Helsinki, Finland, 2012-02-16 11:30 CET (GLOBE NEWSWIRE) --
AFFECTO PLC -- FINANCIAL STATEMENTS BULLETIN -- 16 FEBRUARY 2012 at 12.30
Affecto Plc's Financial Statements Bulletin 2011
Group key figures
MEUR 10-12/11 10-12/10 2011 2010
Net sales 36.6 36.0 127.3 114.1
Operational segment result 3.3 2.9 10.2 5.3
% of net sales 9.1 8.1 8.0 4.6
Operating profit 2.8 2.4 8.2 3.3
% of net sales 7.7 6.7 6.4 2.9
Profit before taxes 2.7 2.0 7.1 1.5
Profit for the period 2.0 1.3 5.3 0.9
Equity ratio, % 46.1 43.1 46.1 43.1
Net gearing, % 27.1 40.4 27.1 40.4
Earnings per share, eur 0.10 0.07 0.26 0.05
Earnings per share (diluted), eur 0.10 0.07 0.25 0.05
Equity per share, eur 2.91 2.69 2.91 2.69
Dividend proposal, eur/share 0.11 0.06
CEO Pekka Eloholma comments:
"Our performance in the fourth quarter was good. Net sales grew to 36.6 MEUR.
Sweden had the highest growth rate (39%). EBIT grew to 2.8 MEUR and was 8% of
net sales. Regarding net sales, the quarter was the second-best in the
company's history. This was also the highest operating profit in over three
years."
"Affecto's order backlog reached a new all-time-high level 57.1 MEUR, which is
5% higher than in Q4/2010 (54.4 MEUR). The increased uncertainty about the
general economic developments has not much affected our daily work and the
demand for our solutions has continued to be good."
"We have succeeded well in our main goal for year 2011, profit improvement.
Profitability has improved by at least two percentage points from previous year
in all other countries except Sweden. Our operating profit more than doubled to
8.2 MEUR (3.3 MEUR) and earnings per share increased to 26 cents (5 cents). The
board has proposed a dividend distribution of 0.11 EUR/share (0.06)."
"Our net sales grew by 12% in 2011 to 127.3 MEUR. In our main business area,
EIM solutions, we outpaced the market growth in all Nordic countries. We grew
by over 40% in Sweden, where we invested in organic growth."
"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.
BUSINESS DEVELOPMENT DURING 10-12/2011
Affecto's net sales in 10-12/2011 were 36.6 MEUR (10-12/2010: 36.0 MEUR). Net
sales in Finland were 14.8 MEUR (13.2 MEUR), in Norway 7.3 MEUR (8.1 MEUR), in
Sweden 6.7 MEUR (4.8 MEUR), in Denmark 3.8 MEUR (6.7 MEUR) and 4.8 MEUR (3.9
MEUR) in Baltic.
Performance in the fourth quarter was good. Net sales grew by 2% and the low
growth was due to a couple of exceptionally large license deals in Denmark and
Norway in the same period last year. Sales of Affecto's own work increased
clearly. Sweden had the highest growth rate (39%).
Affecto's order backlog reached a new all-time-high level 57.1 MEUR, which is
5% higher than in Q4/2010 (54.4 MEUR). The increased uncertainty about the
general economic developments has not much affected our daily work and the
demand for our solutions has continued to be good.
Net sales by reportable segments
Net sales, MEUR 10-12/11 10-12/10 2011 2010
Finland 14.8 13.2 50.3 46.5
Norway 7.3 8.1 27.8 25.8
Sweden 6.7 4.8 21.5 15.3
Denmark 3.8 6.7 14.1 15.4
Baltic 4.8 3.9 16.2 13.7
Other -0.8 -0.7 -2.6 -2.7
-------------------------------------------------
-------------------------------------------------
Group total 36.6 36.0 127.3 114.1
Net sales of Information Management Solutions business in 10-12/2011 were 33.8
MEUR (33.3 MEUR) and net sales of Geographic Information Services were 3.2 MEUR
(2.9 MEUR).
PROFIT
Affecto's operating profit in 10-12/2011 was 2.8 MEUR (2.4 MEUR) and the
operational segment result was 3.3 MEUR (2.9 MEUR). Operational segment result
was in Finland 2.3 MEUR (1.8 MEUR), in Norway 1.0 MEUR (1.1 MEUR), in Sweden
-0.7 MEUR (-0.6 MEUR), in Denmark 0.7 MEUR (0.6 MEUR) and in Baltic 0.5 MEUR
(0.4 MEUR).
Compared to last year, profit increased clearly in Denmark and Finland and
remained approximately at the same level in Norway and Baltic. Also in Sweden
the operational profitability of the business improved during the quarter, but
as the personnel cost calculation methods were changed during the quarter due
to a changed interpretation of certain legislative rules, the last quarter's
result includes approx. 0.5 MEUR of extra cost related already to the previous
quarters. Without the change, the result in Sweden would have been approx. -0.1
MEUR.
Operational segment result by reportable segments
Operational segment 10-12/11 10-12/10 2011 2010
result, MEUR
Finland 2.3 1.8 6.8 5.1
Norway 1.0 1.1 3.1 2.4
Sweden -0.7 -0.6 -2.1 -1.7
Denmark 0.7 0.6 1.6 1.2
Baltic 0.5 0.4 2.1 0.6
Other -0.3 -0.3 -1.3 -2.4
----------------------------------------------------------
----------------------------------------------------------
Operational segment result 3.3 2.9 10.2 5.3
IFRS3 Amortization -0.5 -0.5 -2.0 -2.0
----------------------------------------------------------
Operating profit 2.8 2.4 8.2 3.3
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 0.3 MEUR income in 2011
(0.2 MEUR in Q1, 0.0 MEUR in Q2, 0.0 MEUR in Q3, 0.1 MEUR in Q4).
Taxes corresponding to the profit of the period have been entered as tax
expense. Net profit for the period was 2.0 MEUR, while it was 1.3 MEUR last
year.
YEAR 2011
Affecto is the forerunner in the field of Enterprise Information Management and
the leading Business Intelligence (BI) solution provider in the Nordic
countries. We help our customers to improve productivity and competitiveness by
superior use of information for decision making. 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 and we have subsidiaries in Finland,
Sweden, Norway, Denmark, Estonia, Lithuania, Latvia and Poland.
NET SALES
Affecto's net sales in year 2011 were 127.3 MEUR (Year 2010: 114.1 MEUR). Net
sales in Finland were 50.3 MEUR (46.5 MEUR), in Norway 27.8 MEUR (25.8 MEUR),
in Sweden 21.5 MEUR (15.3 MEUR), in Denmark 14.1 MEUR (15.4 MEUR) and 16.2 MEUR
(13.7 MEUR) in Baltic.
Net sales grew by 12%, and in our main business area, EIM solutions, we
outpaced the market growth in all Nordic countries. Growth was over 40% in
Sweden, where we invested in organic growth. Growth in Baltic was 18%, and the
market improved there during the early part of the year, but cautiousness
increased in the latter half of the year. In Finland the growth was mainly in
the BI business. In Denmark there was significant growth in net sales from own
project work, but total net sales decreased due to the smaller amount of
third-party licenses sold.
The business developed steadily in the Nordic countries, and the Nordic BI
market remained strong during the year. The growth in general economic
uncertainty during the autumn months did not affect our business to any large
extent. The customer's interest for Affecto's solutions remained good.
Net sales of Information Management Solutions business were 116.8 MEUR (103.6
MEUR) and net sales of Geographic Information Services were 11.5 MEUR (11.0
MEUR).
The order backlog was 57.1 MEUR, which is 5% higher than the Q4/2010 order
backlog (54.4 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 was 8.2 MEUR (3.3 MEUR) and the operational segment
result was 10.2 MEUR (5.3 MEUR). Operational segment result was in Finland 6.8
MEUR (5.1 MEUR), in Norway 3.1 MEUR (2.4 MEUR), in Sweden -2.1 MEUR (-1.7
MEUR), in Denmark 1.6 MEUR (1.2 MEUR) and in Baltic 2.1 MEUR (0.6 MEUR).
Profitability improved in all countries during the year. Baltic had the largest
improvement in profitability (from 4 to 13%) and in Finland the profit
increased the most in euro terms (from 5.1 to 6.8 MEUR). Denmark and Norway had
their best annual results ever. In all of these countries, the profit
improvement came from increased operational efficiency of the business
operations, and no significant non-recurring items were included.
Sweden remained loss-making due to the ongoing development actions, as the
local organization and processes have been developed in search of strong
growth. The number of employees in Sweden grew organically by approx. 40%
during the year. However, Sweden did not reach its profitability goals,
although operational profitability improved toward the year-end.
According to the IFRS3 requirements, operating profit includes 2.0 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 5.8 MEUR at
the end of the reporting period.
R&D costs totaled 0.7 MEUR (1.2 MEUR), i.e. 0.6% of net sales (1.0%). These
costs have been recognized as an expense in the income statement.
Taxes corresponding to the profit of the period have been entered as tax
expense. Net profit for the period was 5.3 MEUR, while it was 0.9 MEUR last
year.
FINANCE AND INVESTMENTS
At the end of the reporting period, Affecto's balance sheet totaled 145.1 MEUR
(142.9 MEUR). Equity ratio was 46.1% (43.1%) and net gearing was 27.1% (40.4%).
The financial loans were 34.5 MEUR (36.5 MEUR) at the end of reporting period.
The company's cash and liquid assets were 18.0 MEUR (13.8 MEUR). The
interest-bearing net debt was 16.4 MEUR (22.6 MEUR). Affecto has renegotiated
the bank loan in June 2011 and the loan agreement is valid until June 2016. 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 the covenants
were met at the end of the reporting period.
Cash flow from operating activities for the reported period was 9.7 MEUR (1.5
MEUR) and cash flow from investing activities was -2.1 MEUR (-1.0 MEUR).
Investments in non-current assets were 1.4 MEUR (1.1 MEUR).
Based on the decision by the Annual General Meeting held on 31 March 2011,
Affecto has distributed dividends of 1.3 MEUR (previous year 1.3 MEUR).
EMPLOYEES
The number of employees was 1061 persons at the end of the reporting period
(947). 407 employees were based in Finland, 134 in Norway, 151 in Sweden, 75 in
Denmark and 294 in the Baltic countries. The average number of employees during
the period was 1011 (919 in 2010, 974 in 2009). Wages and salaries were 57.4
MEUR (52.6 MEUR in 2010, 48.6 MEUR in 2009).
Stig-Göran Sandberg was appointed as Country Manager for Finland in June. He
also continues as the Area Manager for Baltic. HR director Hilkka
Remes-Hyvärinen retired in September.
Affecto invests in employee development through various initiatives like the
training concept "Affecto University". Affecto's image as a workplace is
annually evaluated in the Great Place to Work survey, where Affecto ranked
among the country best workplaces in Finland, Norway, Sweden and Denmark.
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.
Finland
Net sales in Finland were 50.3 MEUR (46.5 MEUR). Operational segment result was
6.8 MEUR (5.1 MEUR). The business developed rather steadily, and the
profitability remained at a good level the whole year. Net sales grew by 8%,
mostly in BI business area. Customers' activity has remained good, especially
regarding BI solutions, and the effects of the increased economic uncertainty
did not have material impact.
The Karttakeskus GIS business, reported as a part of Finland, developed well.
Its net sales grew to 11.5 MEUR (11.0 MEUR) and the unit's profitability was
good. Several large customer agreements were signed during the year: the
Digiroad outsourcing agreement with the Finnish Transport Agency for the next
three years, the GIS outsourcing agreement with the Finnish Agency for Rural
Affairs for a year and the GIS system development project with Metsähallitus.
Norway
Net sales in Norway were 27.8 MEUR (25.8 MEUR) and operational segment result
was 3.1 MEUR (2.4 MEUR). Net sales grew by 8% and profitability improved as the
efficiency of business operations improved. The operational segment result was
the best in the company's history. During the latter part of the year, several
significant customer agreements were signed e.g. with Norway Post, Santander
and Finanstilsynet.
Sweden
Net sales in Sweden were 21.5 MEUR (15.3 MEUR) and operational segment result
-2.1 MEUR (-1.7 MEUR). Net sales grew organically by 41% and correspondingly
the number of employees has grown by approx. 40% during the year. The
forward-looking building of the local organization, targeting a significant
growth in net sales in 2011, has clearly lowered profitability. The operational
profitability of the business improved during the year, but a positive result
was not yet reached during the year. The personnel cost calculation methods
were changed during the last quarter due to a changed interpretation of certain
legislative rules, which weakened the annual result by approx. 0.5 MEUR
compared to previous years. The increased order backlog and delivery capacity
provide a good basis for improving profitability.
Denmark
Net sales in Denmark were 14.1 MEUR (15.4 MEUR) and operational segment result
was 1.6 MEUR (1.2 MEUR). The result was the best in the company's history and
one reason was a clear growth in the sales of own work. Net sales decreased due
to a decrease in the third-party license sales.
Baltic (Lithuania, Latvia, Estonia, Poland, South Africa)
Net sales in Baltic were 16.2 MEUR (13.7 MEUR). Operational segment result was
2.1 MEUR (0.6 MEUR). Net sales grew by 18% and profitability improved clearly.
The national economies in the Baltic countries have already returned to growth
path, but the local IT markets have not yet fully recovered from the effects of
the financial crisis and the customers' cautiousness increased again in the
last months of the year. The price competition continues to be tight, and the
EU continues to have great importance in financing both public and also private
investments. The demand for BI solutions has grown somewhat. New projects were
received during the period mostly from public sector entities, e.g. from SODRA.
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 BI will increase their role in the solution
offering.
The growth in uncertainty during the last months of 2011 hasn't so far
materially impacted Affecto's business, but should the uncertainty continue, it
may negatively impact customers' investment decisions either by slowing
decision making or cutting investment plans. On the other hand, the EIM
solutions are seen as a tool for improving operational efficiency and thus the
demand for them did not significantly decrease in the 2008-2010 recession.
CHANGES IN GROUP STRUCTURE
Affecto has established a separate subsidiary Karttakeskus Oy for conducting
the Geographic Information Services (GIS) business in Finland. The GIS services
business was separated from Affecto Finland Ltd through a partial de-merger on
1 January 2011. Both Affecto Finland Ltd and the new Karttakeskus Oy are
wholly-owned subsidiaries of the parent company Affecto Plc.
Affecto has acquired the remaining shares of Affecto Estonia from the minority
shareholders in July. The company is previously consolidated as 100 %
subsidiary in the financial statement of the group and this arrangement is
disclosed in detail in the notes 16 and 33 of the consolidated financial
statements for the year 2010. The transaction had no material impact on the
group financials.
ANNUAL GENERAL MEETING AND GOVERNANCE
The Annual General Meeting of Affecto Plc, which was held on 31 March 2011,
adopted the financial statements for 1.1.–31.12.2010 and discharged the members
of the Board of Directors and the CEO from liability. Approximately 41 percent
of Affecto's shares and votes were represented at the Meeting. The Annual
General Meeting decided that a dividend of EUR 0.06 per share will be
distributed for the year 2010.
Aaro Cantell, Heikki Lehmusto, Jukka Ruuska and Haakon Skaarer were re-elected
as members of the Board of Directors, and Tuija Soanjärvi and Lars Wahlström
were elected as new members. Immediately after the Annual General Meeting the
organization meeting of the Board of Directors was held 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 2011 the Board has not used the authorizations given by the previous Annual
General Meeting. Those authorizations expired on 31 March 2011.
The complete contents of the new authorizations given by the Annual General
Meeting held on 31 March 2011 have been published in the stock exchange release
regarding the Meetings' decisions. The Board did not use the authorizations by
the end of the review period.
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 December 2011, 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 2011, the highest share price was 2.97 euro, the lowest price 2.00 euro,
the average price 2.46 euro and the closing price 2.36 euro. The trading volume
was 8.8 million shares, corresponding to 41% of the number of shares at the end
of the period. The market value of shares was 50.8 MEUR at the end of the
period including the shares owned by Affecto Management Oy.
The share subscription period of the 2006B options expired on 31 December 2011
and no subscriptions were made.
SHAREHOLDERS
The company had a total of 1822 owners on 31 December 2011 and the foreign
ownership was 17%. 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%
(14.5% shares and 0.2% options).
According to the flagging announcements made on 12 January 2011, the ownership
of Capman Public Market Investment has decreased below 5% and the ownership of
OP-Pohjola (OP-Rahastoyhtiö funds) has exceeded 5%.
According to the flagging announcement made on 17 February 2011, the ownership
of Nordea Rahastoyhtiö Suomi has exceeded 5%.
According to the flagging announcement made on 11 April 2011, the ownership of
Nordea Rahastoyhtiö Suomi has decreased below 5%.
According to the flagging announcement made due to a technical change on 13
June 2011, the ownership of OP-Pohjola has decreased below 5% and the ownership
of OP-Rahastoyhtiö funds has exceeded 5%.
According to the flagging announcement made on 26 September 2011, the ownership
of Aaro Cantell and his controlled entities has exceeded 10%.
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.
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
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.
DIVIDEND PROPOSAL
The Board has updated Affecto's dividend policy: Affecto's dividend policy is
to pay 30-50 percent of the profit as dividend. The company may deviate from
this policy due to the needs of business development and growth.
Distributable funds of the group parent company on 31 December 2011 are 67 171
521.24 euros, of which the distributable profit is 26 661 597.75 euros. Board
of Directors proposes that from the financial year 2011 a dividend of 0.11
euros per share will be paid, a total of 2 366 811.48 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
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) 10-12/11 10-12/10 2011 2010
-------------------------------------
-------------------------------------
Net sales 36 643 36 046 127 270 114 078
Other operating income 7 34 97 57
Changes in inventories of -85 -18 -72 -181
finished goods and work in
progress
Materials and services -8 291 -10 311 -26 777 -25 393
Personnel expenses -20 232 -17 868 -72 003 -64 838
Other operating expenses -4 341 -4 635 -16 907 -17 106
Other depreciation and amortisation -368 -325 -1 405 -1 352
IFRS3 amortisation -502 -501 -2 020 -1 990
Operating profit 2 831 2 422 8 182 3 275
Net financial expenses -179 -440 -1 096 -1 797
Profit before income tax 2 652 1 982 7 087 1 479
Income tax -628 -634 -1 762 -546
Profit for the period 2 024 1 348 5 324 933
Profit for the period
attributable to:
Owners of the parent company 2 022 1 361 5 328 955
Non-controlling interest 2 -13 -3 -22
Earnings per share
(EUR per share):
Basic 0.10 0.07 0.26 0.05
Diluted 0.10 0.07 0.25 0.05
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
(1 000 EUR) 10-12/11 10-12/10 2011 2010
-------------------------------------
-------------------------------------
Profit for the period 2 024 1 348 5 324 933
Other comprehensive income:
Translation difference 1 174 787 252 4 214
Total Comprehensive income 3 198 2 135 5 576 5 146
for the period
Total Comprehensive income
attributable to:
Owners of the parent company 3 196 2 148 5 579 5 169
Non-controlling interest 2 -13 -3 -22
CONSOLIDATED BALANCE SHEET
(1 000 EUR) 12/2011 12/2010
-----------------
-----------------
Non-current assets
Property, plant and equipment 2 051 1 908
Goodwill 73 102 72 866
Other intangible assets 5 974 8 099
Deferred tax assets 1 562 1 506
Available-for-sale financial assets - 19
Trade and other receivables 17 36
82 706 84 434
Current assets
Inventories 402 482
Trade and other receivables 43 373 43 662
Current income tax receivables 665 505
Cash and cash equivalents 17 964 13 818
62 405 58 468
-----------------------------------------------------
-----------------------------------------------------
Total assets 145 111 142 901
Equity attributable to owners
of the parent Company
Share capital 5 105 5 105
Reserve of invested non-restricted 46 591 46 591
equity
Other reserves 593 417
Treasury shares -1 996 -1 996
Translation differences -777 -1 028
Retained earnings 10 642 6 605
-----------------------------------------------------
-----------------------------------------------------
60 159 55 695
Non-controlling interest 376 380
Total equity 60 535 56 074
Non-current liabilities
Borrowings 30 355 32 462
Derivative financial instruments - 784
Deferred tax liabilities 1 550 2 288
31 905 35 535
Current liabilities
Borrowings 4 000 4 000
Derivative financial instruments 475 -
Trade and other payables 45 380 45 290
Current income tax liabilities 1 994 953
Provisions 822 1 049
52 670 51 292
Total liabilities 84 576 86 827
-----------------------------------------------------
-----------------------------------------------------
Equity and liabilities 145 111 142 901
SUMMARY CONSOLIDATED CASH FLOW STATEMENT
(1 000 EUR) 2011 2010
-----------------------------------------------------------------
-----------------------------------------------------------------
Cash flows from operating activities
Profit for the period 5 324 933
Adjustments to profit for the period 6 461 5 737
11 786 6 670
Change in working capital 985 -3 314
Interest and other financial cost paid -1 579 -1 651
Interest and other financial income received 202 144
Income taxes paid -1 685 -335
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Net cash from operating activities 9 709 1 514
Cash flows from investing activities
Payment of liabilities, Affecto Estonia -740 -
Acquisition of tangible and intangible -1 416 -1 072
assets
Proceeds from sale of tangible and 42 6
intangible assets
Proceeds from sale of Available-for-sale - 41
financial assets
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-----------------------------------------------------------------
Net cash used in investing activities -2 114 -1 025
Cash flows from financing activities
Related party investments* - 402
Proceeds from non-current borrowings 36 339 -
Repayments of non-current borrowings -38 500 -4 000
Acquisition and disposal of treasury - -1 906
shares**
Dividends paid to the owners -1 291 -1 289
of the parent company
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-----------------------------------------------------------------
Net cash from financing activities -3 452 -6 792
(Decrease)/increase in cash and cash equivalents 4 144 -6 304
Cash and cash equivalents 13 818 19 525
at the beginning of the period
Foreign exchange effect on cash 3 597
Cash and cash equivalents 17 964 13 818
at the end of the period
* Affecto Group management’s investment to incentive arrangement
** Includes shares in Affecto Plc acquired by Affecto Management Oy.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity attributable to owners of the parent
company
------------------------------------------------------
------------------------------------------------------
(1 000 Share Reserve of Other Treasu Trans Ret. Non-cont Total
EUR) capita invested reserv ry lat. earnin rolling equity
l non-restrict es shares diff. gs interest
ed equity
Equity 5 105 46 591 417 -1 996 -1 028 6 605 380 56 074
at 1
January
2011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit 5 328 -3 5 324
Translat 252 252
ion
differe
nces
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 252 5 328 -3 5 576
compre-
hensive
income
Share-ba 176 176
sed
payment
s
Dividend -1 291 -1 291
s paid
--------------------------------------------------------------------------------
Equity 5 105 46 591 593 -1 996 -777 10 642 376 60 535
at 31
Decembe
r 2011
Equity attributable to owners of the parent
company
---------------------------------------------------------
---------------------------------------------------------
(1 000 Share Share Reserve Other Treasu Transl Ret. Non-co Total
EUR) capita premiu of reserv ry at. earnin ntroll equity
l m investe es shares diff. gs ing
d intere
non-res st
tricted
equity
Equity 5 105 25 404 21 188 264 -106 -5 242 6 955 - 53 568
at 1
Januar
y 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit 955 -22 933
Transla 4 214 4 214
tion
differ
ences
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total 4 214 955 -22 5 146
compre
-hensiv
e
income
Share-b 153 153
ased
paymen
ts
Acquisi 106 -16 90
tion
and
dispos
al of
treasu
ry
shares
Decreas -25 25 404
e of 404
share
premiu
m
accoun
t
Dividen -1 289 -1 289
ds paid
Managem -1 996 402 -1 594
ent
incent
ive
plan *
--------------------------------------------------------------------------------
Equity 5 105 - 46 591 417 -1 996 -1 028 6 605 380 56 074
at 31
Decemb
er 2010
* Group management’s incentive plan (Affecto Management Oy)
2. Notes
2.1. Basis of preparation
This financial statement bulletin has been prepared in accordance with the IFRS
recognition and measurement principles. This financial statement bulletin does
not comply with all of the requirements of IAS 34 Interim Financial Reporting.
The financial statement bulletin should be read in conjunction with the annual
financial statements for the year 2010. In material respects, the same
accounting policies have been applied as in the 2010 annual consolidated
financial statements. The amendments to and interpretations of IFRS standards
that entered into force on 1 January had no impact on this financial statement
bulletin.
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) 10-12/11 10-12/10 2011 2010
-------------------------------------
-------------------------------------
Total net sales
Finland 14 840 13 169 50 277 46 522
Norway 7 266 8 080 27 841 25 845
Sweden 6 693 4 813 21 513 15 276
Denmark 3 841 6 732 14 072 15 411
Baltic 4 825 3 902 16 167 13 694
Other -823 -651 -2 600 -2 669
----------------------------------------------------------------------
Group total 36 643 36 046 127 270 114 078
Operational segment result
Finland 2 254 1 759 6 804 5 073
Norway 956 1 083 3 109 2 405
Sweden -677 -574 -2 141 -1 666
Denmark 659 553 1 593 1 226
Baltic 455 437 2 100 595
Other -314 -336 -1 263 -2 367
----------------------------------------------------------------------
----------------------------------------------------------------------
Total operational segment result 3 333 2 923 10 202 5 265
IFRS amortisation -502 -501 -2 020 -1 990
----------------------------------------------------------------------
Operating profit 2 831 2 422 8 182 3 275
Net sales by business lines
(1 000 EUR) 10-12/11 10-12/10 2011 2010
-------------------------------------
-------------------------------------
Information Management Solutions 33 783 33 264 116 812 103 579
Geographic Information Services 3 224 2 917 11 533 10 950
Other -364 -135 -1 076 -451
----------------------------------------------------------------------
----------------------------------------------------------------------
Group total 36 643 36 046 127 270 114 078
2.3. Interest-bearing liabilities
(1 000 EUR) 31.12.2011 31.12.2010
Interest-bearing non-current liabilities
Loans from financial institutions, 30 355 32 462
non-current portion
Loans from financial institutions, 4 000 4 000
current portion
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----------------------------------------------------------------
34 355 36 462
Affecto has renegotiated the bank loan in June 2011. The refinanced 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.
2.4. Contingencies and commitments
The future aggregate minimum lease payments under non-cancelable operating
leases:
(1 000 EUR) 31.12.2011 31.12.2010
Not later than one (1) year 4 046 2 788
Later than one (1) year, 7 526 2 788
but not later than five (5) years
Later than five (5) years 614 268
---------------------------------------------------------
Total 12 186 5 844
Guarantees given:
(1 000 EUR) 31.12.2011 31.12.2010
Liabilities secured by a mortgage
Financial loans 34 500 36 500
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) 31.12.2011 31.12.2010
Pledges 30 39
Other guarantees 2 073 1 526
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.
2.5. Derivative contracts
(1 000 EUR) 31.12.2011 31.12.2010
Interest rate swaps:
Nominal value 20 250 20 250
Fair value -475 -784
3. Key figures
10-12/11 10-12/10 2011 2010
-------------------------------------
-------------------------------------
Net sales, 1 000 eur 36 643 36 046 127 270 114 078
EBITDA, 1 000 eur 3 701 3 248 11 608 6 617
Operational segment result, 3 333 2 923 10 202 5 265
1 000 eur
Operating result, 1 000 eur 2 831 2 422 8 182 3 275
Result before taxes, 1 000 eur 2 652 1 982 7 087 1 479
Profit attributable to the owners 2 022 1 361 5 328 955
of the parent company, 1 000 eur
EBITDA, % 10.1 % 9.0 % 9.1 % 5.8 %
Operational segment result, % 9.1 % 8.1 % 8.0 % 4.6 %
Operating result, % 7.7 % 6.7 % 6.4 % 2.9 %
Result before taxes, % 7.2 % 5.5 % 5.6 % 1.3 %
Net income for equity holders 5.5 % 3.8 % 4.2 % 0.8 %
of the parent company, %
Equity ratio, % 46.1 % 43.1 % 46.1 % 43.1 %
Net gearing, % 27.1 % 40.4 % 27.1 % 40.4 %
Interest-bearing net debt, 16 391 22 645 16 391 22 645
1 000 eur
Gross investment in non-current 435 245 1 416 1 072
assets (excl. acquisitions),
1 000 eur
Gross investments, % of net sales 1.2 % 0.7 % 1.1 % 0.9 %
Research and development costs, 65 362 717 1 178
1 000 eur
R&D –costs, % of net sales 0.2 % 1.0 % 0.6 % 1.0 %
Order backlog, 1 000 eur 57 110 54 354 57 110 54 354
Average number of employees 1 019 940 1 011 919
Earnings per share, eur 0.10 0.07 0.26 0.05
Earnings per share (diluted), 0.10 0.07 0.25 0.05
eur
Equity per share, eur 2.91 2.69 2.91 2.69
Average number of shares, 20 693 20 693 20 693 21 146
1 000 shares
Number of shares at the end of 20 693 20 693 20 693 20 693
period, 1 000 shares
Calculation of key figures
EBITDA = Earnings before interest, taxes,
depreciation, amortization and impairment
Operational segment result = Operating profit before amortisations on
fair value adjustments due to business
combinations (IFRS3) and Goodwill
impairments
Equity ratio, % = Total equity *100
________________________________
Total assets – advances received
Gearing, % = Interest-bearing liabilities – cash *100
and cash equivalents
__________________________________
Total equity
Interest-bearing net debt = Interest-bearing liabilities – cash and
cash equivalents
Earnings per share (EPS) = Result for the period to equity holders
of the Company
______________________________________
Adjusted average number of shares 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
-----
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