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Bouvet

Quarterly Report Aug 28, 2014

3563_rns_2014-08-28_21459d65-db30-4580-8d3e-4dac6cd8f5ea.pdf

Quarterly Report

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QUARTERLY REPORT Q214

About Bouvet

Bouvet provides services in the fields of information technology, digital communication and enterprise management. At 30 June, it had 945 employees divided between 14 offices in Norway and Sweden.

The company is a strategic partner for a number of enterprises, helping them to shape digital solutions which create new business opportunities. Clients appreciate Bouvet's good grasp of their operations, and a broad range of services allows it to act as a turnkey supplier. Bouvet is committed to maintaining long-term client relationships.

Bouvet's regional model with local offices confers clear benefits in marketing work and competitiveness. Many enterprises consider it important that the supplier of business-critical systems has a local presence and expertise. This also makes it easier to establish a long-term relationship and thereby acquire knowledge of the client's business and systems.

As a result of its clear concentration on the principles for managing the business, Bouvet comes across as a solid, well-run and reputable company. In addition to its standards for delivering good solutions, the company sets strict requirements for ethics, conflicts of interest, security, openness and accountability. Bouvet's close relations with clients are possible because the company and its employees execute their assignments with a high degree of integrity.

Highlights of the second quarter 2014

  • · Operating revenues of NOK 276.2 million for the quarter, down from NOK 284.3 million in the same period of 2013, and NOK 577.1 million for the first half compared with NOK 565.4 million in the first six months of last year.
  • · Operating profit of NOK 23.6 million for the quarter compared with NOK 28.5 million in the same period of 2013, and NOK 50.6 million in the first half compared with NOK 50.7 million in the first six months of last year.
  • · Workforce at 30 June totalled 945 people, up by 13 from 31 March and 51 from 30 June 2013.
  • · Consolidated cash flow from operations of NOK 18 million in the quarter, compared with a negative NOK 2.2 million in the same period of 2013. Cash flow from operations in the first half of NOK 4.6 million, compared with a negative 14 million in the first six months of last year.
  • · The State Agency for the Recovery of Fines, Damages and Costs entered into a contract with Bouvet on management and further development of its recovery system.
  • · Bouvet was commissioned to develop a new solution for information and document management for oil company Eni Norge.
  • · Hordaland county council awarded Bouvet an exclusive frame agreement for design and development of a number of websites.
  • · Bouvet is to develop a new SAP-based business system with mobile clients for a company in the transport sector.

Key figures

MILLIONS NOK APR-JUN 2014 APR-JUN 2013 CHANGE % JAN-JUN 2014 JAN-JUN 2013 CHANGE % YEAR 2013
Revenue 276,2 284,3 -2,8 % 577,1 565,4 2,1 % 1 112,8
Operating profit (EBIT) 23,6 28,5 -16,9 % 50,6 50,7 -0,2 % 95,1
Ordinary profit before tax 24,2 28,7 -15,8 % 51,7 51,7 0,1 % 97,1
Profit for the period 17,5 20,8 -15,7 % 36,7 37,4 -1,7 % 69,8
Net cash flow operations 18,0 -2,2 N/A 4,7 -14,0 N/A 99,4
Cash and cash equivalents 98,0 55,6 76,1 % 98,0 55,6 76,1 % 169,2
Number of employees (end of period) 945 894 5,7 % 945 894 5,7 % 931
Number of employees (average) 946 893 6,0 % 939 891 5,3 % 908
Earnings per share 1,67 2,00 -16,4 % 3,53 3,59 -1,9 % 6,75
Diluted earnings per share 1,65 1,97 -16,5 % 3,48 3,55 -1,9 % 6,67
EBIT margin 8,6 % 10,0 % 8,8 % 9,0 % 8,5 %
Equity ratio 34,5 % 32,8 % 34,5 % 32,8 % 35,9 %

Financial results

Operating revenues

Bouvet had operating revenues of NOK 276.2 million in the second quarter, compared with NOK 284.3 million in the same period of 2013. That represented a decrease of 2.8 per cent. The quarter had one less working day compared with the same period of last year, which reduced operating revenues by 1.7 per cent. Rates for the group's hourly based services rose by 2.8 per cent from the second quarter of 2013. The billing ratio for the group's consultants was down by three percentage points from the same period of last year. Operating revenues from the sale of services by sub-contractors totalled NOK 34.5 million, down by NOK 5.7 million from the second quarter of 2013. The average number of employees increased by six per cent over the same period. Taken together, these factors contributed to a small decline in operating revenues from the second quarter of 2013.

Operating revenues for the first half came to NOK 577.1 million, compared with NOK 565.4 million in the same period of 2013. That represented an increase of 2.1 per cent. Sales to existing clients made good progress during the quarter. Clients who also used the group in the second quarter of 2013 accounted for 90.9 per cent of operating revenues. In addition, clients acquired since 30 June 2013 contributed a total of NOK 25 million to second-quarter operating revenues.

Bouvet's strategy is to use services from sub-contractors when it lacks the capacity to meet demand with its own personnel or when clients require leading-edge expertise outside the group's priority areas. The sub-contractor share of total revenues was 12.5 per cent, compared with 14.1 per cent in the second quarter of 2013. The group's long-term target is that this share should be about 15 per cent of total operating revenues.

Operating costs

Bouvet's operating costs, including depreciation and amortisation, were NOK 252.6 million for the second quarter, down from NOK 255.8 million in the same period of 2013. That represents a reduction of 1.3 per cent. Payroll costs increased because the average number of employees rose, in addition to the general growth in pay rates. The group experienced a general rise in pay of 2.7 per cent over the past 12 months. The cost of sales was NOK 34.7 million, compared with NOK 45.6 million in the second quarter of 2013, and primarily comprised procurement of sub-contractor services and the hire of course instructors. Other operating costs rose by 1.7 per cent from the second quarter of 2013 to NOK 28.6 million.

Profit

Operating profit (EBIT) for the second quarter came to NOK 23.6 million, compared with NOK 28.5 million in the same period of 2013. The EBIT margin thereby came to 8.6 per cent, compared with 10 per cent in the second quarter of last year. Net profit came to NOK 17.5 million, down from NOK 20.8 million in the same period of 2013. Diluted earnings per share were NOK 1.65 for the quarter, compared with NOK 1.97 in the same period of 2013.

For the first half, the cumulative EBIT came to NOK 50.6 million as against NOK 50.7 million in the same period of 2013. That represented a decline of 0.2 per cent. The EBIT margin thereby came to 8.8 per cent, compared with nine per cent in the first half of last year. Net profit came to NOK 36.7 million, down from NOK 37.4 million in the same period of 2013. Diluted earnings per share were NOK 3.48 for the first half, compared with NOK 3.55 in the same period of 2013.

Cash flow, liquidity and capital adequacy

Consolidated cash flow from operations was NOK 18 million in the second quarter, compared with a negative NOK 2.2 million in the same period of 2013. Cash flow was affected positively by a reduction in working capital related to clients, work in progress and other current receivables of NOK 19 million from the first quarter of 2014. Cash flow was also negatively affected by a reduction of NOK 22.5 million in current liabilities from the first quarter. The decline in current liabilities reflected a NOK 7.1 million fall in accounts payable, a rise of NOK 5.7 million in direct and indirect taxes payable, and a drop of NOK 21.1 million in other current liabilities. Consolidated cash flow from operations for the first half came

Employees (end of period)

Operating profit (EBIT)

to NOK 4.7 million, compared with a negative NOK 14 million in the same period of 2013. Consolidated cash flow from operations for the past 12 months was NOK 118.1 million, while net profit for the same period was NOK 69.2 million.

The group's client portfolio consists mainly of large, solid listed companies and public enterprises. No bad debts were suffered the second quarter, and the group has good oversight and control of its receivables.

Bouvet has no interest-bearing debt. Bank deposits at 30 June totalled NOK 98 million, compared with NOK 55.6 million a year earlier. It held 19 356 of its own shares at 30 June. A dividend of NOK 61.5 million was paid by Bouvet during the second quarter. Equity at 30 June totalled NOK 138.1 million, representing an equity ratio of 34.5 per cent.

Developments and market

Bouvet offers the full range of expertise required to develop its clients in a digital direction. The first half of 2014 demonstrated that this is appreciated by the market. Bouvet combines deep technological knowledge and the ability to create effective digital communication with a good commercial understanding within the individual sectors.

The oil and gas industry is Bouvet's biggest sector. The industry is currently characterized by cost cutting. Through its long experience of this business, the company knows what is required in terms of systems, organisations and processes for conducting exploration and production. It is accordingly well positioned to support the many new players who are now expanding on the Norwegian continental shelf (NCS). Det Norske Oljeselskap is an example of a company currently expanding its operations, and it acquired Marathon Oil Norge during the second quarter. Bouvet is now supporting Det Norske Oljeselskap in both Trondheim and Stavanger. Its activities with Statoil were again reduced during the second quarter.

The public sector is digitising rapidly. Bouvet has increased its sales to the central and local government sectors in both Norway The corresponding figures for 30 June 2013 were an equity of NOK 119 million and an equity ratio of 32.8 per cent. Bouvet's long-term target is to maintain an equity ratio in excess of 30 per cent.

Segment reporting

The group does not report internally by business areas or segments in an accounting sense. Its business is homogenous and pursued within the Nordic market for IT consultancy services. Risk and return are followed up at departmental level within homogenous consultancy departments with shared markets, on a project basis and per consultant. This does not provide a basis for segment reporting, which is accordingly not presented. Should changes be made to the group's business, the possibility that these changes might provide a basis for segment reporting will be assessed.

and Sweden. Enhanced efficiency, improved digital services for citizens, greater data availability, universal design and improved information security are among the drivers in this sector. Seventeen per cent of Bouvet's sales derived during the second quarter from public administration and the armed forces, with 37 per cent made to enterprises wholly owned by the public sector.

Power supply is a sector which faces big investment requirements, and Bouvet has many clients here. It is involved, for example, in a number of projects related to the establishment of advanced metering systems (AMS).

Retailing is characterised by the trend towards e-commerce. An integrated cross-channel customer experience is becoming steadily more important, and Bouvet occupies a strong position here. Coop is an example of a sharply expanding client which now receives support from Bouvet in a number of specialist areas.

Revenues – client split

Service provision has become more important than the production of goods in Scandinavia, and this trend is reflected in Bouvet's client base. Customer experience is important in everything from media to transport and technical services, and digital solutions are contributing to effective provision of services.

Health is a sector where Bouvet has enjoyed strong growth in recent years, and the company supports health enterprises in both Norway and Sweden. A common denominator for much of this activity is systems which focus on the patient rather than the therapist.

Regional developments

Rogaland region

BERGEN Bouvet is increasing its share of a Rogaland market characterised by cost cutting in the Oil and Gas sector. A high level of activity and many opportunities relate to new players on the NCS. Bouvet has the technical

OSLO SANDVIKA ARENDAL SANDEFJORD KRISTIANSAND SKIEN expertise and structural capital required to help exploration companies through the process of becoming operators on the continental shelf. This involves an integrated concept which takes account of systems, process and organisation. One company which purchased this concept during the period is Det Norske Oljeselskap. Others are in the process of becoming operators and, with its broad range of services, Bouvet is well positioned to meet their needs.

TRONDHEIM ÖREBRO STOCKHOLM During the quarter, the Rogaland region continued to develop its service concepts in order to respond better to market demand. An important aspect here is to offer clients more integrated solutions at a predictable cost. A steadily growing share of sales in Rogaland is being made through models where Bouvet accepts greater delivery responsibility. An example of a product which the company now sells at a fixed price is "integration as a service".

It can furthermore be mentioned that Bouvet is to develop a new solution for information management and document handling at Eni Norge, introduce Lean in Hydro, undertake security analyses at Petoro and provide project management for Svenska Petroleum.

Major clients in the region include Eni Norge, Statoil, GDF Suez, Nortura, Total, Lyse, Wintershall and ConocoPhillips. HAUGESUND STAVANGER BERGEN

The Olavstoppen subsidiary, which provides services in Rogaland within digital communication, has a good reputation and delivered positive results during the quarter.

Eastern region

SANDEFJORD SKIEN A good quarter was experienced by the eastern region, with assignments for both new and existing clients.

KRISTIANSAND The armed forces are the biggest client in the region, and it became clear

ÖREBRO STOCKHOLM during the second quarter that the frame agreement with them would be extended by a further year. Bouvet is supporting digitisation of the armed forces in a number of areas. Another major public-sector client is the State Agency for the Recovery of Fines, Damages and Costs, which signed a

contract with Bouvet before the summer on management and continued development of its recovery system. Worth more than NOK 100 million, this assignment runs for five years with an option for a further two.

Demand is growing for business systems which can also be used with mobile units. Bouvet is to implement an enterprise resource planning (ERP) system for a new client in the transport sector, which includes development a mobile application for its drivers. And Viking Redningstjeneste has ordered new mobile solutions for its employees from Bouvet. Maintenance personnel at Statkraft also took a mobile application developed by the company into use during the quarter.

Bouvet won an assignment during the period to design and develop a new website for Hafslund Nett, while Viasat awarded a contract on support for mass communication and brand-building. Both these companies are new clients in the communication and customer experience field. Activity in this area is also good at existing clients. STAVANGER FORUS BERGEN

Coop is making a commitment to e-commerce, and get support here under its frame agreement with Bouvet. Statnett, the Norwegian National Rail Administration and Sykehuspartner (the South-Eastern Norway Regional Health Authority) are other clients who awarded new assignments to Bouvet during the quarter. OSLO SANDVIKA

Activity in Bouvet's course business was satisfactory during the period.

Northern region

ÖREBRO STOCKHOLM Demand for Bouvet's services in the northern region is good, and new assignments have been secured in the oil/gas industry, the health sector and public administration.

Det Norske Oljeselskap, with its head office in Trondheim, entered into a frame agreement with Bouvet in the first quarter, and support under this contract has now got well under way. Overall activity for Statoil in the northern region has declined somewhat, but Bouvet is also securing new assignments from this client.

Bouvet's Trondheim office has one of Norway's strongest teams for digital map solutions. The company delivers in this field to Barents Watch/the Norwegian Coastal Administration, for example, and these rank now among the northern region's largest clients. The City of Trondheim has also become an important client, and commissioned a solution for managing support payments.

Activity in the health sector is increasing in the northern region as well. Contracts were secured during the quarter with Mid-Norway Regional Health Authority in such areas as medical registration systems. SANDVIKA

Bergen region

Bouvet's level of activity in the Bergen region is good, and many important contracts were secured during the quarter. The largest of these is a frame agreement with Hordaland county council on the design and develop-TRONDHEIM

SANDEFJORD SKIEN ment of web solutions. Running for two years with options for a further two, this contract embraces a number of different websites. A new mobile-friendly website developed by Bouvet for Bergen University College was launched before the summer.

KRISTIANSAND The Western Norway Regional Health Authority has become an important client in Bergen. Bouvet is designing and developing a new website for the authority which focuses on the patient and where information is tailored to the needs of the individual user.

ÖREBRO STOCKHOLM MALMÖ A number of Bouvet's clients in the banking/finance sector have extended their assignments. These include BankID, which is receiving support from Bouvet in developing this service without Java.

Security is becoming increasingly important for clients, and Bouvet has landed a frame agreement on information security from the City of Bergen. Statoil remains an important client for the company in Bergen.

Southern region

Bouvet is experiencing growing demand in the Agder counties for consultancy and project manager services. Demand for system development services is steady in Vestfold and Telemark.

ÖREBRO The company has supported Statoil for a number of years with Procosys, and secured an important management agreement for this project execution tool during the second quarter.

Agder Energi Nett awarded Bouvet a substantial assignment within its programme for establishing AMS. The company also won a contract for ICT security from this client.

Bouvet has been a significant contributor over many years to the myDrilling™ service from Aker Solutions. A new version has now been delivered and adopted by the client on schedule. Bouvet has also developed an environmental reporting solution for the Eco-Lighthouse Foundation. ARENDAL SANDEFJORD KRISTIANSAND SKIEN

Sweden region

Bouvet's Swedish sales and workforce have grown. However, hourly rates are under heavy pressure in the Swedish market.

Digital communication is a priority area for Bouvet in Sweden. This led during the quarter to several new assignments involving the development of web-based solutions for the local government sector. Nobina, a large Nordic bus company, has ordered an intranet with social functions from Bouvet.

The company has developed a concept for solutions related to administrative procedures. On that basis, a contract has been secured to develop a European quality register for cancer treatment.

Other major Swedish clients include SAS, ICA, the Swedish Transport Administration/Swedish Road Administration and Vattenfall.

Sesam

Sesam is a solution for integration, search and data analysis, based on semantic technology. Established as a separate business unit earlier this year, it sells data integration as a service.

Hafslund has used Sesam for search and data integration over a number of years. The solution has now been adopted for the work of establishing AMS. Statnett has also linked a number of systems to its Sesam-based integration.

The Norwegian National Rail Administration and the Directorate for Cultural Heritage need to handle large volumes of data, and a proof of concept based on Sesam was delivered to both clients during the second quarter.

Employees

Bouvet's ambition is to be the consultancy with the most satisfied workforce. That helps to ensure delivery quality, satisfied clients and low employee turnover. Bouvet works continuously to create job satisfaction among its workforce by making provision for professional development, social

Risk

The group is exposed at any time to various forms of operational, market and financial risk. The board and executive management work continuously on risk management and control. This is described in more detail under

interaction and a positive culture where team spirit occupies a central place.

The company had 945 employees at 30 June, up by 13 from 31 March and 51 from the same date of 2013.

corporate governance in the annual report for 2013 (section 10: risk management and internal control). In the board's view, no significant changes occurred over the past three months in the various risks to which the group is exposed.

Prospects

Digital solutions have created big social changes. These will continue in the years to come as innovative technology and new applications become available. Bouvet contributes to this development by making everyday life simpler for people and by securing a bigger return on digitisation for enterprises.

Bouvet has displayed great ability to adapt to the market and offer new services. Its expertise and experience in technology, user behaviour and experiences, and business processes

Contacts

Sverre Hurum President and CEO Tel: +47 23 40 60 00 | +47 91 35 00 47 mean the company is well placed to remain an important player in coming years.

The need to adapt to changes in sectors and local markets will mean that Bouvet experiences some pressure on margins in the short term. However, the company has previously displayed great adaptability and everything required to sustain profitable growth in the longer term is accordingly in place.

Erik Stubø CFO Tel: +47 23 40 60 00 | +47 95 03 60 11

Declaration by the board and the chief executive

We hereby confirm to the best of our knowledge that the interim financial statements for the first half and the second quarter of 2014 have been prepared in accordance with IAS 34, and that the information in the financial statements provides a true and fair picture of the overall assets, liabilities, financial position and financial results of the Bouvet ASA group. We also confirm to the best of our knowledge that the interim report provides a true and fair view of important events in the accounting period and their influence on the interim financial statements, the most important risk and uncertainty factors facing the business in the next accounting period, and significant transactions with close associates.

Oslo, 28 August 2014 The board of directors of Bouvet ASA

Åge Danielsen Chair of the board

Randi Helene Røed Deputy chair

Grethe Høiland Director

Ingebrigt Steen Jensen Director

Egil Christen Dahl Director

Sverre Hurum President and CEO

Consolidated income statement

NOK 1 000 UNAUDITED
APR-JUN
2014
UNAUDITED
APR-JUN
2013
CHANGE CHANGE % UNAUDITED
JAN-JUN
2014
UNAUDITED
JAN-JUN
2013
CHANGE CHANGE % YEAR 2013
REVENUE 276 197 284 264 -8 067 -2,8 % 577 122 565 423 11 699 2,1 % 1 112 774
OPERATING EXPENSES
Cost of sales 34 720 45 644 -10 924 -23,9 % 71 051 86 877 -15 826 -18,2 % 151 996
Personell expenses 186 129 179 500 6 629 3,7 % 393 632 370 892 22 740 6,1 % 743 334
Depreciation fixed assets 2 523 2 231 292 13,1 % 4 941 4 808 133 2,8 % 9 404
Amortisation intangible assets 559 302 257 85,1 % 972 602 370 61,5 % 1 303
Other operating expenses 28 623 28 136 487 1,7 % 55 888 51 497 4 391 8,5 % 111 644
Total operating expenses 252 554 255 813 -3 259 -1,3 % 526 484 514 676 11 808 2,3 % 1 017 681
Operating profit 23 643 28 451 -4 808 -16,9 % 50 638 50 747 -109 -0,2 % 95 093
FINANCIAL ITEMS
Other interest income 721 575 146 25,4 % 1 451 1 329 122 9,2 % 2 599
Other financial income 52 24 28 116,7 % 102 95 7 7,4 % 310
Other interest expense -82 -93 11 -11,8 % -185 -137 -48 35,0 % -328
Other finance expense -146 -231 85 -36,8 % -277 -336 59 -17,6 % -536
Net financial items 545 275 270 98,2 % 1 091 951 140 14,7 % 2 045
Ordinary profit before tax 24 188 28 726 -4 538 -15,8 % 51 729 51 698 31 0,1 % 97 138
Income tax expense
Tax expense on ordinary profit 6 682 7 970 -1 288 -16,2 % 15 015 14 332 683 4,8 % 27 297
Total tax expense 6 682 7 970 -1 288 -16,2 % 15 015 14 332 683 4,8 % 27 297
Profit for the period 17 506 20 756 -3 250 -15,7 % 36 714 37 366 -652 -1,7 % 69 841
Assigned to:
Shareholders in parent company 17 077 20 374 36 089 36 747 68 677
Non-controlling interests 429 382 625 619 1 164

Statement of other income and costs

NOK 1 000 UNAUDITED
APR-JUN
2014
UNAUDITED
APR-JUN
2013
CHANGE CHANGE % UNAUDITED
JAN-JUN
2014
UNAUDITED
JAN-JUN
2013
CHANGE CHANGE % YEAR 2013
Items that may be reclassified
through profit or loss in
subsequent periods
Currency translation differences -61 4 -65 N/A -117 184 -301 N/A 336
Sum other income and costs -61 4 -65 N/A -117 184 -301 N/A 336
Profit for the period 17 506 20 756 -3 250 -15,7 % 36 714 37 366 -652 -1,7 % 69 841
Total profit 17 445 20 760 -3 315 -16,0 % 36 597 37 550 -953 -2,5 % 70 177
Assigned to:
Shareholders in parent company 17 016 20 378 35 972 36 931 69 013
Non-controlling interests 429 382 625 619 1 164
Diluted earnings per share 1,65 1,97 -0,32 -16,3 % 3,48 3,55 -0,07 -1,8 % 6,67
Earnings per share 1,67 2,00 -0,33 -16,5 % 3,53 3,59 -0,06 -1,6 % 6,75

Consolidated balance sheet

NOK 1 000 UNAUDITED
30.06.2014
UNAUDITED
30.06.2013
CHANGE CHANGE % 31.12.2013
ASSETS
NON-CURRENT ASSETS
INTANGIBLE ASSETS
Deferred tax asset 104 0 104 N/A 155
Goodwill 22 183 18 592 3 591 19,3 % 18 745
Other intangible assets 11 074 6 572 4 502 68,5 % 6 001
Total intangible assets 33 361 25 164 8 197 32,6 % 24 901
FIXED ASSETS
Office equipment 10 414 8 234 2 180 26,5 % 9 733
Office machines and vehicles 2 302 1 863 439 23,6 % 1 941
IT equipment 10 947 10 794 153 1,4 % 11 044
Total fixed assets 23 663 20 891 2 772 13,3 % 22 718
FINANCIAL NON-CURRENT ASSETS
Other long-term receivables 11 11 0 0,0 % 11
Total financial non-current assets 11 11 0 0,0 % 11
Total non-current assets 57 035 46 066 10 969 23,8 % 47 630
CURRENT ASSETS
Work in progress 108 381 107 990 391 0,4 % 84 476
Trade accounts receivable 112 562 131 103 -18 541 -14,1 % 125 451
Other short-term receivables 24 787 21 866 2 921 13,4 % 18 658
Cash and cash equivalents 97 992 55 644 42 348 76,1 % 169 222
Total current assets 343 722 316 603 27 119 8,6 % 397 807
TOTAL ASSETS 400 757 362 669 38 088 10,5 % 445 437

Consolidated balance sheet

NOK 1 000 UNAUDITED
30.06.2014
UNAUDITED
30.06.2013
CHANGE CHANGE % 31.12.2013
EQUITY AND LIABILITIES
EQUITY
PAID-IN CAPITAL
Share capital 10 250 10 250 0 0,0 % 10 250
Own shares - nominal value -19 -155 136 -87,7 % -19
Share premium fund 10 000 10 000 0 0,0 % 10 000
Total paid-in capital 20 231 20 095 136 0,7 % 20 231
EARNED EQUITY
Other equity 114 547 96 686 17 861 18,5 % 136 869
Total earned equity 114 547 96 686 17 861 18,5 % 136 869
Non-controlling interests 3 354 2 183 1 171 53,6 % 2 729
Total equity 138 132 118 964 19 168 16,1 % 159 829
DEBT
LONG-TERM DEBT
Deferred tax 0 653 -653 -100,0 % 0
Total long-term debt 0 653 -653 -100,0 % 0
SHORT-TERM DEBT
Trade accounts payable 24 368 33 325 -8 957 -26,9 % 31 863
Income tax payable 24 161 6 934 17 227 248,4 % 28 557
Public duties payable 93 712 85 879 7 833 9,1 % 106 347
Other short-term debt 120 384 116 914 3 470 3,0 % 118 841
Total short-term debt 262 625 243 052 19 573 8,1 % 285 608
Total liabilities 262 625 243 705 18 920 7,8 % 285 608
TOTAL EQUITY AND LIABILITIES 400 757 362 669 38 088 10,5 % 445 437

Consolidated statement of cash flows

NOK 1 000 UNAUDITED
APR-JUN 2014
UNAUDITED
APR-JUN 2013
UNAUDITED
JAN-JUN 2014
UNAUDITED
JAN-JUN 2013
YEAR 2013
CASH FLOW FROM OPERATING ACTIVITIES
Ordinary profit before tax 24 188 28 726 51 729 51 698 97 138
Paid tax -897 -13 610 -19 865 -27 221 -19 847
(Gain)/loss on sale of fixed assets -77 0 -148 0 -41
Ordinary depreciation 2 523 2 231 4 941 4 808 9 404
Amortisation intangible assets 559 302 972 602 1 303
Share based payments 1 181 999 2 362 1 998 3 980
Changes in work in progress, accounts receivable and accounts payable 9 386 -20 354 -18 511 -39 730 -12 026
Changes in other accruals -18 857 -512 -16 755 -6 137 19 469
Net cash flow from operating activities 18 006 -2 218 4 725 -13 982 99 381
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of fixed assets 81 0 165 0 1 293
Purchase of fixed assets -2 544 -1 068 -5 900 -3 071 -10 746
Purchase of intangible assets -860 -325 -1 267 -1 587 -1 660
Investment in subsidiaries - net cash 0 0 -5 909 0 0
Net cash flow from investing activities -3 324 -1 392 -12 912 -4 658 -11 114
CASH FLOWS FROM FINANCING ACTIVITIES
Purchase of own shares 0 -11 539 0 -11 539 -11 539
Sales of own shares 0 0 0 0 6 671
Dividend payments -61 500 -52 022 -61 500 -52 022 -52 022
Net cash flow from financing activities -61 500 -63 561 -61 500 -63 561 -56 891
Net changes in cash and cash equivalents -46 817 -67 171 -69 687 -82 201 31 377
Cash and cash equivalents at the beginning of the period* 144 809 122 815 167 679 137 845 137 845
Cash and cash equivalents at the end of the period 97 992 55 644 97 992 55 644 169 222

* Cash and cash equivalents of period Jan-Jun 2014 is adjusted with cash flow NOK 1 543 thousand from aquicition of subsidiary during the period.

Consolidated statement of changes in equity

NOK 1 000 SHARE
CAPITAL
OWN
SHARES
SHARE
PREMIUM
TOTAL PAID
IN EQUITY
OTHER
EQUITY
NON-CON
TROLLING
INTERESTS
TOTAL
EQUITY
Equity at 01.01.2013 10 250 -1 10 000 20 249 119 757 2 336 142 341
Total comprehensive income 0 36 931 619 37 550
Purchase/sale of own shares (net) -154 -154 -11 386 -11 540
Employee share scheme 0 2 635 2 635
Dividend 0 -51 250 -772 -52 022
Equity at 30.06.2013 (Unaudited) 10 250 -155 10 000 20 095 96 687 2 183 118 964
Equity at 01.01.2014 10 250 -19 10 000 20 231 136 869 2 729 159 829
Total comprehensive income 0 35 972 625 36 597
Employee share scheme 0 3 089 3 089
Dividend 0 -61 384 -61 384
Equity at 30.06.2014 (Unaudited) 10 250 -19 10 000 20 231 114 546 3 354 138 132

Notes

Note 1: Accounting principles

The group made no changes to the accounting principles applied in 2014. This interim report is presented in accordance with the International Financial Reporting Standards (IFRS) and interpretations determined by the European Union, and have been prepared in accordance with IAS 34. The interim financial statements have not been audited, do not include all the information required in annual financial statements and should be viewed in conjunction with the group's annual report for 2013.

Key figures Group

NOK 1 000 APR-JUN 2014 APR-JUN 2013 CHANGE % JAN-JUN 2014 JAN-JUN 2013 CHANGE % YEAR 2013
INCOME STATEMENT
Operating revenue 276 197 284 264 -2,8 % 577 122 565 423 2,1 % 1 112 774
EBITDA 26 725 30 984 -13,7 % 56 551 56 157 0,7 % 105 800
Operating profit (EBIT) 23 643 28 451 -16,9 % 50 638 50 747 -0,2 % 95 093
Ordinary profit before tax 24 188 28 726 -15,8 % 51 729 51 698 0,1 % 97 138
Profit for the period 17 506 20 756 -15,7 % 36 714 37 366 -1,7 % 69 841
EBITDA-margin 9,7 % 10,9 % -11,2 % 9,8 % 9,9 % -1,3 % 9,5 %
EBIT-margin 8,6 % 10,0 % -14,5 % 8,8 % 9,0 % -2,2 % 8,5 %
BALANCE SHEET
Non-current assets 57 035 46 066 23,8 % 57 035 46 066 23,8 % 47 630
Current assets 343 722 316 603 8,6 % 343 722 316 603 8,6 % 397 807
Total assets 400 757 362 669 10,5 % 400 757 362 669 10,5 % 445 437
Equity 138 132 118 964 16,1 % 138 132 118 964 16,1 % 159 829
Long-term debt 0 653 -100,0 % 0 653 -100,0 % 0
Short-term debt 262 625 243 052 8,1 % 262 625 243 052 8,1 % 285 608
Equity ratio 34,5 % 32,8 % 5,1 % 34,5 % 32,8 % 5,1 % 35,9 %
Liquidity ratio 1,31 1,30 0,5 % 1,31 1,30 0,5 % 1,39
CASH FLOW
Net cash flow operations 18 006 -2 218 N/A 4 725 -13 982 N/A 99 381
Net free cash flow 14 683 -3 610 N/A -8 187 -18 640 N/A 88 267
Net cash flow -46 817 -67 171 N/A -69 687 -82 201 N/A 31 377
Cash flow margin 6,5 % -0,8 % N/A 0,8 % -2,5 % N/A 8,9 %
SHARE INFORMATION
Number of shares 10 250 000 10 250 000 0,0 % 10 250 000 10 250 000 0,0 % 10 250 000
Weighted average basic shares outstanding 10 230 644 10 198 320 0,3 % 10 230 644 10 223 551 0,1 % 10 174 317
Weighted average diluted shares outstanding 10 355 542 10 316 214 0,4 % 10 355 542 10 341 445 0,1 % 10 292 902
EBIT per share 2,25 2,75 -17,9 % 4,87 4,88 -0,3 % 9,20
Diluted EBIT per share 2,23 2,71 -18,0 % 4,81 4,82 -0,4 % 9,09
Earnings per share 1,67 2,00 -16,4 % 3,53 3,59 -1,9 % 6,75
Diluted earnings per share 1,65 1,97 -16,5 % 3,48 3,55 -1,9 % 6,67
Equity per share 13,48 11,61 16,1 % 13,48 11,61 16,1 % 15,59
Dividend per share 6,00 5,00 20,0 % 6,00 5,00 20,0 % 5,00
EMPLOYEES
Number of employees (year end) 945 894 5,7 % 945 894 5,7 % 931
Average number of employees 946 893 6,0 % 939 891 5,3 % 908
Operating revenue per employee 292 318 -8,3 % 615 635 -3,1 % 1 225
Operating cost per employee 267 286 -6,8 % 561 578 -2,9 % 1 121
EBIT per employee 25 32 -21,6 % 54 57 -5,3 % 105

Definitions

Cash flow margin Net cash flow operations / Operating revenue
Diluted earnings per share Profit for the period assigned to shareholders in parent company / weighted average diluted
shares outstanding
Diluted EBIT per share EBIT assigned to shareholders in parent company / weighted average diluted shares
outstanding
Dividend per share Paid dividend per share througout the year
Earnings per share Profit for the period assigned to shareholders in parent company / weighted average basic
shares outstanding
EBIT Operating profit
EBIT per employee EBIT / average number of employees
EBIT per share EBIT assigned to shareholders in parent company / weighted average basic shares outstanding
EBITDA Operating profit + depreciation fixed assets and intangible assets
EBITDA-margin EBITDA / operating revenue
EBIT-margin EBIT / operating revenue
Equity per share Equity / number of shares
Equity ratio Equity / total assets
Liquidity ratio Current assets / Short-term debt
Net free cash flow Net cash flow operations - Net cash flow investments
Number of shares Number of issued shares at the end of the year
Operating cost per employee Operating cost / average number of employees
Operating revenue per employee Operating revenue / average number of employees
Weighted average basic shares outstanding Issued shares adjusted for own shares on average for the year
Weighted average diluted shares outstanding Issued shares adjusted for own shares and share scheme on average for the year

Local presence gives closeness to our customers

The Group has offices in Oslo, Trondheim, Bergen, Haugesund, Stavanger, Kristiansand, Arendal, Skien, Sandvika, Sandefjord, Malmö, Örebro and Stockholm. Our philosophy is that competence should be utilized across the company, while projects are attached locally. This means that our customers will have a local account manager and project manager, but access to competence independent of its location.

OSLO

Sandakerveien 24c, bygg D11 Box 4430 Nydalen 0403 Oslo Tel: (+47) 23 40 60 00

ARENDAL

Vikaveien 29 4817 His Tel: (+47) 23 40 60 00

BERGEN

Solheimsgaten 15 5058 Bergen Tel: (+47) 55 20 09 17

GRENLAND

Klostergata 33 Klosterøya 3732 Skien Tel: (+47) 23 40 60 00 KRISTIANSAND Kjøita 25 4630 Kristiansand Tel: (+47) 23 40 60 00

STAVANGER Fabrikkveien 10 4033 Stavanger Tel: (+47) 51 20 00 20

Nedre Strandgata 33 Box 344 Sentrum 4022 Stavanger Tel: (+47) 52 82 10 17

HAUGESUND Diktervegen 8 5538 Haugesund Tel: (+47) 52 82 10 17 TRONDHEIM Kjøpmannsgata 35 7011 Trondheim Tel: (+47) 23 40 60 00

SANDVIKA Leif Tronstadsplass 6 1337 Sandvika Tel: (+47) 23 40 60 00

SANDEFJORD Klinestadmoen 9 3241 Sandefjord Tel: (+47) 23 40 60 00

STOCKHOLM Arenavägen 45, 16 tr 121 77 Johanneshov Tel: (+46) 8 578 771 00 MALMÖ Södergatan 3 211 34 Malmö Tel: (+46) 40 636 60 00

ÖREBRO Klostergatan 3 70361 Örebro Tel: (+46) 0 709 431 411

www.bouvet.net

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