIM REPORT 1-3/2012
Affecto is the forerunner in the field of Enterprise Information Management in the Northern Europe. Our solutions for information management and business analytics help organisations to improve productivity and competitiveness with superior use of information in decision making and execution. We also deliver operational solutions for improving and simplifying processes at customer organizations and offer geographic information services.
Affecto’s head office is in Finland. The company has subsidiaries in Finland, Sweden, Norway, Denmark, Estonia, Lithuania, Latvia, Poland and South Africa.
NET SALES
Affecto's net sales in 1-3/2012 were 33.5 MEUR (1-3/2011: 30.1 MEUR). Net sales in Finland were 13.5 MEUR (11.5 MEUR), in Norway 6.6 MEUR (7.1 MEUR), in Sweden 6.6 MEUR (4.9 MEUR), in Denmark 3.7 MEUR (3.7 MEUR) and 3.8 MEUR (3.5 MEUR) in Baltic.
Net sales grew by 11% in the first quarter mainly in Sweden (35%) and Finland (17%). Baltic grew by 6% and Denmark by 1%. Denmark failed to reach its sales targets and the order backlog decreased somewhat. Market situation is rather good in Norway, but net sales decreased by 7% mostly due to non-optimal resource usage caused by starting new projects. The increased economic uncertainty in late 2011 may have slightly slowed customers' investment decisions, which has also contributed to the development especially in Denmark and Baltic.
Net sales by reportable segments
| Net sales, MEUR | 1-3/12 | 1-3/11 | 2011 |
| Finland | 13.5 | 11.5 | 50.3 |
| Norway | 6.6 | 7.1 | 27.8 |
| Sweden | 6.6 | 4.9 | 21.5 |
| Denmark | 3.7 | 3.7 | 14.1 |
| Baltic | 3.8 | 3.5 | 16.2 |
| Other | -0.6 | -0.6 | -2.6 |
| Group total | 33.5 | 30.1 | 127.3 |
Net sales of Information Management Solutions business in 1-3/2012 were 31.0 MEUR (27.5 MEUR) and net sales of Geographic Information Services were 2.9 MEUR (2.8 MEUR).
The order backlog was 51.3 MEUR, slightly above the order backlog last year (51.2 MEUR). Affecto has a well-diversified customer base. The ten largest customers generated approx. 20% of the group's net sales in 2011 and the largest customer accounted for 3% of net sales.
PROFIT
Affecto's operating profit in 1-3/2012 was 2.0 MEUR (1.6 MEUR) and the operational segment result was 2.5 MEUR (2.1 MEUR). Operational segment result was in Finland 1.8 MEUR (1.2 MEUR), in Norway 0.7 MEUR (0.8 MEUR), in Sweden -0.2 MEUR (-0.5 MEUR), in Denmark 0.3 MEUR (0.4 MEUR) and in Baltic 0.4 MEUR (0.6 MEUR).
Compared to last year, profit and profitability increased clearly in Finland, but decreased in Norway, Denmark and Baltic. Sweden improved from the previous year, but was still loss-making.
Operational segment result by reportable segments
|
Operational segment result, MEUR |
1-3/12 | 1-3/11 | 2011 |
| Finland | 1.8 | 1.2 | 6.8 |
| Norway | 0.7 | 0.8 | 3.1 |
| Sweden | -0.2 | -0.5 | -2.1 |
| Denmark | 0.3 | 0.4 | 1.6 |
| Baltic | 0.4 | 0.6 | 2.1 |
| Other | -0.4 | -0.4 | -1.3 |
| Operational segment result | 2.5 | 2.1 | 10.2 |
| IFRS3 Amortization | -0.5 | -0.5 | -2.0 |
| Operating profit | 2.0 | 1.6 | 8.2 |
According to the IFRS3 requirements, operating profit includes 0.5 MEUR (0.5 MEUR) of amortization on intangible assets related to acquisitions. The IFRS3 amortization is estimated to be approx. 2.0 MEUR per year until 2014, as the other intangible assets impacting in the IFRS3 amortization totaled 5.3 MEUR at the end of the reporting period.
R&D costs totaled 0.0 MEUR (0.3 MEUR), i.e. 0.1% of net sales (1.0%). These costs have been recognized as an expense in the income statement.
The fluctuation in financial costs is explained to a large extent by changes in the fair value of the interest swap taken, which changes have no effect on actual cash flow. The interest rate changes have caused 0.1 MEUR income in 1-3/2012 (0.2 MEUR).
Taxes corresponding to the profit of the period have been entered as tax expense. Net profit for the period was 1.5 MEUR, while it was 1.2 MEUR last year.
FINANCE AND INVESTMENTS
At the end of the reporting period, Affecto's balance sheet totaled 138.0 MEUR (12/2011: 145.1 MEUR). Equity ratio was 49.7% (12/2011: 46.1%) and net gearing was 30.8% (12/2011: 27.1%).
The financial loans were 34.5 MEUR (12/2011: 34.5 MEUR) at the end of reporting period. The company's cash and liquid assets were 15.1 MEUR (12/2011: 18.0 MEUR). The interest-bearing net debt was 19.3 MEUR (12/2011: 16.4 MEUR).
Cash flow from operating activities for the reported period was -2.6 MEUR (2.4 MEUR) and cash flow from investing activities was -0.4 MEUR (-0.5 MEUR). Investments in non-current assets were 0.4 MEUR (0.5 MEUR).
EMPLOYEES
The number of employees was 1079 persons at the end of the reporting period (984). 409 employees were based in Finland, 132 in Norway, 150 in Sweden, 75 in Denmark and 313 in the Baltic countries. The average number of employees during the period was 1076 (974).
REVIEW OF MARKET DEVELOPMENTS
The demand for Enterprise Information Management (EIM) solutions, including Business Intelligence (BI) and Enterprise Content Management (ECM), is estimated to continue growing more rapidly than the general IT services. The average annual global growth of BI and analytics software license markets is estimated to be approx. 8% in the next few years. The Nordic EIM services markets are estimated to grow annually by 6-8%. The scope of EIM solutions continues to evolve, and the new offerings like Master Data Management (MDM), Data Quality and Collaborative Decision Making will increase their role in the solution offering.
The grown uncertainty about the general economic developments during the last months of 2011 hasn't so far materially impacted Affecto's business. During 2012 the decision-making pace has been slightly slower than normal in most countries, but in general there has been no significant negative change in the market situation. EIM solutions are seen as tools for improving operational efficiency, so investments to them are expected to continue.
BUSINESS REVIEW BY AREAS
The group's business is managed through five country units. Finland, Norway, Sweden, Denmark and Baltic are also the reportable segments.
In 1-3/2012 the net sales in Finland were 13.5 MEUR (11.5 MEUR). Operational segment result was 1.8 MEUR (1.2 MEUR). The business developed steadily and profitability was good. Net sales grew by 17%, mostly in the EIM business area. Customers' activity has remained good, especially regarding EIM solutions. An agreement regarding the maintenance and development of Yleisradio's (The Finnish Broadcasting Company) web services systems was signed in January.
Net sales of Karttakeskus GIS business, reported as part of Finland, grew in 1-3/2012 to 2.9 MEUR (2.8 MEUR) and the unit's profitability was good.
In 1-3/2012 the net sales in Norway were 6.6 MEUR (7.1 MEUR) and operational segment result was 0.7 MEUR (0.8 MEUR). Market situation is rather good in Norway, but net sales decreased by 7% mostly due to non-optimal resource usage caused by starting new projects.
In 1-3/2012 the net sales in Sweden were 6.6 MEUR (4.9 MEUR) and operational segment result -0.2 MEUR (-0.5 MEUR). Sweden improved its result from the previous year, but was still loss-making. Net sales grew by 35%, mainly due to the increased delivery capacity and order backlog. Agreement on cooperation in developing Toyota Material Handling Europe AB’s (TMHE) Corporate Performance Management (CPM) solution was signed in February.
In 1-3/2012 the net sales in Denmark were 3.7 MEUR (3.7 MEUR) and operational segment result was 0.3 MEUR (0.4 MEUR). Denmark failed to reach its sales targets and the order backlog decreased somewhat. Resource utilization rate was below normal.
In 1-3/2012 the net sales in Baltic (Lithuania, Latvia, Estonia, Poland, South Africa) were 3.8 MEUR (3.5 MEUR). Operational segment result was 0.4 MEUR (0.6 MEUR). Net sales grew by 6%, but profitability weakened due to slower than planned finalisation of certain ongoing projects. The national economies in the Baltic countries have already returned to growth path, but customers' cautiousness increased again in the last months of the year, slowing down the decision-making. The local IT markets have not yet fully recovered from the effects of the financial crisis: price competition continues to be tight, and the EU continues to have great importance in financing both public and also private investments. A new project agreement with Statistics Lithuania was signed in February. New projects were received during the period, e.g. from Interpolska and Estonian e-health organisation.
ANNUAL GENERAL MEETING AND GOVERNANCE
The Annual General Meeting of Affecto Plc, which was held after the review period on 19 April 2012, adopted the financial statements for 1.1.-31.12.2011 and discharged the members of the Board of Directors and the CEO from liability. Approximately 36 percent of Affecto's shares and votes were represented at the Meeting. The Annual General Meeting decided on a dividend distribution of EUR 0.11 per share for the year 2011. The dividend will be paid in May.
Aaro Cantell, Heikki Lehmusto, Jukka Ruuska, Haakon Skaarer, Tuija Soanjärvi and Lars Wahlström were re-elected as members of the Board of Directors. The organization meeting of the Board of Directors was held immediately after the Annual General Meeting and Aaro Cantell was re-elected Chairman of the Board 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
In 1-3/2012 the Board has not used the authorizations given by the previous Annual General Meeting. Those authorizations expired on 19 April 2012.
The complete contents of the new authorizations given by the Annual General Meeting held on 19 April 2012 have been published in the stock exchange release regarding the Meetings' decisions.
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
The company has only one share series, and all shares have similar rights. As at 31 March 2012 Affecto Plc's share capital consisted of 21 516 468 shares including the shares owned by Affecto Management Oy. The company does not own treasury shares. Affecto Management Oy owns 823 000 shares.
During 1-3/2012, the highest share price was 2.86 euro, the lowest price 2.39 euro, the average price 2.67 euro and the closing price 2.76 euro. The trading volume was 2.2 million shares, corresponding to 41% (annualized) of the number of shares at the end of the period. The market value of shares was 59.4 MEUR at the end of the period including the shares owned by Affecto Management Oy.
SHAREHOLDERS
The company had a total of 2103 owners on 31 March 2012 and the foreign ownership was 15%. 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. 14.8% (14.6% shares and 0.2% options).
According to the flagging announcement made on 16 January 2012, the ownership of Evli Group has exceeded 5%. The ownership will later decrease below 5% when a forward contract made by Evli matures.
ASSESSMENT OF RISKS AND UNCERTAINTIES
The changes in the general economic conditions and the operating environments of its customers have direct impact in Affecto's markets. Slower investment decision making, postponing or cancellation of customers' IT investments may have negative impact on Affecto.
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 Affecto has invested in reforming the organization and processes, which has weakened profitability in the short term.
Affecto's order backlog has traditionally been only for a few months, which decreases the reliability of longer-term forecasts. 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. 11 MEUR in 2011.
Approximately a half of Affecto's business is in Sweden, Norway and Denmark, thus the development of the currencies of these countries (SEK, NOK and DKK) 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.
Affecto's bank loan has covenants, the breach of which may lead to higher financing costs or even the termination of the loan. The covenants are based on total net debt to earnings before interest, taxes, depreciation and amortization and total net debt to total equity.
Affecto's success depends also on good customer relationships. Affecto has a well-diversified customer base. 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.
Affecto's continued success is very much dependent on its management team and personnel. The loss of the services of any member of its senior management or other key employee could have a negative impact on Affecto's business and the ability of the company to implement its strategy. In addition, Affecto's success depends on its ability to hire, develop, train, motivate and retain skilled professionals on its staff.
EVENTS AFTER THE REPORTING PERIOD
The Annual General Meeting was held on 19 April 2012. Matters related to the Meeting have been explained earlier in this Interim Report.
A 2.3 MEUR project agreement was signed with Santander Consumer Bank in April.
According to the flagging announcement made on 25 April 2012, the ownership of funds managed by Danske Invest Fund Management Ltd. has exceeded 5%.
FUTURE OUTLOOK
In 2012 the main focus continues to be on profitability improvement. Profitability (EBIT-%) is estimated to improve and net sales are estimated to grow in 2012.
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
It is possible to 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 14.00 at Restaurant Savoy, Eteläesplanadi 14, Helsinki.
www.affecto.com
-----
Financial information:
1. Consolidated income statement, consolidated comprehensive income statement, balance sheet, cash flow statement and statement of changes in equity
2. Notes
3. Key figures
1. Consolidated income statement, consolidated comprehensive income statement, balance sheet, cash flow statement and statement of changes in equity
CONSOLIDATED INCOME STATEMENT
| (1 000 EUR) | 1-3/2012 | 1-3/2011 | 2011 |
| Net sales | 33 540 | 30 121 | 127 270 |
| Other operating income | 6 | 37 | 97 |
|
Changes in inventories of finished goods and work in progress |
43 | 29 | -72 |
| Materials and services | -6 060 | -5 563 | -26 777 |
| Personnel expenses | -20 244 | -17 812 | -72 003 |
| Other operating expenses | -4 418 | -4 336 | -16 907 |
| Other depreciation and amortisation | -323 | -347 | -1 405 |
| IFRS3 amortisation | -511 | -514 | -2 020 |
| Operating profit | 2 031 | 1 615 | 8 182 |
| Net financial expenses | -152 | -143 | -1 096 |
| Profit before income tax | 1 879 | 1 472 | 7 087 |
| Income tax | -422 | -299 | -1 762 |
| Profit for the period | 1 458 | 1 173 | 5 324 |
|
Profit for the period attributable to: |
|||
| Owners of the parent company | 1 481 | 1 186 | 5 328 |
| Non-controlling interest | -23 | -13 | -3 |
|
Earnings per share (EUR per share): |
|||
| Basic | 0.07 | 0.06 | 0.26 |
| Diluted | 0.07 | 0.06 | 0.25 |
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
|||
| (1 000 EUR) | 1-3/2012 | 1-3/2011 | 2011 |
| Profit for the period | 1 458 | 1 173 | 5 324 |
| Other comprehensive income: | |||
| Translation difference | 508 | -10 | 252 |
|
Total Comprehensive income for the period |
1 965 | 1 163 | 5 576 |
|
Total Comprehensive income attributable to: |
|||
| Owners of the parent company | 1 988 | 1 176 | 5 579 |
| Non-controlling interest | -23 | -13 | -3 |
CONSOLIDATED BALANCE SHEET
| (1 000 EUR) | 3/2012 | 3/2011 | 12/2011 |
| Non-current assets | |||
| Property, plant and equipment | 2 078 | 2 110 | 2 051 |
| Goodwill | 73 530 | 72 879 | 73 102 |
| Other intangible assets | 5 577 | 7 519 | 5 974 |
| Deferred tax assets | 1 638 | 1 535 | 1 562 |
| Available-for-sale financial assets | - | 19 | - |
| Trade and other receivables | 17 | 17 | 17 |
| 82 840 | 84 079 | 82 706 | |
| Current assets | |||
| Inventories | 442 | 506 | 402 |
| Trade and other receivables | 38 706 | 33 776 | 43 373 |
| Current income tax receivables | 967 | 616 | 665 |
| Cash and cash equivalents | 15 079 | 15 682 | 17 964 |
| 55 195 | 50 580 | 62 405 | |
| Total assets | 138 035 | 134 658 | 145 111 |
|
Equity attributable to owners of the parent Company |
|||
| Share capital | 5 105 | 5 105 | 5 105 |
|
Reserve of invested non-restricted equity |
46 591 | 46 591 | 46 591 |
| Other reserves | 629 | 466 | 593 |
| Treasury shares | -1 996 | -1 996 | -1 996 |
| Translation differences | -269 | -1 038 | -777 |
| Retained earnings | 12 122 | 6 500 | 10 642 |
| 62 182 | 55 629 | 60 159 | |
| Non-controlling interest | 354 | 367 | 376 |
| Total equity | 62 536 | 55 996 | 60 535 |
| Non-current liabilities | |||
| Borrowings | 30 363 | 32 467 | 30 355 |
| Derivative financial instruments | - | 579 | - |
| Deferred tax liabilities | 1 427 | 2 153 | 1 550 |
| 31 790 | 35 199 | 31 905 | |
| Current liabilities | |||
| Borrowings | 4 000 | 4 000 | 4 000 |
| Derivative financial instruments | 370 | - | 475 |
| Trade and other payables | 36 277 | 37 435 | 45 380 |
| Current income tax liabilities | 2 222 | 1 157 | 1 994 |
| Provisions | 840 | 872 | 822 |
| 43 709 | 43 463 | 52 670 | |
| Total liabilities | 75 499 | 78 662 | 84 576 |
| Equity and liabilities | 138 035 | 134 658 | 145 111 |
SUMMARY CONSOLIDATED CASH FLOW STATEMENT
| (1 000 EUR) | 1-3/2012 | 1-3/2011 | 2011 |
| Cash flows from operating activities | |||
| Profit for the period | 1 458 | 1 173 | 5 324 |
| Adjustments to profit for the period | 1 467 | 1 280 | 6 461 |
| 2 924 | 2 453 | 11 786 | |
| Change in working capital | -4 542 | 572 | 985 |
| Interest and other financial cost paid | -322 | -363 | -1 579 |
| Interest and other financial income received | 52 | 53 | 202 |
| Income taxes paid | -722 | -366 | -1 685 |
| Net cash from operating activities | -2 610 | 2 350 | 9 709 |
| Cash flows from investing activities | |||
| Payment of liabilities, Affecto Estonia | - | - | -740 |
|
Acquisition of tangible and intangible assets |
-410 | -490 | -1 416 |
|
Proceeds from sale of tangible and intangible assets |
- | 43 | 42 |
| Net cash used in investing activities | -410 | -447 | -2 114 |
| Cash flows from financing activities | |||
| Proceeds from non-current borrowings | - | - | 36 339 |
| Repayments of non-current borrowings | - | - | -38 500 |
|
Dividends paid to the owners of the parent company |
- | - | -1 291 |
| Net cash from financing activities | - | - | -3 452 |
| (Decrease)/increase in cash and cash equivalents | -3 020 | 1 903 | 4 144 |
|
Cash and cash equivalents at the beginning of the period |
17 964 | 13 818 | 13 818 |
| Foreign exchange effect on cash | 135 | -39 | 3 |
|
Cash and cash equivalents at the end of the period |
15 079 | 15 682 | 17 964 |
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 2012 | 5 105 | 46 591 | 593 | -1 996 | -777 | 10 642 | 376 | 60 535 |
| Profit | 1 481 | -23 | 1 458 | |||||
| Translation differences | 508 | 508 | ||||||
| Total compre-hensive income | 508 | 1 481 | -23 | 1 965 | ||||
| Share-based payments | 35 | 35 | ||||||
| Dividends paid | - | - | ||||||
| Equity at 31 March 2012 | 5 105 | 46 591 | 629 | -1 996 | -269 | 12 122 | 354 | 62 536 |
|
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 2011 | 5 105 | 46 591 | 417 | -1 996 | -1 028 | 6 605 | 380 | 56 074 |
| Profit | 1 186 | -13 | 1 173 | |||||
| Translation differences | -10 | -10 | ||||||
| Total compre-hensive income | -10 | 1 186 | -13 | 1 163 | ||||
| Share-based payments | 49 | 49 | ||||||
| Dividends paid | -1 291 | -1 291 | ||||||
| Equity at 31 March 2011 | 5 105 | 46 591 | 466 | -1 996 | -1 038 | 6 500 | 367 | 55 996 |
2. Notes
2.1. Basis of preparation
This condensed interim financial information has been prepared in accordance with IAS 34, Interim Financial Reporting. The condensed interim financial report should be read in conjunction with the annual financial statements for the year ended 31 December 2011. In material respects, the same accounting policies have been applied as in the 2011 annual consolidated financial statements. The amendments to and interpretations of IFRS standards that entered into force on 1 January 2012 had no impact on this interim report.
The non-controlling interest has been presented separately after net profit for the period and in total equity.
2.2. Segment information
Affecto's reporting segments are based on geographical locations and are Finland, Norway, Sweden, Denmark and Baltic.
Segment net sales and result
| (1 000 EUR) | 1-3/2012 | 1-3/2011 | 2011 |
| Total net sales | |||
| Finland | 13 452 | 11 502 | 50 277 |
| Norway | 6 647 | 7 113 | 27 841 |
| Sweden | 6 571 | 4 874 | 21 513 |
| Denmark | 3 705 | 3 657 | 14 072 |
| Baltic | 3 773 | 3 546 | 16 167 |
| Other | -608 | -570 | -2 600 |
| Group total | 33 540 | 30 121 | 127 270 |
| Operational segment result | |||
| Finland | 1 829 | 1 200 | 6 804 |
| Norway | 663 | 849 | 3 109 |
| Sweden | -197 | -521 | -2 141 |
| Denmark | 255 | 395 | 1 593 |
| Baltic | 358 | 584 | 2 100 |
| Other | -365 | -378 | -1 263 |
| Total operational segment result | 2 542 | 2 128 | 10 202 |
| IFRS amortisation | -511 | -514 | -2 020 |
| Operating profit | 2 031 | 1 615 | 8 182 |
Net sales by business lines
| (1 000 EUR) | 1-3/2012 | 1-3/2011 | 2011 |
| Information Management Solutions | 30 993 | 27 544 | 116 812 |
| Geographic Information Services | 2 864 | 2 823 | 11 533 |
| Other | -318 | -246 | -1 076 |
| Group total | 33 540 | 30 121 | 127 270 |
2.3. Changes in intangible and tangible assets
| (1 000 EUR) | 1-3/2012 | 1-3/2011 | 1-12/2011 |
| Carrying amount at the beginning of period | 81 127 | 82 873 | 82 873 |
| Additions | 410 | 490 | 1 416 |
| Disposals | - | -7 | -7 |
| Depreciation and amortization for the period | -834 | -861 | - 3 424 |
| Exchange rate differences | 483 | 13 | 269 |
| Carrying amount at the end of period | 81 185 | 82 508 | 81 127 |
2.4. Interest-bearing liabilities
| (1 000 EUR) | 31.3.2012 | 31.12.2011 |
| Interest-bearing non-current liabilities | ||
|
Loans from financial institutions, non-current portion |
30 363 | 30 355 |
|
Loans from financial institutions, current portion |
4 000 | 4 000 |
| 34 363 | 34 355 |
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.
2.5. Contingencies and commitments
The future aggregate minimum lease payments under non-cancelable operating leases:
| (1 000 EUR) | 31.3.2012 | 31.12.2011 |
| Not later than one (1) year | 3 464 | 4 046 |
|
Later than one (1) year, but not later than five (5) years |
6 733 | 7 526 |
| Later than five (5) years | 488 | 614 |
| Total | 10 685 | 12 186 |
Guarantees given:
| (1 000 EUR) | 31.3.2012 | 31.12.2011 |
| Liabilities secured by a mortgage | ||
| Financial loans | 34 500 | 34 500 |
The above-mentioned liabilities are secured by bearer bonds with a nominal value of 52.5 million euro. The bonds are held by Nordea Pankki Suomi Oyj and secured by a mortgage on company assets of the group companies. In addition, the shares in Affecto Finland Oy and Affecto Norway AS have been pledged to secure the financial liabilities above.
Other securities given on own behalf:
| (1 000 EUR) | 31.3.2012 | 31.12.2011 |
| Pledges | 14 | 30 |
| Other guarantees | 1 987 | 2 073 |
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.
2.6. Derivative contracts
| (1 000 EUR) | 31.3.2012 | 31.12.2011 |
| Interest rate swaps: | ||
| Nominal value | 20 250 | 20 250 |
| Fair value | -370 | -475 |
2.7. Related party transactions
Key management compensation and remunerations to the board of directors:
| (1 000 EUR) | 1-3/2012 | 1-3/2011 | 1-12/2011 |
| Salaries and other short-term employee benefits |
594 |
660 | 2 203 |
| Post-employment benefits | 90 | 118 | 384 |
| Share-based payments | 5 | 12 | 30 |
| Total | 690 | 791 | 2 616 |
Loans to related party:
| (1 000 EUR) | 3/2012 | 3/2011 | 12/2011 |
| Loans to key management of the group | 1 647 | 1 637 | 1 625 |
3. Key figures
| 1-3/2012 | 1-3/2011 | 2011 | |
| Net sales, 1 000 eur | 33 540 | 30 121 | 127 270 |
| EBITDA, 1 000 eur | 2 866 | 2 476 | 11 608 |
|
Operational segment result, 1 000 eur |
2 542 | 2 128 | 10 202 |
| Operating result, 1 000 eur | 2 031 | 1 615 | 8 182 |
| Result before taxes, 1 000 eur | 1 879 | 1 472 | 7 087 |
|
Profit attributable to the owners of the parent company, 1 000 eur |
1 481 | 1 186 | 5 328 |
| EBITDA, % | 8.5 % | 8.2 % | 9.1 % |
| Operational segment result, % | 7.6 % | 7.1 % | 8.0 % |
| Operating result, % | 6.1 % | 5.4 % | 6.4 % |
| Result before taxes, % | 5.6 % | 4.9 % | 5.6 % |
|
Net income for equity holders of the parent company, % |
4.4 % | 3.9 % | 4.2 % |
| Equity ratio, % | 49.7 % | 45.5 % | 46.1 % |
| Net gearing, % | 30.8 % | 37.1 % | 27.1 % |
|
Interest-bearing net debt, 1 000 eur |
19 284 | 20 785 | 16 391 |
|
Gross investment in non-current assets (excl. acquisitions), 1 000 eur |
410 | 490 | 1 416 |
| Gross investments, % of net sales | 1.2 % | 1.6 % | 1.1 % |
|
Research and development costs, 1 000 eur |
44 | 303 | 717 |
| R&D –costs, % of net sales | 0.1 % | 1.0 % | 0.6 % |
| Order backlog, 1 000 eur | 51 287 | 51 155 | 57 110 |
| Average number of employees | 1 076 | 974 | 1 011 |
| Earnings per share, eur | 0.07 | 0.06 | 0.26 |
|
Earnings per share (diluted), eur |
0.07 | 0.06 | 0.25 |
| Equity per share, eur | 3.00 | 2.69 | 2.91 |
|
Average number of shares, 1 000 shares |
20 693 | 20 693 | 20 693 |
|
Number of shares at the end of period, 1 000 shares |
20 693 | 20 693 | 20 693 |
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:
CEO Pekka Eloholma, +358 205 777 737
CFO Satu Kankare, +358 205 777 202
SVP, M&A, IR, Hannu Nyman, +358 205 777 761
