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Dovre Group Oyj

Interim / Quarterly Report Oct 25, 2012

3309_10-q_2012-10-25_2cc48b31-d392-49d8-8051-fb9015a8dad5.pdf

Interim / Quarterly Report

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Dovre Group Plc Interim report October 25, 2012 at 08:45 a.m.

DOVRE GROUP INTERIM REPORT (IFRS) JANUARY 1 – SEPTEMBER 30, 2012

Dovre Group's net sales still growing strongly

(Unless otherwise stated, last year's corresponding period in parentheses.)

SUMMARY

July – September 2012

  • Net sales EUR 23.1 (17.7) million growth 31%
  • Project Personnel: net sales EUR 19.9 (15.4) million growth 30%
  • Consulting: net sales EUR 2.0 (1.4) million growth 40%
  • Software: net sales EUR 1.2 (0.9) million growth 32%
  • Operating result EUR 1.0 (0.9) million growth 7%
  • Operating result 4.3% (5.3%) of net sales
  • Result for the period EUR 0.6 (0.8) million change EUR -0.2 million
  • Earnings per share EUR 0.01 (0.01)
  • Net cash flow from operating activities EUR 1.1 (0.5) million

January – September 2012

  • Net sales EUR 68.4 (53.7) million growth 27%
  • Project Personnel: net sales EUR 58.3 (46.1) million growth 26%
  • Consulting: net sales EUR 6.5 (4.9) million growth 34%
  • Software: net sales EUR 3.8 (2.9) million growth 31%
  • Operating result EUR 3.4 (4.0) million
  • Comparable operating result EUR 3.4 (2.3) million growth 48%
  • Comparable operating result 5.0% (4.3%) of net sales
  • Result for the period EUR 2.2 (2.5) million. Comparable result EUR 2.2 (1.3) million
  • Earnings per share EUR 0.04 (0.04). Comparable earnings per share EUR 0.04 (0.02)
  • Net cash flow from operating activities EUR 1.5 (0.3) million

Comparables for 2011 exclude the gain from the closure of the defined benefit pension plan in Norway in Q1 (impact on the operating result approx. EUR 1.7 million and the result for the period approx. EUR 1.2 million).

In 2012, net sales and comparable operating result are expected to grow over 20% from 2011. The guidance has not been changed.

The interim report is unaudited.

KEY FIGURES

7-9 7-9 Change 1-9 1-9 Change 1-12
(EUR million) 2012 2011 % 2012 2011 *) % 2011 *)
Net sales 23.1 17.7 30.8 % 68.4 53.7 27.4 % 72.5
Operating result 1.0 0.9 6.8 % 3.4 4.0 -14.6 % 4.9
% of Net sales 4.3 % 5.3 % 5.0 % 7.4 % 6.8 %
Result for the period 0.6 0.8 -26.9 % 2.2 2.5 -9.9 % 3.2
% of Net sales 2.4 % 4.3 % 3.2 % 4.6 % 4.4 %
Net cash flow from operations 1.1 0.5 100.5 % 1.5 0.3 437.5 % 2.0
Debt-equity ratio (Gearing), % -29.0 % -26.8 % 8.2 % -29.0 % -26.8 % 8.2 % -34.6 %
Earnings per share, EUR
Basic 0.01 0.01 0.04 0.04 0.05
Diluted 0.01 0.01 0.04 0.04 0.05

*) Including one-time item

JANNE MIELCK, CEO

Our net sales continued on a strong growth path in the third quarter of 2012, with net sales growing 31% compared to the third quarter of 2011. Project Personnel, our biggest division, increased its net sales by almost 30% and Consulting and Software by over 30%. Geographically, our net sales grew most strongly in Norway and Australia.

In the third quarter of 2012, our operating profit was affected by investments in business operations and development. The Group's operating result was EUR 1.0 million, EUR 0.1 million higher than in the third quarter of 2011. Both Consulting and Software improved their operating result significantly.

In January – September 2012, our net sales grew by 27%. All our business divisions experienced strong growth. Again, geographically our net sales grew most strongly in Norway and Australia.

During the period under review, the Group's comparable operating result was EUR 3.4 million, which was approx. EUR 1.1 million and 48% higher than in January – September 2011. All our business divisions improved their operating result.

In the first half of 2012, we acquired a minority share in SaraRasa, a renewable energy project developer based in Singapore, and invested in SaraRasa Bioindo Pte. Ltd., which is the company's first development project. The project is progressing according to plan. In the third quarter of 2012, SaraRasa Bioindo agreed a financing round with the Finnish Fund for Industrial Cooperation (Finnfund).

In the third quarter of 2012, our Consulting division expanded its operations in the renewable energy market. Initially, the division focuses specifically on projects in bio-renewables in Europe and South East Asia. The move is part of the division's current operations and for its part strengthens our ability to operate in a new, growing market sector.

FUTURE OUTLOOK

General economic insecurity has not affected investment levels among Project Personnel division's customers in the Oil and Gas industry. Thus, we expect demand for the division's services to remain strong in key market areas. Market demand supports opportunities for growth, but the highly competitive market creates pressure on profitability.

Current market outlook in the Nordic countries, an important market for the Group's Consulting and Software divisions, is positive. However, economic instability in Europe may affect customers' investment levels in the second half of 2012.

We will continue developing the Group in accordance with our strategy and long-term goals.

In 2012, net sales and comparable operating result are expected to grow over 20% from 2011. The guidance has not been changed.

This future outlook is based on forecasts approved by Dovre Group's Board of Directors.

NET SALES

July – September 2012

In Q3, the Group's net sales increased by 30.8% totaling EUR 23.1 (17.7) million. Project Personnel accounted for 86 (87) %, Consulting for 9 (8) %, and Software for 5 (5) % of the Group's net sales. Net sales for Project Personnel division increased by 29.6% totaling EUR 19.9 (15.4) million. Net sales for Consulting division grew by 40.2% totaling EUR 2.0 (1.4) million. Net sales for Software division grew by 32.2% totaling EUR 1.2 (0.9) million.

By market area, EMEA accounted for 55 (48) %, AMERICAS for 41 (47) %, and APAC for 6 (7) % of the Group's net sales. Net sales for EMEA increased by 50.3% totaling EUR 12.7 (8.4) million. Net sales for AMERICAS increased by 12.8% totaling EUR 9.4 (8.3) million. Net sales for APAC grew by 18.5% totaling 1.4 (1.2) million.

Approximately one third of the growth in net sales incurred from exchange rate variations in favor of the Group.

January – September 2012

During period under review, the Group's net sales increased by 27.4% totaling EUR 68.4 (53.7) million. Project Personnel accounted for 85 (86) %, Consulting for 10 (9) %, and Software for 5 (5) % of the Group's net sales. Net sales for Project Personnel increased by 26.3% totaling EUR 58.3 (46.1) million. Net sales for Consulting grew by 34.3% totaling EUR 6.5 (4.9) million. Net sales for Software grew by 31.1% totaling EUR 3.8 (2.9) million.

By market area, EMEA accounted for 56 (47) %, AMERICAS for 40 (49) %, and APAC for 5 (5) % of the Group's net sales. Net sales for EMEA increased by 53.3% totaling EUR 38.6 (25.2) million. Net sales for AMERICAS increased by 3.6% totaling EUR 27.2 (26.2) million. Net sales for APAC grew by 26.5% totaling 3.7 (2.9) million.

Approximately a quarter of the growth in net sales incurred from exchange rate variations in favor of the Group.

Net sales by reporting segment

7-9 7-9 Change 1-9 1-9 Change 1-12
(EUR million) 2012 2011 % 2012 2011 % 2011
Project Personnel 19.9 15.4 29.6 58.3 46.1 26.3 61.9
Consulting 2.0 1.4 40.2 6.5 4.9 34.3 6.9
Software 1.2 0.9 32.2 3.8 2.9 31.1 4.1
Group functions 0.3 0.3 -4.4 0.9 0.7 22.1 1.3
Net sales between segments -0.4 -0.4 8.0 -1.1 -1.0 -16.0 -1.8
Group total 23.1 17.7 30.8 68.4 53.7 27.4 72.5
Net sales by market area
7-9 7-9 Change 1-9 1-9 Change 1-12
(EUR million) 2012 2011 % 2012 2011 % 2011
EMEA 12.7 8.4 50.3 38.6 25.2 53.3 35.6
AMERICAS 9.4 8.3 12.8 27.2 26.2 3.6 34.0
APAC 1.4 1.2 18.5 3.7 2.9 26.5 3.7
Net sales between market areas -0.3 -0.3 27.4 -1.1 -0.7 -62.0 -0.9
Group total 23.1 17.7 30.8 68.4 53.7 27.4 72.5

Dovre Group's key markets by area are:

  • EMEA: Finland, Norway, and Sweden
  • AMERICAS: Canada and the US
  • APAC: Australia and Sakhalin (Russia)

PROFITABILITY

Operating result July – September 2012

In Q3, the Group's operating result was EUR 1.0 (0.9) million. Project Personnel division's operating result was EUR 0.7 (0.9) million. Consulting division's operating result was EUR 0.3 (0.1) million. Software division's operating result was EUR 0.2 (0.1) million. Operating result for Group functions was EUR -0.1 (-0.1) million.

Operating result January – September 2012

During the period under review, the Group's operating result was EUR 3.4 (4.0) million and comparable operating result EUR 3.4 (2.3) million. Project Personnel division's operating result was EUR 2.4 (3.9) million. Consulting division's operating result was EUR 1.0 (0.5) million. Software division's operating result was EUR 0.6 (0.3) million. Operating result for Group functions was EUR -0.4 (-0.6) million. In Q1/2011, the release of the provision for the defined benefit pension plan in Norway improved the Project Personnel division's operating result by approx. EUR 1.7 million.

Operating result by reporting segment

7-9 7-9 Change 1-9 1-9 Change 1-12
(EUR million) 2012 2011 % 2012 2011 *) % 2011 *)
Project Personnel 0.7 0.9 -23.5 2.4 3.9 -38.3 4.2
Consulting 0.3 0.1 90.4 1.0 0.5 112.8 0.8
Software 0.2 0.1 143.5 0.6 0.3 68.5 0.5
Group functions -0.1 -0.1 9.9 -0.4 -0.6 33.5 -0.6
Operating result between segments -0.1 0.0 -31.7 -0.2 -0.1 -20.0 0.0
Group total 1.0 0.9 6.8 3.4 4.0 -14.6 4.9

*) Including one-time item

Result July – September 2012

In Q3, the Group's result before taxes was EUR 0.9 (1.0) million and after taxes EUR 0.6 (0.8) million, including a total of EUR -0.1 (0.1) million in financing items.

The Group's earnings per share was EUR 0.01 (0.01).

The Group's return on average capital employed before taxes was 17.2 (21.6) %.

Result January – September 2012

The Group's result before taxes was EUR 3.3 (3.8) million and after taxes EUR 2.2 (2.5) million, including a total of EUR 0.0 (-0.2) million in financing items. In Q1/2011, the release of the provision for the defined benefit pension plan in Norway improved the result by approx. EUR 1.2 million.

The Group's earnings per share was EUR 0.04 (0.04). The Group's comparable earnings per share was EUR 0.04 (0.02).

The Group's return on average capital employed before taxes was 19.7 (24.3) %. In 2011, average capital employed before taxes was affected by a one-time item.

CASH FLOW, FINANCING, AND INVESTMENTS

On September 30, 2012, the Group balance sheet total was EUR 41.1 (32.5) million.

The cash and cash equivalents for the Group totaled EUR 7.8 (6.1) million at the end of the period. In addition, the parent company and the subsidiaries have unused credit limits. The Group's cash and cash equivalents changed by EUR -0.3 (0.7) million during January – September 2012.

The equity ratio was 56.1 (60.3) %. The debt-equity ratio (gearing) was -29.0 (-26.8) %. On September 30, 2012, the interest-bearing liabilities amounted to EUR 1.3 (0.9) million, accounting for 3.1 (2.8) % of the Group's shareholders' equity and liabilities. Of the interest-bearing liabilities, EUR 0.0 (0.0) million were noncurrent and EUR 1.3 (0.9) million current.

The net cash flow from operating activities was EUR 1.5 (0.3) million. This includes the EUR -1.7 (-1.6) million change in working capital. EUR 0.5 (0.4) million were paid in taxes.

The net cash flow from investing activities was EUR -1.6 (0.1) million. Gross investments totaled EUR 1.6 (0.1) million, including the Group's investment, EUR 1.5 million, in a project development company based in Singapore and in the company's first development project.

The net cash flow from financing activities was EUR -0.2 (0.2) million. The Group drew new loans worth of EUR 0.4 (0.8) million and paid back existing loans worth of EUR 0.0 (0.9) million. During the period under review, the Group paid a total of EUR 0.6 (0.0) million in dividends.

The balance sheet goodwill totaled EUR 7.9 (7.3) million on September 30, 2012. No indications of impairment of assets exist.

RESEARCH AND DEVELOPMENT

The Group's research and development costs were EUR 0.5 (0.4) million, representing 0.7 (0.7) % of the Group's net sales. A total of EUR 0.0 (0.1) million of capitalized research and development costs were in the Group's balance sheet on September 30, 2012.

The Group's R&D costs consist of the R&D of Safran in the Software division and the R&D of Camako EPM in the Consulting division. The Group's R&D activities proceed as planned.

PERSONNEL

The Group's personnel expenses were EUR 61.2 (46.3) million during the period under review. The comparable personnel expenses were EUR 61.2 (48.0) million.

The personnel expenses of the Project Personnel division were EUR 53.1 (39.9) million and comparable personnel expenses EUR 53.1 (41.6) million. The personnel expenses of the Consulting division were EUR 4.9 (3.8) million. The personnel expenses of the Software division were 2.6 (1.9) million. The personnel expenses of Group functions were EUR 0.7 (0.7) million.

In Q1/2011, the release of the provision for the defined benefit pension plan in Norway decreased the personnel expenses of the Project Personnel division by EUR 1.7 million.

During the period under review, the number of personnel averaged 448 (405).

Personnel by reporting segment (average)

7-9
2012
7-9
2011
Change
%
1-9
2012
1-9
2011
Change
%
1-12
2011
Project Personnel 393 332 18.4 371 332 11.7 331
Consulting 47 46 2.2 47 46 2.2 47
Software 25 23 8.7 25 23 8.7 24
Group functions 5 4 25.0 5 4 25.0 4
Total 470 405 16.0 448 405 10.6 406

On September 30, 2012, Dovre Group employed 476 (403) people worldwide. Of these, 397 (328) were employed by the Project Personnel division, 49 (46) by the Consulting division, 25 (25) by the Software division, and 5 (4) by the Group administration.

BUSINESS PERFORMANCE

Compared to the previous year, our net sales continued its strong growth in the third quarter of 2012. By market area, our net sales grew most strongly in Norway and Australia. In the third quarter of 2012, our operating profit was affected by investments in business operations and development.

Demand for the services of the Project Personnel division has remained strong, and the number of consultants is increasing in our key market areas. In Norway, we also signed two new frame agreements with our current customers. We continue our work to improve our market position and competitiveness.

Our Consulting business continued its strong growth also in the third quarter of 2012. In Norway, both customer demand and billability have remained high. The division has expanded its operations in the renewable energy market. The move is part of the division's current operations and for its part strengthens the Group's ability to operate in a new, growing market sector. Initially, the division focuses specifically on projects in bio-renewables in Europe and South East Asia. The division's service offering for actors involved in renewable energy projects covers project management services and solutions across the project life-cycle.

The Group's Software division increased its net sales and operating profit also in the third quarter of 2012, with both license and maintenance sales increasing. Safran, which is part of the Software division, secured a three-year extension to its current agreement with Statoil for the maintenance and development of Statoil's portfolio of Safran software. Safran is moderately developing its business by continuing market expansion both in Norway and abroad.

In the first half of 2012, Dovre Group acquired a minority share in SaraRasa Biomass Pte. Ltd., a renewable energy project developer based in Singapore, and invested in the company's first development project SaraRasa Bioindo Pte. Ltd., a pellet processing plant using sustainable material and located in Indonesia. SaraRasa Bioindo's build-up toward starting production in early 2013 is progressing according to plan. In the third quarter of 2012, SaraRasa Bioindo agreed a financing round with Finnfund.

SHARES, SHARE HOLDERS, OPTION RIGHTS, AND AUTHORIZATION TO ISSUE SHARES

On January 1, 2012, Dovre Group Plc's share capital was EUR 9,603,084.48 and the total number of shares 62,895,751. The share capital and the total number of shares did not change during the period under review.

Trading and market capitalization

In January – September, 2012, approximately 6.2 (9.1) million Dovre Group shares were traded on the NASDAQ OMX Helsinki Ltd., corresponding to an exchange of approximately EUR 2.4 (4.0) million.

From January 1 to September 30, 2012, the lowest quotation was EUR 0.32 (0.28) and the highest quotation was EUR 0.52 (0.51). On September 30, 2012, the closing quotation was EUR 0.50 (0.33).

The period-end market capitalization was approximately EUR 31.4 (20.8) million.

Shareholders

On September 30, 2012, the number of registered shareholders of Dovre Group Plc totaled 2,854 (2,910) including 8 nominee registers. 0.6 (1.2) % of the Group's shares are nominee-registered.

On September 30, 2012, the ownership of the Board of Directors and CEO accounted for 9.1% of all the shares, or 5,734,475 shares.

Option rights

The subscription period for Dovre Group Plc's 2010A option plan begun on March 1, 2012. No shares were subscribed for with the option rights during the period under review.

In Q3, the Group did not grant any options under the Group's 2010 option plans. No options granted under the options plans were returned to the company.

At the end of the period under review, a total of 2,450,000 options were outstanding under the 2010 option plan. The company has in reserve 730,000 of these.

The Authorization of the Board of Directors

The Annual General Meeting held on March 15, 2012, decided to authorize the Board of Directors to decide on the repurchase of a maximum of 6,200,000 of the Company's own shares, corresponding to approx. 9.9% of the Company's total number of shares. The repurchase authorization is valid until June 30, 2013.

In addition, the Annual General Meeting authorized the Board of Directors to decide on the issuance of shares as well as the issuance of special rights. By virtue of the authorization, the Board is entitled to decide on the issuing of a maximum of 12,400,000 new shares, corresponding to approximately 20% of the Company's total number of shares. The Board is entitled to decide on the conveying of a maximum 6,200,000 own shares held by the Company. The number of shares to be issued to the Company shall not exceed 6,200,000 including the number of own shares acquired by the Company by virtue of the authorization to repurchase the Company's own shares. Additionally, the Board is authorized to grant special rights entitling to shares. The maximum number of shares to be thus issued is 5,000,000 whereby this maximum number is included in the maximum number of shares noted above. The authorization is valid until June 30, 2013.

During the period under review, the Board did not exercise the authorizations granted by the Annual General Meeting held on March 15, 2012.

CORPORATE GOVERNANCE

Dovre Group Plc's Annual General Meeting, held on March 15, 2012, set the number of Board members to five. The following five members were elected as the members of the Board: Ilari Koskelo, Antti Manninen, Leena Mäkelä, Hannu Vaajoensuu, and Ossi Pohjola as a new member. In its first meeting held after the Annual General Meeting, the Board of Directors elected Hannu Vaajoensuu as the Chairman and Antti Manninen as the Vice Chairman of the Board.

Authorized public accountants Ernst & Young Oy continued as the Group's auditor, with APA Mikko Järventausta as the auditor in charge.

A separate stock exchange bulletin outlining the other decisions of the Annual General Meeting was issued on March 15, 2012.

The Corporate Governance Statement for 2011 has been composed in accordance with Recommendation 54 of the Corporate Governance Code of the Finnish Securities Market Association and Chapter 2, Section 6 of the Finnish Securities Market Act. The Corporate Governance Statement has been issued separately from the Annual Review by Dovre Group Plc Board of Directors.

Dovre Group's corporate governance principles are available on the company's website at www.dovregroup.com.

SHORT-TERM RISKS AND UNCERTAINTIES

The success of the Project Personnel division is influenced by the energy sector market as well as investment levels in the Oil and Gas industry. The division expands its business to new geographical market areas. Growth in new market areas requires investments and includes risks. The division's identified main risks are maintaining its overall competitiveness, profitability, and 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.

The Oil and Gas industry in general involves risks, and single projects may experience delays or accidents. Such situations may affect the net sales of the Project Personnel division. However, Dovre Group is not responsible for project delivery, as the company's responsibility is limited to the work performed by its consultants.

Current market outlook in the Nordic countries, an important market for the Group's Consulting and Software divisions, is positive. Our challenge in Norway in particular is to be able to respond to customer demand. Economic instability in Europe may affect customers' investment levels. Risks involved in project delivery are due to both customers and the Group's own personnel.

Dovre Group has two major customers, each of which accounts for more than 10% of the Group's net sales. The Group has extensive delivery agreements with these clients and is thus dependent on its key customers and the long-term frame agreements signed with them. One of our major customers is reviewing its supplier base in 2012.

Dovre Group has invested in a new company SaraRasa Bioindo Pte. Ltd. The build-up phase involves a number of risks, including, for example, organizational set-up, construction of production capacity, legal and regulatory issues, and commercial agreements, especially feedstock purchase and end-product sale agreements. As the company's main operations are located in Indonesia, the company is exposed to high political risk.

The Group's reporting currency is the euro. The Group's most important functional currencies are the Canadian dollar, the Norwegian crown, and the US dollar. Currency fluctuations can affect the company's net sales. Assets and liabilities in foreign currencies can also result in foreign exchange gains or losses. The Group is hedging its currency positions.

Espoo, October 24, 2012

Dovre Group Plc Board of Directors

For additional information, please contact

DOVRE GROUP PLC

Janne Mielck, CEO tel. +358-20-436 2000 [email protected]

www.dovregroup.com

Distribution

NASDAQ OMX Helsinki Ltd Major media www.dovregroup.com

SUMMARY OF FINANCIAL STATEMENTS AND NOTES

The interim report has been prepared in line with IAS 34 and the same accounting principles have been applied as in the 2011 financial statements. Key indicator calculations remain unchanged and have been presented in the 2011 financial statements.

Correction to comparatives for 2011

Dovre Group has corrected the comparatives for 2011 between equity lines. The Group has recognized the non-controlling interest due to a call option that gives present access to benefits associated with the ownership interest.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

7-9 7-9 Change 1-9 1-9 Change 1-12
(EUR thousand) 2012 2011 % 2012 2011 *) % 2011 *)
NET SALES 23 113 17 664 30.8 68 387 53 668 27.4 72 497
Other operating income 0 14 -99.3 34 50 -33.1 82
Material and services -58 -35 63.0 -173 -104 66.1 -180
Employee benefits expense -20 836 -15 746 32.3 -61 181 -46 340 32.0 -63 147
Depreciation and amortization -105 -104 0.9 -322 -336 -4.2 -446
Other operating expenses -1 113 -854 30.2 -3 344 -2 957 13.1 -3 904
OPERATING RESULT 1 002 938 6.8 3 401 3 981 -14.6 4 902
Financing income 13 101 -87.0 329 280 17.5 450
Financing expenses -119 4 -3 101.0 -288 -491 -41.3 -564
Share of results in associates -33 0 -113 0 0
RESULT BEFORE TAX 864 1 044 -17.2 3 329 3 770 -11.7 4 788
Tax on income from operations -307 -281 9.1 -1 113 -1 310 -15.0 -1 586
RESULT FOR THE PERIOD
Other comprehensive income
557 762 -26.9 2 216 2 459 -9.9 3 202
Translation differences 266 -57 565.0 554 -347 259.7 128
Other comprehensive income for the
period, net of tax
266 -57 565.0 554 -347 259.7 128
TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD
823 705 16.8 2 770 2 112 31.1 3 330
ALLOCATION OF COMPREHENSIVE
RESULT FOR THE PERIOD
Result attributable to shareholders of the
parent
ALLOCATION OF COMPREHENSIVE
RESULT FOR THE PERIOD
Result attributable to shareholders of the
parent
557
823
762
705
-26.9
16.8
2 216
2 770
2 459
2 112
-9.9
31.1
3 202
3 330
Earnings/share EUR
Basic
Diluted
0.01
0.01
0.01
0.01
0.04
0.04
0.04
0.04
0.05
0.05
Comprehensive earnings/share EUR
Basic
Diluted
0.01
0.01
0.01
0.01
0.04
0.04
0.03
0.03
0.05
0.05
*) Including one-time item

Dovre Group Plc

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(EUR thousand) Sept. 30,
2012
Sept. 30,
2011 *)
Change
%
Dec. 31,
2011
ASSETS
Non-current assets
Intangible assets 883 1 185 -25.4 1 119
Goodwill 7 852 7 265 8.1 7 491
Tangible assets 138 162 -15.0 83
Investments in associates 1 368 933 46.6 933
Available-for-sale investments 75 76 -1.0 75
Trade receivables and other receivables 244 303 -19.4 242
Deferred tax asset 87 104 -16.5 102
Non-current assets 10 647 10 027 6.2 10 045
Current assets
Trade receivables and other receivables 21 648 16 329 32.6 15 724
Tax receivable, income tax 37 45 -18.0 19
Cash and cash equivalents 7 839 6 063 29.3 7 941
Current assets 29 524 22 436 31.6 23 684
Assets held for sale 933 0 0
TOTAL ASSETS 41 104 32 464 26.6 33 729
EQUITY AND LIABILITIES
Shareholders' equity
Share capital 9 603 9 603 0.0 9 603
Reserve for invested non-restricted equity 346 346 0.0 346
Revaluation reserve 92 138 -33.3 127
Translation differences 1 367 317 331.2 818
Retained earnings 11 201 8 804 27.2 9 524
Shareholders' equity 22 609 19 207 17.7 20 418
Non-current liabilities
Deferred tax liability 940 701 34.2 989
Long-term liabilities, interest-bearing 0 53 -100.0 0
Long-term liabilities, interest-free 25 4 553.8 23
Non-current liabilities 965 757 27.5 1 012
Current liabilities
Short-term liabilities, interest-bearing 1 280 871 47.1 870
Trade payables and other liabilities 15 147 10 672 41.9 11 028
Tax liability, income tax 1 084 957 13.3 362
Current provisions 18 0 39
Current liabilities 17 529 12 499 40.2 12 299
TOTAL EQUITY AND LIABILITIES 41 104 32 464 26.6 33 729

*) Classification of equity line items changed. Comparatives for 2011 corrected.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

  • a) Share capital
  • b) Reserve for non-restricted equity
  • c) Revaluation reserve
  • d) Translation differences
  • e) Retained earnings
  • f) Equity attributable to shareholders of the parent
  • g) Non-controlling interest
  • h) Shareholders' equity total
EUR thousand a) b) c) d) e) f) g) h)
SHAREHOLDERS' EQUITY Jan 1, 2011 15 917 4 976 179 690 -5 197 16 564 155 16 718
Transfers between items -39 39 0 0
Comprehensive income
Profit/loss for the period 2 459 2 459 2 459
Other comprehensive income
Translation differences -2 -373 28 -347 -347
Total comprehensive income 0 0 -2 -373 2 487 2 112 0 2 112
Transactions with shareholders
Reduction of the share capital and
dissolution of the reserve for non-restricted
fund -6 314 -4 976 11 290 0 0
Share based compensation 30 30 30
Dividend distribution 346 346 346
Change in non-controlling interest 155 155 -155 0
Total transactions with shareholders -6 314 -4 630 0 0 11 475 531 -155 376
SHAREHOLDERS' EQUITY Sept. 30, 2011 9 603 346 138 317 8 804 19 207 0 19 207
EUR thousand a) b) c) d) e) f) g) h)
SHAREHOLDERS' EQUITY Jan 1, 2012 9 603 346 127 818 9 524 20 418 0 20 418
Transfers between items -40 40 0 0
Comprehensive income
Profit/loss for the period 2 216 2 216 2 216
Other comprehensive income
Translation differences 5 549 554 554
Total comprehensive income 0 0 5 549 2 216 2 770 0 2 770
Transactions with shareholders
Share based compensation 49 49 49
Dividend distribution -628 -628 -628
Total transactions with shareholders 0 0 0 -579 -579 0 -579
SHAREHOLDERS' EQUITY Sept. 30, 2012 9 603 346 92 1 367 11 201 22 609 0 22 609

CONSOLIDATED STATEMENT OF CASH FLOWS

7-9 7-9 1-9 1-9 1-12
(EUR thousand) 2012 2011 2012 2011 2011
Cash flow from operating activities
Operating result 1 002 938 3 401 3 981 4 902
Adjustments
Depreciation/Amortization 105 104 322 336 446
Gain on disposal of investment 0 0 0 0 -1
Loss on disposal 0 0 0 0 19
Personnel expenses 0 -240 49 -1 870 -1 628
Non-cash transactions 18 0 18 0 0
Adjustments, total 123 -136 389 -1 534 -1 164
Changes in working capital
Trade and other receivables *) 358 -258 -5 268 -2 326 -1 839
Trade and other payables -81 231 3 536 756 1 202
Changes in working capital, total 277 -27 -1 732 -1 570 -637
Interest paid 14 -34 -34 -75 -101
Interest received -10 24 58 45 68
Other financial expenses paid -50 -93 -140 -224 -372
Other financial expenses received 16 27 50 70 233
Income taxes paid -273 -151 -503 -416 -958
Net cash generated by operating activities 1 099 548 1 489 277 1 971
Cash flow from investing activities
Investments in tangible and intangible assets -9 0 -94 -42 -57
Proceeds from sale of tangible assets 0 0 0 0 55
Proceeds from available-for-sale financial assets 0 0 0 186 188
Purchase of shares in associates -9 0 -1 485 0 0
Dividends received 0 0 0 0 1
Net cash generated by investing activities -18 0 -1 579 144 187
Cash flow from financing activities
Stock options exercised 0 0 0 346 346
Repayments of long-term loans 0 -4 0 -356 -408
Proceeds from short-term loans 29 20 417 776 776
Repayments of short-term loans 0 -2 -16 -517 -550
Dividends paid -628 0 -628 0 0
Net cash generated by financing activities -599 15 -227 249 164
Change in cash and cash equivalents 482 563 -317 670 2 322
Translation differences *) 61 4 215 -127 99
Cash and cash equivalents at beginning of the period 7 296 5 496 7 941 5 520 5 520
Cash and cash equivalents at end of the period 7 839 6 063 7 839 6 063 7 941

*) Comparatives for 2011 corrected, i.e. the translation differences on the Group's cash and cash equivalents reported as a separate line item. In 2011, translation differences reported as part of changes in trade and other receivables.

AVERAGE NUMBER OF SHARES

Average number of shares
1-9 1-9 1-12
2012 2011 2011
Undiluted 62,895,751 62,273,084 62,428,751
Diluted 63,023,077 62,784,984 62,859,985
Number of shares at the end of the period
Sept. 30, 2012 Sept. 30, 2011 Dec. 31, 2011
Undiluted 62,895,751 62,895,751 62,895,751
Diluted 63,174,305 63,081,623 63,086,371

GROUP INCOME STATEMENT QUARTERLY

2012 2011 2012 2011 2012 2011 2011
(EUR thousand) 1-3 1-3 *) 4-6 4-6 7-9 7-9 10-12
NET SALES 22 184 18 559 23 090 17 444 23 113 17 664 18 829
Other operating income 13 20 20 16 0 14 32
Material and services -62 -47 -53 -21 -58 -35 -76
Employee benefits expense -19 705 -15 008 -20 640 -15 586 -20 836 -15 746 -16 806
Depreciation and amortization -107 -103 -110 -128 -105 -104 -110
Other operating expenses -1 162 -959 -1 070 -1 144 -1 113 -854 -947
OPERATING RESULT 1 161 2 462 1 238 580 1 002 938 921
% of Net sales 5.2 % 13.3 % 5.4 % 3.3 % 4.3 % 5.3 % 4.9 %
Financing income 146 39 169 140 13 101 170
Financing expenses -138 -244 -31 -251 -119 4 -73
Share of results in associates -13 0 -67 0 -33 0 0
RESULT BEFORE TAX 1 156 2 257 1 309 470 864 1 044 1 018
% of Net sales 5.2 % 12.2 % 5.7 % 2.7 % 3.7 % 5.9 % 5.4 %
Tax on income from operations -361 -822 -445 -207 -307 -281 -276
RESULT FOR THE PERIOD 795 1 435 864 262 557 762 742
% of Net sales 3.6 % 7.7 % 3.7 % 1.5 % 2.4 % 4.3 % 3.9 %

*) Including one-time item

GROUP COMMITMENTS AND CONTINGENT LIABILITIES

(EUR thousand) Sept. 30,
2012
Sept. 30,
2011
Dec. 31,
2011
Collateral for own commitments
Tangible assets 0 0 0
Trade receivables pledged as collateral 3 392 3 210 3 224
Pledged shares 1 514 1 482 1 484
Future minimum lease payments under non-cancellable
operating leases
Not later than one year 525 192 181
Later than one year and not later than five years 748 617 218
Total 1 273 809 399

RELATED PARTY TRANSACTIONS

(EUR thousand) Sept. 30, Sept. 30, Dec. 31,
2012 2011 2011
Investments in associates
Carrying value, opening balance 933 933 933
Additions *) 1 485 0 0
Transfer to assets held for sale **) -933 0 0
Share of profit and loss in associates -113 0 0
Translation differences -4 0 0
At the end of the period 1 368 933 933

*) Additions includes the Group's investments in a project development company based in Singapore and in the company's first development project. Both investments are treated as associates, because the Group has significant influence in the companies due to Board memberships.

**) Transfer to assets held for sales includes the parent company Dovre Group Plc's shares in Kiinteistö Oy Kuukoti in accordance with IFRS 5.

KEY FINANCIAL PERFORMANCE INDICATORS

7-9 7-9 1-9 1-9 1-12
(EUR million) 2012 2011 2012 2011 *) 2011 *)
Net sales 23.1 17.7 68.4 53.7 72.5
Operating result 1.0 0.9 3.4 4.0 4.9
% of Net sales 4.3 % 5.3 % 5.0 % 7.4 % 6.8 %
Result before taxes 0.9 1.0 3.3 3.8 4.8
% of Net sales 3.7 % 5.9 % 4.9 % 7.0 % 6.6 %
Result for the period 0.6 0.8 2.2 2.5 3.2
% of Net sales 2.4 % 4.3 % 3.2 % 4.6 % 4.4 %
Return on equity, % 10.0 % 16.2 % 13.7 % 18.3 % 17.2 %
Return on investment, % **) 17.2 % 21.6 % 19.7 % 24.3 % 26.3 %
Interest-bearing liabilities 1.3 0.9 1.3 0.9 0.9
Cash and cash equivalents 7.8 6.1 7.8 6.1 7.9
Debt-equity ratio (Gearing), % -29.0 % -26.8 % -29.0 % -26.8 % -34.6 %
Equity-ratio, % 56.1 % 60.3 % 56.1 % 60.3 % 61.3 %
Balance sheet total 41.1 32.5 41.1 32.5 33.7
Gross investments 0.0 0.0 1.6 0.1 0.1
% of Net sales 0.1 % 0.0 % 2.3 % 0.1 % 0.1 %
Research & Development costs 0.2 0.1 0.5 0.4 0.5
% of Net sales 0.9 % 0.3 % 0.7 % 0.7 % 0.7 %
Personnel average for the period 470 405 448 405 406
Personnel at the end of the period 476 403 476 403 407
Earnings per share, EUR
Basic 0.01 0.01 0.04 0.04 0.05
Diluted 0.01 0.01 0.04 0.04 0.05
Equity per share, EUR 0.36 0.30 0.36 0.30 0.32

*) Including one-time item

**) Refers to return on average capital employed before taxes. Key indicator calculation remains unchanged and has been presented in the 2011 financial statements.

LARGEST SHAREHOLDERS AS OF SEPTEMBER 30, 2012

Shareholder Shares % Holding
1 Etola Erkki 16 900 000 26.9 %
Etra Capital Oy *) 15 000 000 23.8 %
Etola Erkki 1 900 000 3.0 %
2 Koskelo Ilari 4 529 540 7.2 %
Koskelo Ilari 3 229 540 5.1 %
Navdata Oy **) 1 300 000 2.1 %
3 Sijoitusrahasto Evli Suomi 3 098 320 4.9 %
4 Mäkelä Pekka 1 982 375 3.2 %
5 Siik Rauni 1 230 000 2.0 %
6 Hinkka Petri 1 000 000 1.6 %
7 Siik Seppo Sakari 868 200 1.4 %
8 Kefura Ab 825 000 1.3 %
9 Paasi Kari 768 000 1.2 %
10 Oy Etsmo Ab 750 121 1.2 %
11 Virkki Risto 750 000 1.2 %
12 Ruokostenpohja Ismo 672 783 1.1 %
13 Schütt Christian 640 000 1.0 %
14 Manninen Antti 601 500 1.0 %
Amlax Oy ***) 301 500 0.5 %
Manninen Antti 300 000 0.5 %
15 Thominvest Oy 600 000 1.0 %
16 Hinkka Invest Oy 583 390 0.9 %
17 Vaajoensuu Hannu 545 000 0.9 %
Havacment Oy ****) 215 000 0.3 %
Vaajoensuu Henri ****) 165 000 0.3 %
Vaajoensuu Sara ****) 165 000 0.3 %
18 Jokinen Reino 434 050 0.7 %
19 Olsson Vesa 433 000 0.7 %
20 Nordea Henkivakuutus Suomi Oy 400 000 0.6 %
20 largest shareholders (total) 37 611 279 59.8 %
Nominee registered shares (total) 382 843 0.6 %
Total remaining 24 901 629 39.6 %
Total 62 895 751 100.0 %

*) Erkki Etola holds control in Etra Capital Oy.

**) Ilari Koskelo, member of Dovre Group's Board of Directors, holds control in Navdata Oy.

***) Antti Manninen, Vice-Chairman of Dovre Group's Board of Directors, holds control in Amlax Oy. ****) Hannu Vaajoensuu, Chairman of Dovre Group's Board of Directors, holds control in Havacment Oy. Henri and Sara Vaajoensuu are Hannu Vaajoensuu's family members living in the same household with him.

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