DIGIA PLC FINANCIAL STATEMENT BULLETIN 2009: DIGIA ACHIEVES ITS BEST-EVER OPERATIVE RESULT
DIGIA PLC FINANCIAL STATEMENT BULLETIN, 4 FEBRUARY 2010 at 09:00
DIGIA PLC FINANCIAL STATEMENT BULLETIN 2009: DIGIA ACHIEVES ITS BEST-EVER
OPERATIVE RESULT
Summary
Financial Statement 2009
- Consolidated net sales EUR 120.3 million, down 2.3 per cent year on year
- Operating profit before one-off items EUR 16.9 million, up 26.0 per cent
- One-off items comprised a fourth-quarter goodwill writedown of EUR -23.8
million (no effect on cash flow), as well as a restructuring provision of EUR
-0.9 million related to the closure of offices.
- Consolidated operating profit EUR -7.8 million (EUR 13.4 million in 2008)
- Profitability before one-off items 14.1 per cent (10.9 per cent 2008) and
after one-off items (EBIT%) -6.5 per cent (10.9 per cent in 2008)
- Product business accounted for 15.4 per cent (14.4 per cent in 2008)
- Earnings per share EUR -0.67, (EUR 0.36 in 2008), before one-off items EUR
0.53
- Dividend proposal EUR 0,14 per share
October-December
- Consolidated net sales EUR 33.2 million, up 1.3 per cent year on year
- Operating profit before one-off items EUR 5.4 million, up 85.1 per cent
- Consolidated operating profit EUR -19.3 million (EUR 2.9 million in
10-12/2008)
- Profitability before one-off items 16.3 per cent (8.9 per cent in 10-12/2008)
and after one-off items (EBIT%) -58.3 per cent (8.9 per cent in 10-12/2008)
- Product business accounted for 12.5 per cent (14.1 per cent in 10-12/2008)
- Earnings per share EUR -1.01, (EUR 0.07 in 10-12/2008), before one-off items
EUR 0.18
During the reporting period, the company met with success in achieving its
objectives by maintaining good operative profitability and a strong positive
cash flow, as well as by lowering its gearing ratio. Despite the challenging
market, the company maintained stable net sales while significantly improving
its operative profitability even so that the operative operating profit was
company's all time best.
Profitability was good throughout the reporting period, particularly in the
Enterprise Solutions segment. That segment also increased its net sales year on
year.
The Mobile Solutions segment, on the other hand, was affected by structural
changes ongoing in the business environment during the period, as well as by
increasing price competition. Consequently, the segment did not meet its targets
for service demand and operative profitability. Having followed developments in
the business environment during the reporting period, the Board re-evaluated the
long-term risks related to the Mobile Solutions segment and decided to make a
non-recurrent EUR 23.8 million writedown of goodwill in relation to that
segment.
In order to improve long-term operating conditions, the company launched
measures aimed at rationalising its sites in line with market requirements and
concentrating its expertise into fewer but larger units. In this way, customers'
needs will be met more effectively. Cooperation negotiations related to these
streamlining measures were completed in November. The negotiations involved 110
employees from five different locations, and led to the termination of 46
employees' employment contracts. The streamlining measures should have a
positive impact from the first quarter of 2010 onwards.
The company repaid EUR 26.3 million in interest-bearing liabilities during the
period, after which loans from financial institutions stood at a total of EUR
29.0 million. Having reduced its interest-bearing liabilities, the group also
had significantly lower net financial expenses.
The fourth quarter showed signs of a break in the prevailing market uncertainty.
This led the company back to a growth trend, and enabled the company to achieve
its best-ever operative operating profit in both the last quarter as well as in
the entire reporting period.
The company expects overall demand for IT services to increase moderately in
2010 from the previous year's levels. The company will continue to develop its
sales and increase its operational efficiency, aiming for organic growth in
sales at a rate equalling or exceeding the general market rate. In addition to
growth in sales, operative profitability is also expected to remain high.
Proposal for Dividend Distribution
The unrestricted equity in the balance sheet of the Company as per December 31,
2009 amounted to EUR 41 553 350,95 of which the net result for the financial
year amounts to EUR 3 927 765,97. The Board proposes to the Annual General
Meeting that based on the balance sheet to be adopted for the accounting period
ended December 31, 2009 a dividend of EUR 0,14 per share will be paid. The
dividend will be paid to shareholders registered in the Register of Shareholders
held by Euroclear Finland Ltd on the record date March 8, 2010. The dividend
will be paid on 15.3.2010.
GROUP KEY FIGURES AND RATIOS
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| | 10-12/2 | 10-12/2 | Change | 2009 | 2008 | Change |
| | 009 | 008 | % | | | % |
--------------------------------------------------------------------------------
| Net sales | 33 189 | 32 762 | 1% | 120 335 | 123 203 | -2% |
--------------------------------------------------------------------------------
| Operating profit | 5 396 | 2 916 | 85% | 16 936 | 13 437 | 26% |
| before one-off | | | | | | |
| items | | | | | | |
--------------------------------------------------------------------------------
| - % of net sales | 16% | 9% | | 14% | 11% | |
--------------------------------------------------------------------------------
| Operating profit | -19 335 | 2 916 | -763% | -7 796 | 13 437 | -158% |
--------------------------------------------------------------------------------
| - % of net sales | -58% | 9% | | -6% | 11% | |
--------------------------------------------------------------------------------
| Profit for the | -20 850 | 1 349 | -1645% | -13 664 | 7 409 | -284% |
| period | | | | | | |
--------------------------------------------------------------------------------
| - % of net sales | -63% | 4% | | -11% | 6% | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Return on | -122% | 8% | | -21% | 11% | |
| equity, % | | | | | | |
--------------------------------------------------------------------------------
| Return on | -74% | 10% | | -7% | 11% | |
| investment, % | | | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | 30 429 | 56 950 | -47% | 30 429 | 56 950 | -47% |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Cash and cash | 10 469 | 18 879 | -45% | 10 469 | 18 879 | -45% |
| equivalents | | | | | | |
--------------------------------------------------------------------------------
| Net gearing, % | 34% | 53% | | 34% | 53% | |
--------------------------------------------------------------------------------
| Equity ratio, % | 52% | 47% | | 52% | 47% | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | -1.01 | 0.07 | -1,543 | -0.67 | 0.36 | -286% |
| share, EUR, | | | % | | | |
| undiluted | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | -1.01 | 0.07 | -1,543 | -0.67 | 0.36 | -286% |
| share, EUR, | | | % | | | |
| diluted | | | | | | |
--------------------------------------------------------------------------------
MARKETS AND DIGIA'S BUSINESS
The reporting period was characterised by widespread uncertainty in the markets,
which had an impact on demand for the company's services and the development of
net sales. The decrease in net sales evened out by the middle of the period and
returned to growth in the fourth quarter.
Despite the challenging market, the company was successful in achieving its
objectives by maintaining good operative profitability and a strongly positive
cash flow, and by reducing gearing throughout the reporting period. The fourth
quarter's operating profit before one-off items, and the earnings per share
calculated from it, grew significantly from the same period previous year. Both
figures were at a very good level, and company's best-ever quarterly results.
The company's success was driven by agile adoption of new technologies, an
effective new organisation, high-quality project management and active customer
relationship management and development.
Thanks to its robust cash flow, the company was able to substantially reduce its
gearing ratio during the reporting period. The company repaid EUR 26.3 million
in loans during the period, after which loans from financial institutions stood
at a total of EUR 29.0 million.
During the reporting period, the company's international operations focused on
China. In addition to the Chengdu office opened in 2008, the company established
a new office in Beijing in the second quarter of 2009. Chinese operations have
progressed according to plan and now form an important part of the company's
service strategy.
One of the major events in the reporting period was the Board's decision in
December to record a EUR 23.8 million writedown of goodwill of the Mobile
Solutions segment, which made the company's operating profit negative for the
period. The writedown was based on the company's view on increased risks
relating to the Mobile Solutions segment on long-term, as the evaluation is to
be carried out according to applicable legislation.
To improve its long-term operating conditions, the company launched measures in
November for rationalising its site network in line with market requirements,
and concentrating its expertise into fewer but larger units. In this way,
customers' needs will be met more effectively. The measures encompassed the
closure of the company's offices in Kuopio, Turku, Lahti and Vaasa, and the
reduction of personnel in certain departments of the Pori unit. During the
related cooperation negotiations, the company offered replacement positions in
alternative locations to all personnel of the offices to be closed. Ultimately,
37 employees decided to move permanently or temporarily to another location; 32
others were dismissed and six terminated their own employment at Digia. In
addition to these, eight employees were dismissed in Pori from service segments
in which demand has permanently fallen. Due to the closure measures, the
company's financial statement for the reporting period include a EUR 0.9 million
operational restructuring provision.
As a part of its geographical streamlining measures, the company also closed a
nine-employee site in Yaroslavl, Russia.
Enterprise Solutions:
The beginning of the year was challenging for the Enterprise Solutions segment,
as demand slowed down considerably, especially from industrial and financial
market customers. Despite this, the segment was able to maintain good
profitability throughout the reporting period, considerably exceeding the
previous year's figures in each quarter. Also net sales grew slightly year on
year throughout the reporting period.
In the second half of the year, the amount of tenders made grew, and success in
the challenging market was accelerated by the company's extensive
industry-specific competence and insightful solutions, which led to good sales
of Internet-based systems and ERP systems that increase the efficiency of
customers' operations. In ERP systems, demand grew especially in systems related
to service and customer experience management.
Mobile Solutions:
Ongoing technological changes in the market and the introduction of new
technologies have led to the fragmentation of demand into a larger number of
specialist areas within the Mobile Solutions segment. In certain service and
competence fields, demand has decreased and in part shifted to low-cost
countries. In addition, price competition in the service sector has seen
continual growth. This, coupled with the general global recession, led to the
failure of the Mobile Solutions segment to meet its targets for net sales and
profitability. The beginning of the year, and particularly the second quarter,
were very difficult with a large drop in demand. Thanks to competence
development, an efficient site network and enlivened demand, however, the end of
the year was slightly more positive. On the whole, the net sales for the period
were, however, significantly lower than previous year.
On the other hand, in terms of profitability, the success of the final quarter
led to higher operative operating profit than expected for the fourth quarter.
This raised operative profitability for the entire period to roughly the
previous year's level, even though set targets were not met.
Due to the radical changes in the market, the company re-evaluated the
operations and related long-term risks of the Mobile Solutions segment in
December, which led to a writedown of EUR 23.8 million in the segment's
goodwill.
In terms of operations, the Mobile Solutions segment successfully implemented an
extensive project for the adoption of Linux-based software development and new
methods, as well as related training. Thanks to competence and operational
development progressing according to plan, traditional Symbian development is
now equalled by other technologies in the company.
RISKS AND UNCERTAINTIES
The key risks and uncertainties of the company's business remained unchanged.
Short-term uncertainties are related to any major changes occurring in the
company's core markets. The economic recession, although it is showing signs of
yielding, may still have an impact on customers' investment decisions and
liquidity, and therefore also on the company's net sales and profit.
Furthermore, the growth in customer project sizes increases the risks related to
projects and their profitability.
PROSPECTS FOR THE FUTURE
The company's main objective for 2010 is to focus strongly on creating growth
conditions while maintaining a strong positive cash flow and a good level of
operative profitability.
The company will continue to pursue the conservative internationalisation of its
business operations, making a concerted effort to seek opportunities for
enlarging and developing its product business. Furthermore, the company will
step up its operations in countries with favourable cost levels, especially
China.
The company expects the global economic uncertainty to recede gradually, and the
IT market to grow moderately as compared to 2009. The company predicts organic
growth of its net sales, at a rate at least equal to the general market rate,
and the maintenance of solid operative profitability.
Digia's long-term focus is first and foremost on strengthening its organic
growth and maintaining good cash flow. The company will continue to work on
improving sales and invest into further increasing the efficiency of operations.
NET SALES
Digia's consolidated net sales for the 2009 reporting period were EUR 120.3
million, representing a decrease of 2.3 per cent (EUR 123.2 million in 2008).
The Enterprise Solutions segment posted net sales of EUR 70.8 million during the
reporting period, up 1.5 per cent (EUR 69.8 million in 2008). The net sales of
the Mobile Solutions segment were EUR 49.5 million, down 7.3 per cent (EUR 53.4
million in 2008).
During the reporting period, the product business accounted for EUR 18.5 million
(EUR 17.7 million in 2008) of consolidated net sales, or 15.4 per cent (14.4 per
cent).
International operations accounted for EUR 9.7 million (EUR 14.2 million in
2008) of consolidated net sales during the reporting period, or 8.1 per cent
(11.6 per cent). The 2008 comparison period includes EUR 5.4 million in net
sales from the Swedish software company UIQ, which was declared bankrupt in
early 2009.
Digia's fourth quarter consolidated net sales were EUR 33.2 million, up 1.3 per
cent (EUR 31.0 million in 10-12/2008).
The fourth-quarter net sales of the Enterprise Solutions segment were EUR 19.2
million, up 1.8 per cent (EUR 18.9 million in 10-12/2008). The fourth-quarter
net sales of the Mobile Solutions segment totalled EUR 14.0 million, up 0.7 per
cent (EUR 13.9 million in 10-12/2008).
During the fourth quarter, the product business accounted for EUR 4.2 million
(EUR 4.6 million in 10-12/2008) of consolidated net sales, or 12.5 per cent
(14.1 per cent).
International operations accounted for EUR 2.5 million (EUR 3.7 million in
10-12/2008) of consolidated fourth-quarter net sales, or 7.6 per cent (11.3 per
cent in 10-12/2008). The 10-12/2008 comparison period includes EUR 0.7 million
in net sales from the Swedish software company UIQ.
PROFIT PERFORMANCE AND PROFITABILITY
Digia's consolidated profit performance and profitability were significantly
affected during the 2009 financial year, and especially in the fourth quarter,
by one-off items. These comprised of a EUR 23.8 million goodwill writedown and a
EUR 0.9 million restructuring provision related to the closure of sites, both
made in the last quarter. The goodwill writedown was entirely attributable to
the Mobile Solutions segment. EUR 0.8 million of the restructuring provision was
attributable to Mobile Solutions and EUR 0.1 million to Enterprise Solutions.
The operating profit before one-off items is an indicator of the company's
operative profitability.
Digia's consolidated operating profit before one-off items for the period
amounted to EUR 16.9 million, up 26.0 per cent year on year (EUR 13.4 million in
2008). Profitability before one-off items was 14.1 per cent (10.9 per cent in
2008).
Digia's consolidated operating profit (EBIT) for the reporting period was EUR
-7.8 million, a decrease of 158.0 per cent year on year (EUR 13.4 million in
2008). Profitability (EBIT%) was -6.5 per cent (10.9 per cent in 2008).
The Enterprise Solutions segment recorded an operating profit before one-off
items of EUR 12.3 million for the reporting period, up 39.5 per cent (EUR 8.8
million in 2008). Mobile Solutions recorded an operating profit before one-off
items of EUR 4.6 million, which was level with the previous year (EUR 4.6
million in 2008). The 2008 comparison figures for Mobile Solutions are
negatively affected by a default credit recorded for UIQ Technologies, which had
a EUR -1.8 million effect on the segment's profitability.
The Enterprise Solutions segment recorded an operating profit of EUR 12.2
million for the reporting period, up 38.4 per cent (EUR 8.8 million in 2008).
The operating profit of the Mobile Solutions segment was EUR -20.0 million,
which was a significant reduction year on year due to the impact of the goodwill
writedown and the restructuring provision (EUR 4.6 million in 2008).
Digia's consolidated operating profit before one-off items for the fourth
quarter was EUR 5.4 million, an 85.1 per cent year-on-year increase (EUR 2.9
million in 10-12/2008). Profitability before one-off items was 16.3 per cent
(8.9 per cent in 10-12/2008).
The consolidated operating profit (EBIT) was EUR -19.3 million, which was a
significant reduction year on year due to the impact of the goodwill writedown
and the restructuring provision (EUR 2.9 million in 10-12/2008). Profitability
(EBIT%) was -58.3 per cent (8.9 per cent in 10-12/2008).
The Enterprise Solutions segment recorded an operating profit before one-off
items in the fourth quarter of EUR 3.5 million, up 11.3 per cent (EUR 3.1
million in 10-12/2008). Mobile Solutions recorded an operating profit before
one-off items in the fourth quarter of EUR 1.9 million, up significantly from
the previous year (EUR -0.2 million in 10-12/2008). The 2008 comparison figures
for Mobile Solutions are negatively affected by a default credit recorded for
UIQ Technologies, which had a EUR -1.3 million effect on the segment's
profitability.
The Enterprise Solutions segment recorded an operating profit of EUR 3.4 million
for the fourth quarter, up 8.4 per cent (EUR 3.1 million in 10-12/2008). The
Mobile Solutions segment's operating profit (EBIT) was EUR -22.7 million, which
was a significant reduction year on year due to the impact of the goodwill
writedown and the restructuring provision (EUR -0.2 million in 10-12/2008).
Consolidated earnings before tax totalled EUR -10.1 million for the financial
year (EUR 10.4 million in 2008), and net profit totalled EUR -13.7 million (EUR
7.4 million in 2008). Consolidated earnings before tax for the fourth quarter
totalled EUR -19.8 million for the period (EUR 2.1 million in 10-12/2008), and
net profit totalled EUR -20.9 million (EUR 7.4 million in 10-12/2008).
Consolidated earnings per share before one-off items were EUR 0.53. Net
consolidated earnings per share for the financial year were EUR -0.67 (EUR 0.36
in 2008). In the fourth quarter, consolidated earnings per share before one-off
items were EUR 0.18. Net consolidated earnings per share for the fourth quarter
were EUR -1.01 (EUR 0.07 in 2008).
The Group's net financial expenses for the reporting period were EUR 2.3 million
(EUR 3.0 million in 2008) and for the fourth quarter EUR 0.5 million (EUR 0.8
million in 10-12/2008).
FINANCIAL POSITION AND CAPITAL EXPENDITURE
At the end of the reporting period, the Digia Group's consolidated balance sheet
total stood at EUR 112.8 million (EUR 153.4 million in 2008) and the equity
ratio was 52.3 per cent (47.1 per cent in 2008). Net gearing was 34.3 per cent
(52.8 per cent in 2008). The period-end cash and cash equivalents totalled EUR
10.5 million (EUR 18.9 million in 2008).
Interest-bearing liabilities amounted to EUR 30.4 million (EUR 56.9 million in
2008). Interest-bearing liabilities comprised EUR 29.0 million in loans from
financial institutions, EUR 1.3 million in financial leasing liabilities and EUR
0.2 million in product development loans. During the reporting period, the
company repaid EUR 26.3 million in loans, reducing interest-bearing liabilities
to EUR 29.0 million. Loan covenant terms were modified during the reporting
period to stipulate that regardless of the earnings reported for 2009, the
company is allowed to distribute a maximum of EUR 3 million in dividends in
2010. In future years, the maximum dividend sum will be 30 per cent of the
previous year's net operating profit.
The Group carries out annual impairment tests for goodwill and intangible assets
with an indefinite useful life, in accordance with the IAS 36 standard.
As from 1 January 2009, the allocation of goodwill was changed in line with the
new segment structure. Goodwill is now allocated to Enterprise Solutions and to
Mobile Solutions.
The table below shows, by business segment, goodwill and values subject to
testing at the end of the reporting period:
--------------------------------------------------------------------------------
| EUR 1,000 | Specifie | Depreciati | Goodwill | Other | Total value |
| | d | on during | | items | subject to |
| | intangib | the | | | testing |
| | le | reporting | | | |
| | assets | period | | | |
--------------------------------------------------------------------------------
| Enterprise | 4 230 | 843 | 43 244 | 4 129 | 51 602 |
| Solutions | | | | | |
--------------------------------------------------------------------------------
| Mobile | 6 108 | 1 167 | 22 301 | 4 132 | 32 541 |
| Solutions | | | | | |
--------------------------------------------------------------------------------
| Group total | 10 338 | 2 010 | 65 545 | 8 261 | 84 143 |
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In the fourth quarter of 2009, the company recorded a EUR 23.8 million goodwill
writedown attributable to the Mobile Solutions segment. The writedown was based
on the company's view on increased risks relating to the Mobile Solutions
segment on long-term, as the evaluation is to be carried out according to
applicable legislation. The increased risks are due to pricing pressure
generated by continuously increasing competition in contract engineering and,
especially, the transfer of low-grade manufacturing and customers'
decision-making functions to low-cost countries. The company does not expect the
current target market for Mobile Solutions to grow significantly as a whole from
current levels. The Mobile Solutions business will in future focus on
technologies and services in which the company can maintain at least a
reasonable level of profitability.
Present values were calculated for a five-year forecast period using the
following assumptions related to the Mobile Solutions segment: annual growth in
net sales 0 per cent; operating profit in 2010 9 per cent and thereafter 8 per
cent; discount rate 14.7 per cent. The assumptions for calculating present
values for the Enterprise Solutions segment for the forecast period did not
change and were: annual growth in net sales 3 per cent; operating profit 10 per
cent; discount rate 11.2 per cent. Cash flows following the forecast period were
estimated by extrapolating the cash flows, using the assumptions given above.
Net sales growth is reckoned to constitute the most critical factor in
calculating the present values of cash flows. The amount of goodwill for
Enterprise Solutions requires an average annual growth of 2 per cent for
business operations and 6 per cent profitability. For Mobile Solutions, the
goodwill requires for business to be maintained at the current level, with 8 per
cent profitability.
After the writedown made in the fourth quarter of 2009, the Board did not
foresee a need for impairment in either segment.
The Group's cash flow from business operations for the period was positive by
EUR 20.2 million (positive by EUR 15.5 million in 2008), cash flow from
investments was negative by EUR 1.3 million (negative by EUR 5.3 million in
2008) and cash flow from finance was negative by EUR 27.3 million (negative by
EUR 3.0 million in 2008). Cash flow from finance was negatively affected by a
substantial repayment of loans totalling EUR 26.3 million, as well as by the
payment of dividends, the effect of which amounted to EUR 1.0 million.
Gross capital expenditure during the period totalled EUR 1.3 million (EUR 2.5
million in 2008). Acquisitions of tangible fixed assets totalled EUR 1.1 million
(EUR 2.0 million in 2008).
Return on investment (ROI) for the period was -7.1 per cent (11.3 per cent in
12/2008) and return on equity (ROE) was -21.0 per cent (10.5 per cent in
12/2008).
HUMAN RESOURCES, MANAGEMENT AND ADMINISTRATION
At the end of the period, the number of Group personnel totalled 1,471,
representing an increase of 134 employees or 10.0 per cent since the end of 2008
(2008: 1,337). During the reporting period, the number of employees averaged
1,387, an increase of 73 employees or 5.6 per cent compared to 2008 (2008:
1,314).
Employees by function at the end of the period:
--------------------------------------------------------------------------------
| Enterprise Solutions | 44% |
--------------------------------------------------------------------------------
| Mobile Solutions | 53% |
--------------------------------------------------------------------------------
| Administration and Management | 3% |
--------------------------------------------------------------------------------
As of the end of the period, a total of 219 employees were working outside of
Finland (2008: 123).
Digia Plc's Annual General Meeting of 10 March 2009 re-elected Pekka Sivonen,
Pertti Kyttälä, Kari Karvinen and Martti Mehtälä as members of the Board, and
elected Heikki Mäkijärvi and Jari Pasanen as new members. At the organisation
meeting of the Board, Pekka Sivonen was elected as the full-time Chairman of the
Board and Pertti Kyttälä as the Vice Chairman.
Juha Varelius has been Digia Plc's President and CEO since 1 January 2008.
Ernst & Young Oy, authorised public accountants, are the Group's auditor, with
Heikki Ilkka, Authorised Public Accountant, as the chief auditor.
RELATED PARTY TRANSACTIONS
The Digia Group's related parties include the CEO and the members of the Board
of Directors and the Group Management Team. The Digia Group had no significant
transactions with related parties during the reporting period.
GROUP STRUCTURE AND ORGANISATION
At the end of the period, the Digia Group consisted of parent company Digia Plc
and its active subsidiaries: Digia Finland Ltd (parent company holding 100%),
Digia Sweden AB (100%), Digia Estonia Oü (100%), Digia Hong Kong Ltd (100%) and
Sunrise Resources Oy (100%).
Digia Finland Ltd has the wholly owned active subsidiaries Digia Financial
Software Ltd (100%) and Digia Service Ltd (100%).
Digia Hong Kong Ltd has a wholly owned subsidiary, Digia Software (Chengdu) Co.
Ltd (100%), operating in China, which registered a branch in Beijing during the
reporting period (18 June 2009).
Sunrise Resources Ltd has a wholly owned subsidiary, OOO Digia RUS (100%), in
Russia, whose name was changed towards the end of 2009 (previously Sunrise-r
Spb).
SHAREHOLDERS' MEETINGS
Annual General Meeting on 10 March 2009
Convening on 10 March 2009, Digia Plc's Annual General Meeting (AGM) adopted the
financial statements for 2008, released the Board members and the CEO from
liability, determined Board emoluments, resolved to raise the number of Board
members to six (6), and elected the company's Board of Directors for a new term.
The AGM granted the following authorisations to the Board:
Authorising the Board of Directors to decide on the payment of dividends
The AGM authorised the Board of Directors to decide at its discretion, and if
the financial situation of the company is favourable, on the payment of a
dividend for 2008 such that:
-The dividend shall amount to no more than EUR 0.05 per share;
-The Board of Directors shall decide on the record date for the dividend and
its
payment date, which can at the earliest be the fifth banking day from the record
date; and
-The authorisation shall be valid until the beginning of the next AGM.
Authorising the Board of Directors to decide on a share issue and granting of
special rights
The AGM authorised the Board of Directors to decide on a rights issue or a
capitalisation issue and on granting option rights and other special rights as
set forth in Section 1, Chapter 10 of the Companies Act, subject to the
following conditions:
-On the basis of the authorisation, the Board of Directors can decide on the
conveyance in one or more instalments of a maximum total of 4,000,000 new or own
shares held by the company;
-The Board of Directors is also entitled to decide on the sale of own shares in
public trading. By virtue of the authorisation, the Board of Directors has the
right to decide on share issues and the granting of special rights, waiving the
pre-emptive subscription rights of the shareholders (directed issue);
-The Board of Directors is otherwise authorised to decide on all terms relating
to the share issue, including the subscription price, its payment and its
recognition in the company's balance sheet; and
The authorisation replaces the authorisation granted by the Shareholders'
Meeting on 11 March 2008 and shall be valid for 18 months from the issue date of
the authorisation, i.e. until 10 September 2010.
Authorisation of the Board of Directors to decide on the buyback of own shares
The AGM authorised the Board of Directors to decide on the buyback of the
company's own shares subject to the following conditions:
-A maximum total of 2,000,000 shares may be bought back in one or more
installments;
-The Board shall decide on how the shares are acquired. Own shares can be
bought
back in disproportion to the holdings of the shareholders. The authorisation
also includes the acquisition of shares through public trading organised by
NASDAQ OMX Helsinki Oy in accordance with its rules and instructions or through
offers made to shareholders;
-The shares shall be acquired at the going price in public trading. The minimum
price of the shares to be acquired shall be the lowest quotation in public
trading while the authorisation is in force and, correspondingly, the maximum
price shall be the highest quotation in public trading while the authorisation
is in force;
-Own shares can be bought back only with non-restricted equity. Share buyback
thus reduces the company's distributable funds;
-The Board of Directors is otherwise authorised to decide on all terms relating
to share buyback; and
-The authorisation replaces the authorisation granted by the Shareholders'
Meeting on 11 March 2008 and shall be valid for 18 months from the issue date of
the authorisation, i.e. until 10 September 2010.
On the basis of the authorisations granted by the AGM, the Board of Directors
decided:
-At its meeting on 10 March 2009 to convey own shares as the additional
purchase
price agreed for Sunrise Resources Oy. The additional purchase price was EUR
576,413, which was paid by conveying 198,080 of the company's shares; and
-At its meeting on 12 June 2009 to pay a dividend of EUR 0.05 per share on
shares
not owned by the company, to a maximum of EUR 1,024,289.55; The Board of
Directors decided to set 26 June 2009 as the record date for the dividend and 3
July 2009 as its payment date; and
-At its meeting on 30 September, on the following incentive schemes based on a
directed share issue without payment and treasury shares held by the company to
the management and key employees of the company:
--The President and CEO Juha Varelius and a total of 15 other key employees of
the
company will be offered a share bonus system, whereunder such key employees are
entitled to convert their existing option rights under option scheme 2005A-C
into a maximum total of 51,900 company shares and a cash bonus of equal amount;
--A new share-based incentive system will be created for the company's key
employees other than the CEO, whereunder such key employees are entitled to a
bonus to be decided by the Board each year on the basis of the company's
performance and fulfilment of the objectives set by the Board during the
respective accounting period preceding the Board's decision. Regarding the year
2009, this bonus amounts to the value of a maximum of 200,000 company shares
paid in equal instalments over a period of four years as of 30 January 2010
onwards, provided that the employment of the respective key employee is in force
on the date when the respective payment is due; The bonus will be paid as a
50/50 combination of shares and cash;
--The CEO's current share incentive scheme agreed in 2007 will be terminated
and
replaced with a new scheme, pursuant to which:
---the CEO will be awarded a bonus equal to the value of 100,000 company shares
payable in a 50/50 combination of shares and cash in October 2009, without any
disposition restrictions. Such a bonus will be paid on the basis of the CEO's
good work performance during the year 2008 and, so far in 2009, the challenging
market situation; and
---a new share bonus system will be launched for the CEO, covering two earning
periods (years 2009 and 2010), whereunder the CEO is entitled to a maximum bonus
equal to the value of 80,000 company shares for each earning period depending on
the earning per share (EPS) value reached during said earning period. The
maximum total bonus available for the CEO under the scheme thus equals the value
of 160,000 shares. The bonus will begin to accrue when the EPS amounts to 0.41
EUR (entitling the CEO to a bonus at a value of 20,000 shares) for an earning
period, whereafter the bonus will increase in steps so that the maximum bonus
will become payable if the EPS amounts to 0.69 EUR for the earning period. The
bonus will be paid in a 50/50 combination of shares and cash, without any
disposition restrictions, after the adoption of the financial statements
following the close of the respective earning period.
SHARE CAPITAL AND SHARES
As of the end of the period, the number of Digia Plc shares totalled 20,853,645.
According to Finnish Central Securities Depository Ltd, Digia had 3,974
shareholders on 31 December 2009. The ten major shareholders were:
--------------------------------------------------------------------------------
| Shareholder | Shares and votes |
--------------------------------------------------------------------------------
| Pekka Sivonen | 14.4% |
--------------------------------------------------------------------------------
| Ingman Group Oy Ab | 10.6% |
--------------------------------------------------------------------------------
| Jyrki Hallikainen | 10.2% |
--------------------------------------------------------------------------------
| Kari Karvinen | 7.6% |
--------------------------------------------------------------------------------
| Matti Savolainen | 6.3% |
--------------------------------------------------------------------------------
| Varma Mutual Pension Insurance Company | 3.6% |
--------------------------------------------------------------------------------
| Veikko Laine Oy | 2.8% |
--------------------------------------------------------------------------------
| Nordea Bank Finland Plc (nominee-registered) | 1.6% |
--------------------------------------------------------------------------------
| Skandinaviska Enskilda Banken | 1.3% |
| (nominee-registered) | |
--------------------------------------------------------------------------------
| Etra Trading Oy | 1.0% |
--------------------------------------------------------------------------------
Distribution of holdings by number of shares held on 31 December 2009
--------------------------------------------------------------------------------
| Number of shares | Holding (%) | Shares and votes |
--------------------------------------------------------------------------------
| 1 - 100 | 20.3% | 0.3% |
--------------------------------------------------------------------------------
| 101 - 1,000 | 55.1% | 5.0% |
--------------------------------------------------------------------------------
| 1,001 - 10,000 | 21.6% | 11.6% |
--------------------------------------------------------------------------------
| 10,001 - 100,000 | 2.4% | 12.9% |
--------------------------------------------------------------------------------
| 100,001 - 1,000,000 | 0.5% | 21.1% |
--------------------------------------------------------------------------------
| 1,000,001 - 3,000,000 | 0.1% | 49.1% |
--------------------------------------------------------------------------------
Shareholding by sector on 31 December 2009
--------------------------------------------------------------------------------
| | Holding (%) | Shares (%) |
--------------------------------------------------------------------------------
| Companies | 5.2% | 19.5% |
--------------------------------------------------------------------------------
| Financial institutions and | 0.3% | 4.8% |
| insurance companies | | |
--------------------------------------------------------------------------------
| Non-corporate public sector | 0.1% | 3.7% |
--------------------------------------------------------------------------------
| Non-profit organisations | 0.3% | 0.4% |
--------------------------------------------------------------------------------
| Households | 93.6% | 70.2% |
--------------------------------------------------------------------------------
| Foreign ownership | 0.5% | 1.4% |
--------------------------------------------------------------------------------
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 1.39 and the highest was EUR 3.88. The share closed at EUR
3.43 on the last trading day. The trade-weighted average was EUR 2.72. The
Group's market capitalisation totalled EUR 71,528,002 at the end of the period.
The company received the following flagging notifications during the reporting
period:
- Jyrki Hallikainen announced on 6 March 2009 that his holding in the company
had exceeded the 5% flagging threshold and amounted to 9.12% of the company's
shares and votes.
- Jyrki Hallikainen announced on 27 March 2009 that his holding in the company
had exceeded the 10% flagging threshold and amounted to 10.24% of the company's
shares and votes.
- Pekka Sivonen announced on 9 November 2009 that his holding in the company had
fallen below the 15 flagging threshold and amounted to 14.37% of the company's
shares and votes.
- The Ingman Group announced on 9 November 2009 that the total holding of the
Group and its controlled entities had exceeded the 10% flagging threshold and
was 10.48% of the company's shares and votes.
STOCK OPTION SCHEMES
During the reporting period, Digia Plc had a stock option scheme from 2005 as a
part of its key personnel incentive scheme. The number of warrants under that
scheme totalled 900,000, of which 300,000 were marked as 2005A, 300.000 as 2005B
and 300,000 as 2005C. The warrants entitled their holders to subscribe a maximum
total of 900,000 Digia Plc shares.
At its meeting on 30 September 2009, the Board of Directors decided to entitle
the company's key employees to exchange their stock options for shares in the
company. The Board decided not to establish any new option-based incentive
schemes. According to the Board's conversion offer, one Digia share and an
equivalent cash sum would be provided in exchange for twenty (20) A options, for
four (4) B options or for two and two-thirds (2 2/3) C options. The conversion
offer was made to the holders of warrants under the 2005 scheme. The conversion
offer was approved fully, and a total of 276,000 warrants held by key personnel
were converted into 51,900 Digia shares and the equivalent cash amount in order
to cover the tax cost of the incentive. The conversion was done using the
company's own shares.
At the end of the financial year, all A options in the 2005 scheme had expired.
22,000 B options were held by previous employees of the company, while all the
rest had been returned to the company. All C options had been returned. The
returned options will not be exercised. The maximum dilution effect of the
outstanding options was 0.1 per cent on 31 December 2009.
Helsinki, 3 February 2010
Digia Plc
Board of Directors
BRIEFING FOR MEDIA AND ANALYSTS
Digia will hold a briefing on its Financial Statement for analysts and the media
on Thursday 4 February 2010 at 10 am, at WTC Sodexo in the Marski cabinet of the
World Trade Center, Aleksanterinkatu 17, 00100 Helsinki, Finland. All are
welcome.
FURTHER INFORMATION
Juha Varelius, President and CEO, Mobile: +358 400 855849, E-mail:
juha.varelius@digia.com
Kjell Lindqvist, CFO, Mobile: +358 40 8230733, E-mail: kjell.lindqvist@digia.com
The Financial Statement Bulletin and access to the related live briefing for the
media and analysts (in Finnish) will be available in the Investors section at
www.digia.fi from 11 am on 4 February 2010.
DISTRIBUTION
NASDAQ OMX Helsinki
Key media
ATTACHMENTS
Consolidated income statement
Consolidated statement of financial position
Consolidated cash flow statement
Consolidated statement of changes in shareholders' equity
Notes to the accounts
The Financial Statement has been prepared in compliance with IFRS and standard
IAS 34. This Financial Statement is based on unaudited figures.
CONSOLIDATED INCOME STATEMENT, EUR 1,000
--------------------------------------------------------------------------------
| | 10-12/20 | 10-12/2 | Change | 2009 | 2008 | Change |
| | 09 | 008 | % | | | % |
--------------------------------------------------------------------------------
| NET SALES | 33 189.4 | 32 | 1.3% | 120 | 123 | -2.3% |
| | | 761.6 | | 335.2 | 203.4 | |
--------------------------------------------------------------------------------
| Other | 90.6 | 32.9 | 175.6% | 219.7 | 59.6 | 268.7% |
| operating | | | | | | |
| income | | | | | | |
--------------------------------------------------------------------------------
| Materials and | -2 041.9 | -1 | 4.3% | -7 996.5 | -10 | -20.4% |
| services | | 958.5 | | | 048.7 | |
--------------------------------------------------------------------------------
| Depreciation | -24 | -1 | 2022.5 | -28 | -4 762.6 | 489.0% |
| and impairment | 826.4 | 169.7 | % | 051.3 | | |
--------------------------------------------------------------------------------
| Other | -25 | -26 | -3.8% | -92 | -95 | -2.9% |
| operating | 747.1 | 750.8 | | 303.1 | 014.3 | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Operating | -19 | 2 915.5 | -763.2 | -7 796.1 | 13 437.4 | -158.0% |
| profit | 335.4 | | % | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Financial | -477.8 | -820.6 | -41.8% | -2 323.2 | -3 031.3 | -23.4% |
| expenses (net) | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Pre-tax profit | -19 | 2 094.9 | -1045. | -10 | 10 406.1 | -197.2% |
| | 813.1 | | 8% | 119.3 | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Direct tax | -1 037.1 | -745.5 | 39.1% | -3 544.6 | -2 997.1 | 18.3% |
--------------------------------------------------------------------------------
| NET PROFIT | -20 | 1 349.4 | -1645. | -13 | 7 409.0 | -284.4% |
| | 850.3 | | 2% | 663.9 | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Components of | | | | | | |
| statement of | | | | | | |
| comprehensive | | | | | | |
| income: | | | | | | |
--------------------------------------------------------------------------------
| Exchange | -0.7 | -181.7 | -99.6% | 128.3 | -242.4 | -152.9% |
| differences on | | | | | | |
| translating | | | | | | |
| foreign | | | | | | |
| operations | | | | | | |
--------------------------------------------------------------------------------
| TOTAL | -20 | 1 167.7 | -1885. | -13 | 7 166.6 | -288.9% |
| COMPREHENSIVE | 850.9 | | 6% | 535.6 | | |
| INCOME | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Distribution | | | | | | |
| of net profit: | | | | | | |
--------------------------------------------------------------------------------
| Parent company | -20 | 1 349.4 | -1645. | -13 | 7 409.0 | -284.4% |
| shareholders | 850.3 | | 2% | 663.9 | | |
--------------------------------------------------------------------------------
| Minority | 0.0 | 0.0 | | 0.0 | 0.0 | |
| shareholders | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Distribution | | | | | | |
| of | | | | | | |
| comprehensive | | | | | | |
| income: | | | | | | |
--------------------------------------------------------------------------------
| Parent company | -20 | 1 167.7 | -1885. | -13 | 7 166.6 | -288.9% |
| shareholders | 850.9 | | 6% | 535.6 | | |
--------------------------------------------------------------------------------
| Minority | 0.0 | 0.0 | | 0.0 | 0.0 | |
| shareholders | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | -1.01 | 0.07 | -1542. | -0.67 | 0.36 | -286.1% |
| share, EUR | | | 9% | | | |
--------------------------------------------------------------------------------
| Earnings per | -1.01 | 0.07 | -1542. | -0.67 | 0.36 | -286.1% |
| share, EUR, | | | 9% | | | |
| diluted | | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION, EUR 1,000
--------------------------------------------------------------------------------
| Assets | 31 Dec. 2009 | 31 Dec.2008 | Change % |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Fixed and other | | | |
| non-current assets | | | |
--------------------------------------------------------------------------------
| Intangible assets | 76 577.3 | 103 045.2 | -26% |
--------------------------------------------------------------------------------
| Tangible assets | 2 616.7 | 3 125.6 | -16% |
--------------------------------------------------------------------------------
| Financial assets | 628.0 | 628.0 | 0% |
--------------------------------------------------------------------------------
| Long-term receivables | 202.9 | 0.0 | |
--------------------------------------------------------------------------------
| Deferred tax assets | 1 211.6 | 1 756.1 | -31% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total fixed and other | 81 236.6 | 108 554.9 | -25% |
| non-current assets | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Current receivables | 21 048.3 | 25 957.4 | -19% |
--------------------------------------------------------------------------------
| Available-for-sale | 293.4 | 273.2 | 7% |
| financial assets | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 10 175.2 | 18 605.6 | -45% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total current assets | 31 517.0 | 44 836.3 | -30% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total assets | 112 753.5 | 153 391.2 | -26% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity and | 31 Dec. 2009 | 31 Dec. 2008 | Change % |
| liabilities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Share capital | 2 085.4 | 2 085.4 | 0% |
--------------------------------------------------------------------------------
| Issue premium fund | 7 899.5 | 7 899.5 | 0% |
--------------------------------------------------------------------------------
| Other reserves | 5 203.8 | 5 203.8 | 0% |
--------------------------------------------------------------------------------
| Unrestricted invested | 35 447.8 | 34 938.2 | 1% |
| shareholders' equity | | | |
--------------------------------------------------------------------------------
| Translation difference | -126.0 | -254.3 | -50% |
--------------------------------------------------------------------------------
| Retained earnings/loss | 21 337.1 | 14 801.0 | 44% |
--------------------------------------------------------------------------------
| Net profit | -13 663.9 | 7 409.0 | -284% |
--------------------------------------------------------------------------------
| Equity attributable to | 58 183.7 | 72 082.6 | -19% |
| parent company | | | |
| shareholders | | | |
--------------------------------------------------------------------------------
| Minority interest | 0.0 | 0.0 | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total shareholders' equity | 58 183.7 | 72 082.6 | -19% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Liabilities | | | |
--------------------------------------------------------------------------------
| Long-term interest-bearing | 23 601.3 | 935.2 | 2423.5% |
| liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 2 672.3 | 3 137.8 | -15% |
--------------------------------------------------------------------------------
| Total long-term | 26 273.7 | 4 073.0 | 545% |
| liabilities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Current interest-bearing | 6 827.4 | 56 014.8 | -88% |
| liabilities | | | |
--------------------------------------------------------------------------------
| Other short-term debt | 21 468.7 | 21 220.8 | 1% |
--------------------------------------------------------------------------------
| Total short-term | 28 296.1 | 77 235.6 | -63% |
| liabilities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total liabilities | 54 569.8 | 81 308.6 | -33% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Shareholders' equity and | 112 753.5 | 153 391.2 | -26% |
| liabilities | | | |
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000
--------------------------------------------------------------------------------
| Cash flow from business operations: | 1 Jan. 2009 - | 1 Jan. 2008 - 31 |
| | 31 Dec. 2009 | Dec.2008 |
--------------------------------------------------------------------------------
| Net profit | -13 664 | 7 409 |
--------------------------------------------------------------------------------
| Adjustments to net profit | 33 919 | 10 821 |
--------------------------------------------------------------------------------
| Change in working capital | 6 817 | 1 321 |
--------------------------------------------------------------------------------
| Interest paid | -1 929 | -3 533 |
--------------------------------------------------------------------------------
| Interest received | 91 | 596 |
--------------------------------------------------------------------------------
| Income tax paid | -5 002 | -1 141 |
--------------------------------------------------------------------------------
| Net cash flow from operations | 20 232 | 15 473 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Cash flow from investments: | | |
--------------------------------------------------------------------------------
| Purchase of property, plant and | -1 342 | -2 512 |
| equipment, and intangible assets | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiary, net of cash | - | -2 803 |
| acquired | | |
--------------------------------------------------------------------------------
| Cash flow from investments | -1 342 | -5 315 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Cash flow from financing: | | |
--------------------------------------------------------------------------------
| Proceeds from share issue | - | 7 |
--------------------------------------------------------------------------------
| Acquisition of own shares | -33 | -951 |
--------------------------------------------------------------------------------
| Repayment of current loans | -58 242 | -33 |
--------------------------------------------------------------------------------
| Repayments of non-current loans | -18 000 | - |
--------------------------------------------------------------------------------
| Withdrawals of current loans | 5 000 | - |
--------------------------------------------------------------------------------
| Withdrawals of non-current loans | 45 000 | - |
--------------------------------------------------------------------------------
| Dividends paid and other profit | -1 024 | -2 041 |
| distribution | | |
--------------------------------------------------------------------------------
| Cash flow from financing | -27 300 | -3 019 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | -8 410 | 7 140 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at beginning | 18 879 | 11 739 |
| of period | | |
--------------------------------------------------------------------------------
| Change in fair value | - | - |
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | -8 410 | 7 140 |
--------------------------------------------------------------------------------
| Cash and cash equivalents assets at end | 10 469 | 18 879 |
| of period | | |
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, EUR 1,000
--------------------------------------------------------------------------------
| | a | b | c | d | e | f | g |
--------------------------------------------------------------------------------
| SHAREHOLDERS' | 2 085 | 7 893 | 38 111 | 5 204 | -12 | 15 322 | 68 602 |
| EQUITY, 1 | | | | | | | |
| Jan. 2008 | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | | | | | | 7 409 | 7 409 |
--------------------------------------------------------------------------------
| Other | | | | | -242 | | -242 |
| comprehensive | | | | | | | |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Increase in | | 7 | | | | | 7 |
| share capital | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | | | -2 041 | | | | -2 041 |
--------------------------------------------------------------------------------
| Own share | | | -1 131 | | | 169 | -962 |
| redemption | | | | | | | |
| fund | | | | | | | |
--------------------------------------------------------------------------------
| Share-based | | | | | | -690 | -690 |
| payments | | | | | | | |
| recognised | | | | | | | |
| against | | | | | | | |
| equity | | | | | | | |
--------------------------------------------------------------------------------
| SHAREHOLDERS' | 2 085 | 7 899 | 34 938 | 5 204 | -254 | 22 210 | 72 083 |
| EQUITY, 31 | | | | | | | |
| Dec. 2008 | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | a | b | c | d | e | f | g |
--------------------------------------------------------------------------------
| SHAREHOLDERS' | 2 085 | 7 899 | 34 938 | 5 204 | -254 | 22 210 | 72 083 |
| EQUITY, 1 | | | | | | | |
| Jan. 2008 | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | | | | | | -13 664 | -13 664 |
--------------------------------------------------------------------------------
| Other | | | | | 128 | | 128 |
| comprehensive | | | | | | | |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Dividends | | | | | | -1 024 | -1 024 |
--------------------------------------------------------------------------------
| Own share | | | 510 | | | -169 | 340 |
| redemption | | | | | | | |
| fund | | | | | | | |
--------------------------------------------------------------------------------
| Share-based | | | | | | 321 | 321 |
| payments | | | | | | | |
| recognised | | | | | | | |
| against | | | | | | | |
| equity | | | | | | | |
--------------------------------------------------------------------------------
| SHAREHOLDERS' | 2 085 | 7 899 | 35 448 | 5 204 | -126 | 7 673 | 58 184 |
| EQUITY, 31 | | | | | | | |
| Dec. 2008 | | | | | | | |
--------------------------------------------------------------------------------
a = share capital
b = share premium
c = unrestricted invested shareholders' equity reserve
d = other reserves
e = currency translation differences
f = retained earnings
g = total shareholders' equity
NOTES TO THE ACCOUNTS
Accounting principles:
The Financial Statement has been drafted in line with IFRS. As from 1 January
2009, the Group has applied the following new and revised standards: IFRS 8
Operating Segments and IAS 1 Presentation of Financial Statements. In other
respects, the same accounting principles have been applied as in the 2008
financial statements. The accounting principles and formulas for the calculation
of key figures and ratios are unchanged and are presented in the 2008 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 1,024,289.55.
Events after the balance sheet date:
There have been no major events since the end of the reporting period.
Segment information:
Since the beginning of 2009, a new organisation has been in force, merging the
company's sales, products, services and competencies. Digia's business
operations are now divided into two main business segments: Enterprise Solutions
and Mobile Solutions. Enterprise Solutions is divided into ERP and Financial
Administration, Digital Services and Integration Solutions.
The Mobile Solutions segment is divided into Contract Engineering Services and
User Experience Services.
--------------------------------------------------------------------------------
| NET SALES, EUR 1,000 | 10-12/ | 10-12/ | Change | 2009 | 2008 | Change |
| | 2009 | 2008 | % | | | % |
--------------------------------------------------------------------------------
| Enterprise Solutions | 19 226 | 18 890 | 1.8% | 70 841 | 69 796 | 1.5% |
--------------------------------------------------------------------------------
| Mobile Solutions | 13 962 | 13 872 | 0.7% | 49 494 | 53 408 | -7.3% |
--------------------------------------------------------------------------------
| Digia Group | 33 189 | 32 762 | 1.3% | 120 | 123 | -2.3% |
| | | | | 335 | 203 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit | 10-12/ | 10-12/ | Change | 2009 | 2008 | Change |
| before one-off | 2009 | 2008 | % | | | % |
| items, EUR 1,000 | | | | | | |
--------------------------------------------------------------------------------
| Enterprise Solutions | 3 477 | 3 124 | 11.3% | 12 301 | 8 821 | 39.5% |
--------------------------------------------------------------------------------
| Mobile Solutions | 1 919 | -209 | -1019,0 | 4 634 | 4 617 | 0.4% |
| | | | % | | | |
--------------------------------------------------------------------------------
| Digia Group | 5 396 | 2 916 | 85.1% | 16 936 | 13 437 | 26.0% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING PROFIT, | 10-12/ | 10-12/ | Change | 2009 | 2008 | Change |
| EUR 1,000 | 2009 | 2008 | % | | | % |
--------------------------------------------------------------------------------
| Enterprise Solutions | 3 387 | 3 124 | 8.4% | 12 211 | 8 821 | 38.4% |
--------------------------------------------------------------------------------
| Mobile Solutions | -22 | -209 | 10781.2 | -20 | 4 617 | -533.3% |
| | 722 | | % | 007 | | |
--------------------------------------------------------------------------------
| Digia Group | -19 | 2 916 | -763.2% | -7 796 | 13 437 | -158.0% |
| | 335 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| ASSETS, EUR 1,000 | 31 Dec. 2009 | 31 Dec.2008 |
--------------------------------------------------------------------------------
| Enterprise Solutions | 61 240 | 64 777 |
--------------------------------------------------------------------------------
| Mobile Solutions | 39 205 | 67 349 |
--------------------------------------------------------------------------------
| Unallocated | 12 308 | 21 266 |
--------------------------------------------------------------------------------
| Digia Group | 112 753 | 153 391 |
--------------------------------------------------------------------------------
Consolidated income statement by quarter:
--------------------------------------------------------------------------------
| EUR 1,000 | 10-12/20 | 7-9/2009 | 4-6/2009 | 1-3/2009 | 10-12/200 |
| | 09 | | | | 8 |
--------------------------------------------------------------------------------
| Net sales | 33 189.4 | 25 281.5 | 31 017.9 | 30 846.4 | 32 761.6 |
--------------------------------------------------------------------------------
| Other operating | 90.6 | 81.7 | 44.1 | 3.3 | 32.9 |
| income | | | | | |
--------------------------------------------------------------------------------
| Materials and | -2 041.9 | -1 496.0 | -2 737.3 | -1 721.4 | -1 958.5 |
| services | | | | | |
--------------------------------------------------------------------------------
| Depreciation and | -24 | -1 012.8 | -1 107.3 | -1 104.9 | -1 169.7 |
| impairment | 826.4 | | | | |
--------------------------------------------------------------------------------
| Other operating | -25 | -19 426.2 | -22 779.4 | -24 350.5 | -26 750.8 |
| expenses | 747.1 | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Operating profit | -19 | 3 428.3 | 4 438.1 | 3 672.9 | 2 915.5 |
| | 335.4 | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Financial | -477.8 | -669.5 | -522.8 | -653.2 | -820.6 |
| expenses (net) | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Pre-tax profit | -19 | 2 758.8 | 3 915.3 | 3 019.7 | 2 094.9 |
| | 813.1 | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Direct tax | -1 037.1 | -617.5 | -1 055.3 | -834.6 | -745.5 |
--------------------------------------------------------------------------------
| Net profit | -20 | 2 141.3 | 2 859.9 | 2 185.1 | 1 349.4 |
| | 850.3 | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Allocation: | | | | | |
--------------------------------------------------------------------------------
| Parent company | -20 | 2 141.3 | 2 859.9 | 2 185.1 | 1 349.4 |
| shareholders | 850.3 | | | | |
--------------------------------------------------------------------------------
| Minority | 0 | 0.0 | 0.0 | 0.0 | 0.0 |
| shareholders | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Earnings per | -1.01 | 0.10 | 0.14 | 0.11 | 0.07 |
| share, EUR | | | | | |
--------------------------------------------------------------------------------
| Earnings per | -1.01 | 0.10 | 0.14 | 0.11 | 0.07 |
| share, EUR, | | | | | |
| diluted | | | | | |
--------------------------------------------------------------------------------
Group key figures and ratios:
--------------------------------------------------------------------------------
| | 2009 | 2008 | 2007 |
--------------------------------------------------------------------------------
| Extent of business | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Net sales | 120 335 | 123 203 | 105 839 |
--------------------------------------------------------------------------------
| - change from previous year | -2% | 16% | 25% |
--------------------------------------------------------------------------------
| Average capital invested | 108 823 | 127 023 | 123 994 |
--------------------------------------------------------------------------------
| Personnel at period-end | 1 471 | 1 337 | 1 155 |
--------------------------------------------------------------------------------
| Average number of personnel | 1 387 | 1 314 | 1 116 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Profitability | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Operating profit before one-off | 16 936 | 13 437 | 11 080 |
| items and impairment | | | |
--------------------------------------------------------------------------------
| - -% of net sales | 14% | 11% | 10% |
--------------------------------------------------------------------------------
| Operating profit | -7 796 | 13 437 | 11 080 |
--------------------------------------------------------------------------------
| - -% of net sales | -6% | 11% | 10% |
--------------------------------------------------------------------------------
| Pre-tax profit | -10 119 | 10 406 | 7 898 |
--------------------------------------------------------------------------------
| - -% of net sales | -8% | 8% | 7% |
--------------------------------------------------------------------------------
| Net profit | -13 664 | 7 409 | 5 871 |
--------------------------------------------------------------------------------
| -% of net sales | -11% | 6% | 6% |
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| Return on equity, % | -21% | 11% | 9% |
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| Return on investment, % | -7% | 11% | 9% |
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| | | | |
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| Financing and financial position | | | |
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| | | | |
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| Interest-bearing liabilities | 30 429 | 56 950 | 56 413 |
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| Short-term investments & cash and | 10 469 | 18 879 | 11 739 |
| bank receivables | | | |
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| Net gearing, % | 34% | 53% | 65% |
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| Equity ratio | 52% | 47% | 47% |
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| Net cash flow from operating | 20 232 | 15 473 | 6 157 |
| activities | | | |
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| Basic earnings per share (EUR) | -0.67 | 0.36 | 0.29 |
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| Earnings per share (EUR), diluted | -0.67 | 0.36 | 0.29 |
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| Equity per share | 2.79 | 3.46 | 3.32 |
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| Lowest share price | 1.39 | 1.73 | 2.93 |
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| Highest share price | 3.88 | 3.35 | 4.26 |
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| Average share price | 2.72 | 2.83 | 3.77 |
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| Market capitalisation | 71 528 | 38 788 | 61 079 |
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The formulae for the key figures and ratios are available in the financial
statements section. These formulae remained unchanged during the reporting
period.
The weighted average number of shares during the reporting period, adjusted for
share issues, totalled 20,853,645. The weighted average number of shares during
the reporting period, adjusted for dilution, totalled 20,853,645. The number of
outstanding shares totalled 20,587,691 at the end of the reporting period.
The company held a total of 129,964 treasury shares at the end of reporting
period.
The accounting counter value of own shares is EUR 0.10 per share. The company
held about 0.6 per cent of the capital stock as of 30 December 2009. The buyback
program was terminated by the Board at its meeting on 3 February 2009.
Relating to the company's performance-based incentive system, Digia has financed
the acquisition of 300,000 own shares. Said shares were not distributed at the
end of the review period and Evli Alexander Management Ltd holds 135,990 shares.
