Helsinki, 2013-02-14 11:30 CET (GLOBE NEWSWIRE) -- AFFECTO PLC -- FINANCIAL STATEMENTS BULLETIN -- 14 FEBRUARY 2013 at 12.30
Affecto Plc's Financial Statements Bulletin 2012
Group key figures
| MEUR | 10-12/12 | 10-12/11 | 2012 | 2011 |
| Net sales | 38.3 | 36.6 | 133.4 | 127.3 |
| Operational segment result | 5.0 | 3.3 | 12.5 | 10.2 |
| % of net sales | 13.2 | 9.1 | 9.4 | 8.0 |
| Operating profit | 4.5 | 2.8 | 10.5 | 8.2 |
| % of net sales | 11.8 | 7.7 | 7.8 | 6.4 |
| Profit before taxes | 4.3 | 2.7 | 10.0 | 7.1 |
| Profit for the period | 3.3 | 2.0 | 7.6 | 5.3 |
| Equity ratio, % | 50.6 | 46.1 | 50.6 | 46.1 |
| Net gearing, % | 15.8 | 27.1 | 15.8 | 27.1 |
| Earnings per share, eur | 0.16 | 0.10 | 0.37 | 0.26 |
| Earnings per share (diluted), eur | 0.15 | 0.10 | 0.36 | 0.25 |
| Equity per share, eur | 3.24 | 2.91 | 3.24 | 2.91 |
| Dividend proposal, eur/share | 0.16 | 0.11 |
CEO Pekka Eloholma comments:
Affecto's performance in the fourth quarter was good. Net sales grew by 5% to 38.3 MEUR (36.6 MEUR). Highest growth was achieved in Denmark, but also Norway and Sweden grew nicely. The general market sentiment was more positive than during the earlier quarters. Sales of consultant work developed well and also the sales of 3rd-party license sales clearly exceeded last year. Operating profit was 4.5 MEUR (2.8 MEUR) making this the best ever Q4 for Affecto. Also Sweden made profit.
Despite the weak general macroeconomic sentiment year 2012 was good for Affecto. We achieved all time highest net sales 133.4 MEUR (127.3 MEUR) and also improved our profitability. Operating profit grew to 10.5 MEUR (8.2 MEUR) and EPS to 37 cents (26 cents).
Development during 2012 was mainly positive. Customers' cautiousness regarding investment decisions marked the year, but we were still able to grow by 5%. We had challenges with the profitability in Sweden, but our other units performed well. 15% profitability reached in Finland is excellent, and the 11-12% in Norway, Denmark and Baltic is also a good performance.
We start year 2013 confidently. Thanks to the strong sales in the last quarter, Affecto's order backlog grew to a new record 61.4 MEUR (57.1 MEUR), which gives a good foundation for year 2013. However, the Euro crisis and uncertainty regarding the general economy continue, so the year may resemble last year and we do not believe in rapid growth during the early months. Achieving good sales growth will likely be challenging also this year.
Operating profit and net sales are estimated to grow in 2013.
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.
BUSINESS DEVELOPMENT 10-12/2012
Affecto's net sales in 10-12/2012 were 38.3 MEUR (10-12/2011: 36.6 MEUR). Net sales in Finland were 14.7 MEUR (14.8 MEUR), in Norway 8.0 MEUR (7.3 MEUR), in Sweden 7.3 MEUR (6.7 MEUR), in Denmark 4.9 MEUR (3.8 MEUR) and 4.3 MEUR (4.8 MEUR) in Baltic.
Net sales by reportable segments
| Net sales, MEUR | 10-12/12 | 10-12/11 | 2012 | 2011 |
| Finland | 14.7 | 14.8 | 52.6 | 50.3 |
| Norway | 8.0 | 7.3 | 27.2 | 27.8 |
| Sweden | 7.3 | 6.7 | 24.0 | 21.5 |
| Denmark | 4.9 | 3.8 | 16.0 | 14.1 |
| Baltic | 4.3 | 4.8 | 16.7 | 16.2 |
| Other | -0.9 | -0.8 | -3.0 | -2.6 |
| Group total | 38.3 | 36.6 | 133.4 | 127.3 |
Net sales grew by 5% in the fourth quarter. Denmark grew by 29% and also Norway and Denmark experienced about 10% growth. Net sales decreased by 1% in Finland and by 11% in Baltic. The quarter was good regarding sales and the general market sentiment seemed to be clearly more positive than during the third quarter. Sales of the third-party licenses, sold with the solutions, increased significantly compared to last year which contributed positively both to net sales and profit especially in Denmark. Sales of consultant work developed well, too.
Net sales of Information Management Solutions business in 10-12/2012 were 35.5 MEUR (33.8 MEUR) and net sales of Karttakeskus GIS business were 3.2 MEUR (3.2 MEUR).
Order backlog grew to 61.4 MEUR, 7% above last year (57.1 MEUR).
PROFIT
Affecto's operating profit in 10-12/2012 was 4.5 MEUR (2.8 MEUR) and the operational segment result was 5.0 MEUR (3.3 MEUR). Operational segment result was in Finland 2.5 MEUR (2.3 MEUR), in Norway 1.3 MEUR (1.0 MEUR), in Sweden 0.3 MEUR (-0.7 MEUR), in Denmark 0.9 MEUR (0.7 MEUR) and in Baltic 0.5 MEUR (0.5 MEUR).
Operating profit in the fourth quarter was 12% of net sales. Profitability increased by 4 percentage points compared to the previous year. Profitability improved in all country units, most in Sweden. Increase in license sales contributed positively to the result.
Operational segment result by reportable segments
|
Operational segment result, MEUR |
10-12/12 | 10-12/11 | 2012 | 2011 |
| Finland | 2.5 | 2.3 | 7.7 | 6.8 |
| Norway | 1.3 | 1.0 | 3.3 | 3.1 |
| Sweden | 0.3 | -0.7 | -0.9 | -2.1 |
| Denmark | 0.9 | 0.7 | 1.8 | 1.6 |
| Baltic | 0.5 | 0.5 | 2.0 | 2.1 |
| Other | -0.6 | -0.3 | -1.4 | -1.3 |
| Operational segment result | 5.0 | 3.3 | 12.5 | 10.2 |
| IFRS3 Amortization | -0.5 | -0.5 | -2.1 | -2.0 |
| Operating profit | 4.5 | 2.8 | 10.5 | 8.2 |
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. Change in the fair value of the interest swap agreement has caused 0.1 MEUR income in 10-12/2012 (0.1 MEUR).
Taxes corresponding to the profit of the period have been entered as tax expense. Net profit for the period was 3.3 MEUR, while it was 2.0 MEUR last year.
YEAR 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 organisations 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 2012 were 133.4 MEUR (Year 2011: 127.3 MEUR). Net sales in Finland were 52.6 MEUR (50.3 MEUR), in Norway 27.2 MEUR (27.8 MEUR), in Sweden 24.0 MEUR (21.5 MEUR), in Denmark 16.0 MEUR (14.1 MEUR) and 16.7 MEUR (16.2 MEUR) in Baltic.
Net sales grew by 5%. Highest growth was achieved in Denmark (14%), but also all other countries grew with the exception of Norway. The year was characterized by uncertainty about general economy, which slowed down customers' investment decisions and affected especially the third quarter negatively. However, in general term the business developed rather steadily. Sales of the third-party licenses, sold with the solutions, clearly decreased during the early part of the year, but thanks to the strong last quarter the full-year sales fell only moderately. The achieved growth in net sales was mainly due to growth in sales of consultant work.
Net sales of Information Management Solutions business were 122.9 MEUR (116.8 MEUR) and net sales of Karttakeskus GIS business were 11.9 MEUR (11.5 MEUR).
Order backlog grew to 61.4 MEUR, 7% above last year (57.1 MEUR). The order backlog is estimated to contain more long-term projects than earlier.
PROFIT
Affecto's operating profit was 10.5 MEUR (8.2 MEUR) and the operational segment result was 12.5 MEUR (10.2 MEUR). Operational segment result was in Finland 7.7 MEUR (6.8 MEUR), in Norway 3.3 MEUR (3.1 MEUR), in Sweden -0.9 MEUR (-2.1 MEUR), in Denmark 1.8 MEUR (1.6 MEUR) and in Baltic 2.0 MEUR (2.1 MEUR).
Operating profit was 8% of net sales and profitability increased clearly from the previous year (6%). Sales of consultant work increased more than the personnel costs improving profitability. Small decrease in license sales affected profit negatively.
Profitability increased in almost all countries, and the 15% profitability reached in Finland is excellent, and the 11-12% in Norway, Denmark and Baltic is also a good performance. In Sweden the loss decreased from last year and the last quarter was positive also there. Development actions in Sweden continue and the goal is to achieve normal profitability also there, but structural and operational changes for the business will take some time.
According to the IFRS3 requirements, operating profit includes 2.1 MEUR (2.0 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 3.9 MEUR at the end of the reporting period.
R&D costs totaled 0.1 MEUR (0.7 MEUR), i.e. 0.1% of net sales (0.6%). 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. Change in the fair value of the interest swap agreement has caused 0.5 MEUR income (0.3 MEUR).
Taxes corresponding to the profit of the period have been entered as tax expense. Net profit for the period was 7.6 MEUR, while it was 5.3 MEUR last year.
FINANCE AND INVESTMENTS
At the end of the reporting period Affecto's balance sheet totaled 147.9 MEUR (145.1 MEUR). Equity ratio was 50.6% (46.1%) and net gearing was 15.8% (27.1%).
The financial loans were 30.5 MEUR (34.5 MEUR) at the end of reporting period. The company's cash and liquid assets were 19.8 MEUR (18.0 MEUR). The interest-bearing net debt was 10.6 MEUR (16.4 MEUR).
Cash flow from operating activities for the reported period was 9.1 MEUR (9.7 MEUR) and cash flow from investing activities was -1.0 MEUR (-2.1 MEUR). Investments in tangible and intangible assets were 1.0 MEUR (1.4 MEUR).
The Annual General Meeting held in April decided to distribute a dividend of 2.4 MEUR (1.3 MEUR).
EMPLOYEES
The number of employees was 1096 persons at the end of the reporting period (1061). 416 employees were based in Finland, 131 in Norway, 140 in Sweden, 69 in Denmark and 340 in the Baltic countries. The average number of employees during the period was 1089 (1011 in 2011, 919 in 2010). Wages and salaries were 60.2 MEUR (57.4 MEUR in 2011, 52.6 MEUR in 2010).
Rene Lykkeskov was appointed as the country manager for Sweden in September.
REVIEW OF MARKET DEVELOPMENTS
Uncertainty about the general economic development affected Affecto's business negatively in 2012. Customers' decision-making pace was slower than normally, which decreased Affecto's growth. The effect was especially visible in the third quarter. The sales of third-party licenses decreased during the early part of the year, which may have been caused by customers preferring to invest in further development of existing solutions instead of investing in totally new solutions. License sales recovered in the final months of the year.
In general, there has been no significant negative change in the market situation regarding our core markets. Enterprise Information Management (EIM) solutions are seen as tools for improving operational efficiency, so investments in them are expected to continue. The demand for EIM solutions, including Business Intelligence (BI) and Enterprise Content Management (ECM), is estimated to continue growing more rapidly than the general IT services. The analyst forecasts for the average annual growth of BI and analytics software license markets are approx. 6-8% in the next few years. The Nordic EIM services markets are estimated to grow annually by 6-8% on average. However, market growth estimates for 2012 and 2013 are smaller. 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.
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.
The net sales in Finland grew by 5% to 52.6 MEUR (50.3 MEUR). Net sales of consultant work grew, while net sales of licenses decreased. Operational segment result was 7.7 MEUR (6.8 MEUR). Profitability increased to 15%, an excellent level. Customers' cautiousness in decision making was clearly visible during the third quarter, but the business climate and customers' activity improved somewhat during the last months. As a whole, the year was good and development pretty steady. Largest deals in the review period were an agreement regarding the maintenance and development of Yleisradio's (The Finnish Broadcasting Company) in January and agreements with an energy sector, a media sector and a public sector customer in December.
The net sales of Karttakeskus GIS business, reported as part of Finland, grew slightly to 11.9 MEUR (11.5 MEUR) and its profitability was excellent. Largest deal in the review period was the GIS outsourcing agreement for one additional year with the Finnish Agency for Rural Affairs in April.
The net sales in Norway were 27.2 MEUR (27.8 MEUR) and operational segment result was 3.3 MEUR (3.1 MEUR). Net sales decreased by 2%, but profitability increased to 12%. Customers' interest for solutions including offshore/nearshore work has grown. Customers' cautiousness was clearly visible during the early part of the year, but the business climate and customers' activity seem to have somewhat improved by the end of the year. Order backlog is at a good level, but contains more long-term projects than earlier. Largest deals in the review period were the agreements with Santander Consumer Bank in April and November and an agreement with Dacon in December.
The net sales in Sweden were 24.0 MEUR (21.5 MEUR) and operational segment result -0.9 MEUR (-2.1 MEUR). The net sales grew by 11%, but the profit development was disappointing. Profit improved compared to the previous year but was still negative, although the last quarter was positive. The country manager for Sweden was changed in September. Largest deal in the review period was an agreement on cooperation in developing Toyota Material Handling Europe AB’s (TMHE) Corporate Performance Management (CPM) solution in February.
The net sales in Denmark were 16.0 MEUR (14.1 MEUR) and operational segment result was 1.8 MEUR (1.6 MEUR). Net sales grew by 14% and profitability remained at previous year's level of 11%. After a cautious start to the year the market climate seems to have improved and the customers' activity to have grown somewhat during the year. License sales picked up during the last quarter.
The net sales in Baltic (Lithuania, Latvia, Estonia, Poland, South Africa) were 16.7 MEUR (16.2 MEUR). Operational segment result was 2.0 MEUR (2.1 MEUR). Net sales grew by 3% and profitability was 12%. Slower than planned finalisation of certain projects affected profitability negatively. Business conditions seem to be more normal and optimistic than in the Nordic countries. The EU continues to have great importance in financing both public and also private investments. Largest deals in the review period were a new project agreement with Statistics Lithuania in February and an agreement with Port of Klaipeda in November.
ANNUAL GENERAL MEETING AND GOVERNANCE
The Annual General Meeting of Affecto Plc, held 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.
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 Company will issue a Corporate Governance Statement for year 2012 that has been composed in accordance with Recommendation 54 of the Corporate Governance code and Chapter 7, Section 7 of the Finnish Securities Market Act. The Corporate Governance Statement is issued separately from the report of the board of directors and it will available on the company’s website.
THE AUTHORIZATIONS GIVEN TO THE BOARD OF DIRECTORS
The Board has not used the authorizations given by the Annual General Meeting in 2011, which 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 company has acquired 100 000 own shares by 31 December 2012, part of which has been later conveyed as board fee payment.
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. Based on the authorization a total of 21 573 shares have been conveyed to the Board members as a partial payment of their fees, in accordance to the decision made by the Annual General Meeting.
SHARES AND TRADING
During the review period a total of 26 600 new shares were subscribed with 2008B options.
The company has only one share series and all shares have similar rights. As at 31 December 2012 Affecto Plc's share capital consisted of 21 543 068 shares. The company owned 78 427 treasury shares and Affecto Management Oy owned 823 000 shares.
In 2012 the highest share price was 3.00 euro, the lowest price 2.39 euro, the average price 2.73 euro and the closing price 2.95 euro. The trading volume was 4.9 million shares, corresponding to 23% of the number of shares at the end of the period. The market value of shares was 63.3 MEUR at the end of the period including the shares owned by Affecto Management Oy but excluding the treasury shares.
2008B options have been listed on Nasdaq OMX Helsinki since 2 April 2012. The 2006 option program expired on 31 December 2012 without subscriptions made with the options.
SHAREHOLDERS
The company had a total of 2339 owners on 31 December 2012 and the foreign ownership was 13%. 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. 14.7% (14.6% shares and 0.1% 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.
According to the flagging announcement made on 25 April 2012, the ownership of funds managed by Danske Invest Fund Management Ltd. has exceeded 5%.
ASSESSMENT OF RISKS AND UNCERTAINTIES
The changes in the general economic conditions and the operating environment of customers have direct impact in Affecto's markets. The Euro crisis 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 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. 10 MEUR in 2012.
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.
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 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 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 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.
DIVIDEND PROPOSAL
Distributable funds of the group parent company on 31 December 2012 are 67 268 561.05 euros, of which the distributable profit is 26 707 176.68 euros. Board of Directors proposes that from the financial year 2012 a dividend of 0.16 euros per share will be paid, a total of 3 434 342.56 euros with the outstanding number of shares at the end of the financial period, and the rest is carried forward to the retained earnings account. No material changes have taken place in respect of the company’s financial position after the balance sheet date. The liquidity of the company is good and in the opinion of the Board of Directors proposed distribution of profit does not risk the liquidity of the company.
FUTURE OUTLOOK
Operating profit and net sales are estimated to grow in 2013.
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
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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) | 10-12/2012 | 10-12/2011 | 2012 | 2011 |
| Net sales | 38 301 | 36 643 | 133 400 | 127 270 |
| Other operating income | 196 | 7 | 221 | 97 |
|
Changes in inventories of finished goods and work in progress |
-68 | -85 | -94 | -72 |
| Materials and services | -8 997 | -8 291 | -27 072 | -26 777 |
| Personnel expenses | -19 516 | -20 232 | -75 542 | -72 003 |
| Other operating expenses | -4 554 | -4 341 | -17 106 | -16 907 |
| Other depreciation and amortisation | -322 | -368 | -1 290 | -1 405 |
| IFRS3 amortisation | -521 | -502 | -2 067 | -2 020 |
| Operating profit | 4 519 | 2 831 | 10 451 | 8 182 |
| Net financial expenses | -232 | -179 | -408 | -1 096 |
| Profit before income tax | 4 287 | 2 652 | 10 042 | 7 087 |
| Income tax | -1 036 | -628 | -2 467 | -1 762 |
| Profit for the period | 3 250 | 2 024 | 7 575 | 5 324 |
|
Profit for the period attributable to: |
||||
| Owners of the parent company | 3 260 | 2 022 | 7 552 | 5 328 |
| Non-controlling interest | -9 | 2 | 23 | -3 |
|
Earnings per share (EUR per share): |
||||
| Basic | 0.16 | 0.10 | 0.37 | 0.26 |
| Diluted | 0.15 | 0.10 | 0.36 | 0.25 |
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
||||
| (1 000 EUR) | 10-12/2012 | 10-12/2011 | 2012 | 2011 |
| Profit for the period | 3 250 | 2 024 | 7 575 | 5 324 |
| Other comprehensive income: | ||||
| Translation difference | -323 | 1 174 | 1 723 | 252 |
|
Total Comprehensive income for the period |
2 927 | 3 198 | 9 298 | 5 576 |
|
Total Comprehensive income attributable to: |
||||
| Owners of the parent company | 2 937 | 3 196 | 9 275 | 5 579 |
| Non-controlling interest | -9 | 2 | 23 | -3 |
CONSOLIDATED BALANCE SHEET
| (1 000 EUR) | 12/2012 | 12/2011 |
| Non-current assets | ||
| Property, plant and equipment | 1 711 | 2 051 |
| Goodwill | 74 651 | 73 102 |
| Other intangible assets | 4 098 | 5 974 |
| Deferred tax assets | 1 506 | 1 562 |
| Trade and other receivables | 11 | 17 |
| 81 977 | 82 706 | |
| Current assets | ||
| Inventories | 317 | 402 |
| Trade and other receivables | 45 529 | 43 373 |
| Current income tax receivables | 325 | 665 |
| Cash and cash equivalents | 19 767 | 17 964 |
| 65 937 | 62 405 | |
| Total assets | 147 914 | 145 111 |
|
Equity attributable to owners of the parent Company |
||
| Share capital | 5 105 | 5 105 |
|
Reserve of invested non-restricted equity |
46 643 | 46 591 |
| Other reserves | 693 | 593 |
| Treasury shares | -2 202 | -1 996 |
| Translation differences | 946 | -777 |
| Retained earnings | 15 781 | 10 642 |
| 66 965 | 60 159 | |
| Non-controlling interest | 311 | 376 |
| Total equity | 67 277 | 60 535 |
| Non-current liabilities | ||
| Loans and borrowings | 26 387 | 30 355 |
| Deferred tax liabilities | 987 | 1 550 |
| 27 374 | 31 905 | |
| Current liabilities | ||
| Loans and borrowings | 4 000 | 4 000 |
| Derivative financial instruments | - | 475 |
| Trade and other payables | 46 745 | 45 380 |
| Current income tax liabilities | 2 159 | 1 994 |
| Provisions | 359 | 822 |
| 53 263 | 52 670 | |
| Total liabilities | 80 638 | 84 576 |
| Equity and liabilities | 147 914 | 145 111 |
SUMMARY CONSOLIDATED CASH FLOW STATEMENT
| (1 000 EUR) | 2012 | 2011 |
| Cash flows from operating activities | ||
| Profit for the period | 7 575 | 5 324 |
| Adjustments to profit for the period | 6 449 | 6 461 |
| 14 024 | 11 786 | |
| Change in working capital | -1 340 | 985 |
| Interest and other financial cost paid | -1 207 | -1 579 |
| Interest and other financial income received | 165 | 202 |
| Income taxes paid | -2 525 | -1 685 |
| Net cash from operating activities | 9 117 | 9 709 |
| Cash flows from investing activities | ||
| Payment of liabilities, Affecto Estonia | - | -740 |
| Acquisition of tangible and intangible assets | -1 008 | -1 416 |
|
Proceeds from sale of tangible and intangible assets |
49 | 42 |
| Net cash used in investing activities | -959 | -2 114 |
| Cash flows from financing activities | ||
| Proceeds from non-current borrowings | - | 36 339 |
| Repayments of non-current borrowings | -4 000 | -38 500 |
| Acquisition of treasury shares | -266 | - |
| Proceeds from share options exercised | 49 | - |
| Acquisition of non-controlling interest | -134 | - |
|
Dividends paid to the owners of the parent company |
-2 367 | -1 291 |
| Net cash from financing activities | -6 718 | -3 452 |
| (Decrease)/increase in cash and cash equivalents | 1 440 | 4 144 |
|
Cash and cash equivalents at the beginning of the period |
17 964 | 13 818 |
| Foreign exchange effect on cash | 363 | 3 |
|
Cash and cash equivalents at the end of the period |
19 767 | 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 | 7 552 | 23 | 7 575 | |||||
| Translation differences | 1 723 | 1 723 | ||||||
| Total compre-hensive income | 1 723 | 7 552 | 23 | 9 298 | ||||
| Share-based payments | 100 | 100 | ||||||
| Exercise of share options | 49 | 49 | ||||||
| Acquisition of treasury shares | -266 | -266 | ||||||
| Treasury shares as compensation to the Board of Directors | 2 | 60 | 62 | |||||
| Acquisition of non-controlling interest without changing control | -45 | -89 | -135 | |||||
| Dividends paid | -2 367 | -2 367 | ||||||
| Equity at 31 December 2012 | 5 105 | 46 643 | 693 | -2 202 | 946 | 15 781 | 311 | 67 277 |
|
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 | 5 328 | -3 | 5 324 | |||||
| Translation differences | 252 | 252 | ||||||
| Total compre-hensive income | 252 | 5 328 | -3 | 5 576 | ||||
| Share-based payments | 176 | 176 | ||||||
| Dividends paid | -1 291 | -1 291 | ||||||
| Equity at 31 December 2011 | 5 105 | 46 591 | 593 | -1 996 | -777 | 10 642 | 376 | 60 535 |
2. Notes
2.1. Basis of preparation
This financial statement bulletin has been prepared in accordance with the IFRS recognition and measurement principles and in accordance with IAS 34, Interim Financial reporting. The financial statement bulletin 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) | 10-12/2012 | 10-12/2011 | 2012 | 2011 |
| Total net sales | ||||
| Finland | 14 680 | 14 840 | 52 570 | 50 277 |
| Norway | 8 003 | 7 266 | 27 161 | 27 841 |
| Sweden | 7 323 | 6 693 | 23 984 | 21 513 |
| Denmark | 4 947 | 3 841 | 16 038 | 14 072 |
| Baltic | 4 287 | 4 825 | 16 684 | 16 167 |
| Other | -938 | -823 | -3 036 | -2 600 |
| Group total | 38 301 | 36 643 | 133 400 | 127 270 |
| Operational segment result | ||||
| Finland | 2 531 | 2 254 | 7 747 | 6 804 |
| Norway | 1 311 | 956 | 3 317 | 3 109 |
| Sweden | 335 | -677 | -945 | -2 141 |
| Denmark | 922 | 659 | 1 800 | 1 593 |
| Baltic | 520 | 455 | 1 981 | 2 100 |
| Other | -579 | -314 | -1 382 | -1 263 |
| Total operational segment result | 5 040 | 3 333 | 12 518 | 10 202 |
| IFRS amortisation | -521 | -502 | -2 067 | -2 020 |
| Operating profit | 4 519 | 2 831 | 10 451 | 8 182 |
Net sales by business lines
| (1 000 EUR) | 10-12/2012 | 10-12/2011 | 2012 | 2011 |
| Information Management Solutions | 35 511 | 33 783 | 122 892 | 116 812 |
| Karttakeskus GIS business | 3 159 | 3 224 | 11 884 | 11 533 |
| Other | -369 | -364 | -1 376 | -1 076 |
| Group total | 38 301 | 36 643 | 133 400 | 127 270 |
2.3. Changes in intangible and tangible assets
| (1 000 EUR) | 2012 | 2011 |
| Carrying amount at the beginning of period | 81 127 | 82 873 |
| Additions | 1 008 | 1 416 |
| Disposals | -30 | -7 |
| Depreciation and amortization for the period | - 3 357 | - 3 424 |
| Exchange rate differences | 1 711 | 269 |
| Carrying amount at the end of period | 80 460 | 81 127 |
2.4. Share capital, share premium, 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 |
| 1.1.2011 | 20 693 468 | 5 105 | 46 591 | -1 996 |
| 31.12.2011 | 20 693 468 | 5 105 | 46 591 | -1 996 |
| 1.1.2012 | 20 693 468 | 5 105 | 46 591 | -1 996 |
| Exercise of share options | 26 600 | - | 49 | - |
| Acquisition of treasury shares | -100 000 | - | - | -266 |
| Treasury shares of compensation to the Board of Directors | 21 573 | - |
2 |
60 |
| 31.12.2012 | 20 641 641 | 5 105 | 46 643 | -2 202 |
At the end of reporting period Affecto Plc owned 78 427 treasury shares. In addition to that Affecto Management Oy, included in consolidated accounts, owned 823 000 shares in Affecto Plc. The amount of registered shares was 21 543 068 shares.
2.5. Interest-bearing liabilities
| (1 000 EUR) | 31.12.2012 | 31.12.2011 |
| Interest-bearing non-current liabilities | ||
|
Loans from financial institutions, non-current portion |
26 387 | 30 355 |
|
Loans from financial institutions, current portion |
4 000 | 4 000 |
| 30 387 | 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.
2.6. Contingencies and commitments
The future aggregate minimum lease payments under non-cancelable operating leases:
| (1 000 EUR) | 31.12.2012 | 31.12.2011 |
| Not later than one (1) year | 3 966 | 4 046 |
|
Later than one (1) year, but not later than five (5) years |
6 594 | 7 526 |
| Later than five (5) years | - | 614 |
| Total | 10 561 | 12 186 |
Guarantees given:
| (1 000 EUR) | 31.12.2012 | 31.12.2011 |
| Liabilities secured by a mortgage | ||
| Financial loans | 30 500 | 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) | 31.12.2012 | 31.12.2011 |
| Pledges | 6 | 30 |
| Other guarantees | 3 559 | 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.
2.7. Derivative contracts
| (1 000 EUR) | 31.12.2012 | 31.12.2011 |
| Interest rate swap: | ||
| Nominal value | - | 20 250 |
| Fair value | - | -475 |
The interest rate swap agreement expired on 31 December 2012
2.8. Related party transactions
Key management compensation and remunerations to the board of directors:
| (1 000 EUR) | 2012 | 2011 |
| Salaries and other short-term employee benefits |
2 184 |
2 203 |
| Post-employment benefits | 279 | 384 |
| Termination benefits | 245 | - |
| Share-based payments | 13 | 30 |
| Total | 2 721 | 2 616 |
Loans to related party:
| (1 000 EUR) | 31.12.2012 | 31.12.2011 |
| Loans to key management of the group | 1 624 | 1 625 |
3. Key figures
| 10-12/2012 | 10-12/2011 | 2012 | 2011 | |
| Net sales, 1 000 eur | 38 301 | 36 643 | 133 400 | 127 270 |
| EBITDA, 1 000 eur | 5 362 | 3 701 | 13 808 | 11 608 |
|
Operational segment result, 1 000 eur |
5 041 | 3 333 | 12 518 | 10 202 |
| Operating result, 1 000 eur | 4 519 | 2 831 | 10 451 | 8 182 |
| Result before taxes, 1 000 eur | 4 287 | 2 652 | 10 042 | 7 087 |
|
Profit attributable to the owners of the parent company, 1 000 eur |
3 260 | 2 022 | 7 552 | 5 328 |
| EBITDA, % | 14.0 % | 10.1 % | 10.4 % | 9.1 % |
| Operational segment result, % | 13.2 % | 9.1 % | 9.4 % | 8.0 % |
| Operating result, % | 11.8 % | 7.7 % | 7.8 % | 6.4 % |
| Result before taxes, % | 11.2 % | 7.2 % | 7.5 % | 5.6 % |
|
Net income for equity holders of the parent company, % |
8.5 % | 5.5 % | 5.7 % | 4.2 % |
| Equity ratio, % | 50.6 % | 46.1 % | 50.6 % | 46.1 % |
| Net gearing, % | 15.8 % | 27.1 % | 15.8 % | 27.1 % |
|
Interest-bearing net debt, 1 000 eur |
10 621 | 16 391 | 10 621 | 16 391 |
|
Gross investment in non-current assets (excl. acquisitions), 1 000 eur |
175 | 435 | 1 008 | 1 416 |
| Gross investments, % of net sales | 0.5 % | 1.2 % | 0.8 % | 1.1 % |
|
Order backlog, 1 000 eur |
61 359 | 57 110 | 61 359 | 57 110 |
| Average number of employees | 1 095 | 1 019 | 1 089 | 1 011 |
| Earnings per share, eur | 0.16 | 0.10 | 0.37 | 0.26 |
|
Earnings per share (diluted), eur |
0.15 | 0.10 | 0.36 | 0.25 |
| Equity per share, eur | 3.24 | 2.91 | 3.24 | 2.91 |
|
Average number of shares, 1 000 shares |
20 615 | 20 693 | 20 642 | 20 693 |
|
Number of shares at the end of period, 1 000 shares |
20 642 | 20 693 | 20 642 | 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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