Quarterly Report • Apr 29, 2015
Quarterly Report
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Dovre Group Plc Interim report April 29, 2015 at 8.45 a.m.
Q1: All time high net sales, operating result negative due to merger related costs
Dovre Group reviews its guidance for 2015 released on February 12, 2015: Net sales are expected to be at the same level as in 2014. Operating result is expected to improve from 2014. The guidance does not include non-recurring items related to the potential NPC merger nor its impact on net sales or operating result.
Previous guidance: Net sales are expected to be at the same level as in 2014. Operating result is expected to improve from 2014.
The interim report is unaudited. Last year's corresponding period in parentheses.
| EUR million | 1-3 2015 |
1-3 2014 |
Change % |
1-12 2014 |
|---|---|---|---|---|
| Net sales | 26.2 | 24.7 | 6.0 | 98.9 |
| Operating result | -0.1 | 0.3 | -121.8 | 1.2 |
| % net sales | -0.3 % | 1.3 % | 1.2 % | |
| Result | 0.1 | 0.1 | -31.9 | 0.3 |
| % net sales | 0.2 % | 0.4 % | 0.3 % | |
| Net cash flow from operations | 0.0 | -1.3 | 103.7 | 1.9 |
| Cash and cash equivalents | 10.5 | 12.1 | -12.8 | 10.3 |
| Debt-equity ratio (Gearing), % | -43.4 % | -52.5 % | -17.3 | -42.2 % |
| Earnings per share, EUR: | ||||
| Undiluted | 0.00 | 0.00 | -32.3 | 0.00 |
| Diluted | 0.00 | 0.00 | -32.1 | 0.00 |
"Our net sales growth continued in Q1, reaching an all-time high. Net sales grew both in euros and in constant currencies – a good achievement in a challenging market environment. Operating result in Q1 was negative, mainly due to external advisory services related to a M&A opportunity. We continue to scrutinize costs across the whole organization. During the period under review, the company and the employees
agreed to changes that will result in annual cost savings of approx. EUR 0.3 million in Finland. The cost savings will be only partially realized this year and will take full effect from 2016. Measures to improve profitability continue also in other countries.
Demand for project personnel services is weakening, especially in Norway. However, Project Personnel's net sales increased during the period under review. Project Personnel's profitability declined compared to Q1/2014. This was mainly due to idle time for consultants in Norway and rate reductions required by clients, but which we were not able to fully offset by cutting our costs. At the same time, investments in future growth – primarily Dovre Club and global sales – were higher than in Q1/2014.
In the Consulting business area, our net sales and operating result improved distinctly from Q1/2014. In particular Norway and Sweden improved compared to the previous year.
In accordance with our focused growth strategy, released in October 2014, our target is to have net sales of EUR 200 million and an operating result exceeding EUR 10 million in 2019. In March we announced a conditional merger with Norwegian Petroleum Consulting Group, which, if completed, will take us significantly closer to our strategic net sales target. We are currently planning merger integration. Our aim is to complete the transaction within the first half of 2015.
The pellet production plant owned by our associate SaraRasa has been relocated to Surabaya. The new location offers more secure and better availability of feedstock, lower production costs, and better logistics. The production is scheduled to restart in the autumn."
In Q1, Dovre Group's net sales increased by 6%, totaling EUR 26.2 (24.7) million. In constant currencies, the Group's net sales increased by approx. 2%. In Q1, Project Personnel accounted for 92 (91) % and Consulting for 8 (9) % of the Group's net sales.
Net sales for Project Personnel increased by 5.1%, totaling EUR 24.1 (22.9) million. In constant currencies, Project Personnel's net sales were at the same level as in Q1/2014. Net sales for Consulting increased by 18.1% totaling EUR 2.1 (1.8) million. In constant currencies, Consulting business area's net sales increased by 23%.
By market area, EMEA's net sales totaled EUR 15.2 (14.8) million, accounting for 58 (60) % of the Group's net sales in Q1. Net sales for AMERICAS were EUR 9.6 (8.8) million, accounting for 37 (36) % the Group's net sales. Net sales for APAC were EUR 1.3 (1.1) million, accounting for 5 (4) % the Group's net sales.
In Q1, the Group signed a frame agreement with Frontica Advantage AS, a company based in Norway. Following a rigorous, three stage selection process which started in October 2014, Frontica Advantage selected Dovre Group as their preferred supplier of project management consultants and technical consultants in the Oslo region in Norway. Frontica Advantage is part of Frontica Business Solutions AS, a global provider of corporate services to the oilfield services industry. The frame agreement is valid for a minimum of 3 years, with an option for two one year extensions.
| Change in | |||||
|---|---|---|---|---|---|
| Net sales by reporting segment | 1-3 | 1-3 | Change | constant | 1-12 |
| EUR million | 2015 | 2014 | % | currencies % | 2014 |
| Net sales by reporting segment | 1-3 | 1-3 | Change | Change in constant |
1-12 |
|---|---|---|---|---|---|
| EUR million | 2015 | 2014 | % | currencies % | 2014 |
| Project Personnel | 24.1 | 22.9 | 5.1 | 0.3 | 91.1 |
| Consulting | 2.1 | 1.8 | 18.1 | 22.8 | 7.8 |
| Other functions | 0.0 | 0.0 | 0.0 | ||
| Group total | 26.2 | 24.7 | 6.0 | 1.9 | 98.9 |
| Net sales by market area EUR million |
1-3 2015 |
1-3 2014 |
Change % |
Change in constant currencies % |
1-12 2014 |
|---|---|---|---|---|---|
| EMEA | 15.2 | 14.8 | 3.3 | 4.7 | 58.0 |
| AMERICAS | 9.6 | 8.8 | 9.1 | -3.3 | 36.0 |
| APAC | 1.3 | 1.1 | 17.2 | 6.8 | 4.9 |
| Group total | 26.2 | 24.7 | 6.0 | 1.9 | 98.9 |
Dovre Group's markets by area are:
In Q1, the Group's operating result was EUR -0.1 (0.3) million. The operating result was negatively affected by non-recurring items, EUR 0.3 (0.0) million in total, which were mainly due to external advisory services related to M&A opportunities. Project Personnel business area's operating result was EUR 0.5 (0.8) million. Consulting business area's operating result was EUR 0.2 (0.1) million. The operating result of Other functions, which includes the non-recurring items, was EUR -0.7 (-0.4) million.
Project Personnel's operating result was mainly driven by our clients' needs for cost reductions. In the Consulting business area, business activity has been lively in Norway and Sweden, whilst in Finland the year has started slowly. We have taken action to improve the profitibality of our operations in Finland.
In Q1, Dovre Group Plc held employee co-operation negotiations. The negotiations concerned all employees in Finland, including the management. The company and the employees agreed to changes that will result in annual cost savings of approx. EUR 0.3 million in Finland.
| Operating result by | ||||
|---|---|---|---|---|
| reporting segment | 1-3 | 1-3 | Change | 1-12 |
| EUR million | 2015 | 2014 | % | 2014 |
| Project Personnel | 0.5 | 0.8 | -42.3 | 2.5 |
| Consulting | 0.2 | 0.1 | 184.6 | 0.8 |
| Other functions | -0.7 | -0.4 | -51.4 | -1.9 |
| Unallocated | 0.0 | -0.1 | 49.5 | -0.2 |
| Group total | -0.1 | 0.3 | -121.9 | 1.2 |
In Q1, the Group's result before taxes was EUR 0.1 (0.3) million, including EUR 0.3 (0.1) million of currency exchange gains that were recorded in the Group's financing income and expenses. Majority of the Group's currency exchange gains were unrealized. The result also includes the Group's share, EUR -0.1 (-0.1) million, of the results of its associates SaraRasa Biomass Pte Ltd. and SaraRasa Bioindo Pte Ltd. The Group's result after taxes was EUR 0.1 (0.1) million.
In Q1, the Group's earnings per share was EUR 0.00 (0.00). The Group's return on average capital employed before taxes (ROI) was 3.0 (5.2) %.
On March 31, 2015, the Group balance sheet total was EUR 38.8 (42.0) million. The Group's cash and cash equivalents totaled EUR 10.5 (12.1) million. In addition, the parent company and the subsidiaries have unused credit limits.
On March 31, 2015, the equity ratio was 53.9 (49.9) % and the debt-equity ratio (gearing) -43.4 (-52.5) %. The interest-bearing liabilities amounted to EUR 1.5 (1.0) million, accounting for 3.7 (2.5) % of the Group's shareholders' equity and liabilities. The Group's interest-bearing liabilities were all current.
Net cash flow from operating activities was EUR 0.0 (-1.3) million, which includes EUR 0.3 (-1.1) million change in working capital.
Net cash flow from investing activities was EUR -0.3 (-0.4) million. Gross investments totaled EUR 0.0 (-0.1) million.
Net cash flow from financing activities was EUR 0.0 (0.0) million. The Group drew new current loans worth of EUR 0.0 (0.0) million.
The balance sheet goodwill totaled EUR 6.9 (7.0) million on March 31, 2015. No indications of impairment exist.
In Q1, the average number of personnel employed by the Group was 478 (470. Project Personnel employed 424 (419) and Consulting 49 (47). On March 31, 2015, Dovre Group employed 473 (473) people, 420 (422) of which were employed by Project Personnel and 48 (47) by Consulting. In Project Personnel business area 42 (42) % of employees were independent contractors.
| Personnel | 1-3 | 1-3 | Change | 1-12 |
|---|---|---|---|---|
| average | 2015 | 2014 | % | 2014 |
| Project Personnel | 424 | 419 | 1.2 | 428 |
| Consulting | 49 | 47 | 4.3 | 48 |
| Other functions | 6 | 4 | 50.0 | 4 |
| Group total | 478 | 470 | 1.9 | 481 |
On March 31, 2015, Dovre Group's share capital was EUR 9,603,084.48 and the total number of shares 63,415,751. There were no changes in the Group's share capital during the period under review. Increase in the number of shares during the period under review, 150,000 in total, was due to subscription of new shares with the company's 2010A and 2010C stock option plans. The new shares were entered in the Finnish trade register on March 2, 2015. The increase has been recorded in the company's reserve for non-restricted equity.
In January – March, 2015, approximately 8.8 (11.4) million Dovre Group shares were exchanged on the NASDAQ OMX Helsinki Ltd., corresponding to a trade of approximately EUR 4.4 (6.6) million. The lowest quotation was EUR 0.36 (0.46) and the highest EUR 0.57 (0.68). On March 31, 2015, the closing quotation was EUR 0.48 (0.51). The period-end market capitalization was approximately EUR 30.4 (32.1) million.
On March 31, 2014, the number of registered shareholders of Dovre Group Plc totaled 3,718 (3,551), including 9 (9) nominee-registers. Of the Group's shares, 0.9 (0.9) % are nominee-registered.
On March 31, 2015, members of the Group's Board of Directors and the CEO held, including holdings through controlled companies and family members living in the same household, a total of 4,901,588 (4,706,526) shares in the company, representing 7.7 (7.5) % of all shares.
On March 4, 2015, the company released an announcement regarding a transaction which, if completed, will result in an increase in the company's total number of shares from the current 63,415,751 to a total of 99,868,769 shares. The transaction will also result in the following changes in holdings:
Dovre Group has two option plans, 2010 and 2013. Each stock option entitles the holder to subscribe one share in Dovre Group Plc.
The share subscription period and price per series under the 2010 option plan are as follows:
The subscription period for Dovre Group Plc's 2010A option plan ended on February 28, 2015. A total of 315,000 shares were subscribed for under the option plan, 120,000 of which during the period under review. The remaining 240,000 stock options expired as unused. At the end of the period under review, a total of 965,000 were outstanding under the the 2010 option plan.
Under the 2013 option plan, the total number of stock options offered for subscription to Dovre Group's key personnel is 3,000,000. The share subscription period and price per series under the 2013 option plan are as follows:
During the period under review, the Group granted a total of 750,000 2013C stock options to the Group's key personnel. A total of 50,000 2013B stock options were returned to the company. At the end of the period under review, the company had granted a total of 2,135,000 options under the 2013 option plan and had in reserve a total of 865,000 options.
On March 31, 2015, the Group's CEO Patrick von Essen held a total of 600,000 stock options granted under the 2013B and 2013C option plans.
Dovre Group Plc's Annual General Meeting held on March 25, 2015, adopted the financial statements and consolidated financial statements for 2014 and discharged the members of the Board of Directors and the CEOs from liability for the financial year ending on December 31, 2014. The Annual General Meeting decided on the use of the profit shown on the balance sheet and the payment of dividend, the composition and remuneration of the Board of Directors, the election of the Auditor and the authorization of the Board of Directors to decide on the repurchase of the Company's own shares and on the issuance of shares as well as the issuance of other special rights entitling to shares. In addition, the Annual General Meeting approved the purchase of the full share capital of a company known as Norwegian Petroleum Consulting Group AS and authorized the Board of Directors to decide on the direct issuance of shares, the acceptance as pledge of the shares issued in direct issuance, and the payment of extra dividend related therewith.
In accordance with the Board's proposal, the Annual General Meeting decided that a dividend of EUR 0.02 per share to be paid for the financial year 2014. The dividend is paid to a shareholder who, on the dividend record date March 27, 2015 is registered as a shareholder in the Company's shareholder register maintained by Euroclear Finland Ltd. The dividend was paid on April 8, 2015.
The Annual General Meeting decided that the number of Board members be set at four (4) and re-elected all four members to continue on the Board of Directors.The members of the Board are: Rainer Häggblom, Ilari
Koskelo, Arja Koski, and Tero Viherto. In its first meeting after the Annual General Meeting, the Board of Directors re-elected Rainer Häggblom as the Board's Chairman.
The Annual General Meeting resolved that the chairman of the Board is paid EUR 35,000, the vice chairman of the Board EUR 25,000, and each other member of the Board EUR 22,000 per year. In addition, reasonable travel expenses are also compensated. Out of the annual compensation, 40% of the total gross compensation will be used to purchase Dovre Group Plc's shares on regulated market in trading through NASDAQ OMX Helsinki Ltd, or alternatively by using the own shares held by the company. The shares will be purchased and/or granted as soon as possible after the Annual General Meeting. The total amount of the annual compensation paid to Board members and the method of payment did not change from the previous year.
The Annual General Meeting re-elected the Authorized Public Accountant entity Ernst & Young Ltd as the Company's auditor, with APA Mikko Järventausta continuing as the Company's principal auditor.
The Annual General Meeting authorized the Board of Directors to decide on the repurchase of the Company's own shares on the following conditions: the Board is entitled to decide on repurchase of a maximum of 6,200,000 of the Company's own shares, which shall be repurchased in deviation from the proportion to the holdings of the shareholders using the non-restricted equity and acquired through trading at the regulated market organized by NASDAQ OMX Helsinki Ltd at the share price prevailing at the time of acquisition. This number of shares corresponds to approximately a maximum of 9.8% of the total number of shares in the Company. The shares may be repurchased in order to be used as consideration in possible acquisitions or other arrangements related to the Company's business, to finance investments or as part of the Company's incentive program or to be held, otherwise conveyed or cancelled by the Company. The Board of Directors shall decide on other matters related to the repurchase of the Company's own shares. This repurchase authorization is valid until June 30, 2016 and revokes earlier repurchase authorizations.
The Annual General Meeting authorized the Board of Directors to decide on the issuance of new shares and/or the conveyance of own shares held by the Company and/or the granting of special rights referred to in Chapter 10, Section 1 of the Finnish Companies Act on the following conditions:
By virtue of the authorization, the Board may also decide on a directed issue of shares and special rights, i.e. waiving the pre-emptive subscription rights of the shareholders, under the requirements of the law. By virtue of the authorization, a maximum of 12,400,000 shares may be issued, corresponding to approximately 19.6% of the Company's existing shares.
The Board may use the authorization in one or more instalments. The Board may use the authorization to finance or conclude acquisitions or other arrangements, to strengthen the Company's capital structure, to incentive programs or other purposes decided by the Board. The new shares may be issued or the Company's own shares conveyed either against payment or free of charge. The new shares may also be issued as an issue without payment to the Company itself. The Board was authorized to decide on other terms of the issuance of shares and special rights. By virtue of the authorization, the Board of Directors may decide on the realization of the Company's own shares possibly held by the Company as pledge.
The authorization is valid until June 30, 2016. The authorization revokes earlier authorizations to issue shares and grant option rights and other special rights entitling to shares.
The Annual General Meeting approved the purchase of the full share capital of Norwegian Petroleum Consulting Group AS and authorized the Board of Directors to decide on the direct issuance of shares, the acceptance as pledge of the shares issued in direct issuance, and the payment of extra dividend related therewith on the following conditions:
In addition to the aforementioned authorization regarding the issuance of shares and option rights as well as other special rights entitling to shares, the Annual General Meeting authorized the Board of Directors to decide on the directed share issue of a maximum of 36,453,018 new shares in connection with the transaction mentioned above in deviation from the pre-emptive subscription rights of the shareholders. There is a weighty financial reason for the Company to issue shares as direct issue. The new shares issued by virtue of this authorization do not entitle to any dividend distributed from the financial year 2014 or previous financial years. The share issue authorization is valid until June 30, 2016. The authorization does not revoke the aforementioned issuance authorization.
The Annual General Meeting authorized the Board of Directors to decide on the acceptance as pledge of the shares issued in direct issue in connection with the transaction and to be used as pledge against the fulfilment of the terms of the contract of the transaction. The amount to be accepted as pledge based on this authorization shall not exceed 6,000,000 shares in total, representing approximately 9.5% of the shares in the Company. The Board of Directors shall decide on other terms and conditions of the acceptance as pledge of the shares. The pledge authorization is valid until June 30, 2016.
In addition, the Annual General Meeting authorized the Board of Directors to decide on the distribution of extra dividend of EUR 0.06 per share as part of the aforementioned transaction. The new shares issued in relation to the aforementioned transaction do not entitle to extra dividend possibly decided by the Board by virtue of this authorization. The authorization to distribute extra dividend is valid until the beginning of the next Annual General Meeting and until June 30, 2016, at the latest.
Acceptance of the acquisition required that all proposals concerning the acquisition were accepted.
No significant changes have taken place in the Group's short-term risks and uncertainties during the period under review. In the Project Personnel business area, the Group's most significant risks include cost cutting and reduced investment budgets for oil and gas clients as well as lowering oil prices. So far our operations in Russia have not been impacted by trade sanctions. However, there is a risk that, if sanctions escalate, our operations may be affected. The business acquisition, if completed, provides opportunities but also includes risks, such as delayed integration. In addition, expansion to new geographical market areas requires investments and includes risks. The business area's other challenges are maintaining its competitiveness and profitability as well as its key resources in an ever more competitive market environment. Project Personnel business is project-based by nature, thus adding an element of uncertainty to forecasting. Dovre Group is responsible for the work performed by its consultants. However, the company has no overall responsibility for project deliveries.
In the Consulting business area, general economic uncertainty does not affect as directly the demand for the Group's services. This is mainly due to the fact that one of our main clients, the Norwegian public sector, aims to invest counter-cyclically. Project delivery involves minor risks due to both clients and the Group's own personnel such as project delays or loss of key personnel.
Dovre Group has invested in a project development company specialized in renewable energy, SaraRasa Biomass Pte Ltd., and in its first development project, SaraRasa Bioindo Pte Ltd. SaraRasa Bioindo's production unit is located in Indonesia and is thus exposed to high country risk. Other significant risks include risks relating to commercial agreements, including feedstock purchase and end-product sale agreements. The relocation of the pellet production line within Indonesia from Selat to Surabaya increases the business risk in the short term, but will decrease it in the long term.
The Group's reporting currency is euro. The Group's most important functional currencies are the Norwegian crown, the Canadian dollar, and the United States dollar. Although the Group's sales and corresponding expenses are mainly in the same currency, currency fluctuations can affect the Group's net sales as well as the operating result. Foreign currency denominated assets and liabilities can also result in foreign exchange gains or losses. The Group is hedging its currency positions when appropriate.
The market is still affected by several uncertainties, including general economic trends, oil price, and political instabilities. Our main markets are, however, in politically and economically stable countries. Our clients are increasingly cautious about investments and we do not expect global demand to pick up in 2015. With strong focus on sales, we are well placed to continue winning market share in the Project Personnel business area. In the Consulting business area, we have a strong order stock, which includes clients from both the public and the private sectors.
Markets are consolidating and we expect this trend to continue. We expect our relative fixed costs to decrease each year going forward.
Dovre Group reviews its guidance, released on February 12, 2015, for 2015: Net sales are expected to be at the same level as in 2014. Operating result is expected to improve from 2014. The guidance does not include non-recurring items related to the potential NPC merger nor its impact on net sales or operating result.
Previous guidance: Net sales are expected to be at the same level as in 2014. Operating result is expected to improve from 2014.
On March 4, 2015, Dovre Group Plc released a stock exchange bulletin announcing the signing of a conditional agreement concerning the merger of Dovre Group Plc and Norwegian Petroleum Consulting Group AS. Dovre Group Plc's Annual General Meeting held on March 25, 2015, has approved the transaction and authorized the Board of Directors, in accordance with the Board's proposal, to decide on the issuance of a maximum of 36,453,018 new shares in connection with the transaction, the acceptance as pledge of a maximum of 6,000,000 shares of the new shares issued, and the payment of extra dividend of EUR 0.06 per share as part of the transaction.
In addition, the completion of the transaction is subject to fulfilment of the following conditions:
According to our advisor, the first two conditions do not present an impediment to the completion of the transaction.
The target is to complete the transaction within the first half of 2015.
Dovre Group holds a briefing on the Q1/2015 interim report on Wednesday, April 29, 2015 at 10:00 a.m. at Helsinki Bourse Club, Fabianinkatu 14 A, 4th floor.
The CEO's presentation is available on the company's website www.dovregroup.com.
Helsinki, April 28, 2015
DOVRE GROUP PLC BOARD OF DIRECTORS
For additional information, please contact:
Dovre Group Plc Patrick von Essen, CEO ([email protected])
Heidi Karlsson, CFO ([email protected])
tel. +358-20-436 2000 www.dovregroup.com
Distribution NASDAQ OMX Helsinki Ltd Major media www.dovregroup.com
The interim report is unaudited.
| 1-3 | 1-3 | Change | 1-12 | |
|---|---|---|---|---|
| EUR thousand | 2015 | 2014 | % | 2014 |
| NET SALES | 26 176 | 24 694 | 6.0 | 98 889 |
| Other operating income | 10 | 42 | -76.1 | 105 |
| Material and services | -107 | -88 | 21.1 | -406 |
| Employee benefits expense | -23 595 | -21 759 | 8.4 | -87 053 |
| Depreciation and amortization | -88 | -118 | -25.2 | -377 |
| Other operating expenses | -2 466 | -2 450 | 0.6 | -9 941 |
| Impairment, assets held for sale | 0 | 0 | -43 | |
| OPERATING RESULT | -70 | 320 | -121.8 | 1 173 |
| Financing income | 454 | 74 | 517.6 | 483 |
| Financing expenses | -133 | -58 | 129.3 | -216 |
| Share of results in associates | -103 | -76 | 35.5 | -555 |
| RESULT BEFORE TAX | 148 | 260 | -43.1 | 885 |
| Tax on income from operations | -85 | -167 | -49.2 | -617 |
| RESULT FOR THE PERIOD | 63 | 92 | -31.9 | 268 |
| Other comprehensive income Other comprehensive income to be classified to or loss in subsequent periods: Translation differences Other comprehensive income for the period, net of tax TOTAL COMPREHENSIVE INCOME FOR THE PERIOD |
605 605 668 |
-152 -152 -60 |
498.0 498.0 1 222.6 |
16 16 284 |
| Earnings/share EUR Basic, result for the period Diluted, result for the period |
0.00 0.00 |
0.00 0.00 |
-32.3 -32.1 |
0.00 0.00 |
| Average number of shares | ||||
| Basic | 63,315,751 | 62,940,751 | 63,019,918 | |
| Diluted | 63,591,185 | 63,433,276 | 63,458,950 | |
| Number of shares, period end | March 31, 2015 |
March 31, 2014 |
Dec. 31, 2014 |
|
| Basic | 63,415,751 | 62,990,751 | 63,265,751 | |
| Diluted | 63,779,794 | 63,685,913 | 63,415,264 |
| EUR thousand | March 31, 2015 |
March 31, 2014 |
Change % |
Dec. 31, 2014 |
|---|---|---|---|---|
| ASSETS | ||||
| Non-current assets | ||||
| Intangible assets | 623 | 693 | -10.1 | 689 |
| Goodwill | 6 854 | 6 978 | -1.8 | 6 645 |
| Tangible assets | 126 | 156 | -19.2 | 138 |
| Investments in associates | 483 | 895 | -46.0 | 521 |
| Other receivables | 1 434 | 316 | 339.9 | 931 |
| Deferred tax assets | 320 | 306 | 4.6 | 307 |
| Non-current assets | 9 840 | 9 344 | 4.8 | 9 231 |
| Current assets | ||||
| Trade receivables and other receivables | 17 328 | 19 499 | -10.9 | 14 879 |
| Tax receivable, income tax | 229 | 203 | 12.8 | 202 |
| Cash and cash equivalents | 10 516 | 12 053 | -12.8 | 10 343 |
| Current assets | 28 073 | 31 755 | -11.5 | 25 424 |
| Assets held of sale | 890 | 933 | -4.6 | 890 |
| TOTAL ASSETS | 38 803 | 42 032 | -7.7 | 35 545 |
| EQUITY AND LIABILITIES | ||||
| Shareholders' equity | ||||
| Share capital | 9 603 | 9 603 | 0.0 | 9 603 |
| Reserve for invested non-restricted equity | 506 | 381 | 32.8 | 463 |
| Revaluation reserve | 0 | 8 | -100.0 | 0 |
| Translation differences | -287 | -1 059 | -72.9 | -891 |
| Retained earnings | 11 104 | 12 035 | -7.7 | 12 285 |
| Shareholders' equity | 20 926 | 20 968 | -0.2 | 21 459 |
| Non-current liabilities | ||||
| Deferred tax liability | 520 | 584 | -11.0 | 568 |
| Other non-current liabilities | 40 | 26 | 53.8 | 37 |
| Non-current liabilities | 560 | 610 | -8.2 | 605 |
| Current liabilities | ||||
| Short-term liabilities, interest-bearing | 1 428 | 1 041 | 37.2 | 1 289 |
| Trade payables and other liabilities | 15 807 | 19 145 | -17.4 | 11 931 |
| Tax liability, income tax | 51 | 260 | -80.4 | 232 |
| Current provisions | 31 | 8 | 287.5 | 30 |
| Current liabilities | 17 317 | 20 454 | -15.3 | 13 481 |
| TOTAL EQUITY AND LIABILITIES | 38 803 | 42 032 | -7.7 | 35 545 |
| EUR thousand | a) | b) | c) | d) | e) | f) |
|---|---|---|---|---|---|---|
| SHAREHOLDERS' EQUITY Jan. 1, 2014 | 9 603 | 352 | 21 | -907 | 16 297 | 25 366 |
| Comprehensive income | ||||||
| Result for the period | 92 | 92 | ||||
| Other comprehensive income | ||||||
| Translation differences | -152 | -152 | ||||
| Transfers between items | -13 | 13 | 0 | |||
| Total comprehensive income | 0 | 0 | -13 | -152 | 105 | -60 |
| Transactions with shareholders | ||||||
| Stock options exercised | 29 | 29 | ||||
| Share based compensation | 42 | 42 | ||||
| Dividend distribution | -4 409 | -4 409 | ||||
| Total transactions with shareholders | 0 | 29 | 0 | 0 | -4 367 | -4 338 |
| SHAREHOLDERS' EQUITY March. 31, 2014 | 9 603 | 381 | 8 | -1 059 | 12 035 | 20 968 |
| EUR thousand | a) | b) | c) | d) | e) | f) |
| SHAREHOLDERS' EQUITY Jan. 1, 2015 | 9 603 | 463 | 0 | -892 | 12 285 | 21 459 |
| Comprehensive income | ||||||
| Result for the period | 63 | 63 | ||||
| Other comprehensive income | ||||||
| Translation differences | 605 | 605 | ||||
| Total comprehensive income | 0 | 0 | 0 | 605 | 63 | 668 |
| Transactions with shareholders | ||||||
| Stock options exercised | 43 | 43 | ||||
| Share based compensation | 24 | 24 | ||||
| Dividend distribution | -1 268 | -1 268 | ||||
| Total transactions with shareholders | 0 | 43 | 0 | 0 | -1 244 | -1 201 |
| SHAREHOLDERS' EQUITY March. 31, 2015 | 9 603 | 506 | 0 | -287 | 11 104 | 20 926 |
| 1-3 | 1-3 | 1-12 | |
|---|---|---|---|
| EUR thousand | 2015 | 2014 | 2014 |
| Cash flow from operating activities | |||
| Operating result | -70 | 320 | 1 173 |
| Adjustments: | |||
| Depreciation / Amortization | 88 | 118 | 420 |
| Loss on disposal of investment | 0 | 0 | 6 |
| Personnel expenses | 25 | 44 | 127 |
| Adjustments, total | 113 | 162 | 553 |
| Changes in working capital | |||
| Trade and other receivables, increase (-) / | |||
| decrease (+) | -1 806 | -2 659 | 1 763 |
| Trade and other payables, increase (+) / | |||
| decrease (-) | 2 113 | 1 541 | -533 |
| Changes in working capital, total | 307 | -1 118 | 1 230 |
| Interest paid | -12 | -6 | -20 |
| Interest received | 11 | 15 | 55 |
| Other financial expenses paid and received | 50 | 2 | -5 |
| Income taxes paid | -351 | -672 | -1 132 |
| Net cash generated by operating activities | 48 | -1 297 | 1 854 |
| Cash flow from investing activities | |||
| Investments in tangible and intangible assets | -7 | -71 | -313 |
| Purchase of shares in associates | 0 | 0 | -27 |
| Loan receivables from associates | -324 | -295 | -807 |
| Net cash generated by investing activities | -331 | -366 | -1 147 |
| Cash flow from financing activities | |||
| Stock options exercised | 43 | 29 | 111 |
| Proceeds from short-term loans | 0 | 0 | 113 |
| Repayments of short-term loans | -10 | -7 | -7 |
| Dividends paid | 0 | 0 | -4 409 |
| Net cash generated by financing activities | 33 | 22 | -4 192 |
| Change in cash and cash equivalents | -250 | -1 641 | -3 485 |
| Translation differences | 423 | -43 | 91 |
| Cash and cash equivalents at beginning of the period | 10 343 | 13 737 | 13 737 |
The interim report has been prepared in line with IAS 34 and, apart from the addition below, the same accounting principles have been applied as in the 2014 financial statements. Key indicator calculations remain unchanged and have been presented in the 2014 financial statements.
As of January 1, 2014, the Group has adopted the following new, revised, and amended standards: - IFRS annual improvements 2010-2012 and 2011-2013
The Group's segment information is based on the Group's internal financial reporting and has been prepared in accordance with IFRS standards. The Group does not allocate the parent company's intra-Group charges to segments for the purposes of segment reporting. Unallocated expenses include customer agreements and relations and their amortization, share-based compensation recognized as expense in the income statement, financial items, and income taxes.
| 1-3/2015 | Project | Other | Elimi | Un | Group | |
|---|---|---|---|---|---|---|
| EUR thousand | Personnel | Consulting | functions | nations | allocated | total |
| Net sales | 24 100 | 2 077 | 0 | 0 | 0 | 26 176 |
| Operating result | 455 | 183 | -660 | 0 | -48 | -70 |
| Financing income and expenses Share of results in associates Income taxes |
-103 | 321 -85 |
321 -103 -85 |
|||
| Result for the period | 455 | 183 | -763 | 0 | 188 | 63 |
| 1-3/2014 EUR thousand |
Project Personnel |
Consulting | Other functions |
Elimi nations |
Un allocated |
Group total |
| Net sales | 22 936 | 1 758 | 0 | 0 | 0 | 24 694 |
| Operating result | 789 | 62 | -436 | -95 | 320 | |
| Financing income and expenses Share of results in associates |
-76 | 16 | 16 -76 |
|||
| Income taxes | -167 | -167 |
| EUR thousand | March 31, 2015 | March 31, 2014 | Dec. 31, 2014 |
|---|---|---|---|
| Carrying value, opening balance | 521 | 967 | 967 |
| Additions | 0 | 0 | 27 |
| Share of profit and loss in associates | -103 | -76 | -555 |
| Translation differences | 65 | 4 | 82 |
| At the end of the period | 483 | 895 | 521 |
Dovre Group Plc has one class of shares. The book value of the shares is EUR 0.15 per share. Each share entitles the shareholder to one vote. Dovre Group Plc's shares are traded on NASDAQ OMX Helsinki Ltd.
| Number of | Reserve for non-restricted |
||
|---|---|---|---|
| EUR thousand | shares | Share capital | equity |
| Dec. 31, 2013 | 62 915 751 | 9 603 | 352 |
| Stock options exercised | 350 000 | 111 | |
| Dec. 31, 2014 | 63 265 751 | 9 603 | 463 |
| Stock options exercised | 150 000 | 43 | |
| March 31, 2015 | 63 415 751 | 9 603 | 506 |
In Q1, a total of 120,000 shares were subscribed for under Dovre Group Plc's 2010A option plan. The subscription period of the plan was March 1, 2012 – February 28, 2015. The increase in the company's number of shares has been entered in the Finnish trade register on March 2, 2015.
In Q1, a total of 30,000 shares were subscribed for under Dovre Group Plc's 2010C option plan. The subscription period of the plan is March 1, 2014 – February 28, 2017. The increases in the company's number of shares were entered in the Finnish trade register on March 2, 2015.
After the registration, the total number of shares in the company is 63,415,751 shares. The increase has been recorded in the company's reserve for non-restricted equity.
Dovre Group Plc's Annual General Meeting held on March 25, 2015, decided that shareholders be paid a dividend of EUR 0.02 per share, corresponding to approx. EUR 1.3 million. The dividend was paid on April 8, 2015.
In Q1, a total of 750,000 stock options were granted to the Group's key personnel under the company's 2013C option plan. Of these, a total of 300,000 were granted to the Group's CEO Patrick von Essen, a total of 300,000 to other members of the Group Executive Team, and a total of 150,000 to toher key personnel.
The share subscription price for the 2013C series is EUR 0.51, which is the trade volume weighted average rating in NASDAQ OMX Helsinki Ltd during February 1 – March 31, 2015, and the subscription period March 1, 2017 – February 28, 2020. The fair value of the stock options, EUR 0.12, was calculated using the Black & Scholes model. The key variables used were as follows:
| Share price at grant date | EUR 0.48 |
|---|---|
| Expected volatility | 31% |
| Expected option life | 5 years |
| Risk-free rate | 0.15% |
During the period under review, the Group has charged a total of EUR 24 thousand (48 thousand) of sharebased compensation as expense in the income statement.
| March 31, 2015 | |||||
|---|---|---|---|---|---|
| EUR thousand Non-current financial assets |
a) | b) | c) | d) | e) |
| Loan receivables from associates | 1 394 | 1 394 | 1 394 | ||
| Loan receivables from others | 40 | 40 | 40 | ||
| Current financial assets | |||||
| Interest receivables from associates | 24 | 24 | 40 | ||
| Trade receivables | 14 430 | 14 430 | 14 430 | ||
| 15 888 | 15 888 | 15 904 | |||
| Non-current financial liabilities | |||||
| Other liabilities | 40 | 40 | 26 | ||
| Current financial liabilities | |||||
| Interest-bearing liabilities | 1 428 | 1 428 | 1 428 | ||
| Trade payables | 5 621 | 5 621 | 5 621 | ||
| 7 089 | 7 089 | 7 078 | |||
| March 31, 2014 | |||||
| EUR thousand | a) | b) | c) | d) | e) |
| Non-current financial assets | |||||
| Loan receivables from associates | 290 | 290 | 289 | ||
| Loan receivables from others | 26 | 26 | 26 | ||
| Current financial assets | |||||
| Trade receivables | 16 559 | 16 559 | 16 559 | ||
| 16 875 | 16 875 | 16 875 | |||
| Non-current financial liabilities | |||||
| Other liabilities | 26 | 26 | 26 | ||
| Current financial liabilities | |||||
| Interest-bearing liabilities | 1 041 | 1 041 | 1 041 | ||
| Derivatives – liabilities | 3 | 3 | 3 | ||
| Trade payables | 6 213 | 6 213 | 6 213 | ||
| 3 | 7 280 | 7 283 | 7 283 | ||
The Group's financial assets and liabilities at fair value through profit or loss consist of currency derivatives. The fair value of derivatives is determined using the appropriate quoted market price and commonly used option valuation methods. This corresponds to level 2 in the hierarchy required by IFRS 13 Fair Value Measurement.
Future minimum lease payments for non-cancellable operating leases
| March 31, | March 31, | Dec. 31, | |
|---|---|---|---|
| EUR thousand | 2015 | 2014 | 2014 |
| Not later than one year | 597 | 776 | 607 |
| Later than one year and not later than five years | 867 | 1 190 | 958 |
| Total | 1 464 | 1 966 | 1 565 |
The Group's operating leases include business premises, warehouse space, and cars. The leases have varying lengths, index clauses, renewal rights, and other terms.
| EUR thousand | March 31, 2015 | March 31, 2014 | Dec. 31, 2014 |
|---|---|---|---|
| Loan receivables | 1 394 | 290 | 894 |
| Interest receivables | 24 | 4 | 36 |
| Trade receivables | 0 | 9 | 23 |
| Interest income | 32 | 4 | 52 |
Dec. 31, 2014
| 2015 | 2014 | 2014 | 2014 | 2014 | |
|---|---|---|---|---|---|
| EUR thousand | 1-3 | 1-3 | 4-6 | 7-9 | 10-12 |
| NET SALES | 26 176 | 24 694 | 24 128 | 24 653 | 25 414 |
| Other operating income | 10 | 42 | 35 | 29 | -1 |
| Material and services | -107 | -88 | -136 | -66 | -117 |
| Employee benefits expense | -23 595 | -21 759 | -21 533 | -21 830 | -21 931 |
| Depreciation and amortization | -88 | -118 | -104 | -74 | -124 |
| Other operating expenses | -2 466 | -2 450 | -2 380 | -2 433 | -2 678 |
| OPERATING RESULT | -70 | 320 | 11 | 280 | 563 |
| % of net sales | -0.3 % | 1.3 % | 0.0 % | 1.1 % | 2.2 % |
| Financing income | 454 | 74 | 27 | 201 | 182 |
| Financing expenses | -133 | -58 | -50 | -56 | -52 |
| Share of results in associates | -103 | -76 | -195 | -116 | -168 |
| RESULT BEFORE TAX | 148 | 260 | -207 | 308 | 524 |
| % of net sales | 0.6 % | 1.1 % | -0.9 % | 1.3 % | 2.1 % |
| Tax on income from operations | -85 | -167 | -56 | -201 | -193 |
| RESULT FOR THE PERIOD | 63 | 92 | -263 | 107 | 331 |
| % of net sales | 0.2 % | 0.4 % | -1.1 % | 0.4 % | 1.3 % |
Key indicator calculations remain unchanged and have been presented in the 2014 financial statements.
| 1-3 | 1-3 | 1-12 | |
|---|---|---|---|
| EUR million | 2015 | 2014 | 2014 |
| Cash and cash equivalents | 10.5 | 12.1 | 10.3 |
| Interest-bearing liabilities | 1.4 | 1.0 | 1.3 |
| Shareholders' equity | 20.9 | 21.0 | 21.5 |
| Balance sheet total | 38.8 | 42.0 | 35.5 |
| Return on equity, % | 1.2 % | 1.6 % | 1.1 % |
| Return on investment, % | 3.0 % | 5.2 % | 3.9 % |
| Debt-equity ratio (Gearing), % | -43.4 % | -52.5 % | -42.2 % |
| Equity-ratio, % | 53.9 % | 49.9 % | 60.4 % |
| Personnel average for the period | 478 | 470 | 481 |
| Personnel at the end of the period | 473 | 473 | 486 |
| Earnings per share, EUR (basic, average for period) | 0.001 | 0.001 | 0.004 |
| Equity per share, EUR (basic, at end of period) | 0.33 | 0.33 | 0.34 |
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