Helsinki, 2012-08-09 08:01 CEST (GLOBE NEWSWIRE) -- DIGIA PLC INTERIM REPORT 9 August 2012, 9:00 A.M.
DIGIA PLC SECOND QUARTER 2012: POSITIVE DEVELOPMENT IN PRODUCT BUSINESS WHILE CHALLENGES IN CONTRACT ENGINEERING BUSINESS CONTINUED TO TAX PROFITABILITY
SUMMARY
January-June
- Consolidated net sales: EUR 50.6 (65.7) million, down 23.1 per cent
- Operating profit before extraordinary items EUR 2.7 (2.9) million, down 7.3 per cent
- Extraordinary items include a EUR 0.6 million restructuring provision associated with the reorganisation (2011: restructuring provision EUR 3.2 million and goodwill writedown EUR 25.4 million)
- Operating profit after extraordinary items: EUR 2.1 (-25.6) million
- Profitability (EBIT %) before extraordinary items was 5.3 (4.4) per cent and after extraordinary items 4.1 (-39.0) per cent
- Product business accounted for 29.9 (18.2)per cent
- Earnings per share before extraordinary items EUR 0.08 (0.12) and after extraordinary items EUR 0.05 (-1.20)
April-June
- Consolidated net sales: EUR 24.5 (32.4) million, down 24.3 per cent
- Operating profit before extraordinary items EUR 1.3 (0.6) million, up 100.3 per cent
- Operating profit after extraordinary items: EUR 0.7 (-27.9) million
- Profitability (EBIT %) before extraordinary items was 5.1 (1.9) per cent and after extraordinary items 2.8 (-86.2) per cent
- Product business accounted for 33.1 (21.9) per cent
- Earnings per share before extraordinary items EUR 0.04 (0.05) and after extraordinary items EUR 0.01 (-1.27)
Qt business developed as planned during the reporting period, with net sales showing growth and profitability improving towards the period end. At the end of the second quarter, Qt business profitabilitywas very good. With Qt business, the proportion of the company’s product business and international business grew significantly compared to the same period in the previous year. They now form a significant portion of the company’s entire business.
After the reporting period, on 8 August 2012, Digia signed a contract with Nokia Corporation for the acquisition of Qt software technology and the related business. Digia expects this acquisition to drive positive development of the Qt business in the future.
On the whole, however, Digia’s net sales showed a marked decrease year-on-year. This is attributable to the major reduction in demand for mobile contract engineering services that began in Q2/2011. During the reporting period, the downward trend was even stronger than anticipated and taxed the company’s profitability, especially in the second quarter.
Since Q2/2011, Digia has taken consistently and successfully adapted its business and organisation to match the changed business environment.
Despite the adjustment measures, the decline in net sales has inevitably led to a proportional increase in fixed costs, holding back profitability development in the reporting period. Besides challenges in Digia’s remaining contract engineering business, other factors eroding profitability included the investments made in international business.
Digia reiterates its forecast for the remainder of 2012 and expects to see its operational efficiency improve and profitability rise to a good level during the second half.
GROUP KEY FIGURES AND RATIOS
| 4-6/2012 | 4-6/2011 | Change, % | 1-6/2012 | 1-6/2011 | Change, % | 2011 | |
| Net sales | 24,493 | 32,358 | -24.3 % | 50,558 | 65,715 | -23.1 % | 121,940 |
| Operating profit before extraordinary items | 1,256 | 627 | 100.3 % | 2,674 | 2,886 | -7.3 % | 8,084 |
| - % of net sales | 5.1 % | 1.9 % | 5.3 % | 4.4 % | 6.6 % | ||
| Operating profit | 676 | -27,886 | 2,095 | -25,627 | -22,168 | ||
| - % of net sales | 2.8 % | -86.2 % | 4.1 % | -39.0 % | -18.2 % | ||
| Net profit | 280 | -26,263 | 1,077 | -24,815 | -22,452 | ||
| - % of net sales | 1.1 % | -81.2 % | 2.1 % | -37.8 % | -18.4 % | ||
| Return on equity, % | 2.9 % | -217.5 % | 5.5 % | -99.2 % | -41.9 % | ||
| Return on investetment, % | 5.1 % | -152.1 % | 7.4 % | -67.8 % | -28.7 % | ||
| Interest-bearing liabilities | 18,407 | 22,457 | -18.0 % | 18,407 | 22,457 | -18.0 % | 21,872 |
| Cash and cash equivalents | 8,375 | 5,300 | 58.0 % | 8,375 | 5,300 | 58.0 % | 8,170 |
| Net gearing, % | 25.5 % | 46.1 % | 25.5 % | 46.1 % | 34.5 % | ||
| Equity ratio, % | 50.9 % | 42.5 % | 50.9 % | 42.5 % | 47.8 % | ||
| Earnings per share, EUR, undiluted | 0.01 | -1.27 | 0.05 | -1.20 | -1.08 | ||
| Earnings per share, EUR, diluted | 0.01 | -1.27 | 0.05 | -1.20 | -1.08 |
MARKETS AND DIGIA'S BUSINESS
Deceleration of economic growth in several Eurozone countries is reining in Finnish exports and total output. Customer companies, which see information technology as an element that can facilitate greater operational efficiency and growth, are nonetheless pursuing their projects and initiating new ones. In some cases, economic uncertainty has lengthened decision-making processes and project schedules have been delayed. Customers are also experiencing growing cost pressures, which is beginning to reflect on their purchase decisions.
In terms of human resources, the situation is somewhat conflicting: On the one hand, a large number of experts were released onto the job market from various contract engineering projects; on the other, there is a shortage of experienced architecture and business experts, which is causing lengthened recruitment processes and pressure for rising labour cost.
Although the introduction of the new organisation at the beginning of 2012 went smoothly and according to plan, in some areas operational efficiency enhancement measures still continue.
Growing cost pressures on customers had a major impact on demand for contract engineering services in the second quarter. Demand for ERP systems and other operational systems was reasonable during the reporting period.
The Qt business increased its net sales, with operations progressing according to plan during the period. Profitability also improved as expected, as the period progressed. At the end of the period, the profitability level was very good.
In Digia’s Russian unit, business development efforts are more sharply focused on ERP system deliveries to local customers, especially in the trade sector’s value chain. In addition, the unit provides near shore resource services to Finnish business units. Local business continued to grow during the period, as new customer relationships were established.
Digia’s Chinese unit shifted its focus even more towards local business development. The unit’s capacity is also used to provide off shore services to the Finnish business units.
NET SALES
Digia’s consolidated net sales for the reporting period were EUR 50.6 (65.7) million, down 23.1 per cent on the same period in 2011.
The decrease was due to a sharp fall in demand for mobile contract engineering services after the end of the comparison period and during the reporting period. On the other hand, net sales from the Qt business grew considerably year-on-year and was EUR 7.0 million for the reporting period.
During the reporting period, the product business accounted for EUR 15.1 million (EUR 11.9 million) or 29.9 per cent (18.2 per cent) of consolidated net sales.
International operations accounted for EUR 10.6 (5.7) million, or 21.0 (8.7) per cent of consolidated net sales.
Digia’s consolidated net sales for the second quarter were EUR 24.5 (32.4) million, down 24.3 per cent on the same period in 2011.
In the second quarter, product business accounted for EUR 8.1 (7.1) million of consolidated net sales, or 33.1 (21.9) per cent.
International operations accounted for EUR 5.4 (3.2) million of consolidated net sales in the second quarter, or 22.2 (9.9) per cent.
PROFIT PERFORMANCE AND PROFITABILITY
Digia’s consolidated operating profit before extraordinary items for the reporting period was EUR 2.7 (2.9) million, down 7.3 per cent year-on-year. Profitability (EBIT %) before extraordinary items was 5.3 (4.4) per cent. Extraordinary items included a EUR 0.6 million restructuring provision associated with the reorganisation of the Group Management Team carried out as part of the operational efficiency improvement.
Digia Group’s operating profit after extraordinary items amounted to EUR 2.1 (-25.6) million. Profitability (EBIT %) after extraordinary items was 4.1 (-39.0) per cent.
Digia’s consolidated operating profit before extraordinary items in the second quarter was EUR 1.3 (0.6) million, up 100.3 per cent year-on-year. Profitability (EBIT %) before extraordinary items was 5.1 (1.9) per cent.
Digia Group’s operating profit after extraordinary items amounted to EUR 0.7 (-27.9) million. Profitability (EBIT %) after extraordinary items was 2.8 (-86.2) per cent.
The company’s operating costs and profitability were affected by investments in the international product business, a relative increase in the proportion of fixed operating costs, and the additional costs arising from higher personnel turnover. Moreover, the weaker than expected profitability of the remaining contract engineering business taxed performance in the second quarter.
Consolidated earnings before tax for the period totalled EUR 1.5 (-26.2) million, and net profit was EUR 1.1 (-24.8) million. Consolidated earnings before tax for the second quarter were EUR 0.4 (-28.1) million, and net profit totalled EUR 0.3 (-26.3) million.
Consolidated earnings per share for the period, before extraordinary items, were EUR 0.08 (0.12). Consolidated earnings per share after extraordinary items came to EUR 0.05 (-1.20). Consolidated earnings per share, before extraordinary items, for the second quarter were EUR 0.04 (0.05). Consolidated earnings per share after extraordinary items for the second quarter came to EUR 0.01 (-1.27).
The Group’s net financial expenses for the reporting period were EUR 0.6 (0.5) million and for the second quarter EUR 0.3 (0.2) million.
FINANCIAL POSITION AND EXPENDITURE
At the end of the reporting period, Digia Group’s consolidated balance sheet total stood at EUR 81.8 million (12/2011: EUR 87.8 million), and the equity ratio was 50.9 (12/2011: 47.8) per cent. Net gearing was 25.5 (12/2011: 34.5) per cent. Period-end cash and cash equivalents totalled EUR 8.4 (12/2011: 8.2) million.
Interest-bearing liabilities amounted to EUR 18.4 (12/2011: 21.9) million. These consisted of EUR 17.0 million in loans from financial institutions and EUR 1.4 million in financial leasing liabilities.
The Group’s cash flow from operations for the period was positive by EUR 6.5 (3.6) million, cash flow from investments was negative by EUR 1.2 (1.4) million, and cash flow from financing was negative by EUR 5.1 (6.6) million. Cash flow from financing was negatively affected by the repayment of loans for a total sum of EUR 3.0 million, as well as the payment of EUR 2.1 million in dividends.
The Group’s investments in fixed assets during the reporting period totalled EUR 0.3 (1.4) million. Acquisitions of tangible fixed assets totalled EUR 0.2 (0.9) million.
Return on investment (ROI) for the period was 7.4 (-67.8) per cent, and return on equity (ROE) was 5.5 (-99.2) per cent.
The Group carries out quarterly impairment testing of goodwill and intangible assets with an indefinite useful life.
The table below shows the distribution of goodwill and values subject to testing at the end of the reporting period:
| EUR 1,000 | Specified intangible assets | Amortisations during the reporting period | Goodwill | Other items | Total value subject to testing |
| Group total | 2,925 | 495 | 44,543 | 7,866 | 55,334 |
Present values were calculated for a five-year forecast period based on the following assumptions: Net sales and operating profit for the first two quarters of the forecast period according to the confirmed figures, and for the following two quarters according to budget. As of the beginning of 2013, annual net sales growth of 3 per cent, operating profit of 10 per cent, and a discount rate of 8.9 per cent are forecast. Cash flows after the forecast period are estimated by means of cash-flow extrapolation, applying the assumptions given above.
According to a completed sensitivity analysis, the estimated goodwill requires net sales to remain at the current level, with profitability at 4.4 per cent, or net sales growth of 7.0 per cent with profitability at 0.1 per cent. The management sees no risk of goodwill impairment.
HUMAN RESOURCES, MANAGEMENT, AND ADMINISTRATION
At the end of the period, the total number of Group personnel was 997, representing a decrease of 178 employees, or 15.1 per cent since the end of 2011 (2011: 1,175). During the reporting period, the number of employees averaged 1,045, a decrease of 408 employees or 28.1 per cent from the 2011 average (2011: 1,453).
Employees by function at the end of the period:
| Business units | 96 % |
| Administration and management | 4 % |
As of the end of the period, 162 employees were working abroad (12/2011: 161).
The Digia Plc Annual General Meeting of 13 March 2012 re-elected Robert Ingman, Kari Karvinen, Pertti Kyttälä and Tommi Uhari as members of the Board. Päivi Hokkanen, Seppo Ruotsalainen and Leena Saarinen were elected as new members. At the organisation meeting of the Board, Pertti Kyttälä was elected Chairman of the Board and Robert Ingman Vice Chairman.
Juha Varelius has been Digia Plc’s President and CEO since 1 January 2008.
In June 2012, Anja Wasenius became Digia’s acting CFO.
Ernst & Young Oy, authorised public accountants, are the Group’s auditors, with Authorised Public Accountant Heikki Ilkka as the principal auditor.
RISKS AND UNCERTAINTIES
Short-term uncertainties are related to any major changes occurring in the company’s core business areas.
The Eurozone debt crisis and the risk of economic recession may affect customers’ investment decisions and liquidity, and thereby the company’s sales and profits. There have already been signs of the effect of increased uncertainty on customers’ investment decisions, and some planned projects have been delayed.
Furthermore, as the size of customer projects grows, risks related to the projects and profitability management are increasing.
Risks and their management are described on the company’s website at www.digia.com.
FUTURE PROSPECTS
The company’s main objective for 2012 is to grow the share of the scalable product business. The main cornerstone of the company’s operations remains the maintenance of high profitability and a positive cash flow.
The company expects the IT market to remain at roughly the previous year’s level in 2012. However, risks associated with the Eurozone debt crisis and general inflation may affect demand for IT services and the development of business profitability. Slightly greater uncertainty is therefore related to the economic prospects for 2012.
The company expects demand for its ERP systems, operational systems and integration services to grow during the rest of the year.
Measures will be completed to improve the efficiency of the contract engineering business and to adapt operations to the current market conditions.
The company will continue to seek expansion in the growing Russian market, especially through its Business Intelligence solutions, ERP systems and complementary products and services, and particularly within the trade and logistics customer segments.
The company plans to align its Chinese operations to correspond even better to local sales and international delivery contracts. As part of this realignment, the Beijing sales unit will also support Qt business sales.
The company expects the Qt business to retain a healthy profit level, and net sales from the business to show continued positive development for the rest of the year.
On the whole, Digia expects to improve its operational efficiency and to raise its profitability to a healthy level during the second half.
OTHER EVENTS DURING THE REPORTING PERIOD
Convening on 13 March 2012, the Digia Plc Annual General Meeting (AGM) approved the financial statements for 2011, released the Board members and the CEO from liability, determined Board emoluments, resolved to keep the number of Board members at seven, and elected the Board of Directors for the new term.
With regard to profit distribution for 2011, the AGM approved the Board’s proposal to make a repayment of capital of EUR 0.10 per share to all shareholders listed on the shareholder list maintained by Euroclear Finland Ltd on the reconciliation date of 16 March 2012. The date for the repayment of capital was set at 23 March 2012.
The AGM granted the following authorisations to the Board:
Authorisation of the Board of Directors to decide on buying back own shares and/or accepting them as collateral
The AGM authorised the Board to decide on the buyback and/or acceptance as collateral of no more than 2,000,000 shares in the company. This buyback can only be executed by means of the company’s unrestricted equity. The Board shall decide on how these shares are to be bought. Own shares may be bought back in disproportion to the holdings of the shareholders. The authorisation also includes acquisition of shares through public trading organised by NASDAQ OMX Helsinki Oy in accordance with the rules and instructions of NASDAQ OMX Helsinki and Euroclear Finland Ltd, or through offers made to shareholders. Shares may be acquired in order to improve the company’s capital structure, to fund acquisitions or other business transactions, for offering share-based incentive schemes, to sell on, or to be annulled. The shares must be acquired at the market price in public trading. This authorisation supersedes that granted by the AGM of 16 March 2011 and is valid for 18 months – i.e. until 13 September 2013.
Authorising the Board of Directors to decide on a share issue and granting of special rights
The AGM authorised the Board to decide on an ordinary or bonus issue of shares and the granting of special rights (as defined in Section 1, Chapter 10 of the Limited Liability Companies Act) in one or more instalments, as follows: The issue may total, at a maximum, 4,000,000 shares. The authorisation applies both to new shares and to treasury shares held by the company. By virtue of the authorisation, the Board has the right to decide on share issues and the granting of special rights, in deviation from the pre-emptive subscription rights of the shareholders (a directed issue). The authorisation may be used to fund or complete acquisitions or other business transactions, for offering share-based incentive schemes, to develop the company’s capital structure, or for other purposes. The Board was authorised to decide on all terms related to the share issue or special rights, including the subscription price, its payment in cash or (partly or wholly) in capital contributed in kind or its being written off against the subscriber’s receivables, and its recognition in the company's balance sheet. This authorisation supersedes that granted by the AGM of 16 March 2011 and is valid for 18 months – i.e. until 13 September 2013.
SHARE CAPITAL AND SHARES
On 30 June 2012, the number of Digia Plc shares totalled 20,875,645.
At the end of the period, according to Finnish Central Securities Depository Ltd, Digia had 5,964 shareholders.
The 10 biggest shareholders were:
| Shareholder | Shares and votes |
| Ingman Group Oy Ab | 16.3 % |
| Jyrki Hallikainen | 10.2 % |
| Pekka Sivonen | 8.8 % |
| Kari Karvinen | 6.5 % |
| Matti Savolainen | 6.1 % |
| Ilmarinen Mutual Pension Insurance Company | 4.8 % |
| Varma Mutual Pension Insurance Company | 3.6 % |
| Nordea Bank Finland Plc (nominee-registered) | 1.5 % |
| Etola Oy | 1.0 % |
| Olli Ahonen | 0.9 % |
Distribution of holdings by number of shares on 30 June 2012
| Number of shares | Shareholders | Shares and votes |
| 1 – 100 | 22.2 % | 0.4 % |
| 101 – 1,000 | 59.2 % | 7.7 % |
| 1,001 – 10,000 | 17.2 % | 13.1 % |
| 10,001 – 100,000 | 1.0 % | 9.1 % |
| 100,001 – 1,000,000 | 0.3 % | 21.6 % |
| 1,000,001 – 4,000,000 | 0.1 % | 47.9 % |
Distribution of shareholding by sector on 30 June 2012
| Shareholders | Shares | |
| Non-financial corporations | 4.4 % | 21.3 % |
| Financial and insurance corporations | 0.3 % | 4.5 % |
| General government | 0.1 % | 8.4 % |
| Not-for-profit institutions serving households | 0.3 % | 0.6 % |
| Households | 94.6 % | 64.1 % |
| Rest of the world | 0.4 % | 1.1 % |
The weighted average number of shares during the reporting period, adjusted for share issues, came to 20,754,153. The number of outstanding shares came to 20,772,523 in total at the end of the review period.
The company held a total of 103,122 treasury shares at the end of the reporting period. The accounting counter value of these treasury shares is EUR 0.10 per share. Treasury shares accounted for about 0.5 per cent of the capital stock at the period-end. In relation to the company’s performance-based incentive system, Digia has financed the acquisition of 300,000 own shares. At the end of the review period, 12,424 of these shares remained undistributed and were under the management of Evli Alexander Management Ltd.
REPORTED SHARE PERFORMANCE ON THE HELSINKI STOCK EXCHANGE
Digia Plc shares are listed on the Nordic Exchange under ‘Information Technology IT Services’. The company's short name is DIG1V. The lowest reported share quotation was EUR 2.28 and the highest was EUR 3.30. The share officially closed at EUR 2.35 on the last trading day. The trade-weighted average was EUR 2.92. The Group’s market capitalisation totalled EUR 49,057,766 at the end of the period.
The company received no flagging notifications during the reporting period.
STOCK OPTION SCHEMES
Digia Plc had no outstanding options.
Helsinki, 9 August 2012
Digia Plc
Board of Directors
BRIEFING FOR ANALYSTS
Digia will hold a briefing on its financial statement for analysts on Thursday 9 August 2012, at 11 am, at WTC Sodexo, in the Marski cabinet of the World Trade Center, Aleksanterinkatu 17, 00100 Helsinki, Finland.
SOURCES OF FURTHER INFORMATION
President and CEO Juha Varelius, mobile +358 400 855 849, email juha.varelius@digia.com
The Interim Report and presentation thereof will be available at the company’s website at www.digia.com in the ‘Investors’ section, from 11am.
DISTRIBUTION
NASDAQ OMX Helsinki
Key media
ABBREVIATED FINANCIAL STATEMENTS AND ATTACHMENTS
Consolidated Income Statement
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Consolidated Statement of Changes in Shareholders’ Equity
Notes to the Accounts
The interim report has been prepared in compliance with IFRS and the IAS 34 standard.
This interim report is based on unaudited figures.
CONSOLIDATED INCOME STATEMENT, EUR 1,000
| 4-6/2012 | 4-6/2011 | Change, % | 1-6/2012 | 1-6/2011 | Change, % | 2011 | |
| NET SALES | 24,493.4 | 32,358.3 | -24.3 % | 50,557.8 | 65,715.1 | -23.1 % | 121,939.9 |
| Other operating income | 251.6 | 28.5 | 782.5 % | 453.8 | 52.7 | 761.0 % | 360.7 |
| Materials and services | -2,184.9 | -3,906.6 | -44.1 % | -4,729.2 | -6,390.2 | -26.0 % | -10,721.0 |
| Depreciation, amortisation, and impairment | -697.5 | -26,387.2 | -97.4 % | -1,345.5 | -27,314.0 | -95.1 % | -29,267.9 |
| Other operating expenses | -21,186.2 | -29,979.1 | -29.3 % | -42,842.0 | -57,690.3 | -25.7 % | -104,479.7 |
| Operating profit | 676.4 | -27,886.1 | 2,094.9 | -25,626.7 | -22,168.0 | ||
| Financial expenses (net) | -289.1 | -185.6 | 55.7 % | -636.8 | -528.3 | 20.5 % | -963.1 |
| Earnings before tax | 387.3 | -28,071.8 | 1,458.1 | -26,155.0 | -23,131.2 | ||
| Income taxes | -107.6 | 1,809.2 | -380.7 | 1,340.3 | 679.5 | ||
| NET PROFIT | 279.7 | -26,262.6 | 1,077.4 | -24,814.7 | -22,451.6 | ||
| Other comprehensive income: | |||||||
| Exchange differences on translating foreign operations | 192.3 | -121.0 | 317.4 | -0.6 | 42.1 | ||
| TOTAL COMPREHENSIVE INCOME | 472.0 | -26,383.6 | 1,394.8 | -24,815.3 | -22,409.5 | ||
| Distribution of net profit: | |||||||
| Parent-company shareholders | 279.7 | -26,262.6 | 1,077.4 | -24,814.7 | -22,451.6 | ||
| Minority interest | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||
| Distribution of total comprehensive income: | |||||||
| Parent-company shareholders | 472.0 | -26,383.6 | 1,394.8 | -24,815.3 | -22,409.5 | ||
| Minority interest | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||
| Earnings per share, EUR | 0.01 | -1.27 | 0.05 | -1.20 | -1.08 | ||
| Earnings per share (diluted), EUR | 0.01 | -1.27 | 0.05 | -1.20 | -1.08 |
CONSOLIDATED BALANCE SHEET, EUR 1,000
| Assets | 30.6.2012 | 31.12.2011 | Change, % |
| Non-current assets | |||
| Intangible assets | 47,885.3 | 48,486.7 | -1.2 % |
| Tangible assets | 2,469.3 | 3,156.5 | -21.8 % |
| Financial assets | 627.0 | 627.0 | 0.0 % |
| Long-term receivables | 60.3 | 60.3 | 0.0 % |
| Deferred tax assets | 707.3 | 789.9 | -10.5 % |
| Total non-current assets | 51,749.2 | 53,120.3 | -2.6 % |
| Current assets | |||
| Current receivables | 21,694.6 | 26,523.0 | -18.2 % |
| Available-for-sale financial assets | 312.8 | 303.5 | 3.1 % |
| Cash and cash equivalents | 8,061.9 | 7,866.5 | 2.5 % |
| Total current assets | 30,069.3 | 34,693.0 | -13.3 % |
| Total assets | 81,818.4 | 87,813.3 | -6.8 % |
| Shareholders' equity and liabilities | 30.6.2012 | 31.12.2011 | Change, % |
| Share capital | 2,087.6 | 2,087.6 | 0.0 % |
| Rights issue | 0.0 | 0.0 | |
| Issue premium fund | 7,899.5 | 7,899.5 | 0.0 % |
| Other reserves | 5,203.8 | 5,203.8 | 0.0 % |
| Unrestricted invested shareholders’ equity | 33,447.8 | 35,525.0 | -5.8 % |
| Translation difference | 525.8 | 208.4 | 152.3 % |
| Retained earnings | -10,952.7 | 11,279.9 | |
| Net profit | 1,077.4 | -22,451.6 | |
| Equity attributable to parent-company shareholders | 39,289.2 | 39,752.6 | -1.2 % |
| Minority interest | 0.0 | 0.0 | |
| Total shareholders’ equity | 39,289.2 | 39,752.6 | -1.2 % |
| Liabilities | |||
| Long-term interest-bearing liabilities | 12,551.6 | 15,441.7 | -18.7 % |
| Other long-term liabilities | 265.0 | 674.0 | -60.7 % |
| Deferred tax liabilities | 644.9 | 772.0 | -16.5 % |
| Total long-term liabilities | 13,461.5 | 16,887.7 | -20.3 % |
| Short-term interest-bearing liabilities | 5,855.2 | 6,430.2 | -8.9 % |
| Other short-term liabilities | 23,212.5 | 24,742.8 | -6.2 % |
| Total short-term liabilities | 29,067.7 | 31,173.0 | -6.8 % |
| Total liabilities | 42,529.2 | 48,060.7 | -11.5 % |
| Total shareholders' equity and liabilities | 81,818.4 | 87,813.3 | -6.8 % |
CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000
| 1.1.2012-30.06.2012 | 1.1.2011-30.6.2011 | 1.1.2011-31.12.2011 | |
| Cash flow from operations: | |||
| Net profit | 1,077 | -24,815 | -22,452 |
| Adjustments to net profit | 3,830 | 29,615 | 34,780 |
| Change in working capital | 1,226 | 2,223 | 2,791 |
| Interest paid | -358 | -370 | -781 |
| Interest income | 2 | 19 | 35 |
| Taxes paid | 713 | -3,025 | -5,532 |
| Cash flow from operations | 6,490 | 3,646 | 8,842 |
| Cash flow from investments: | |||
| Purchases of tangible and intangible assets | -1,163 | -1,407 | -2,733 |
| Cash flow from investments | -1,163 | -1,407 | -2,733 |
| Cash flow from financing: | |||
| Proceeds from share issue | 0 | 0 | 0 |
| Acquisition of own shares | 0 | 0 | 0 |
| Repayment of current loans | -3,044 | -1,044 | -19,044 |
| Repayments of non-current loans | 0 | 0 | 0 |
| Withdrawals of current loans | 0 | 0 | 3,500 |
| Withdrawals of non-current loans | 0 | 0 | 13,500 |
| Dividends paid and other profit distribution | -2,078 | -5,577 | -5,577 |
| Cash flow from financing | -5,123 | -6,621 | -7,621 |
| Change in liquid assets | 205 | -4,382 | -1,512 |
| Liquid assets at beginning of period | 8,170 | 9,682 | 9,682 |
| Change in fair value | |||
| Change in liquid assets | 205 | -4,382 | -1,512 |
| Liquid assets at end of period | 8,374 | 5,300 | 8,170 |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY, EUR 1,000
| 2011 | a) | b) | c) | d) | e) | f) | g) | h) |
| Shareholders’ equity, 1 January 2011 | 2,086 | 40 | 7,899 | 35,486 | 5,204 | 166 | 16,529 | 67,411 |
| Net profit | -24,815 | -24,815 | ||||||
| Other comprehensive income | -1 | -1 | ||||||
| Distribution of dividends | -5,577 | -5,577 | ||||||
| Share-based payments recognised against equity | 1 | -40 | 39 | 236 | 236 | |||
| Shareholders’ equity, 30 June 2011 | 2,088 | 0 | 7,899 | 35,525 | 5,204 | 165 | -13,627 | 37,254 |
| 2012 | a) | b) | c) | d) | e) | f) | g) | h) |
| Shareholders’ equity, 1 January 2012 | 2,088 | 0 | 7,899 | 35,525 | 5,204 | 208 | -11,172 | 39,753 |
| Net profit | 1,077 | 1,077 | ||||||
| Other comprehensive income | 317 | 317 | ||||||
| Repayment of capital | -2,077 | -2,077 | ||||||
| Share-based payments recognised against equity | 219 | 219 | ||||||
| Shareholders’ equity, 30 June 2012 | 2,088 | 0 | 7,899 | 33,448 | 5,204 | 526 | -9,875 | 39,289 |
a = share capital
b = rights issue
c = share premium
d = unrestricted invested shareholders’ equity
e = other reserves
f = currency translation differences
g = retained earnings
h = total shareholders’ equity
NOTES TO THE ACCOUNTS
Accounting principles
The interim report has been drafted in line with IFRS, applying the same accounting principles as in the 2011 financial statements. The accounting principles and formulae for the calculation of key figures and ratios are unchanged and are presented in the 2011 financial statements.
Seasonal nature of business
The Group's business is affected by the number of workdays each month, as well as by holiday seasons.
Dividends paid
Dividends paid during the reporting period totalled EUR 2,077,252.30.
Events after the reporting period
After the reporting period, on 8 August 2012, Digia signed a contract with Nokia Corporation for the acquisition of Qt software technology and the related business. This acquisition will enter into effect during the third quarter of 2012. With the acquisition, Digia will assume responsibility for all liabilities and operations, previously handled by Nokia, associated with Qt technologies. More detailed information on the acquisition is available from stock exchange and press releases issued by Digia today. Digia will provide more information on the effects of the acquisition on the company's business, after the transaction has been finalised.
Related-party transactions
Digia Group’s related parties include the CEO and the members of the Board of Directors and Group Management Team. Digia Group had no significant transactions with related parties during the reporting period.
Consolidated income statement by quarter
| EUR 1,000 | 4-6/2012 | 1-3/2012 | 10-12/2011 | 7-9/2011 | 4-6/2011 |
| Net sales | 24,493.4 | 26,064.4 | 30,197.3 | 26,027.5 | 32,358.3 |
| Other operating income | 251.6 | 202.2 | 261.0 | 47.0 | 28.5 |
| Materials and services | -2,184.9 | -2,544.3 | -2,568.9 | -1,761.9 | -3,906.6 |
| Depreciation, amortisation, and impairment | -697.5 | -648.0 | -1,095.9 | -858.1 | -26,387.2 |
| Other operating expenses | -21,186.2 | -21,655.8 | -25,407.6 | -21,381.8 | -29,979.1 |
| Operating profit | 676.4 | 1,418.5 | 1,385.9 | 2,072.7 | -27,886.1 |
| Financial expenses (net) | -289.1 | -347.7 | -318.3 | -116.6 | -185.6 |
| Earnings before tax | 387.3 | 1,070.8 | 1,067.7 | 1,956.2 | -28,071.8 |
| Income taxes | -107.6 | -273.1 | 149.8 | -810.5 | 1,809.2 |
| Net profit | 279.7 | 797.7 | 1,217.5 | 1,145.6 | -26,262.6 |
| Allocation: | |||||
| Parent-company shareholders | 279.7 | 797.7 | 1,217.5 | 1,145.6 | -26,262.6 |
| Minority interest | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Earnings per share, EUR | 0.01 | 0.04 | 0.06 | 0.06 | -1.27 |
| Earnings per share (diluted), EUR | 0.01 | 0.04 | 0.06 | 0.06 | -1.27 |
Group key figures and ratios:
| 1-6/2012 | 1-6/2011 | 2011 | |
| Extent of business: | |||
| Net sales | 50,558 | 65,715 | 121,940 |
| - change from previous year | -23.1 % | -3.1 % | -6.8 % |
| Average capital invested | 59,660 | 75,219 | 76,176 |
| Personnel at period end | 997 | 1,512 | 1,175 |
| Average number of personnel | 1,045 | 1,560 | 1,453 |
| Profitability: | |||
| Operating profit before extraordinary items and impairment | 2,674 | 2,886 | 8,084 |
| - % of net sales | 5.3 % | 4.4 % | 6.6 % |
| Operating profit | 2,095 | -25,627 | -22,168 |
| - % of net sales | 4.1 % | -39.0 % | -18.2 % |
| Earnings before tax | 1,458 | -26,155 | -23,131 |
| - % of net sales | 2.9 % | -39.8 % | -19.0 % |
| Net profit | 1,077 | -24,815 | -22,452 |
| % of net sales | 2.1 % | -37.8 % | -18.4 % |
| Return on equity, % | 5.5 % | -99.2 % | -41.9 % |
| Return on investment, % | 7.4 % | -67.8 % | -28.7 % |
| Financing and financial standing: | |||
| Interest-bearing liabilities | 18,407 | 22,457 | 21,872 |
| Short-term investments, and cash and bank receivables | 8,375 | 5,300 | 8,170 |
| Net gearing | 25.5 % | 46.1 % | 34.5 % |
| Equity ratio | 50.9 % | 42.5 % | 47.8 % |
| Net cash flow from operations | 6,490 | 3,646 | 8,842 |
| Earnings per share, undiluted (EUR) | 0.05 | -1.20 | -1.08 |
| Earnings per share, diluted (EUR) | 0.05 | -1.20 | -1.08 |
| Equity per share | 1.88 | 1.78 | 1.90 |
| Lowest share price | 2.28 | 2.79 | 2.30 |
| Highest share price | 3.30 | 5.79 | 5.79 |
| Average share price | 2.92 | 4.55 | 3.88 |
| Market capitalisation | 49,058 | 71,395 | 50,519 |
Formulas for key figures and ratios are presented in the 2011 financial statements. These formulas remained unchanged during the reporting period.
