Interim / Quarterly Report • Aug 18, 2009
Interim / Quarterly Report
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Interim report January 1 – June 30, 2009
BTS' net turnover increased by 6 percent during the first half year and amounted to MSEK 286.6 (270.5). Adjusted for changes in exchange rates, growth was -14 percent. Growth varied significantly among the units: BTS Other markets 16 percent, BTS Europe -17 percent, BTS USA -8 percent and APG -31 percent (growth figure calculated in local currencies).
Operating profit before amortization of intangible assets (EBITA) decreased by 16 percent during the first half year and amounted to MSEK 34.4 (41.1). Operating profit during the first half year was affected by MSEK 5.3 (4.3) for amortization of intangible assets attributable to acquisitions; the increase is due to a higher dollar rate. Operating profit (EBIT) amounted to MSEK 29.1 (36.8).
The operating margin before amortization of intangible assets (EBITA margin) was 12 (15) percent. The operating margin (EBIT margin) was 10 (14) percent.
The Group's profit before tax for the first half year decreased by 19 percent to MSEK 28.4 (35.1).
Earnings were positively impacted by a higher dollar rate, improved earnings in BTS North America and by improved net interest earnings. However, earnings were negatively impacted by a significant deterioration in earnings in BTS Europe.
BTS' net turnover increased slightly during the second quarter and amounted to MSEK 149.2 (148.2). Adjusted for changes in exchange rates, growth was -19 percent.
Operating profit before amortization of intangible assets (EBITA) decreased by 27 percent during the second quarter and amounted to MSEK 20.3 (27.6). Operating profit during the second quarter was affected by MSEK 2.6 (2.1) for amortization of intangible assets attributable to acquisitions; the increase is due to a higher dollar rate. Operating profit (EBIT) decreased by 31 percent to MSEK 17.7 (25.5).
The operating margin before amortization of intangible assets (EBITA margin) was 14 (19) percent. The operating margin (EBIT margin) was 12 (17) percent.
Profit before tax for the second quarter decreased by 30 percent and amounted to MSEK 17.5 (24.9).
Earnings were positively impacted by a higher dollar rate, improved earnings in BTS North America and by improved net interest earnings. However, earnings were negatively impacted by a significant deterioration in earnings in BTS Europe. The deterioration in earnings in two offices BTS Europe was significantly greater than the total deterioration in earnings in BTS.
Demand for training and consultancy services weakened during the first half year compared to the previous year. Demand for BTS' services has been better than the market as a whole, apart from APG. APG has been more exposed to the deterioration in market conditions on account of its client and product mix.
Many of BTS' clients are significantly affected by the severe recession. However, BTS considers that it is in a significantly better position than its competitors, through a well-diversified customer base, an underweight of clients in the most exposed sectors, very competitive solutions as well as client projects of a strategic and long-term nature.
BTS has a small market share and the company sees good opportunities to increase this during the recession. BTS' recession strategy is based on:
This strategy worked during 2008 and during the first half year 2009, as BTS is considered to have developed significantly better than the overall market.
More positive trends were noted on the US market during the second quarter, whereas the market in Europe continued to develop negatively.
BTS offers the most comprehensive range of tailored simulation solutions on the market today, a well developed sales organisation and at the same time, is the only company in the world that can serve large international companies on a global basis within this area. BTS to a greater extent, can satisfy existing clients' needs for additional services and solutions, which generates good growth opportunities both in the near-term and long-term.
New clients secured during the first half year included Burger King, Deloitte, DSM, Huhtamaki, HSBC, Indra, LRF, McDonalds, MetLife, Munters, SingTel, Sodexo, Vestas and Woolworths Ltd
| Net turnover per operative unit | ||||||
|---|---|---|---|---|---|---|
| Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Rolling 12 month |
Full-year | |
| MSEK | 2009 | 2008 | 2009 | 2008 | 2008/2009 | 2008 |
| North America* | 108.2 | 98.8 | 205.3 | 183.7 | 391.0 | 369.4 |
| Europe | 27.6 | 38.1 | 57.8 | 67.2 | 128.8 | 138.2 |
| Other markets | 13.4 | 11.3 | 23.5 | 19.6 | 44.7 | 40.8 |
| Total | 149.2 | 148.2 | 286.6 | 270.5 | 564.5 | 548.4 |
| *North America | ||||||
| BTS | 80.2 | 66.0 | 148.7 | 121.8 | 281.1 | 254.2 |
| APG | 28.0 | 32.8 | 56.6 | 61.9 | 109.9 | 115.2 |
| Total | 108.2 | 98.8 | 205.3 | 183.7 | 391.0 | 369.4 |
| Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Rolling 12 month |
Full-year | |
|---|---|---|---|---|---|---|
| MSEK | 2009 | 2008 | 2009 | 2008 | 2008/2009 | 2008 |
| North America* | 21.5 | 15.5 | 32.2 | 25.1 | 53.8 | 46.7 |
| Europe | -2.9 | 10.3 | 0.3 | 14.2 | 16.6 | 30.5 |
| Other markets | 1.7 | 1.8 | 1.9 | 1.8 | 2.7 | 2.6 |
| Total | 20.3 | 27.6 | 34.4 | 41.1 | 73.1 | 79.8 |
| *North America | ||||||
| BTS | 19.3 | 14.0 | 30.3 | 22.3 | 51.8 | 43.8 |
| APG | 2.2 | 1.5 | 1.9 | 2.8 | 2.0 | 2.9 |
| Total | 21.5 | 15.5 | 32.2 | 25.1 | 53.8 | 46.7 |
Net turnover for BTS' North American operations amounted to MSEK 148.7 (121.8) during the first half year. Adjusted for changes in exchange rates, revenue decreased by 8 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 30.3 (22.3) during the first half year. The operating margin before amortization of intangible assets (EBITA margin) was 20 (18) percent.
Net turnover amounted to MSEK 80.2 (66.0) during the second quarter. Adjusted for changes in exchange rates, revenue decreased by 8 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 19.3 (14.0) during the second quarter. The operating margin before amortization of intangible assets (EBITA margin) was 24 (21) percent.
The deterioration in US market conditions has impacted revenue in BTS USA negatively but the company is considered to have developed significantly better than the market as a whole. More positive trends were noted on the market at the end of the quarter.
The operating margin increased due to improved cost efficiency, notwithstanding the negative growth.
Net turnover for APG amounted to MSEK 56.6 (61.9) during the first half year. Adjusted for changes in exchange rates, revenue decreased by 31 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 1.9 (2.8) during the first half year. The operating margin before amortization of intangible assets (EBITA margin) was 3 (5) percent.
Net turnover amounted to MSEK 28.0 (32.8) during the second quarter. Adjusted for changes in exchange rates, revenue decreased by 35 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 2.2 (1.5) during the second quarter. The operating margin before amortization of intangible assets (EBITA margin) was 8 (5) percent.
The deterioration in US market conditions has had a significant adverse effect on APG on account of the company's client and product mix. An action program was carried out in order to raise the gross margin and reduce costs. The operating margin increased during the second quarter notwithstanding the significant revenue decrease.
Net turnover for Europe amounted to MSEK 57.8 (67.2) during the first half year. Adjusted for changes in exchange rates, revenue decreased by 17 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 0.3 (14.2) during the first half year. The operating margin before amortization of intangible assets (EBITA margin) was 1 (21) percent.
Net turnover amounted to MSEK 27.6 (38.1) during the second quarter. Adjusted for changes in exchange rates, revenue decreased by 31 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK -2.9 (10.3)
during the second quarter. The operating margin before amortization of intangible assets (EBITA margin) was -11 (27) percent.
The very significant deterioration in earnings in BTS Europe during the second quarter is due to the fact that two offices experienced major revenue decreases compared with the previous year. BTS Europe is expected to display a better earnings trend during the second half year compared with the first half year.
Net turnover for Other markets amounted to MSEK 23.5 (19.6) during the first half year. Adjusted for changes in exchange rates, revenue increased by 16 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 1.9 (1.8) during the half year. The operating margin before amortization of intangible assets (EBITA margin) was 8 (9) percent.
Net turnover amounted to MSEK 13.4 (11.3) during the second quarter. Adjusted for changes in exchange rates, revenue increased by 9 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 1.7 (1.8) during the second quarter. The operating margin before amortization of intangible assets (EBITA margin) was 12 (16) percent.
The trend in all markets (Australia, South East Asia and South Africa) was positive during the first half year. The operating margin has deteriorated due to recruitments and marketing investments.
BTS' cash flow from operating activities amounted to MSEK 19.9 (8.2) during the first half year. The cash flow from operating activities amounted to MSEK 44.0 (25.2) during the second quarter.
Cash and cash equivalents amounted to MSEK 58.9 (46.4) at the end of the period. The company's interest-bearing loans, which relate to previously completed acquisitions, amounted to MSEK 76.4 (75.5) at the end of the period.
BTS' solidity was 58 (51) percent at the end of the period.
The company had no outstanding conversion loans at the balance sheet date.
The number of employees in BTS Group AB as of June 30 was 260 (243). The average number of employees during the first half year was 264 (240)
The Company's net turnover amounted to MSEK 1.3 (0.5) and the profit after net financial items amounted to MSEK 15.0 (2.9). Cash and cash equivalents amounted to MSEK 1.3 (0).
The current market conditions mean that the estimates for 2009 are more uncertain than normal. Profit before tax is expected to be in line with the previous year.
BTS is exposed to a number of risks and uncertainties in it operations, which are mentioned in the Annual Report 2008. As of June 30, 2009, it is assessed that no new significant risks or uncertainties have arisen.
In order to prepare the financial statements in conformity with IFRS the Corporate Management is required make assessments and estimates and make assumptions that affect the application of the accounting principles and the recognized amounts of assets, liabilities, income and costs. The estimates and assumptions are based on historical experience and a number of other factors that are regarded as reasonable under the existing circumstances. Actual outcomes can deviate from these estimates and assessments. Estimates and assumptions are reviewed regularly.
This interim report is prepared in accordance with IAS 34, Interim Financial Reporting and the Swedish Annual Accounts Act. The accounting principles and calculation methods applied are in line with the accounting principles used in the preparation of the most recent financial statements.
Revised IAS 1 – Presentation of Financial Statements has been applied from January 1, 2009. Among other things, the amendment means that income and expenses previously recognized as changes in equity now shall be recognized in a separate statement directly after the income statement. Another change is that new names for the financial statements can be used. BTS, however, has elected to use the old names as this amendment is not mandatory.
IFRS 8 – Operating Segments is effective for annual periods starting from January 1, 2009 but BTS has early adopted the standard. The new standard means that the segment information is presented on the basis of a management approach, which means that it is presented in the way used in the internal reporting. The application of IFRS 8 does not imply any difference in relation to classification of operating segments compared with previous reporting under IAS 14.
IFRS 2 (Amendment) – Share-Based Payment is applied from January 1, 2009. The amendment of the standard has not had any material impact on the consolidated financial statements.
Interim Report Jul – Sep November 5, 2009 Year-end Report February, 2010
The Board of Directors and the CEO declare that the undersigned interim report provides a true and fair overview of the Company's and the Group's operations, their financial position and performance as well as describing material risks and uncertainties facing the Company and other companies in the Group.
Stockholm, August 18, 2009
| Michael Grindfors | Mariana Burenstam Linder | Stefan Gardefjord |
|---|---|---|
| Chairman of the Board Member of the Board | Member of the Board |
| Dag Sehlin | Henrik Ekelund |
|---|---|
| Member of the Board | CEO |
| Member of the Board |
This report has not been the subject of separate examination by BTS' auditor
| Henrik Ekelund CEO | Phone: | 08-587 070 00 |
|---|---|---|
| Stefan Brown CFO |
Phone: | 08-587 070 62 |
| Thomas Ahlerup | Phone: | 08-587 070 02 |
| Senior Vice President Corporate Communications | Mobile: 076-800 5755 |
For additional information visit our home page www.bts.com
BTS Group AB (publ) Grevgatan 34 114 53 Stockholm SWEDEN
Phone. +46 8 587 070 00 Fax. +46 8 587 070 01 Corporate registration number: 556566-7119
| INCOME STATEMENT, Summary | 3 months ended | 6 months ended | 12 months ended | |||
|---|---|---|---|---|---|---|
| KSEK | June 30 | June 30 | June 30 | June 30 | June 30 | Dec 31 |
| 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |
| Revenue | 149 141 | 148 215 | 286 555 | 270 530 | 564 395 | 548 370 |
| Operating expenses | -128 061 | -120 038 | -250 553 | -228 362 | -488 374 | -466 183 |
| Depreciation tangible assets | -816 | -538 | -1 603 | -1 044 | -2 928 | -2 369 |
| Amortization intangible assets | -2 554 | -2 136 | -5 341 | -4 361 | -10 336 | -9 356 |
| Operating result | 17 710 | 25 503 | 29 058 | 36 763 | 62 757 | 70 462 |
| Financial income and expenses | -206 | -576 | -661 | -1 702 | -1 835 | -2 876 |
| Result before tax | 17 504 | 24 927 | 28 397 | 35 061 | 60 922 | 67 586 |
| Taxes | -6 102 | -8 067 | -9 819 | -11 483 | -20 884 | -22 548 |
| Result for the period | 11 402 | 16 860 | 18 578 | 23 578 | 40 038 | 45 038 |
| attributable to equity holders of the parent | 11 402 | 16 860 | 18 578 | 23 578 | 40 038 | 45 038 |
| Earnings per share, before dilution of shares, SEK | 0,63 | 0,93 | 1,03 | 1,31 | 2,22 | 2,50 |
| Number of shares at end of the period | 18 048 300 18 048 300 18 048 300 18 048 300 18 048 300 18 048 300 | |||||
| Average number of shares before dilution of shares | 18 048 300 18 048 300 18 048 300 18 048 300 18 048 300 18 048 300 | |||||
| Earnings per share, after dilution of shares, SEK | 0,63 | 0,93 | 1,03 | 1,31 | 2,22 | 2,50 |
| Average number of shares after dilution of shares Dividend per share |
18 048 300 18 048 300 18 048 300 18 048 300 18 048 300 18 048 300 | 1,20 | ||||
| GROUP STATEMENT OF COMPREHENSIVE INCOME | 3 months ended | 6 months ended | 12 months ended | |||
| KSEK | June 30 | June 30 | June 30 | June 30 | June 30 | Dec 31 |
| 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |
| Result for the period | 11 402 | 16 860 | 18 578 | 23 578 | 40 038 | 45 038 |
| Other comprehensive income: | ||||||
| Income/expenses in shareholders' equity | - | - | - | - | - | - |
| Other comprehensive income for the year, net of ta | - | - | - | - | - | - |
| Total comprehensive income for the year | 11 402 | 16 860 | 18 578 | 23 578 | 40 038 | 45 038 |
| attributable to equity holders of the parent | 11 402 | 16 860 | 18 578 | 23 578 | 40 038 | 45 038 |
| BALANCE SHEET , Summary | ||||||
| KSEK | 06-30-09 | 06-30-08 | 12-31-08 | |||
| Assets | ||||||
| Goodw ill | 157 658 | 135 756 | 161 216 | |||
| Other intangible assets | 23 341 | 26 370 | 28 612 | |||
| Tangible assets | 10 178 | 5 908 | 8 727 | |||
| Other fixed assets | 5 065 | 4 882 | 5 003 | |||
| Accounts receivable | 116 159 | 121 631 | 147 184 | |||
| Other current assets | 47 676 | 30 948 | 34 904 | |||
| Cash and bank | 58 927 | 46 391 | 65 887 | |||
| Total assets | 419 004 | 371 886 | 451 533 | |||
| Equity and liabilities Equity |
244 681 | 188 969 | 250 908 | |||
| Interest bearing - non current liabilities | 392 | 84 | 450 | |||
| Non interest bearing - non current liabilities | 161 | - | 166 | |||
| Interest bearing - current liabilities | 79 445 | 75 667 | 81 690 | |||
| Non interest bearing - current liabilities | 94 325 | 107 166 | 118 319 | |||
| Total equity and liabilities | 419 004 | 371 886 | 451 533 | |||
| CASH FLOW STATEMENT, Summary KSEK |
Jan-Jun | Jan-Jun | Jan-Dec | |||
| 2009 | 2008 | 2008 | ||||
| Cash flow from current operations | 19 890 | 8 181 | 37 506 | |||
| Cash flow from investment activities | -2 669 | -19 888 | -28 572 | |||
| Cash flow from financing operations | -26 497 | -4 642 | -15 967 | |||
| Change in liquid funds | -9 276 | -16 349 | -7 033 | |||
| Liquid funds, opening balance | 65 887 | 67 473 | 67 473 | |||
| Effect of exchange rate changes on cash | 2 316 | -4 733 | 5 447 | |||
| Liquid funds, closing balance | 58 927 | 46 391 | 65 887 |
| CHANGES IN EQUITY | |||||
|---|---|---|---|---|---|
| KSEK | Total Equity | Total Equity | Total Equity | ||
| 06-30-09 | 06-30-08 | 12-31-08 | |||
| Opening balance | 250 908 | 198 603 | 198 603 | ||
| Dividend to shareholders | -21 658 | -21 658 | -21 658 | ||
| Conversion differences | -3 258 | -11 916 | 28 342 | ||
| Miscellaneous | 111 | 362 | 583 | ||
| Result for the period | 18 578 | 23 578 | 45 038 | ||
| Closing balance | 244 681 | 188 969 | 250 908 |
| KEY RATIOS | 3 months ended | 6 months ended | 12 months ended | |||
|---|---|---|---|---|---|---|
| June 30 2009 |
June 30 2008 |
June 30 2009 |
June 30 2008 |
June 30 2009 |
Dec 31 2008 |
|
| Revenues, KSEK | 149 141 | 148 215 | 286 555 | 270 530 | 564 395 | 548 370 |
| EBITA (Earnings before interest, tax and | ||||||
| amortisation), KSEK | 20 264 | 27 639 | 34 399 | 41 124 | 73 093 | 79 818 |
| EBIT (Operating result), KSEK | 17 710 | 25 503 | 29 058 | 36 763 | 62 757 | 70 462 |
| EBITA margin (Earnings before interest, tax | ||||||
| and amortisation margin), % | 14 | 19 | 12 | 15 | 13 | 15 |
| EBIT margin (Operating margin ), % | 12 | 17 | 10 | 14 | 11 | 13 |
| Profit margin, % | 8 | 11 | 6 | 9 | 7 | 8 |
| Operational capital, KSEK | 265 360 | 266 877 | ||||
| Return on equity, % | 18 | 20 | ||||
| Return on operational capital, % | 26 | 31 | ||||
| Solidity at end of the period, % | 58 | 51 | 58 | 51 | 58 | 56 |
| Cash flow , KSEK | 15 449 | 2 612 | -9 276 | -16 349 | 40 | -7 033 |
| Liquid funds at end of the period, KSEK | 58 927 | 46 391 | 58 927 | 46 391 | 58 927 | 65 887 |
| Average number of employees | 263 | 243 | 264 | 240 | 260 | 249 |
| Number of employees at end of the period | 260 | 243 | 260 | 243 | 260 | 267 |
| Revenues for the year per employee, KSEK | 2 171 | 2 202 |
Earnings per share Earnings attributable to the parent company´s shareholders divided by number of shares EB IT A margin (Earnings befo re interest, tax and amo rtisatio n margin) Operating result before interest, tax and amortisation as a percentage of revenues. EBIT margin (Operating margin) Operating result after depreciation as a percentage of revenues. P rofit margin Result for the period as a percentage of revenues. Operational capital Total balance sheet reduced by liquid funds and other interest bearing assets and reduced by non-interest bearing liabilities. Return on equity Result for the period (converted into whole year) as a percentage of average equity. Return on operational capital Operating result as a percentage of average operational capital. Solidity Equity as a percentage of total balance sheet. Organic gro wth Growth excluding aquisition
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