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Atea Annual Report 2009
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Annual Report
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AT&A
Annual Report 2009
EBITDA
2005 – 2009
Actual figures (MNOK)*
OPERATING REVENUES
2005 – 2009
Actual figures (MNOK)*
KEY FIGURES
| Group
(Amounts in MNOK) | Actual* | | |
| --- | --- | --- | --- |
| | 2009 | 2008 | 2007 |
| Operating revenues | 14,588.6 | 14,767.8 | 13,210.3 |
| Contribution | 3,592.1 | 3,525.6 | 2,956.2 |
| Contribution margin (%) | 24.6 | 23.9 | 22.4 |
| EBITDA | 501.4 | 540.9 | 491.4 |
| EBITDA margin (%) | 3.8 | 3.7 | 3.7 |
| EBIT | 334.1 | 401.4 | 388.2 |
| Earnings per share continued operations (NOK) | 4.00 | 4.53 | 4.50 |
| Diluted earnings per share continued operations (NOK) | 3.99 | 4.52 | 4.45 |
| Net interest-bearing debt position | -214.1 | -678.0 | -541.9 |
| Liquidity | 1,536.5 | 1,176.1 | 846.2 |
| Equity ratio (%) | 39.3 | 34.5 | 31.2 |
| Number of employees (continued operations) | 4,380 | 4,571 | 3,608 |
- Actual figures for 2009 include: Mondo Hosting from 26/6, AC Sikring from 13/8, A Communications from 3/11, Aprismo from 16/12 and Uni Networks from 22/12. For 2008: Sonex from 21/1, Tomato from 15/2, Spiritsp from 1/7, Kongsberg Systec from 12/9 and Telindus from 5/12. For 2007: Tre65 from 15/5 og Informatikk from 1/6.
“Atea’s blue box is interesting in several ways besides its clarification of our market focus. It also means promoting the Group’s foundation by delivering value for the shareholders through open and professional reporting routines.”
Rune Falstad, CFO of Atea ASA
Atea's blue box
- OUR WINNING RECIPE FOR GROWTH AND PROFIT
2009 was a fantastic year for Atea despite the financial crisis and a general reduction in IT investments. The results show stable revenues, strong profits, record high cash flow and several strategic acquisitions. Like many of our customers, we have used this year to expand aggressively. With our winning culture and strategy we have improved our competitiveness and won significant market shares, resulting in an even stronger position at the end of this recession. With continuous high ambitions, the goal is to deliver further growth and profit. At the same time Atea's blue box continues to grow, as it is becoming more attractive to the Group's customers in the Nordic and Baltic regions. The attacking approach continues.
Atea's blue box. What is it? In short Atea's blue box is a collection of the Group's product and service offerings within IT and infrastructure. Categorized in four areas – based on technological and market affiliation – it includes products, services and solutions mainly focused on [1] clients like PC's, printers and cell phones etc, [2] computer centers with virtualization, operations, servers, storage and catastrophe solutions etc, [3] communication like broad band, networks, telephony and video [4] Unified Communication is interaction and a single interface for communication through presence, video, split screen, chat, telephony, e-mail etc. But it doesn't stop there. In reality Atea's blue box constitutes even larger product and service offerings. For example safety is fundamental in all we do and licence consulting is an area our customers make money in. Technology trends ensure that the blue box is growing. At the same time the advantage increases when choosing one supplier with certified competence to solve all IT infrastructure needs. Atea's understanding in how technology integrates, coincides and how it can be exploited makes Atea the optimal supplier and a one stop shop partner for IT divisions.
Winning culture. In Atea a winning instinct is crucial. This is recognized and well established among our employees, who in
person represent the winning culture. Together we have succeeded, despite the hard times, thanks to fantastic efforts throughout the entire organization. It is with the greatest respect I thank all colleagues for a fantastic year. Thanks to the winning will and strong focus on exploiting opportunities – by attacking and obtaining market shares – it has been possible to deliver remarkably good results combined with a healthy focus on costs. By delivering increased value to our customers, all the time, our position has strengthened.
Winning strategy. Atea's objective is to accomplish NOK 20 billion in revenue in 2011 and a profit of NOK 1 billion. The strategy coincides with local targets for growth and profit based on exchange rates the first quarter 2009. During the last year Atea has obtained market shares. We now control 13 per cent of the total market for IT and infrastructure in the Nordic and Baltic regions valued at NOK 112 billion in total. Being the undisputed leading player, the prospects are promising as we set out to gain additional market shares with a goal of totaling 15 per cent in the coming years. Despite the financial crisis and recession Atea has delivered exceptionally solid financial results. This allows the Board, for the second consecutive year, to suggest a payment of dividend.
This is very gratifying and it proves that the winning strategy is beneficial, not least for you as a shareholder. That is important. It is also gratifying that the share price has tripled during the last year. It proves that the financial markets have faith in us.
Exciting times. In tough times opportunities are bigger – especially for solid and leading players. A year ago we promised to exploit just that. A successful year builds a foundation for further aggressive expansion with a solid financial position. The goal is to gain further market shares. The attacking approach continues. As the leading supplier of IT and infrastructure in the Nordic and Baltic regions, we set out to take advantage of the opportunities in the best interest of our customers, partners, colleagues and shareholders. I am looking forward to the continuation. With Atea's blue box we attack in a new and exciting time.
17 March 2010
Claus Hougesen
CEO
Key figures and CEO Statement
Atea Annual Report 2009
Atea's blue box
-
Clients
PC's and mobile phones, printers, thick and thin clients etc -
Computer centers
Virtualization, consolidations, catastrophe solutions, management, servers, storage etc -
Interaction
Mobility solutions, network, telephony, video, broad band and lines etc -
Unified Communication
Interaction, real time communication, a single interface for communication through presence, video, split screen, chat etc
About Atea
Atea Annual Report 2009
Market shares gained in all individual markets
Atea has used the last year – and the financial crisis – to reinforce its position as the undisputed leading provider of IT services and infrastructure in the Nordic and Baltic regions. Atea has gained market shares in all markets and both revenue and profit are maintained in 2009 despite challenging times. That builds a solid foundation for further success with a focus on growth. We will keep on attacking.
2009 was a very good year for Atea, both in regards of revenue and results, despite challenging macro economic conditions and a general reduction in IT investments. The beginning of the year marked an important milestone for the largest Nordic- and Europe's third largest - provider of IT solutions and infrastructure, as Atea as a company name and brand was established in all markets. With a uniform profile and clear position Atea has used the year to strengthen its position in all markets. Now Atea focuses on further growth. Atea's strategy is to keep strengthening the Group's position.
Distribution of turnover per country 2009 (%)
- Norway (24,4)
- Denmark (36,0)
- Sweden (27,2)
- Finland (10,3)
- The Baltics (2,1)
Growing competitiveness
Atea is a complete provider of hardware, application products and related services within IT infrastructure. With a wide range of products, services and solution offerings, the company contributes to strengthen their customer's competitiveness. On the other hand, Atea's size adds increased competitiveness to the Group, with the opportunity to offer favorable rates. The solid financial strength contributes to the Group's central role in the ongoing consolidation of IT infrastructure markets, both in individual markets and across national boarders. Historically Atea has been involved in several of the largest acquisitions in the industry and the consolidation is expected to continue as a result of the prevailing market conditions. Significant cost reductions have been provided in 2009 as part of the very efficient cost programme, while still maintaining Atea's winning spirit and motivation.
Growing trends
According to market researcher Gartner Group virtualization and Unified Communication, as well as self-service and automation, will among others be an important part for future growth. With that in mind, we can expect significant growth associated with Atea's different solutions and concepts within these specific areas, including Atea Spintop, which offers self-service and automation related to management and administration, making it effective to handle licence and software in larger businesses. Atea is already well-positioned within these areas, and has an objective to focus further in the future.
Growing blue box
Atea's blue box describes the Group's overall product and service offering within IT infrastructure. It includes product, service and solutions within four primary categories - based on technological and market affiliation - primary associated clients (PC's and mobile phones), computer center (virtualization, management, server and storage), interaction (efficient communication and good networks) as well as Unified Communication (video and web conference, IP telephony, mobility and chat). While Atea gains market shares within the Group's primary business areas, the total business potential increases because technology trends and a call for efficiency contribute by creating new and related business areas, naturally coinciding with Atea's blue box. That will probably cause an increase in demand for the company's products and services, explaining why there is an expected increase within several areas going forward. Atea's blue box clarifies the Group's offer.
Growing market
The Nordic and Baltic markets for IT infrastructure are estimated at NOK 112 billion after the previous year's market reduction of approximately 8 per cent. Atea has won market shares in all individual markets, placing the Group's market shares at about 13 per cent, compared to approximately 11 per cent last year. Despite Atea's already leading position further growth is expected. The objective is that the growth will be both in the form of gained market shares as well as the total market growth returning to the previous rate. The Group's goal is an increase in market shares to over 15 per cent in upcoming years due to organizational and structural development.
Atea in growth
It is expected that the positive organic development in 2010 will be supplemented by growth through acquisitions. The objective is to accomplish NOK 20 billion in operating revenues and EBITDA of NOK 1 billion in 2011, based on local goals for growth and profit in local currencies. To achieve this strategic objective, about half of the growth in the coming years is expected to come from organic growth associated with existing operations, while the other half will come from structural acquisitions. IDC predicts an overall growth of 2 per cent in the IT market in 2010. Atea expect to further increase its market shares in 2010.
Acquisitions 2009
- Aprismo...Denmark (software/license)
- AC Sikring...Denmark (IT safety and surveillance)
- Mondo...Denmark (outsourcing, management and cloud computing)
- A Communications...Finland (video conference/IP telephony)
- Uni Networks...Norway (IT infrastructure)
About Atea
Atea Annual Report 2009
Key focus areas
There is a targeted focus on numerous areas within Atea’s blue box and neighboring segments. At the same time technology trends contribute to the blue box’s increased growth. This is due to an increasing number of neighboring technology and market areas, close to what Atea has delivered for a while, naturally coincide with the company’s supply chain.
Daily routines are changing. The technological life of IT equipment is about to become shorter than the financial life of the product. That means that investments in new equipment and solutions pay off faster than ever – often in under a year – but it also increases the demands for benefit. New technology contributes to increased efficiency and flexibility in the daily life through increased productivity. New opportunities and new market areas emerge in the interface between technology and daily life. It is all about smart solutions and increased interaction with efficient communication. The objective is to exploit this in the future.
Unified Communication
With Unified Communication (UC), which is an interface for managing all communication, users are able to maximize the advantage of the interplay between technology and efficiency needs. It also provides freedom to choose where and how the work is carried out. For Atea that means complex deliveries where e-mail, telephone and video conference, voice mail, chat, presence, IP telephony and mobile telephony are integrated and are made available through one single interface. Atea’s UC solutions are market leading and represent an important focus area for the company. A fusion between IT and telecommunication contributes to new and exciting market opportunities for Atea. For the users the opportunities are gathered in the PC, laptop or mobile phone. Atea realized early the advantage of UC solutions for businesses and has invested in building competence within this area. Atea is the company that has carried most UC projects in the Nordic countries. This is an advantage for our customers. UC solutions increase efficiency, provide flexibility to the users as well as reduces cost in regards to communication and travel. Reduced travelling saves the environment. All advantages cause expectations of increased demand and growth in the coming years – which is why Atea has targeted focus on Unified Communication in all markets. A couple of hundred UC projects were delivered in 2009 and with 23,000 customers the potential is great going forward.
Windows 7 and Atea 7 design
From the end of 2009 and until 2011 a significant focus on upgrades and deliveries associated with Windows 7 – where Atea holds an in-house concept, Atea 7 design, for efficient and stream lined implementation of Windows 7 – are expected. Atea 7 design was launched in the fall of 2009 at the same time as Windows 7, as it is based on a close affiliation with Microsoft. The launch quickly became a success amongst businesses with a desire for new functionality.
The common objective for Microsoft and Atea is to implement 2 million Windows 7 licenses in the next years.
Windows 7 represent a great potential for Atea, along with other key Microsoft technologies, such as Microsoft Desktop Optimization Pack, creating automation around the client’s desk, as well as Windows Server 2008 (release2). Together these software solutions represent a significant potential for Atea. At the same time it is expected that many customers will use the opportunity to upgrade their hardware as Windows 7 is increasingly prioritized by customers in the private and public segments throughout 2010 and 2011. Windows 7 and Atea 7 design therefore constitute key focus areas for Atea in all markets. Atea has launched www.atea7.com as part of that, where customers can calculate savings affiliated with an upgrade to Windows 7. The total potential associated with Windows 7 is great with possible increased revenue of NOK 1 billion in 2011.
Ateadirect
Ateadirect makes it easy for small and medium sized businesses to purchase IT equipment on the web, by e-mail or phone. Essential is the new and easy to use web shop, based on Atea’s familiar eSHOP model, with a wide product range and competitive prices.
This way Atea places increased focus on a customer base with even greater potential; companies with 20 to 100 employees. After the Danish launch in April 2009 Atea quickly gained a market share of 4.1 per cent, with revenue of NOK 135 million out of the total market of approximately NOK 3.3 billion in 2009. The objective for the next years is to win an increasing share of the Nordic market with the launch of Ateadirect in all the Nordic countries. Atea’s position as one of the leading Nordic IT buyers, with an annual purchasing volume of over NOK 10 billion, combined with the company’s leading storage and distribution capacity, makes it possible for Atea to take great advantage of Ateadirect.
About Atea
Atea Annual Report 2009
CSR and Green IT
Atea was a first mover within Green IT customer concepts and with the on-going strong focus on www.goitgreen.com, Atea is still leading in the Nordic region.
Climate-friendly customer concepts
2009 was a challenging year for many Atea customers. One might fear that this would put the environmental concepts at risk but reality has shown otherwise. 2009 meant continued focus and development of Green IT.
Recycling
The Atea recycling concept www.goitloop.com which was launched in 2008 was in high demand throughout 2009. The possibility to dispose of used IT equipment in a safe, economical and environmentally sound manner was received extremely well by the Nordic market.
ROI calculation
Return on investment (ROI) is very important when investing in new IT solutions. These calculations can be a complex matter where Atea, as a professional partner, can assist. This inspired Atea to create a calculation for an environmental return on investment which sums up the CO2 saved by our customers when they implement new IT-solutions and equipment.
CO2 savings
Atea's calculations show that by the end of the year 2009 Atea's sales of IT equipment has saved the environment for CO2 emissions equivalent to the emission from 17,218 Nordic households. Atea has hereby proven that the Green IT concepts are of great value for the customers, own business as well as the environment.
Atea's internal environmental efforts and corporate responsibility
The Atea Group's commitment to Green IT stretches deeply into each individual Atea organization, both as a business concept and as a way of thinking and acting in everyday life. The internal responsibility for the environmental focus is rooted in the Corporate Management to ensure constant focus. All Atea companies participate in the Atea Green Community with local responsible Green Environmental Officers, who ensure all local Green activities and Green developments meet the Atea environmental targets.
Atea participates in the following activities, which are all carefully selected and internationally acknowledged.
- Carbon Footprint Report
A yearly measurement of Atea's carbon footprint. Atea uses a report model which is based on the international standard the Greenhouse Gas Protocol, which is the most widely used accounting tool to manage greenhouse gas emissions.
Target: Atea will lower the carbon footprint with 25 percent per employee from 2007 to 2015 and have a goal to become CO2 neutral in 2010/2011.
- Carbon Disclosure Project (CDP)
CDP requests climate change data on behalf of more than 475 institutional investors to be used by financial decision makers in their investment, lending and insurance analysis.
Target: Atea participated for the first time in 2009 and received acknowledgment for good results on the Carbon Disclosure Leaders Index - a position Atea will strive to improve in the years to come.
- United Nations Carbon Neutral Network (CNN)
The network facilitates information exchange and networking in the transition to a low-emission and eventually climate neutral society.
Target: To be accepted as a member of the CNN, Atea has established a climate-neutral strategy and is willing to share lessons learned and innovative ideas as well as a yearly update of results and cases.
- United Nations Global Compact (GC)
UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles regarding human rights, labor, environment and anti-corruption. As a part of the ICT sector Atea has particular focus on the principles regarding the environment, as this is the area where we believe we have the largest impact. From 2011 Atea ASA will on behalf of the Atea Group report on the activities related to the Global Compact.
Target: Atea ASA must yearly report on progress and activities carried out by the Atea Group.
- Environmental Management System ISO 14001
All Atea companies are certified according to the ISO14001 environmental management system standard.
Target: All Atea companies must individually ensure that all demands within ISO 14001 are met and be responsible for a yearly, continued renewal of the certificate.
CSR and Green IT
Atea Annual Report 2009
Denmark
VERY STRONG RESULTS – DESPITE A CHALLENGING MARKET
Highlights 2009
In a challenging market the Danish business division delivers good results and increasing market shares.
Atea Denmark still delivers solid results despite the economic recession. Revenue increased by 3.3 per cent in 2009, even though there was a decline of 2.8 per cent in fixed currency. Still the Danish company delivers great results with an EBITDA of MNOK 262.8 and a margin of 5.0 per cent. The improvement is mainly due to the cost reduction programme. Atea gained market shares in 2009 with continued strengthened position as the solid market leader, in particular due to
> With Free Choice, Ateadirect, UC, Windows 7 and network solutions the good development continues
Peter Trans, Man. Dir. of Atea A/S
strong growth within service sales throughout the year. The order backlog is solid at the beginning of 2010.
Significant investments in Atea's system and service solutions were made in 2009, as well as the new eSHOP platform with the launch of Ateadirect in April. The same applies for online shops for mobile phones and licensed products (software). The launch of Atea's concept for sales of IT products as an employee benefit, "The Free Choice", is expected to provide significant growth during the next years, as new customer groups are introduced to Atea's product offering. By introducing the new multi media tax in Denmark, businesses can offer their employees beneficial IT equipment purchases with a salary deduction before taxes.
In 3rd quarter Atea was selected as provider of IT infrastructure to UN's international climate conference (COP15) and in August IP surveillance company AC Sikring was acquired. In 4th quarter acquisitions and several important contracts came in place. First
Atea entered into an agreement to acquire the software business from Aprismo. At the same time, a contract was signed with TDC, valued at MNOK 226 in 2010, for sales and administration of broad band products to companies. In addition two contracts with the Danish government was signed valued at MNOK 160 in 2010 for delivery of video conferencing equipment and audio visual equipment. 5 January 2010 Atea acquired a leading supplier of video conferencing and AV solutions, Calamus Danmark, valued at MNOK 101.3. This company is expected to contribute with operating revenues of MNOK 251.5 with EBITDA of MNOK 18.3 during the fiscal year ending in March 2010.
Revenue: 5,259.6 (5,090.9 in 2008)
EBITDA: 262.8 (218.3 in 2008)
Offices: 7
Employees: 1,300
Focus areas: "The Free Choice", Windows 7, UC, Ateadirect and interaction/network solutions
The markets
Atea Annual Report 2009
Norway
STABLE DEVELOPMENT WITH FOCUS ON FURTHER STRONG GROWTH
Highlights 2009
After two years with strong growth Atea continues to deliver increased revenue despite challenging times.
2007 and 2008 represented solid growth for Atea in Norway. Revenue also increased in 2009 because of the contribution from acquisitions. Operating revenue increased by 1.7 per cent and EBITDA margin was 3.7 per cent. Atea gained with that new market shares despite challenging conditions, especially in infrastructure and hardware. As the rest of the Group, the cost reduction programme was intensified with satisfying results in 2nd half. In 4th quarter 2009 Atea delivered EBITDA
> After several years of growth, our focus is to keep delivering
>
> Steinar Sensteby, Man. Dir. of Atea AS
MNOK 54.7 and a margin of 5.2 per cent in Norway.
The Norwegian focus is based on experience-driven deliveries and consulting. At the same time organizational and market investments where made in 2009, expected to pay off in terms of scalability and increased dynamics when the market conditions improve. In April 2009 Atea's office in Hamar was opened. With 14 offices and close to 900 employees, Atea is the most certified IT infrastructure company in Norway with a total of 600 certified consultants and competence in the whole value chain. That position will be developed in the future.
In the 2nd quarter 2009 several contracts were signed, including NAV with an annual value of approximately MNOK 30 over three years. Atea also entered into a three-year contract with Det norske oljeselskap ASA for MNOK 75, as well as an agreement with the counties Buskerud, Vestfold, Hedmark, Oppland and Nordland for student computers estimated at
MNOK 70. In the 4th quarter a seven-year agreement was signed with Altibox with a value of NOK 1.4 billion for logistics services to Altibox's partners and installation of broad band and alarm products to fibre customers. In the same quarter the company Uni Networks AS was acquired with an expertise in wireless and wired infrastructure, as well as modern computer rooms. Atea has also delivered UC solutions for MNOK 25 to Storebrand's new headquarters opened before Christmas 2009.
The objective is continued growth with particular focus on UC, Windows 7, increased software sales and new service contracts as well as launching Ateadirect in 2010.
Revenue: 3,566.3 (3,507.0 in 2008)
EBITDA: 130.9 (164.6 in 2008)
Offices: 14
Employees: 887
Focus areas: UC, Ateadirect, Windows 7, software sales and service contracts
Sweden
MARKET SHARES GAINED – THE OBJECTIVE IS FURTHER GROWTH
Highlights 2009
Despite a tough market, Atea increased service revenues in local currency and gained market shares in 2009.
Swedish revenue and results were somewhat reduced in 2009, but Atea still gained market shares in Sweden. Measured in fixed currency, operating revenues fell by 3.8 per cent last year and the EBITDA margin came in at 3.3 per cent. At the same time the cost programme intensified with particularly good results in 2nd half of 2009. With about 800 consultants the service revenues increased marginally in a tough Swedish market and the backlog is solid at the beginning of 2010.
> We are the undisputed market leader within Atea's blue box and in growth mode
>
> Lars Pettersson, Man. Dir. of Atea AB
Atea has strengthened the position as the market leader within IT and infrastructure and as a reliable consultant for the customers. Through the market leading position, and with Atea's blue box, the customers are offered one stop shop opportunities as well as local presence with expertise in clients, computer centres, interaction and Unified Communication (UC). Going forward additional focus areas are Windows 7, Ateadirect and copy/print.
As a part of the growth strategy Atea has strengthened its market position considerably within copy and print as 5 companies was acquired in February 2010 for a total enterprise value of maximum MNOK 38.5 (MSEK 47.2) in cash. The acquisitions provide additional expertise related to hardware and services with 91 new employees in 8 Swedish cities. Atea achieves synergies through merging business operations and an increased customer base as well as optimization of support functions and IT systems. The acquisitions are expected to contribute with operating revenues of MNOK 161.6 (MSEK 200.0) and EBITDA of MNOK 12.3 (MSEK 15.2) in 2010.
Today Atea is the leading provider of IT and communications equipment to the public sector in Sweden. Following the three-year licence and service agreement signed with Rikspolisstyrelsen in 2nd quarter, Atea entered into several contracts with the Swedish government in 2nd half 2010, i.e. for deliveries of products and services related to computer communication, networks, video conferencing and telecom to most Swedish municipalities as well as national and local authorities. Atea was also selected as supplier under several contracts responsible for client management (DLM) and delivery of 11,000 PCs to Gävle Municipality in Sweden.
Revenue: 3,965.9 (4,284.2 in 2008)
EBITDA: 131.6 (160.4 in 2008)
Offices: 28
Employees: 1,335
Focus areas: UC, copy/print
Ateadirect, Windows 7
The markets
Atea Annual Report 2009
Finland
SUBSTANTIAL POTENTIAL FOR FURTHER GROWTH
Highlights 2009
Atea gained large market shares in 2009 through solid growth and improved profitability.
2009 was expected to be a year of recovery and growth. However, the global economic downturn continued to affect the Finnish market as the BNP plummeted by 7,8 per cent which is the worst drop since 1918. Despite the challenging situation, Atea managed not only to gain market shares, but to improve its revenue and profitability. This was due to a new sales model with defined customer segments, increased sales focus through various targeted activities and a successful cost reduction programme.
Atea provides the most suitable value adding solutions for the customers
Juha Sihvonen, Man. Dir. of Atea Oy
In 2009 Atea evaluated and sharpened its offering within the blue box. The key focus areas for 2009-2010 were defined as Unified Communication, virtualization, Device Lifecycle Management and eSHOP, which has been a great success during the past year since more than two thirds of all Finnish customer orders now are placed through Atea's eSHOP.
Atea has notably strengthened the position within communication and networking through strategic acquisitions. In November Atea acquired the Finnish videoconferencing and IP telephony company A Communications Oy, which in 2009 generated revenues of MNOK 49,8 and EBITDA of MNOK 5,5. In February 2010 the network solution provider PALnet Oy was acquired. This business is expected to contribute with revenues of MNOK 104,7 and EBITDA of MNOK 11,3 in 2010.
Throughout the years Atea has built a strong position as a preferred IT provider for the Finnish public sector. The long cooperation with the Finnish Defense Forces was strengthened further with new significant contracts for printing solutions and within other areas. Another remarkable contract was a 3-year frame agreement signed with one of the leading catering companies in the Nordic and the Baltic countries. This agreement has an estimated total value of MNOK 54.1 (MEUR 6.5) over three years. Other successful projects within the key focus areas were the implementation of virtualization solutions for North Karelia University of Applied Sciences as well as the European Forest Institute. Within Unified Communication Atea executed projects with NCC and Pohjolan Voima.
Revenue: 1,501.4 (1,440.2 in 2008)
EBITDA: 12.5 (0.8 in 2008)
Offices: 11
Employees: 332
Key focus areas: UC, virtualization, Device Lifecycle Management and eSHOP
The Baltics
GREAT MARKET SHARE GAINS – DESPITE TOUGH TIMES
Highlights 2009
The Baltic market was particularly hit by the financial crisis, affecting the revenue and results. Still Atea delivered profit and gained great market shares in 2009.
The Baltic revenue was significantly reduced in 2009 as a result of the very difficult market. Still Atea maintained good profitability. The result is strongly increased market shares, as the competitive picture is altered, making Atea a clear winner. After a specially challenging beginning of the year, the market conditions improved. Despite a tough market, Atea marginally increased service revenues in the region, with difficult market conditions within product sales. The market will probably remain quite challenging, expected particularly to harm the competitors.
After a tough year Atea is well positioned for organic growth
Arunas Bartusevicius, Man. Dir. of Atea UAB
However, further EU funds are expected to finance future IT projects in the public sector, with good possibilities for continued IT investments in the region. In this area Atea holds a solid position, having won most governmental contracts in the Baltics the last year. Especially in second half 2009 Atea won several new contracts within the public sector, which will be mainly implemented during 2010. The contracts in 2009 include deliveries to the Ministry of Internal Affairs in Lithuania and the national libraries as well as modernization of the criminal records and systems for ID issuance. On this basis organizational growth is expected during the years to come. In March 2010 a contract with the Ministries of Education in Lithuania and Latvia were signed for modernization of the IT equipment in the schools.
The very satisfactory result is also due to the cost reduction programme which was intensified during 2009. It made it possible for Atea to deliver an EBITDA margin of 3.2 per cent in the Baltics with an order backlog of MNOK 102 at the end of the year, up from MNOK 80 the previous year.
Atea has strengthened its position as market leader within IT and infrastructure in the Baltic region. With headquarters in Vilnius, Lithuania, and a total of 319 employees in 12 regional offices, Atea is the only significant provider of IT infrastructure with operations in all the Baltic countries.
Revenue: 299.5 (454.4 in 2008)
EBITDA: 9.5 (20.4 in 2008)
Offices: 12
Employees: 319
Key focus areas: UC, Ateadirect, computer centres and networks
The markets
Atea Annual Report 2009
Common services
Common services in the Nordic and Baltic regions provide easy and efficient access to a range of services for customers locally.
More and more select eSHOP
Atea's e-commerce solution, eSHOP, allows easy access to information concerning prices, inventories and deliveries for over 100,000 products. More and more customers prefer to shop online, emphasizing Atea's eSHOP advantages, with increased availability, product overview and substantial savings throughout the ordering and sales process. With a long list of suppliers and products, Atea's eSHOP stands out as an unbeatable model for IT distribution with low transaction costs. The focus on Atea's eSHOP will continue at the same time as Ateadirect will be established in new markets following the launch in Denmark in April 2009. Atea's eSHOP has an established customer base amongst Nordic businesses, but the launch of Ateadirect is expected to result in even more efficient sales of IT equipment to smaller businesses and their employees, although Atea does not sell directly to consumers. The focus on Atea's eSHOP and Ateadirect increases with expectations of further growth in the future.
Logistics, configuration and recycling in growth
Atea's centre for logistics, configuration and recycling services in Växjö, Sweden, is experiencing stable revenues and increasing profit margins. The centre is unique and adds valuable competitive advantage to the overall products and services on offer from Atea. The centre was involved in a wide range of PC deliveries to the public sector in 2009, particularly to schools throughout Scandinavia. In total 300,000 PCs were delivered in 2009, which of 150,000 included configuration services. At the same time, Atea recycled as much as 150,000 PCs. A third of Atea's total hardware deliveries are handled by the logistics centre. The product range constitutes 4,000 high-volume products which are a part of Atea's total portfolio of approximately 150,000 products. The internal revenue related to Atea's centre for logistics, configuration and recycling services comprise NOK 2.4 billion with an increasing profit due to improved efficiency. The product deliveries carried out by the 155 employees at the centre are expected to remain stable, while the configuration and recycling services are expected to grow, resulting in improved profit margins. As part of the focus on green IT, an easy and efficient recycling process is implemented for the customers. Through goitloop and goitgreen the customers save the environment as well as money and energy.
Popular software packaging and distribution
Atea Service Centre offers efficient deployment and implementation of new software to a substantial part of the Group's larger and international customers. From the centre in Riga the implementation is automated with direct distribution to the users' various clients, such as computers, lap tops and mobile phones. With continuous packaging and electronic distribution of new updates and software from Atea, the customers achieve great advantages and cost reductions. Atea is the leading provider within this area in the Nordic and Baltic regions. At the same time, this represents a great advantage related to an efficient deployment of Windows 7 for Nordic and Baltic customers. Together with Atea's local presence and the Atea 7 design concept, complete solutions are offered for the upgrade to Windows 7 with around the clock monitoring of customer needs related to upgrade and maintenance. The 43 employees at Atea Service Centre are operating 24/7 as the services form a key role in the deployment of Windows 7 and Microsoft Office 2010 for customers and users in the years to come. More and more customers choose to outsource their business' internal software packaging and upgrades to Atea. This creates a competitive advantage for Atea in all markets. Atea Service Centre is one of only six organizations in Nordic and Baltic countries certified and compliant with ITIL (ISO 20,000).
Growing need of financial services
Activities associated with Atea's leasing and finance business have increased since the establishment in 2007. The customers are offered financing of IT investments through Atea's financial companies in Norway, Denmark, Sweden and Finland. With 15 employees in total, Atea experience growth and increased demand for its financial services, representing a total leasing and finance portfolio of more than NOK 1 billion at the end of 2009. The market is growing as more and more customers prefer to finance their IT investments through monthly installments. Atea offers financial services to its customers through underlying financial partners and banks. With a 3-year down payment and external financing, the risk is very low for Atea. Selling IT equipment with financial services, on average, gives a significantly quicker settlement positively affecting the operating cash flow. Today nearly 4 per cent, approximately MNOK 600, of Atea's total sales revenues is delivered with financial services. The long-term objective is to increase the penetration of financial services totaling 15 per cent of overall sales revenues, expecting to provide solid profits due to the businesses scalability. In a very challenging financial market Atea Financial Services has delivered EBITDA of MNOK 9 in 2009.
About Atea
Atea Annual Report 2009
Board of Directors' Report 2009
Atea delivered a good year in 2009, both in terms of revenue and profit, under the prevailing macro economic conditions. As the leading Nordic and Europe's third largest provider of IT infrastructure and services, the year also marked an important milestone for the Group, as the Atea brand was established in all markets. This has contributed in creating an even clearer profile and position across markets and borders. Despite the financial crisis and a general decline in IT investments in the Nordic and Baltic regions, Atea used 2009 to strengthen its position and gain significant market shares. With stable revenues, operational efficiency and cost control, the Group delivered both marginally improved profitability and margins in 2009 compared with previous years. EBITDA, excluding option plan costs and non core project costs, came in at MNOK 550 with a positive operational cash flow of more than MNOK 720 for the year. Based on the Group's solid results, the Board recommends paying a dividend for the second consecutive year of NOK 1.25 per share for 2009 (NOK 1.00 per share in 2008). At the same time significant shareholder value has been created throughout the year. Share price increased more than 200 per cent for the year, reflecting Atea's positive development.
Despite a year with difficult macro and market conditions Atea strengthened its market position as the leading provider of IT infrastructure and services in the Nordic and Baltic regions. Good profitability and strong cash flows in 2009 supported the company's financial solidity combined with net debt of less than MNOK 215 by year-end. At the same time the focus is further growth. In 2009 five acquisitions were completed, contributing with strong expertise within strategically important business areas in growth. The resolute work in gaining further market shares continues with full focus in 2010. With the growth strategy 20:11:1 Atea has an objective to achieve operating revenues of NOK 20 billion and EBITDA of NOK 1 billion in 2011. This shall be achieved through an offensive focus on growth – both organically and structurally – in the coming years. The opinion of the Board is that Atea is well positioned to achieve the Group's growth objectives.
Atea is primarily a complete provider of hardware and software products as well as related consulting services within IT infrastructure. Through a range of market leading technologies from selected suppliers, combined with value-adding services and a focus on the individual customer's needs, the company contributes to strengthening the customers' competitiveness and helps customers achieve their strategic goals. A focused IT infrastructure strategy combined with cost management and a local presence has created a solid foundation for profitable growth. The Atea Group has 72 offices in the Nordic and Baltic regions. The several local offices, well distributed in the Nordic and Baltic countries, enable a close and large focus on the customers' needs in all individual markets. At the same time, common resources, such as Atea's eSHOP, software packaging in Riga, Latvia, financing services with common structure in all individual markets as well as common services linked to the logistics centre in Sweden are offered. Atea's commitment to Green IT through the concepts goitgreen and goitloop has been a key focus area in 2009 – and the focus continues with undiminished force in 2009 – both within Atea and towards the company's customers.
Atea delivered stable revenues and good profitability through 2009 with particularly strong increase in profits during 4th quarter 2009. Significant cost reductions have been implemented throughout the organization as part of the Group's efficient cost reduction programme. At the same time, Atea's well established winning spirit and high motivation in the organization is contained. Atea has established a strengthened foundation for long term growth, supported by the strategic acquisitions in 2009, which has provided the Group with specialist expertise and expanded the customer base within business areas with a large growth potential.
Goals and strategy
The objective for the Group's development includes a further increase in revenues and profits going forward. The goal is to deliver revenues of NOK 20 billion with an EBITDA of NOK 1 billion in 2011 (20:11:1). The strategy is linked to local growth and profit based on local currencies as of 1st quarter 2009.
Atea's strategy is to further strengthen the Group's position. This is to be done based on, amongst other things, Atea's blue box – describing the Group's integrated range of product and service offerings within IT infrastructure. Atea's blue box includes sales of products, services and solutions within four primary categories – based on technological and market affiliation – mainly oriented around clients (PCs and mobile phones), computer centre (virtualization, management, servers and storage), interaction (effective communication and good networks) as well as Unified Communication (video and web conference, IP telephony, mobility and chat). At the same time as Atea gains market shares within the Group's primary business activities, the total business potential increases with new trends and needs for efficiency contributing to creating new and related business areas, naturally affiliating with Atea's blue box. This will probably cause an increase in product and service demand and a growth in several areas is therefore expected in the future.
Board of Directors' Report
Atea Annual Report 2009
Board of Directors' Report
Area Annual Report 2009
Development number of employees 2007 – 2009
Percentage women/men – complete overview 2009
The Nordic and Baltic markets for IT infrastructure are estimated at NOK 112 billion. The financial crisis has in general caused a decrease of 8 per cent in the total market last year. At the same time Atea delivered stable revenues and strong results, which means the Group's market share today is about 13 per cent, up from around 11 per cent one year ago. Despite Atea's market leading position further growth is expected. The objective is that the growth going forward will be both in the form of gained market shares combined with the expectation that the total market growth is returning to the previous rate. The objective is to increase market shares further during the years to come to over 15 per cent through organizational and structural development. As market leader and with further strengthened position, it is the Board's opinion that the conditions are favourable for further growth.
The Nordic and Baltic IT infrastructure market is fragmented. Atea is the clear leading player with 4-5 medium-sized and several smaller national players. In the Nordic region, the Group's position was strengthened the last year, with market shares gained in all individual markets. Operating revenues ended at NOK 14.6 billion against NOK 14.8 billion in 2008, a decrease in only 1.2 per cent despite a total decrease of nearly 8 per cent in the market.
Within the service area the Group traded NOK 3.1 billion in 2009, representing an increase of about 6.4 per cent compared with previous years. That means Atea has succeeded in maintaining a good development within consulting services in spite of the market conditions. There is reason to expect an increasing demand for the Group's consultant and service deliveries as the market conditions improves, as the correlation in this area is usually large. At the same time, the Group experiences a stable positive development within areas like Unified Communication, virtualization, mobility, Software Asset Management, Client Lifetime Management and Self Service Automation, print and copy as well as safety and surveillance. The Group's market position in these areas has strengthened during the year after several
acquisitions in 2008 and 2009, adding further specialist expertise to Atea. Local acquisitions form a key part of the company's growth strategy, which also facilitates cost synergies and increased geographic presence. Because the customers typically request the employees' specialist expertise, Atea has high ambitions as an employer, with an objective of providing an attractive work place where the best and most innovative specialist expertise in the industry seek together in the best interest of customers as well as professional and commercial development across businesses, departments and markets.
List of acquisitions in 2009:
Aprismo...Denmark (software/licences)
AC Sikring...Denmark (IT security and surveillance)
Mondo...Denmark (outsourcing, management and cloud computing)
A Communication...Finland (video conference/IP telephony)
Uni Networks...Norway (IT infrastructure)
Net cash payments of acquisitions in 2009: MNOK 30.1 (MNOK 218.0 in 2008)
EV/EBITDA multiplier 2009: 2.8-5.5 (1.1–5.8 in 2008)
Market development and trends
The financial crisis and the challenging macro economic conditions since autumn 2008 have shown that IT investments to a large extent are cyclical with a correlation between the level of investments and the macro economic climate in general. Even though the financial crisis has caused a reduction of previous estimates for general market and investment increase within IT in the Nordic and Baltic regions, Atea has upheld the Group's revenue and profit, which means the Group has consolidated its position considerably in 2009.
Forecasts for the IT infrastructure market are still relatively uncertain compared with
previous years, but IT investments are characterized by central drivers and important technology trends – like Unified Communication, mobile infrastructure solutions, virtualization, Software Asset Management, Desktop Lifetime Management and Green IT – areas where Atea is already well established both professionally and commercially. Atea is well positioned in the Nordic and Baltic regions through a determined focus and clear business development as well as acquisitions of several businesses within these business areas.
Unified Communication
Unified Communication (UC) – where e-mail, telephone and video conference, voice mail, Instant Messaging, IP telephony etc are made available through one single interface – makes it easier to communicate regardless of location. Atea's solutions within UC are considered to be market leading and represent a key focus area for the company. At the same time, the trend is that businesses, to an increasing extent, request the possibility to buy both IT and telecommunications services from a single supplier. That merger between IT and telecommunications contributes to open up new and exciting possibilities in the market for Atea.
Atea 7 design
From the end of 2009 to 2011 a significant focus on upgrades and related Windows 7-deliveries are expected, offering customers efficient and streamlined services associated with the implementation of Windows 7. Many customers are also expected to use the opportunity to upgrade hardware as Windows 7 is increasingly prioritized by customers in the private and public sectors during 2010 and 2011.
Green IT
The awareness and focus on environmental friendly solutions are also increasing, creating new demands and expectations for all players in the market. As market leader Atea takes a particular responsibility through the company's targeted and dedicated focus on Green IT – both in relation to its customers – but also as part of the Group's efforts on internal measures in this field.
Through Green IT, investments in IT equipment and solutions are made, contributing to reduced environmental emissions while economic and commercial gains are achieved. Examples are video conference solutions, energy efficient IT solutions and recycling. Through the implementation of the goitgreen and goitloop concepts Atea has played an active role to promote and support the implementation of Green IT for a wide range of customers in 2009. Atea's logistics centre in Växjö, Sweden, plays a key role in the Group's environmental focus. Green IT is a long-term focus the Group will maintain in the future - expecting to result in commercial gain in several areas with cost reductions and CO2 reductions. Atea is leading in this area offering a range of customized and standardized solutions. The demand for value-adding IT services is expected to contribute to a larger part of the Group's income, in line with the trend the last years.
Competitive situation
At the end of 2009 the Group had more than 23,000 customers and a solid leading position within IT infrastructure. Atea is present in the largest cities in Norway, Denmark, Sweden, Finland, Lithuania, Estonia and Latvia. The IT infrastructure market is strongly fragmented. Because of that Atea often meets competition from several small players often specializing in niches, but not having the same broad product range as Atea. Atea has, with its 72 locations in the Nordic and Baltic region, a strong local presence, supported by highly qualified consultants, good partnerships and the Group's many certifications. At the same time, Atea's size gives an increased competitive force and ability to offer favourable prices on products and services. It is expected that existing and new customers will consider Atea's size and financial solidity as favourable in tougher financial times. Atea's solid financial strength contributes to the Group's central role in the ongoing consolidation of IT infrastructure, in both individual markets and across the country boarders. Historically the Group has been involved in several of the largest acquisitions in the industry and the consolidation is expected to continue due to the current market conditions.
On the Nordic and Baltic markets the Group works with the most important international IT players, of which the largest are Microsoft, Cisco, HP, IBM, Lenovo, WMware and Citrix. The last year the partnership with several of these suppliers has intensified and
further developed to optimize the business potential for all parties. For Atea this means an increased focus from suppliers with increased support in general related with the focus on their solutions in the Nordic and Baltic regions.
On that basis the Board considers Atea, with its unique position in the Nordic and Baltic IT infrastructure market, to be well positioned to meet the expected market conditions and competitive situation in 2010 and 2011.
Research and development activities
Atea has no significant activities related to research and development, as the Group's business operations mainly include resales, implementation and consulting related to hardware, software and solutions developed by others.
Financial results
In 2009 the Group reported consolidated operating revenues of MNOK 14,588.6 (compared with MNOK 14,767.8 in 2008 and MNOK 13,210.3 in 2007). This is equivalent to a decrease of 1.2 per cent from last year. Corrected for acquisitions, the underlying organic development shows a decrease of 3.1 per cent. The Group's operating profit before depreciation, option expenses and non core project costs was MNOK 550.3 (compared with MNOK 547.5 in 2008 and MNOK 506.3 in 2007). Including option expenses and non core projects, the operating profit before depreciations was MNOK 501.4. The Group's operating profit, including depreciations, was MNOK 334.1 in 2009 (compared with MNOK 401.4 in 2008 and 388.2 in 2007).
Board of Directors' Report
Atea Annual Report 2009
In 2009 net financial items totalled MNOK 55.0 (compared with MNOK 66.7 in 2008 and MNOK 48.6 in 2007). Profit before tax from continued operations was MNOK 279.1 (compared with 334.7 in 2008 and MNOK 339.6 in 2007). The Group did not have any discontinued operations in 2009 or 2008 (compared with MNOK -4.8 in 2007). After positive tax effects of MNOK 103.3 (compared with MNOK 97.9 in 2008 and MNOK 88.4 in 2007), the net profit for the year came in at MNOK 382.4 (compared with 432.6 in 2008 and MNOK 423.1 in 2007).
Atea ASA, which is listed on the Oslo Stock Exchange, is the holding company for the Group and includes the Group's top management with associated staff functions, with
a total of nine employees. The company's financial accounts for 2009 show an operating loss of MNOK -20.8 (compared with MNOK-10.0 in 2008 and MNOK 20.2 in 2007). This represents mainly the Group's head office costs for the year. The loss for the year was MNOK -280.6 (compared with MNOK 557.5 in 2008 and MNOK 331.3 in 2007). The profit for the year was negative due to financial costs and currency effects. Unrealized currency effects associated with the company's long-term loans to subsidiaries in 2009 account for MNOK -297.6 (MNOK 326.7 in 2008 and MNOK -10.6 in 2007). Net unrealized currency effects in terms of the loans are MNOK 18.5.
The Board of Directors proposes that the
deficit of the parent company, Atea ASA, of MNOK 280.6 is covered by transfers from retained earnings of MNOK 280.6 before this year's proposed dividends. Unrestricted equity, which can be distributed as dividends, totals MNOK 683.4 as of December 31, 2009. The Board is proposing a payment of dividends of NOK 1.25 per share, totalling MNOK 119.4.
As announced 27 June 2008, Atea A/S in Denmark has resumed ownership of a "non core" software development project for the Danish Ministry of Food, Agriculture and Fisheries (DFFE). As a result of the delay, Atea reported in 3rd quarter 2009 additional costs of approximately MNOK 35.0 to be recognised in the 4th quarter based on Traen A/S exercising their option to buy the project back after delivery. The development project is completed and MNOK 32.3 is recognised as "non core" costs in 2009. Payment of MNOK 28.0 from the customer was received in December 2009. The deferred payment of MNOK 53.1 for acquiring these business operations shall be paid by Traen A/S after delivery of the project. The payment structure is linear, scheduled over 4 years, and the total amount is to be fully paid to Atea by December 31, 2013. This project is the last "non core" project from the restructuring of the former Ementor Group in 2006, now named Atea.
Equity, financing and cash flow
Equity and debt financing
In the opinion of the Board of Directors, the Financial Statements for 2009 give an accurate and fair view of the company's and the Group's financial position as of December 31, 2009, and the profit of the year and cash flows, as well as the changes in equity during the accounting year. The annual accounts for the company and the Group were prepared on the basis of the going concern assumption, and the Board of Directors confirms that the necessary conditions have been met.
The Group's equity including minority interests at the end of the year was MNOK 2,813.0 compared with MNOK 2,858.2 the previous year (and MNOK 2,100.4 in 2007). The equity ratio at the end of the year was at 39.3 per cent (compared with 34.5 per cent at the beginning of the year and 31.3 per cent at the end of 2007). The equity has substantially strengthened the last years as a result of the positive earnings in 2008 and 2009. Holdings of cash and cash equivalents totalled MNOK 194.5 compared with
Board of Directors' Report
Atea Annual Report 2008
EBITDA
2007 – 2009 (MNOK)
Operating revenue
2007 – 2009 (MNOK)
MNOK 568.2 as of December 31, 2008 (and MNOK 383.9 in 2007).
The unused portion of short term drawing facilities amounted to MNOK 132.0. Including unused drawing facilities and after the deduction of restricted funds, the Group had liquidity reserves of MNOK 1,536.5 at the end of the year compared with MNOK 1,176.1 the year before (and MNOK 846.2 in 2007). In addition, at the end of 2009, the Group had drawn MNOK 162.9 on a factoring facility of MNOK 1,465.6 provided by Nordea. The amount available for borrowing under the facility will vary depending on the accounts receivable. The maximum financing available under the facility based on the size of the accounts receivable at year end was MNOK 1,373.5. As of December 31, 2009, MNOK 225.9 had also been drawn on a short-term loan facility from Nordea.
Net interest-bearing debt was reduced during 2009 by MNOK 463.9 to MNOK 214.1 as of December 31, 2009, compared with a net interest-bearing position of MNOK 678.0 the previous year (and MNOK 541.9 by the end of 2007). The operational debt ratio measured by net interest-bearing debt divided by EBITDA for the entire year was 0.4, down from 1.2 one year ago, which indicates a solid financial position for the Group.
In the opinion of the Board of Directors, the Group has adequate financing at the end of 2009 and consequently no additional external financing needs in 2010. Thus, payment of dividends of NOK 1.25 per share is
proposed, as both the Group's financial and liquidity position enables this in combination with continued investments in order to generate further growth and solid profits.
Cash flow and working capital
The Group has focused for several years on keeping a low level of working capital tied-up, which is the total of accounts receivable, non-interest bearing short-term receivables and inventories, after the deduction of accounts payable and other current liabilities. The working capital ratio was 0.5 per cent at the end of 2009, which is substantially lower than the ratio of 2.4 per cent at the end of 2008. The reduction is mainly due to the successful focus on the cash flows with a lower amount of overdue accounts receivables, as well as to some extent advance payments from public contracts and extraordinary refunds, among other aspects including taxes. As of December 31, 2009, the working capital was MNOK 86.8. Acquisitions totalling MNOK 30.1 have been paid in cash in 2009. The cash flow related to equity transactions was MNOK 17.8 in 2009 and includes sales of own shares related to the options program and the employee share purchase offer. By the end of the year the parent company's holding of own shares constituted 2,899,169, which is equivalent to 3.03 per cent of the total number of issued shares in Atea ASA.
The Group's cash flow from operations in 2009 was MNOK 726.5, up from MNOK 501.3 the previous year (and MNOK 490.8 in 2007). This includes the payment of previous recorded restructuring provisions of
MNOK 27.5 (and MNOK 76.7 in 2008). Ordinary investments totalled MNOK 135.7 in 2009 (compared with MNOK -151.3 in 2008). Net cash flow in 2009 was MNOK -311.4 (compared with MNOK 112.3 in 2008 and MNOK -241.7 in 2007).
Financial risk
The Group's risk management is the responsibility of the central finance department in compliance with guidelines approved by the Board. It comprises specific areas such as currency risk, interest risk, credit risk, use of financial derivatives and investment in excess liquidity. The Group's finance department identifies, evaluates and secures financial risk in close cooperation with the respective operating units.
The Group manages the capital in order to ensure continuous operations of the Group's companies and to maximize shareholder value. This is achieved through the balance of debt, equity and profit. The Group's goal is to have equity in excess of over 20 per cent as well as an operational gearing (net interest bearing debt divided by EBITDA) of a maximum of 3.5. At the end of 2009 the Group reported equity of 39.3 per cent and an operational gearing of 0.4.
Market risk
The company is exposed to foreign currency fluctuations, especially Swedish Kronor (SEK) and Danish Kroner (DKK), US Dollars (USD) and Euro (EUR), since part of the company's revenues and purchases of goods are in foreign currencies. The company's policy is that any significant committed stock
Board of Directors' Report
Area Annual Report 2009
Net interest-bearing debt
2007 – 2009 (MNOK)
-214.1 (2009)
-678.0 (2008)
-541.9 (2007)
Contribution
2007 – 2009 (MNOK)
or loan transaction with foreign currency exposure is to be hedged with forward contracts. The company is also exposed to fluctuations in interest rates, since the company's debt has variable interest rates.
Due to the economic recession it is still to a certain extent reasonable to have lower expectations and greater uncertainty with regard to the demand for the Group's products in its operating countries. However, there is no reason to believe that this uncertainty applies more to Atea than to any of its competitors.
Credit risks
Historically the Group has seen very few losses on receivables. The Group has not experienced any particular increase in losses related to receivables despite the strained macro economic situation in 2009. On a general basis, the risk of counter-parties not having financial capacity to fulfil their obligations could be larger than normal due to the economic conditions, also in 2010, yet still considered to be manageable. No agreements relating to offsetting claims or other financial instruments have been established that would minimize the company's credit risk; however the Group has increased its focus on collecting receivables.
Liquidity risk
The company considers its liquidity to be good and the company has no external financing needs in 2010. The Group has established a common cash pool system for Norway, Denmark, Sweden and Finland to manage cash flows in the Group as efficiently as possible.
Shares and shareholders
Key figures, the Atea share:
- As part of the Group's change of name, the company's ticker symbol has changed from EME to ATEA at the turn of the year 2008/09.
- Atea's shares increased by a total of 201 per cent in 2009, from NOK 16.60 to NOK 50.00. The share's lowest listing was on 23 February, 2009 with a price of NOK 14.10.
- The year's high was listed on the year's last trading day, December 30, 2009 with a price of NOK 50.00.
- In 2009, 77,339,809 shares in Atea was traded (compared with 123,093,054 in 2008) totalling NOK 2.1 billion (3.9 billion in 2008).
- Each share was on average traded 0.8 times in 2009 (1.3 in 2008).
- The minimum trading unit is 500 shares.
- At year-end the number of shareholders was 10,166, an increase from 9,699 at the beginning of the year.
As of December 31, 2009 the registered share capital was NOK 955,270,220, divided into 95,527,022 shares with a par value of NOK 10. In 2009, the Annual General Meeting was held on 29 April with 43.52 per cent of the total share capital represented.
In this connection the Board's proposal to pay dividends of NOK 1 per share was approved, with a total dividend distribution of MNOK 95,527,022 to the company's shareholders. The Atea ASA share was traded exclusive dividend rights as from 30 April, 2009. Meanwhile the Board's authorization from the Annual General Meeting on 24 April, 2008 was sustained, enabling expansion of the share capital by up to MNOK 100 by issuing 10,000,000 new shares at NOK 10. The expansion can be used to strengthen the company's equity, acquisitions of complementary businesses and associated liabilities, issuance of shares in connection with mergers and in connection with entering alliances with industrial or strategic partners. The authorization is valid until the Annual General Meeting in 2010. In addition the Board was granted authority at the Annual General Meeting on 29 April, 2009 to buy back company shares in Atea ASA with par value of up to MNOK 70.
Atea ASA has during 2009 sold 889,066 company shares at an average price of NOK 28.23 per share (compared with a net purchase of 2,788,325 company shares in 2008 at an average price of NOK 25.07 per share). The share sales have been conducted with connection to the exercise of employee options and the employees' share purchase offer.
15 October, 2009 an extraordinary General Meeting was held in order to approve of necessary amendments to the Articles of Association in relation to the electronic disclosure of the Annual Reports and doc
uments concerning matters of treatment for the Annual General Meeting. This means the company, according to the new regulations from 2009/2010, will be able to take advantage of the opportunity to publish the Annual Report and other formal corporate documentations electronically on the company website. It is the opinion of the Board that this is appropriate, as it provides social and environmental benefits as well as cost reductions through reduced mailing of printed material. The Board of Directors encourages all shareholders to inquire the information electronically at www.atea.com.
Atea ASA has a broad shareholder structure, with 10,166 shareholders. The company's largest shareholder is Chairman Ib Kunøe, who through Consolidated Holdings A/S, System Integration ApS, direct ownership as well as close associates, controlled 30.1 per cent shares at year end 2009.
Employees
As of 31 December, 2009 the Group had a total of 4 380 employees, a net reduction of 191 from the beginning of the year. The reduction is mainly a result of Atea's cost reduction programme.
As a knowledge-driven business, it is important to create value through effective development and utilization of the company's competence. This places special demands on the management as well as the company as such, which is why the development of management resources is a key focus area throughout the Group's businesses with management trainee programs. A great deal of importance is still attached to the development of all employees. Individual meetings with the employees are carried out regularly in order to form goals and support the individual development in addition to employee surveys.
The average number of man-year equivalents employed by the Group in 2009 was 4,366, compared with 4,289 in 2008. For the operation as a whole, registered sick leave was 1.7 per cent, representing a decrease of 0.3 per cent from 2008.
The Group's employees have not suffered any accidents or injuries in connection with the company's activities in 2009. The Group's businesses have worked systematically with health, safety and environment (HSE) and use HSE tools, while systematic efforts have been made to follow up on absence due to sickness.
In a modern knowledge-based work environment diversity and equality are important aspects. This is also important to Atea, as diversity contributes to a better foundation for decisions and improves innovativeness. The Group regards it as essential to stimulate diversity in the organization and take advantage of this - academically, culturally and commercially. Atea's goal is for groups at all levels to represent different experiences, age, gender, and other backgrounds. At the end of 2009, the percentage of women among the Group's employees was 20.2 per cent (compared with 20,6 per cent at the beginning of the year). The Group is working systematically to recruit more women at all levels. In addition, an effort is being made to ensure that women stay in the company. At the same time, efforts are made in order to be compliant with the principle of equal opportunities and rights as well as preventing discrimination based on ethnicity, national origin, ancestry, colour of skin, language, religion or belief. The Group is focused on promoting equal rights and preventing discrimination according to the purpose of the Anti-Discrimination Act. As a part of this, targeted measures and assessments are carried out related to facilitating the physical conditions so that the different tasks and functions of the business can be performed by as many as possible.
Of the shareholder-elected board representatives, 3 of 5 were women as of 31 December, 2009. The Board of Directors consists of 5 female representatives and 3 male representatives.
Change in number of employees 2009
Employees as of 31 December, 2009...4,571
Increase in connection with
the acquisition of companies. 72
Reduction of employees. 263
Employees as of 31 December, 2009...4,380
Board of Directors and corporate management
The Board of Directors of Atea ASA consists of:
Ib Kunøe
Board Chairman
Cathrine Foss Stene
Shareholder-elected board member
Kristine M. Madsen
Shareholder-elected board member
Sigrun Hjelmquist
Shareholder-elected board member
Sven Madsen
Shareholder-elected board member
Jørn I. Goldstein
Employee-elected board member
Karin S. Løkke
Employee-elected board member
Marthe Dyrud
Employee-elected board member
The Group's key managers in 2009:
Claus Hougesen
President and CEO of Atea ASA
Rune Falstad
Chief Financial Officer of Atea ASA
Jesper Mathiasen
Business Development Director of Atea ASA
Peter Trans
Managing Director of Atea A/S, Denmark
Lars Pettersson
Managing Director of Atea AB, Sweden
Steinar Sonsteby
Managing Director of Atea AS, Norway
Juha Sihvonen
Managing Director of Atea Oy, Finland
Arunas Bartusevicius
Managing Director of UAB Atea, The Baltics
Environmental measures
The physical products that the Group sells are developed and manufactured by international technology companies. The Group and the company do not produce any physical products, and the distribution is largely outsourced to distribution partners. Hence there is little pollution connected with the Group's own operations compared with other companies and other industries. Atea's calculations show that the company's sales of IT equipment throughout 2009 have saved the environment for CO2 emissions equivalent to 17,218 Nordic households. This shows that Atea, with its Green IT concepts, contribute with great value to customers, the company and the environment as such. The Group's businesses participate in measures required by law to protect the environment, including return arrangements for obsolete ICT equipment.
Atea's clear focus on Green IT was set out early through several customer concepts, like www.goitgreen.com. The continuous focus on Green IT makes Atea a leader in the Nordic region. In 2009 there was a high demand for Atea's recycling concept, www. goitloop.com, which since its launch has facilitated the disposal of used IT equipment in a safe, economically and environmentally responsible manner. This has been especially well received in the Nordic market. Atea has developed a model for calculating environ
mental return on investments to illustrate the specific savings for the customers. The calculation shows how much CO2 the customers save the environment when implementing new IT solutions and equipment.
The Group's involvement in Green IT is well ingrained in all of the individual Atea companies, as a business concept and as a way of carrying out work on a day to day basis. All Atea companies participate in Atea Green Community with local resources in charge of Atea's environmental programme. This ensures green activities and realization of Atea's environmental target on a local level. Atea also participates in several national and international activities, all carefully chosen and recognized. Atea's objective is to reduce CO2 emissions with 25 per cent per employee from 2007 to 2015, with an objective to become CO2 neutral in 2010/2011.
Corporate governance
The Annual Report includes a separate statement from the company regarding the Norwegian Code of Practice for Corporate Governance. Key principles in the Group's policy are:
Open information
- Equal treatment of all shareholders.
- Board of Directors consisting of outside members who are not associated with the company's operations.
Outlook for 2010
The macro economic turbulence the last year has affected the Group's organic growth in 2009, as expected and foreseen in the Annual Report for 2009. In difficult times there is an advantage in being a large and leading player. Atea has gained market shares in 2010, and this trend is expected to continue.
According to the report and forecast from IDC in February 2010 a decrease of 7.7 per cent is reported in the total Nordic IT infrastructure market in 2009. Compared with this, Atea has succeeded very well in a challenging market. Based on the above mentioned analysis for 2009 the hardware sales has decreased by 14.7 per cent and service sales has decreased by 3.7 per cent, while total software sales have increased by 2.5 per cent in value. Significant technology trends, such as Unified Communications, mobile infrastructure solutions, virtualization, Software Asset Management, Desktop Lifetime Management, Windows 7 and Green IT, areas of which Atea has put a strong mark on, will also be important incentives for IT investments going forward. In 2010 IDC predicts a total market growth of 2.0 per cent. Atea expects to gain further market shares in 2010.
At the same time the cost basis was trimmed in 2009. In 4th quarter 2009 the cost basis was reduced by MNOK 82.0, or 9.5 per cent, compared with 4th quarter 2008. On this basis the "run rate" is lower at the beginning of 2010 than during the same period of 2009.
The positive organic development in 2010 is expected to be supplemented by growth through acquisitions, as Atea has the necessary financial strength and focus on playing an important role in the ongoing market consolidation. The objective is to achieve operating revenues of NOK 20 billion and EBITDA of NOK 1 billion in 2011, based on local objectives for profit in local currencies.
Oslo, 17 March 2010
Sven Madsen
Ib Kunoe
Chairman of the Board
Cathrine Foss Stene
Karin S. Løkke
Jørn Irving Goldstein
Claus Hungesen
CEO
Board of Directors' Report
Atea Annual Report 2009
Consolidated income statement Atea Group
| (Amounts in MNOK) | Note | 2009 | 2008 | 2007 |
|---|---|---|---|---|
| Operating revenues | 5 | 14 588,6 | 14 767,8 | 13 210,3 |
| Goods consumed | 10 996,5 | 11 242,2 | 10 254,1 | |
| Employee compensation and benefit expenses | 19 | 2 496,6 | 2 387,6 | 1 990,7 |
| Depreciation | 7, 8 | 167,3 | 139,5 | 103,2 |
| Other operating expenses | 561,8 | 597,1 | 474,1 | |
| Non-Core | 32,3 | - | - | |
| Operating profit/loss | 334,1 | 401,4 | 388,2 | |
| Financial income | 90,3 | 151,1 | 172,8 | |
| Financial expenses | 145,2 | 217,7 | 221,4 | |
| Net financial items | 21 | -55,0 | -66,7 | -48,6 |
| Profit/loss before taxes from continued operations | 279,1 | 334,7 | 339,6 | |
| Taxes on continued operations | 16 | -103,3 | -97,9 | -88,4 |
| Profit/loss from continued operations | 382,4 | 432,6 | 428,0 | |
| Profit/loss from discontinued operations | 6 | - | -0,0 | -4,8 |
| Profit/loss for the year | 382,4 | 432,6 | 423,1 | |
| Attributable to: | ||||
| Shareholders of Atea ASA | 382,2 | 431,0 | 423,1 | |
| Minority interests | 0,2 | 1,6 | - | |
| Profit/loss for the year after shareholder distributions | 382,4 | 432,6 | 423,1 | |
| Other comprehensive income | ||||
| Currency translation differences | -369,1 | 383,8 | -57,6 | |
| Total comprehensive income | -369,1 | -383,8 | -57,6 | |
| Total profit/loss for the year | 13,3 | 816,4 | 365,5 | |
| Attributable to: | ||||
| Shareholders of Atea ASA | 13,1 | 814,8 | 365,5 | |
| Minority interests | 0,2 | 1,6 | - | |
| Total profit/loss for the year | 13,3 | 816,4 | 365,5 | |
| Earnings per share | ||||
| (Amounts in NOK) | ||||
| - earnings per share for the Group | 22 | 4,00 | 4,53 | 4,45 |
| - diluted earnings per share for the Group | 22 | 3,99 | 4,52 | 4,40 |
| - earnings per share for continued operations | 22 | 4,00 | 4,53 | 4,50 |
| - diluted earnings per share for continued operations | 22 | 3,99 | 4,52 | 4,45 |
Financial statements and notes
Atea Annual Report 2009
Consolidated balance sheet
(Amounts in MNOK)
| Note | 2009 | 2008 | |
|---|---|---|---|
| ASSETS | |||
| Property, plant and equipment | 7 | 115,1 | 148,3 |
| Deferred tax assets | 16 | 318,0 | 218,9 |
| Goodwill | 8 | 2 324,3 | 2 540,1 |
| Other intangible assets | 8 | 230,9 | 247,9 |
| Retirement benefit funds | 17 | 1,5 | - |
| Other long-term receivables | 9 | 55,7 | 73,6 |
| Non-current assets | 3 045,6 | 3 228,7 | |
| Inventories | 10 | 393,4 | 420,1 |
| Trade receivables | 9 | 3 211,4 | 3 645,2 |
| Other current receivables | 9 | 310,0 | 418,2 |
| Other financial assets | 0,8 | 1,6 | |
| Cash and cash equivalents | 11 | 194,5 | 568,2 |
| Current assets | 4 109,9 | 5 053,3 | |
| Total assets | 7 155,5 | 8 282,1 | |
| EQUITY AND LIABILITIES | |||
| Share capital and premiums | 12 | 1 524,4 | 1 515,5 |
| Fund | 12 | 43,0 | 403,8 |
| Retained earnings | 1 241,9 | 935,5 | |
| Equity attributable to shareholders of Atea ASA | 2 809,3 | 2 854,8 | |
| Minority interests | 27 | 3,7 | 3,5 |
| Equity | 2 813,0 | 2 858,2 | |
| Interest-bearing long-term liabilities | 14 | 12,4 | 15,4 |
| Other long-term liabilities | 22,9 | 47,5 | |
| Retirement benefit obligations | 17 | 0,9 | 2,9 |
| Deferred tax liabilities | 16 | 73,7 | 90,7 |
| Non-current liabilities | 109,9 | 156,4 | |
| Trade payables | 13 | 2 162,2 | 2 244,9 |
| Interest-bearing current liabilities | 14 | 403,9 | 1 244,1 |
| Tax payable | 16 | 10,4 | 9,8 |
| Other provisions for obligations | 18 | 144,4 | 187,3 |
| Other current liabilities | 13 | 1 511,4 | 1 575,3 |
| Other financial liabilities | 0,2 | 6,0 | |
| Current liabilities | 4 232,5 | 5 267,4 | |
| Total liabilities | 4 342,4 | 5 423,9 | |
| Total equity and liabilities | 7 155,5 | 8 282,1 |
Financial statements and notes
Atea Annual Report 2009
Consolidated cash flow statement
| (Amounts in MNOK) | Note | 2009 | 2008 | 2007 |
|---|---|---|---|---|
| Profit/loss before taxes | 279,1 | 334,7 | 339,6 | |
| Taxes paid | -5,7 | -1,8 | 1,8 | |
| Profit/loss from discontinued operations | -0,0 | -4,8 | ||
| Depreciation | 167,3 | 139,5 | 103,1 | |
| Options | 16,6 | 7,0 | 9,2 | |
| Change in inventories | -19,1 | -20,6 | -23,8 | |
| Change in trade receivables | 91,7 | 48,2 | -84,4 | |
| Change in trade payables | 155,8 | -104,3 | 196,3 | |
| Change in other accruals | 40,8 | 98,5 | -46,1 | |
| Net cash flow from operational activities | 726,5 | 501,3 | 490,8 | |
| Acquisition of subsidiaries/businesses | 26 | -30,1 | -218,0 | -193,6 |
| Payments related to acquisitions in previous years | -15,3 | -34,6 | - | |
| Sale of subsidiaries/businesses | 2,0 | 8,0 | - | |
| Proceeds related to sales in previous years | 1,7 | - | - | |
| Purchase of tangible/intangible fixed assets | 7,8 | -135,7 | -151,3 | -132,4 |
| Sale of tangible/intangible fixed assets | 0,2 | 0,4 | 8,6 | |
| Net cash flow from investment activities | -177,2 | -395,4 | -317,4 | |
| Purchase/sale of treasury shares | 17,8 | -70,6 | -42,9 | |
| Proceeds from new issues | - | - | 19,0 | |
| Dividend distributions | -91,7 | - | - | |
| Proceeds from borrowings | - | 77,0 | 48,5 | |
| Repayment of loans | -786,8 | - | -439,7 | |
| Net cash flow from financing activities | -860,7 | 6,4 | -415,1 | |
| Net change in cash and cash equivalents for the year | -311,4 | 112,3 | -241,7 | |
| Cash and cash equivalents at the start of the year | 11 | 568,2 | 383,9 | 645,9 |
| Currency effect on cash held in a foreign currency | -62,3 | 72,0 | -20,3 | |
| Cash and cash equivalents at the end of the year | 11 | 194,5 | 568,2 | 383,9 |
Financial statements and notes
Alisa Annual Report 2009
Consolidated statement of changes in equity
| (Amounts in MNOK) | Share capital 1) | Share premium reserve | Fund for employee option programmes | Fund for currency translation differences | Retained earnings | Equity attributable to shareholders of Atea ASA | Minority interests 2) | Total equity |
|---|---|---|---|---|---|---|---|---|
| Equity as of 1 January 2007 | 944,8 | 589,6 | 23,4 | 39,2 | 157,0 | 1 754,1 | - | 1 754,1 |
| Profit/loss for the year | - | - | - | - | 423,1 | 423,1 | - | 423,1 |
| Comprehensive income, foreign currency | - | - | - | -57,6 | - | -57,6 | - | -57,6 |
| Employee option programmes, employee contributions | - | - | 4,8 | - | - | 4,8 | - | 4,8 |
| Change in treasury shares | -10,0 | - | - | - | -32,9 | -42,9 | - | -42,9 |
| Issue of share capital | 10,3 | 8,7 | - | - | - | 19,0 | - | 19,0 |
| Equity as of 31 December 2007 | 945,1 | 598,3 | 28,2 | -18,4 | 547,2 | 2 100,4 | - | 2 100,4 |
| Equity as of 1 January 2008 | 945,1 | 598,3 | 28,2 | -18,4 | 547,2 | 2 100,4 | - | 2 100,4 |
| Profit/loss for the year | - | - | - | - | 431,0 | 431,0 | 1,6 | 432,6 |
| Comprehensive income, foreign currency | - | - | - | 383,8 | - | 383,8 | - | 383,8 |
| Employee option programmes, employee contributions | - | - | 10,2 | - | - | 10,2 | - | 10,2 |
| Change in treasury shares | -27,9 | - | - | - | -42,8 | -70,6 | - | -70,6 |
| Minority interests from acquisitions | - | - | - | - | - | - | 1,9 | 1,9 |
| Equity as of 31 December 2008 | 917,2 | 598,3 | 38,4 | 365,4 | 935,5 | 2 854,8 | 3,5 | 2 858,2 |
| Equity as of 1 January 2009 | 917,2 | 598,3 | 38,4 | 365,4 | 935,5 | 2 854,8 | 3,5 | 2 858,2 |
| Dividends | - | - | - | - | -91,7 | -91,7 | - | -91,7 |
| Profit/loss for the year | - | - | - | - | 382,2 | 382,2 | 0,2 | 382,4 |
| Comprehensive income, foreign currency | - | - | - | -369,1 | - | -369,1 | - | -369,1 |
| Employee option programmes, employee contributions | - | - | 8,3 | - | - | 8,3 | - | 8,3 |
| Change in treasury shares | 8,9 | - | - | - | 15,9 | 24,8 | - | 24,8 |
| Equity as of 31 December 2009 | 926,1 | 598,3 | 46,7 | -3,7 | 1 241,9 | 2 809,3 | 3,7 | 2 813,0 |
1) See Note 12.
2) See Note 27.
Financial statements and notes
Atea Annual Report 2009
Note 1 General information
The Atea Group is the leading supplier of IT infrastructure products and services in the Nordic Countries and Baltic States. Measured by revenue the Atea Group is number three in Europe in its field. Atea is present in seven countries – including Norway, Denmark, Sweden, Finland, Lithuania, Latvia and Estonia. The Group offers hardware and software products, consulting services and service agreements in the infrastructure area. Through a range of market leading technologies from leading suppliers, combined with value-added services and a focus on individual customer needs, the company contributes to strengthening the customers' competitiveness and helps customers achieve their strategic goals.
The Group has a total of 72 offices, which allow Atea to be close to the needs of our customers. One of the Group's competitive advantages is the ability to use local customer needs as our point of departure and adapt our offerings accordingly. Each country has access to the Group's common resources, such as eSHOP, financing services and an advanced logistics centre in Växjö, Sweden. The Group's e-commerce system, eSHOP, provides easy access to detailed information on over 100,000 products, including price comparisons, inventory and delivery times. Over 80 suppliers are affiliated with eSHOP. The Group's primary focus shall continue to be IT infrastructure, and our strategy is to reinforce our already leading market position in the Nordic Countries and the Baltic States.
As of 31 December 2009, Atea had 4,380 employees, a reduction of 191 employees during the year.
The principal activities for the Group's various business areas are described in greater detail in note 5 – Segment information.
Atea ASA is a public limited company that is registered and domiciled in Norway. The office address is Brynsalleen 2, Oslo. Atea ASA is listed on the Oslo Stock Exchange and had 10,166 shareholders as of 31 December 2009, compared with 9,699 shareholders at the beginning of the year. The company's largest shareholder is Ib Kunøe through his companies Consolidated Holdings A/S and System Integration ApS. Ib Kunøe, who is also the Chairman of the Board of Atea ASA, controls 30.1 per cent of the shares together with related parties. Atea ASA reports its consolidated and company accounts in accordance with the International Financial Reporting Standard (IFRS). These consolidated accounts were approved by the Board on 17 March 2010. The Board of Directors decided that a dividend of NOK 1.25 per share shall be distributed for 2009.
Note that there may be figures and percentages that do not always add up correctly due to rounding differences.
Note that in the financial statements and in all tables in the footnotes, the figures are included in the Norwegian format, i.e. a comma has been used instead of a period sign in the decimal position. In the text to the footnotes, the comma has been used as 1000 separator, while the period sign has been used in the decimal position.
Note 2 Summary of significant accounting principles
2.0 Basis of the consolidated financial statements
The consolidated financial statements of Atea have been prepared in accordance with International Financial Reporting Standards (IFRS) as determined by the EU, and include Atea ASA and subsidiaries in which Atea ASA, directly or indirectly, has a controlling interest through ownership interests or agreements. The consolidated financial statements have been prepared under the historical cost convention, and modified by any revaluation of assets and liabilities at fair value through profit or loss according to the policies for the relevant areas. All the figures are presented in NOK and rounded to the closest whole NOK 1000. Notice is given of any exceptions.
2.1 Adoption of new and revised International Financial Reporting Standards (IFRS)
a) Amendments to published standards and interpretations that entered into force as of 2009:
- IFRS 8 - Operating segments, which enters into force as of 1 January 2009, and specifies the "management approach" as the only criterion for both the identification of operating segments and the reporting of information related to these segments.
- IAS 1 (Revised) - Presentation of Financial Statements, which enters into force as of 1 January 2009. The Group has adopted a new specification format, which entails, for example, a separate specification of other income and expenses (comprehensive income).
- IFRS 3 (Revised) - Business Combinations, which enters into force as of 1 July 2009 - In the revised standard the conditional settlement of the purchase price is measured at fair value on the takeover date. Subsequent adjustment of a conditional settlement will be posted directly against goodwill only in cases where the change reflects better knowledge of the fair value on the takeover date and the adjustment takes place within the measurement period (12 months from the takeover).
All other subsequent adjustments will be reported through the income statement. In the revised standard costs related to the acquisition must be recognised on the income statement and can no longer be accounted for as part of the purchase price for the acquisition. These changes will have an impact on Atea from 1 January 2010.
b) The following standards, interpretations and amendments entered into force in 2009, but they are not considered relevant to the group:
- IAS 23 (Revised) - Borrowing Costs, entry into force from 1 January 2009.
- IFRS 2 (Amendments) - Share-based Payment: Vesting Conditions and Cancellations, entry into force from 1 January 2009.
- IFRS 7 (Amendments) - Improving Disclosures about Financial Instruments
- IFRIC 13 - Customer Loyalty Programmes, entry into force from 1 July 2008.
- IAS 39 (Amendments) - Financial Instruments: Recognition and Measurement: Eligible Hedged Items, entry into force from 1 July 2009.
c) The group has not implemented early adoption of any standards, amendments or interpretations in 2009:
- IAS 7 (Amendments) - Statements of Cash Flows
- IAS 27 (Revised 2008) - Consolidated and Separate Financial Statements
- IAS 38 (Amendments) - Intangible Assets
- IAS 40 (Amendments) - Investment Property
- IAS 20 (Amendments) - Accounting for Government Grants and Disclosure of Government Assistance
Financial statements and notes
Atea Annual Report 2009
2.2 Consolidation principles
2.2.1 Critical accounting estimates
The preparation of accounts in accordance with IFRS requires the use of certain critical accounting estimates. In addition, the application of the Atea's accounting principles requires that the management exercise judgement. Areas that contain a high degree of such discretionary assessments, or a high degree of complexity, or areas where the assumptions and estimates are of significance to the consolidated accounts are described separately. This applies in particular to the depreciation of fixed assets, valuation of goodwill, valuations associated with acquisitions, valuation of deferred tax assets, pension liabilities and other accounting provisions. Changes to accounting estimates are included in the accounts for the period in which the change occurs.
2.2.2 Subsidiaries
Subsidiaries are all the units where Atea has influence over the unit's financial and operational strategy, normally through ownership of more than half of the voting capital. Subsidiaries are consolidated from the point in time when control is transferred to the group and eliminated from consolidation when such control ends.
Atea uses the purchase method of accounting to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets contributed as consideration for the purchase, liabilities incurred upon the transfer of control, plus costs directly attributable to the actual acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interests. The excess of the cost of acquisition over the fair value of Atea's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement. The costs associated with acquisitions will be recognised on the income statement from 1 January 2010. Correspondingly, if there were to be a discrepancy between the estimated fair value based on the conditional settlement and fair value, and this cannot be attributed to new information on the fair value or more than 12 months passing from the takeover, the difference shall be recognised on the income statement.
Minority interests are included in Atea's income statement, which is specified as majority and minority interests. Correspondingly, minority interests are included as part of Atea's shareholders' equity and are specified on the balance sheet.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Accounting policies for subsidiaries have been changed where necessary to ensure consistency with the policies adopted by Atea.
2.2.3 Discontinued operations
In connection with the sale or winding-up of operations, revenues, expenses and gains/losses related to the discontinued operations are reported separately from the group's other income items. Income elements, gains/losses and tax expenses for discontinued operations are presented net on one separate line in the income statements.
The criteria for this accounting presentation is that a binding sales agreement has been signed for assets that can be attributed to the operations in question, or the operations are made available for sale by decision-making bodies, actively marketed for sale and it is highly probable that a sale will be carried out within one year.
2.3 Comparative figures
Comparative figures for previous years are changed in the event of significant changes in accounting principles.
If changes are made in classifying and grouping accounting items, the comparative figures are changed accordingly. This also applies when presenting discontinued operations on separate lines on the income statement (the corresponding figures for the balance sheet are not changed).
Historical comparative figures are not restated in the event of changes in group composition or the acquisition of subsidiaries.
2.4 Segment reporting
Atea's primary reporting format is the geographical segments. General business or economic planning and follow-up performed by the Group's decision-makers (CEO/CFO) takes place in geographical segments as well as separate units that deliver products and services internally to other geographical segments. A geographical segment is engaged in providing products or services within a particular geographical area that are subject to risks and returns that are different from other geographical segments.
Atea's secondary reporting format is the business segments. A segment is a portion of the business operations that delivers products or services that are subject to a risk and return that are distinct from that of other business areas.
In the segment reporting, the internal sales between the various segments are eliminated.
2.5 Foreign currency translation
2.5.1 Functional and presentation currencies
Items included in the financial statements of each of the Atea Group's entities are measured primarily using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Norwegian kroner (NOK), which is the functional and presentation currency of Atea ASA.
2.5.2 Transactions and balance sheet items
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. If the foreign currency position is considered cash flow hedging or hedging of net investments in foreign entities, the gains or losses are entered directly against equity.
2.5.3 Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(i) Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet
(ii) Income and expenses for each income statement are translated at average exchange rates
(iii) All resulting exchange differences are recognised as a separate component of equity
On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders' equity. When a foreign operation is sold, such
Financial statements and notes
Atea Annual Report 2009
exchange differences are recognised in the income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.
2.6 Classification
Assets are classified as current when intended for sale or consumption in the normal operating cycle, or held primarily for the purpose of being traded, or expected to be realised within twelve months, or classified as cash or equivalents. All other assets are classified as long-term. Liabilities are classified as current when expected to be settled in the normal operating cycle, or held primarily for the purpose of being traded, or due to be settled within twelve months, or there are no unconditional rights to defer settlement for at least twelve months. All other liabilities shall be classified as non-current.
2.7 Property, plant and equipment
2.7.1 Recognition
For the years that are presented, Atea does not own any land or buildings. Computer equipment, office machines, vehicles and office furnishings/ fittings are stated at historical cost less depreciation. Historical cost includes expenses that are directly attributable to the acquisition of the items.
Costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will pass to Atea and the cost of the item can be measured reliably.
Depreciation is calculated using the straight-line method to allocate their cost over their estimated useful lives as follows:
(i) Computer equipment, 3-5 years
(ii) Office machines, 3-5 years
(iii) Vehicles, 3-5 years
(iv) Office furnishing/fittings, 3-10 years
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Repair and maintenance costs are charged to the income statement during the financial period in which they are incurred.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount.
2.7.2 Financial leases
The group leases certain operating assets. Leases for property, plant and equipment, where most of the risk and control rests with the group are classified as financial leases. At the start of the lease term financial leases are accounted for in the financial statements as assets and liabilities, equal to the lowest of fair value of the operating asset or the present value of the minimum lease payments.
Each lease payment is allocated between an instalment and an interest payment, resulting in a constant interest cost on the remaining lease liability. Interest costs are accounted for as a financial profit/loss item. Lease liabilities, excluding interest costs, are presented as other short-term or long-term liabilities. Fixed assets acquired through financial lease agreements are depreciated over the lease's term or the depreciation period for equivalent assets, whichever is shorter.
If a sale and leaseback transaction results in a financial lease, any gain will be postponed and recognised as revenue over the period of the lease.
2.7.3 Operating leases
Leases for which most of the risk rests with the other contracting party are classified as operating leases. Lease payments are classified as operating costs and recognised in the income statement during the contract period.
If a sale and leaseback transaction results in an operating lease and it is clearly stated that the transaction has been carried out at its fair value, any gain or loss will be recognised in the income statement when the transaction is carried out. If the sales price is less than the fair value, any gain or loss will be recognised in the income statement directly at the time of the transaction, apart from in situations when this leads to future lease payments that are below the market price. In such cases, the gain/loss is amortised over the lease period. If the sales price is above the fair value, the excess price is amortised over the asset's estimated period of use.
2.8 Intangible assets
2.8.1 Recognition
Intangible assets are recognised in the balance sheet if it can be proven that there are probable future economic benefits that can be attributed to the asset, which is owned by Atea; and the asset's cost price can be reliably estimated.
Intangible assets are recognised at their cost price. Intangible assets with undefined useful lives are not amortised, but impairment losses are recognised if the recoverable amount is less than the cost price.
2.8.2 Business combinations and goodwill
Goodwill represents the excess of the cost of acquisition over the fair value of Atea's share of the net identifiable assets of the acquired subsidiary/associate at the time of the acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of associates is included in investments in associates. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Goodwill is allocated to the relevant cash-generating units for the purpose of impairment testing. Each of those cash-generating units represents the lowest levels for which there are separately identifiable cash flows. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
2.8.3 Other intangible assets
Computer software and rights
Acquired computer software licences are recorded in the balance sheet on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives. Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred. Costs that are directly associated with the production of identifiable and unique software products controlled by the Group, and where it is probable that recoverable amounts from future cash flows related to the asset will be accrued by Atea, and that the expenses can be measured reliably, are recognised as intangible assets. Computer software costs/solutions and rights recognised on the balance sheet are amortised over their estimated useful lives, normally 3-6 years.
Contracts and customer relationships
In connection with business combinations, contracts and customer relationships are recorded at fair value on the group's opening balance sheet. The depreciation period for contracts and customer relationships is defined as 4-5 years, based on the period they are estimated to generate cash flows.
Expenses related to research activities are recognised in the income statement as they are incurred.
Financial statements and notes
Atea Annual Report 2009
2.9 Impairment of non-financial assets
Assets that have an undefined useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
2.10 Financial instruments
Atea classifies financial instruments in the following categories:
2.10.1 Held-to-maturity
Financial instruments with fixed or determinable cash flows and a fixed maturity that the Group has the positive intention and ability to hold to maturity are classified as held-to-maturity investments. Financial instruments that are held to maturity are included in the non-current asset unless the maturity date is less than 12 months after the balance sheet date. Investments held to maturity are carried at amortised cost. The interest element is disregarded if it is insignificant.
2.10.2 At fair value through the income statement
Financial instruments that are held with the intention of making a gain on short-term fluctuations in prices are classified as financial assets at fair value through profit or loss. Financial instruments at fair value through the income are classified as current assets, and are carried at fair value at the balance sheet date. Changes in the fair value are recognised in the income statement and included in the net financial income/expenses. Derivatives are also classified under this group when not part of a hedge according to IAS 39.
2.10.3 Financial assets available-for-sale
All other financial instruments, with the exception of loans and receivables originally issued by the company, are classified as available for sale. Financial instruments that are available for sale are presented as current assets if the management has decided to sell the instruments within 12 months of the balance sheet date. Available for sale financial instruments are carried at fair value on the balance sheet date. The gain or loss resulting from changes in the fair value are recognised directly in equity until the investment has been sold. The accumulated gain or loss on financial instruments that have previously been recognised in equity will then be reversed and the gain or loss will be recognised in the income statement.
2.10.4 Hedging
Before a hedging transaction is carried out, the group's finance department assesses whether a derivative (or another financial instrument in the case of a foreign currency hedge) is to be used as:
(i) a fair value hedge of a recognised asset, liability or a fixed commitment,
(ii) a cash flow hedge of a recognised asset or liability, a future transaction identified as very probable or, in the case of foreign currency risk, a fixed commitment, or
(iii) a net investment hedge in a foreign entity.
The group's criteria for classifying a derivative or other financial instrument as a hedging instrument are as follow:
(i) The hedge is expected to be very effective in that it counteracts changes in the fair value of or cash flows from an identified object – and the efficiency of the hedge is expected to be within the range of 80-125 %,
(ii) the effectiveness of the hedge can be reliably measured,
(iii) adequate documentation is established when the hedge is entered into, showing, for example, that the hedge is effective,
(iv) for cash flow hedges, that the forthcoming transaction must be highly probable; and
(v) the hedge is evaluated regularly and has proven to be effective.
Fair value hedges
Derivatives designated as hedging instruments are assessed at fair value and changes in fair value are recognised in the income statement. Correspondingly, a change in the fair value of the hedged item attributable to the hedged risk is recognised in the income statement.
Cash flow hedges
The effective components of changes in fair value for a hedging instrument will be recognised in the accounts under Other Comprehensive Income. The ineffective part of the hedging instrument is recognised on an ongoing basis in the income statement. When the expected transaction is subsequently accounted for, the associated accumulated gain or loss from the equity is eliminated and included in the income statement or the balance sheet item in question that is hedged. If the hedged transaction is no longer expected to occur, any previously accumulated gains or losses on the hedging instrument that have previously been recorded directly against equity will be recognised in the income statement.
2.11 Inventories
Goods purchased for resale are valued at the lower of historical cost or net realisable value. The net realisable value is the estimated sales price under ordinary operations less the cost of sales. The historical cost is calculated by means of the first-in, first-out principle (FIFO).
Atea also keeps inventory to cover the spare parts needed in connection with service agreements. The spare parts inventory is recognised at cost price less accumulated, straight-line depreciation over the average duration of the contracts.
2.12 Trade receivables
Trade receivables, including accrued, uninvoiced income, are recognised at a discounted value. The interest element is disregarded if it is insignificant. Provisions for losses are accounted for when there are objective indicators that Atea will not receive settlement in accordance with the original terms and conditions.
The provisions represent the difference between the nominal and present value of cash flows that are expected to be received. The change in the provisions for the period is accounted for in the income statement.
2.13 Cash and cash equivalents
Cash includes cash in hand and at bank. Cash equivalents are short-term liquid investments that can be converted into cash within three months and to a known amount, and which contain insignificant risk elements. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
2.14 Share capital and premiums
Ordinary shares are classified as equity. Costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds. Costs directly attributable to the issue of new shares related to an acquisition of a business, are included in the cost of acquisition as part of the purchase consideration.
Where any group company purchases the company's own shares, the consideration paid, including any directly attributable costs (net of income taxes,) is deducted from equity attributable to Atea's shareholders until the shares are cancelled, reissued or disposed of.
Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable transaction costs and the related income tax effects, is included in equity attributable to Atea's shareholders.
Financial statements and notes
Atea Annual Report 2009
2.15 Borrowings
Borrowings are recognised at fair value when the loan is disbursed, net of the transaction costs incurred. Transaction costs are charged as an expense over the term of the loan (effective interest rate). Borrowings are classified as current liabilities unless there exists an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
2.16 Income tax
Income tax consists of the tax payable and changes to deferred tax. Deferred tax/tax assets are calculated on all taxable temporary differences, with the exception of:
(i) Goodwill for which amortisation is not deductible for tax purposes.
(ii) Temporary differences relating to investments in subsidiaries, associates or joint ventures when the group decides when the temporary differences are to be reversed and this is not expected to take place in the foreseeable future.
In the case of recent losses, deferred tax assets are recognised when there is convincing evidence that Atea will have a sufficient profit for tax purposes to utilise the tax assets. On each balance sheet date, Atea reviews its unrecorded and unrecognised tax assets. Atea recognises deferred tax assets on its balance sheet when the conditions for recognition have been met. Correspondingly, Atea will reduce its deferred tax assets if they can no longer be utilised.
Deferred tax and deferred tax assets are measured on the basis of the current tax rates and laws applicable to the companies in the Group where temporary differences have arisen.
Deferred tax and deferred tax assets are recognised at their nominal value and classified as a non-current asset or a long-term liability in the balance sheet.
2.17 Employee benefits
2.17.1 Pension obligations
Group companies operate various pension schemes. The schemes are generally funded through payments to insurance companies. Atea has both defined benefit and defined contribution plans. A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. A defined contribution plan is a pension plan under which Atea pays fixed contributions to a separate legal entity. Atea has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions, in excess of the greater of 10% of the value of plan assets or 10% of the defined benefit obligation, are charged or credited to income over the employees' expected average remaining working lives. Changes in the pension plan benefits are recognised immediately in the income statement, unless the changes that the new pension plan represents are conditional on the employees remaining in service for a specified period of time (contribution period). In this case, the past-service costs are amortised on a straight-line basis over the vesting period.
For defined contribution plans, Atea pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. Atea has no further payment obligations once the contributions have been paid. The contributions are recognised as an employee benefit expense when they are due.
2.17.2 Share-based compensation
Employee options at Atea represent rights for employees to subscribe to shares in the company at a future date at a predetermined subscription price (subscription right). Subscribing normally requires continued employment.
The fair value of the employee services received in exchange for the allotment of options is recognised as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options allotted. At each balance sheet date, the entity revises its estimates of the number of options that are expected to become exercisable. It recognises the impact of the revision of original estimates, if any, in the income statement, and a corresponding adjustment to equity over the remaining vesting period. The proceeds received net of any directly attributable transaction costs are credited to share capital and share premium when the options are exercised.
2.17.3 Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. Atea recognises termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy.
2.17.4 Bonus plans
Atea recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
2.18 Provisions
Provisions are recognised when Atea has a valid liability (legal or constructive) as a result of events that have taken place and it can be proven probable (more probable than not) that a financial settlement will take place as a result of this liability, and that the size of the amount can be measured reliably. Provisions are reviewed on each balance sheet date and their level reflects the best estimate of the liability. When the effect of time is insignificant, the provisions will be equal to the size of the expense necessary to be free of the liability. When the effect of time is significant, the provisions will be the present value of future payments to cover the liability.
Restructuring provisions only include direct expenses linked to the actual restructuring that is necessary and which is not part of the day-to-day operations. Restructuring provisions are recognised when the company has a detailed restructuring plan in which the business area is identified; the premises and type of departments that will be affected, the number of employees who will be compensated for dismissal, the type of expenses that will be incurred and when the restructuring is to begin have been clarified; and the restructuring plan has been commenced or communicated to those who will be affected by it. Provisions are not recognised for future operating losses.
2.19 Contingent liabilities and assets
Contingent liabilities are defined as:
(i) Possible obligations resulting from past events whose existence depends on future events
(ii) Obligations that are not recognised because it is not probable that they will lead to an outflow of resources
(iii) Obligations that cannot be measured with sufficient reliability
Financial statements and notes
Atea Annual Report 2009
Contingent liabilities are not recognised in the annual financial statements. Significant contingent liabilities are stated, with the exception of contingent liabilities where the probability of the liability occurring is remote.
A contingent asset is not recognised in the annual financial statements, but is stated if there is a certain level of probability that a benefit will accrue to Atea.
2.20 Revenue recognition
Revenue comprises the fair value for the sale of goods and services, net of value-added tax, rebates and discounts. Intercompany sales are eliminated. Revenues are not recognised unless the customer has accepted the deliverance and collectability of the related receivables is reasonably assured. Revenue is recognised as follows for Atea's different types of revenues:
2.20.1 Products
Sales of goods are recognised when Atea has delivered products to the customer. Products channelled directly from the distributor to the customer are at Atea's own risk and expense, and therefore presented as gross sales in the income statement.
2.20.2 Consulting services
Consulting services billed on an hourly basis are recognised as income when Atea has delivered the services to the customer.
2.20.3 Fixed price projects
Fixed price projects include both fixed price consulting projects and combined consulting and product deliveries. Project revenue and costs related to earned revenue are recognised according to the stage of completion of the project. The stage of completion is determined based on the accrued cost related to services delivered compared to total estimated cost for the project. Earned revenue for the period is earned revenue at the balance sheet date, less earned revenue in prior periods. Costs related to earned revenue are total estimated costs multiplied by the degree of completion. Costs related to earned revenue for the period are increases in the amount from prior periods. Any expected total project costs that exceed the total project revenue are recognised as a liability in the period they are identified.
2.20.4 Service contracts
Service contracts include time-limited service & support and outsourcing contracts, or contracts running until termination by either party. Service revenues are recognised in the accounting period in which the services are rendered, and such revenues are normally allocated linearly over the length of the contracts. Costs related to earned service revenues are recognised according to the stage of completion. The stage of completion represents recognised revenues compared to total revenues for the contract.
Note 3 Financial risk and capital management
3.1 Financial risk factors
The Group's activities cause different financial risks: market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and floating interest rate risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial performance. The Group uses derivative financial instruments to hedge certain risk exposures.
Risk management is carried out by the Group Treasury under policies approved by the Board of Directors. The Group Treasury identifies, evaluates and hedges financial risks in close co-operation with the Group's operating units. The Board of Directors provides principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and the investment of excess liquidity.
3.1.1 Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk in multiple foreign currencies. This risk is particularly relevant with respect to the Swedish krona (SEK), Danish krone (DKK), Euro (EUR), Latvian lat (LVL), Lithuanian litas (LTL), Estonian krone (EEK) and US dollar (USD). Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.
In order to manage foreign exchange risk arising from future commercial transactions and recognised assets and liabilities, entities in the Group use forward contracts. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity's functional currency. The Group Treasury is responsible for managing the net position in each foreign currency by using external forward currency contracts.
| Forward currency contracts | 2009 | 2008 | ||||||
|---|---|---|---|---|---|---|---|---|
| Average exchange rate | Local currency | Contract value | Fair value | Average exchange rate | Local currency | Contract value | Fair value | |
| Full value | MLC | MNOK | MNOK | Full value | MLC | MNOK | MNOK | |
| Sell currency NOK | ||||||||
| Less than three months | 0,989 | 30,0 | 29,7 | -0,3 | 1,026 | 70,0 | 71,8 | 1,4 |
| Sell currency DKK | ||||||||
| Less than three months | 1,135 | 32,0 | 36,3 | 0,6 | 1,258 | 85,0 | 106,9 | -5,0 |
| Purchase currency EUR | ||||||||
| Less than three months | 8,423 | 1,5 | 12,3 | -0,2 | 9,900 | 1,0 | 9,9 | -0,1 |
| Sell currency EUR | ||||||||
| Less than three months | 8,423 | 1,6 | 13,6 | 0,2 | - | - | - | - |
| Purchase currency USD | ||||||||
| Less than three months | 5,718 | 9,1 | 51,8 | 0,3 | 7,139 | 7,9 | 56,4 | 1,8 |
| 3 to 6 months | 5,856 | 0,4 | 2,1 | -0,0 | - | - | - | - |
| Sell currency USD | ||||||||
| Less than three months | 5,679 | 1,6 | 8,9 | -0,1 | - | - | - | - |
| 3 to 6 months | 5,791 | 0,4 | 2,1 | 0,0 | - | - | - | - |
Financial statements and notes
Atea Annual Report 2009
The table above illustrates the outstanding forward currency contracts as of 31 December 2009 and 31 December 2008.
The company has investments in foreign subsidiaries, whose net assets are exposed to foreign currency translation risk.
3.1.2 Credit risk
Throughout the last years Atea has had modest losses on trade debtors. New customers must be approved before they are granted credit. The responsibility for granting credit is decentralised to each operating unit. Credit insurance is used only to a small extent. The Group has no significant concentration of credit risk, since the customer base is large and unrelated. Derivative counterparties and bank deposits are limited to high-credit-quality financial institutions.
3.1.3 Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Group Treasury aims to maintain flexibility in funding by keeping committed credit lines available.
3.1.4 Cash flow and fair value interest rate risk
As of 31 December 2009 the Group had a net negative interest-bearing position of MNOK 214.1 (MNOK 678 in 2008). The interest rates on deposits and loans have a term of less than 12 months. As the Group has no significant interest-bearing assets, the Group's income and operating cash flow are substantially independent of changes in market interest rates. The Group's interest rate risk arises from borrowings. Borrowings issued at variable rates expose the Group to floating interest rate risk. The Group is not actively managing its floating interest rate risk.
3.2 Accounting for derivative financial instruments and hedging activities
The Group has recognised all changes in the fair value of any derivative instrument immediately in the income statement. For all financial instruments the carrying amount is equal to the fair value.
The nominal value less impairment provision of trade receivables and payables are assumed to correspond to fair value.
3.3 Capital management
The Group manages its capital to secure the ongoing operations of the companies in the Group and to maximise the shareholders' return. This is accomplished through a healthy balance between liabilities, equity and earnings. Atea assesses its operational gearing (net interest-bearing liabilities/operating profit before depreciation) and the Group's equity ratio on an ongoing basis.
The Group's target is to have an equity ratio of 20% or more and maximum operational gearing of 3.5. At the end of 2009 the Group had an equity ratio of 38.9% (33.1% in 2008) and operational gearing of 0.4 (1.2 in 2008).
3.4 Sensitivity analysis
The Group has identified market risk (foreign exchange risk, primarily with respect to SEK, DKK, EUR, USD, LVL, LTL and EEK) and adjustable interest rate risk as the two most important risk factors it is exposed to. The tables below illustrate how fluctuations in these two risks will affect the Group's earnings and equity after tax.
| Sensitivity analysis 2009 – MNOK | Interest rate risk | Foreign currency risk | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Amount affected | + 200 bp 1) | - 200 bp 1) | Amount affected | + 10% | - 10% | ||||
| Effect on profit/ loss | Other effects on equity | Effect on profit/ loss | Other effects on equity | Effect on profit/ loss | Other effects on equity | Effect on profit/ loss | |||
| Financial assets 2) | |||||||||
| - NOK | -235,7 | -4,7 | - | 4,7 | - | -45,9 | -4,6 | - | 4,6 |
| - SEK | 556,6 | 11,1 | - | -11,1 | - | 606,5 | 0,5 | 60,2 | -0,5 |
| - DKK | -134,5 | -2,7 | - | 2,7 | - | 961,8 | -4,2 | 100,4 | 4,2 |
| - EUR | -34,6 | -0,7 | - | 0,7 | - | 247,7 | 2,2 | 22,5 | -2,2 |
| - USD | 22,3 | 0,4 | - | -0,4 | - | 65,2 | 6,5 | - | -6,5 |
| - LTL | 18,0 | 0,4 | - | -0,4 | - | - | - | - | - |
| - LVL | 1,9 | 0,0 | - | -0,0 | - | - | - | - | - |
| - EEK | 1,6 | 0,0 | - | -0,0 | - | - | - | - | - |
| Effect on financial assets before taxes | 3,9 | - | -3,9 | - | 0,4 | 183,1 | -0,4 | ||
| Tax rate (28%) | -1,1 | - | 1,1 | - | -0,1 | -51,3 | 0,1 | ||
| Effect on financial assets after taxes | 2,8 | - | -2,8 | - | 0,3 | 131,8 | -0,3 | ||
| Financial liability items 3) | |||||||||
| - NOK | 88,4 | -1,8 | - | 1,8 | - | - | - | - | - |
| - SEK | 287,7 | -5,8 | - | 5,8 | - | - | - | - | - |
| - DKK | 7,7 | -0,2 | - | 0,2 | - | - | - | - | - |
| - EUR | 22,0 | -0,4 | - | 0,4 | - | - | - | - | - |
| - LTL | 6,6 | -0,1 | - | 0,1 | - | - | - | - | - |
| - LVL | 4,3 | -0,1 | - | 0,1 | - | - | - | - | - |
| - EEK | 0,5 | -0,0 | - | 0,0 | - | - | - | - | - |
| Effect on financial liability items before taxes | -8,3 | - | 8,3 | - | - | - | - | ||
| Tax rate (28%) | 2,3 | - | -2,3 | - | - | - | - | ||
| Effect on financial liability items after taxes | -6,0 | - | 6,0 | - | - | - | - | ||
| Total increase/reduction | -3,2 | - | 3,2 | - | 0,3 | 131,8 | -0,3 |
1) Basis points
2) Consist of cash and cash equivalents, loans and derivative contracts (forward currency contracts)
3) Consist of liabilities and derivative contracts (forward currency contracts)
Financial statements and notes
Atea Annual Report 2009
Sensitivity analysis 2008 – MNOK
Interest rate risk
Foreign currency risk
| Amount affected | + 200 bp 1) | - 200 bp 1) | Amount affected | + 10% | - 10% | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Effect on profit/ loss | Other effects on equity | Effect on profit/ loss | Other effects on equity | Effect on profit/ loss | Other effects on equity | Effect on profit/ loss | Other effects on equity | |||
| Financial assets 2) | ||||||||||
| - NOK | -278,5 | -5,6 | - | 5,6 | - | - | - | - | - | - |
| - SEK | 439,2 | 8,8 | - | -8,8 | - | 732,2 | 6,0 | 67,2 | -6,0 | -67,2 |
| - DKK | 302,3 | 6,0 | - | -6,0 | - | 1 339,0 | 15,0 | 118,9 | -15,0 | -118,9 |
| - EUR | 10,3 | 0,2 | - | -0,2 | - | 329,5 | 2,5 | 26,7 | -2,5 | -26,7 |
| - USD | 11,2 | 0,2 | - | -0,2 | - | 11,2 | 1,1 | - | -1,1 | - |
| - LTL | 77,0 | 1,5 | - | -1,5 | - | - | - | - | - | - |
| - LVL | 6,4 | 0,1 | - | -0,1 | - | - | - | - | - | - |
| - EEK | 1,8 | 0,0 | - | -0,0 | - | - | - | - | - | - |
| Effect on financial assets before taxes | 11,4 | - | -11,4 | - | 24,6 | 212,8 | -24,6 | -212,8 | ||
| Tax rate (28%) | -3,2 | - | 3,2 | - | -6,9 | -59,6 | 6,9 | 59,6 | ||
| Effect on financial assets after taxes | 8,2 | - | -8,2 | - | 17,7 | 153,2 | -17,7 | -153,2 | ||
| Financial liability items 3) | ||||||||||
| - NOK | 546,5 | -10,9 | - | 10,9 | - | 1,4 | 0,1 | - | -0,1 | - |
| - SEK | 319,7 | -6,4 | - | 6,4 | - | - | - | - | - | - |
| - DKK | 324,1 | -6,5 | - | 6,5 | - | -5,0 | -0,5 | - | 0,5 | - |
| - EUR | 40,4 | -0,8 | - | 0,8 | - | - | - | - | - | - |
| - LTL | 11,1 | -0,2 | - | 0,2 | - | - | - | - | - | - |
| Effect on financial liability items before taxes | -24,8 | - | 24,8 | - | -0,4 | - | 0,4 | - | ||
| Tax rate (28%) | 7,0 | - | -7,0 | - | 0,1 | - | -0,1 | - | ||
| Effect on financial liability items after taxes | -17,9 | - | 17,9 | - | -0,3 | - | 0,3 | - | ||
| Total increase/reduction | -9,7 | - | 9,7 | - | 17,5 | 153,2 | -17,5 | -153,2 |
1) Basis points
2) Consist of cash and cash equivalents, loans and derivative contracts (forward currency contracts)
3) Consist of liabilities and derivative contracts (forward currency contracts)
Note 4 Critical estimates and judgements in applying the entity's accounting policy
When applying the entity's accounting policies the management make judgements that have significant effects on the amounts recognised in the financial statements.
Estimates and valuations are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual results can differ from estimates.
The main estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are specified below. Important and critical judgements in applying the entity's accounting policies are also specified.
Uncertainties related to estimates of provisions are described in Note 18, including provisions for restructuring.
Valuation of goodwill/intangible assets and other fixed assets
The most important estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are related to impairment assessment of goodwill and other fixed assets. The book value of goodwill as of 31 December 2009 is MNOK 2,324.3, other intangible assets is
MNOK 230.9, and property, plant and equipment is MNOK 115.1. The management has used best estimates when determining the depreciation period for intangible assets and other depreciable assets.
Goodwill has an undefined useful life and is tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The assessment of impairment for 2009 indicates that even with the use of conservative estimates with regard to future cash flows and discount rates, the book value of any of the assets will not exceed the recoverable amounts. These assessments have been made in light of the scope of the effect we can see that the macroeconomic recovery will have on future cash flows.
Recoverable amounts of cash-generating units are determined based on judgements of fair values less costs to sell or value-in-use estimates.
Deferred tax
The recognition of deferred tax assets and liabilities requires that judgement be exercised. Atea recognises deferred tax assets on its balance sheet when it has been deemed adequately probable that the operations in the individual country will generate a taxable profit that the tax loss carryforward can be used to offset. Taking into account the historical losses and cyclical nature, future earnings are not deemed probable until the individual company has actually reported
Financial statements and notes
Atea Annual Report 2008
a taxable profit for a period. In calculating the tax asset that is to be recognised, the expected profit is only taken into account for a limited future period. At the end of 2009 deferred tax assets and liabilities of MNOK 318.0 and MNOK 73.4, respectively, were recognised.
Revenue recognition
The group uses the percentage-of-completion method in accounting for fixed-price projects and service contracts. Use of the percentage-of-completion method requires the Group to estimate the services performed to date as a proportion of the total services to be performed.
Trade receivables
There is no concentration of credit risk with respect to trade receivables, as the group has a large number of customers spread across several countries.
Note 5 Segment information
I – Geographic markets
Atea’s primary reporting format is geographic markets. Atea had operations in Norway, Sweden, Denmark, Finland and the Baltic States in 2009. Other activities include common/group functions. The geographic division is in conformity with the group’s legal organisation and the internal management reporting. Thus the distribution of revenue, expenses, assets and liabilities to different countries follows the group’s legal structure. Below is an allocation of key figures to the different countries. The financial items in the various countries include large intercompany balances. Financial items and interest-bearing liabilities have thus not been allocated to the countries.
Norway delivered operating revenues of MNOK 3,566.3 for the full year 2009, up by 1.7% from the previous year. EBIT totalled MNOK 95.3 (2.7%), compared with MNOK 135.8 (3.9%) for the full year 2008. Uni Networks was acquired in December. Uni Networks specialises in the provision of wireless and cable infrastructure, as well as modern, environment-friendly computer rooms.
Sweden delivered operating revenues of MNOK 3,965.9 for the full year 2009, down by 7.4% from the previous year. EBIT totalled MNOK 115.3 (2.9%), compared with MNOK 141.7 (3.3%) for the full year 2008.
Denmark delivered operating revenues of MNOK 5,259.6 for the full year 2009, up by 3.3% from the previous year with a reduction in constant currency of 2.8%. EBIT totalled MNOK 175.8 (3.3%), compared with MNOK 148.6 (2.9%) for the full year 2008. Atea A/S acquired the outsourcing and hosting activities of Mondo Hosting A/S in June. In August Atea A/S acquired all the shares in the Danish IP monitoring company AC Sikring A/S. In December Atea A/S entered into an agreement for the transfer of software operations from Aprismo A/S. All the shares in the Danish video conferencing and AV company Calamus Danmark A/S will be acquired as of 5 January 2010.
Finland delivered operating revenues of MNOK 1,501.4 for the full year 2009, up by 34.1% from the previous year. EBIT totalled MNOK -0.5 (0.0%), compared with MNOK -7.0 (-0.5%) for the full year 2008. In October Atea Oy entered into an agreement to acquire all the shares in A Communications Oy.
The Baltics delivered operating revenues of MNOK 299.5 for the full year 2009, down by 34.1% from the previous year. EBIT totalled MNOK -0.1 (0.0%), compared with MNOK 12.6 (2.8%) for the full year 2008.
Atea Logistics and Atea Service Center consists of Atea Logistics in Växjö in Sweden and the software packaging and distribution centre in Riga in Latvia. Logistics delivered operating revenues of MNOK 2,437.8 for the full year 2009, down by 1.8% from the previous year. EBIT totalled MNOK 16.3 (0.7%), compared with MNOK -5.2 (-0.2%) for the full year 2008.
Other/elim, consists of group expenses and eliminations.
| 2009 | ||||||||
|---|---|---|---|---|---|---|---|---|
| (Amounts in MNOK) | Norway | Sweden | Denmark | Finland | The Baltics | Atea Service Center & Logistics | Other/ eliminations | Total |
| Operating revenues | 3 566,3 | 3 965,9 | 5 259,6 | 1 501,4 | 299,5 | 2 437,8 | -2 441,9 | 14 588,6 |
| Operating expenses, excl. depreciation and unusual items | 3 435,4 | 3 834,2 | 4 996,8 | 1 488,9 | 289,9 | 2 415,7 | -2 406,1 | 14 054,9 |
| Non-Core | - | - | - | - | - | - | 32,3 | 32,3 |
| Depreciation | 35,6 | 16,3 | 87,0 | 13,0 | 9,6 | 5,8 | - | 167,3 |
| Operating profit/loss | 95,3 | 115,3 | 175,8 | -0,5 | -0,1 | 16,3 | -68,1 | 334,1 |
| Net financial items | -55,0 | |||||||
| Profit/loss before taxes from continued operations | 95,3 | 115,3 | 175,8 | -0,5 | -0,1 | 16,3 | -68,1 | 279,1 |
| Minority interests | 0,4 | 0,3 | 0,1 | -0,0 | -0,6 | - | - | 0,2 |
| Profit/loss before taxes | 279,0 | |||||||
| Employees in continued operations as of 31 December | 887 | 1 335 | 1 300 | 332 | 319 | 198 | 9 | 4 380 |
Financial statements and notes
Atea Annual Report 2009
2008
| (Amounts in MNOK) | Norway | Sweden | Denmark | Finland | The Baltics | Atea Service Center & Logistics | Other/ elimina- tions | Total |
|---|---|---|---|---|---|---|---|---|
| Operating revenues | 3 507,0 | 4 284,2 | 5 090,9 | 1 440,2 | 454,4 | 2 483,6 | -2 492,4 | 14 767,8 |
| Operating expenses, excl. depreciation and unusual items | 3 342,4 | 4 123,8 | 4 872,5 | 1 441,0 | 434,0 | 2 480,3 | -2 467,2 | 14 226,8 |
| Depreciation | 28,8 | 18,8 | 69,7 | 6,1 | 7,7 | 8,4 | - | 139,5 |
| Operating profit/loss | 135,8 | 141,7 | 148,6 | -7,0 | 12,6 | -5,2 | -25,2 | 401,4 |
| Net financial items | -66,7 | |||||||
| Profit/loss before taxes from continued operations | 135,8 | 141,7 | 148,6 | -7,0 | 12,6 | -5,2 | -25,2 | 334,7 |
| Minority interests | 0,1 | 0,1 | 0,2 | -0,0 | 1,2 | - | - | 1,6 |
| Profit/loss before taxes | 333,1 | |||||||
| Employees in continued operations as of 31 December | 922 | 1 375 | 1 371 | 301 | 386 | 205 | 11 | 4 571 |
2007
| (Amounts in MNOK) | Norway | Sweden | Denmark | Finland | The Baltics | Atea Service Center & Logistics | Other/ elimina- tions | Total |
|---|---|---|---|---|---|---|---|---|
| Operating revenues | 3 074,1 | 4 096,6 | 4 643,0 | 1 446,6 | 2 510,4 | -2 560,4 | 13 210,3 | |
| Operating expenses, excl. depreciation and unusual items | 2 895,8 | 3 987,6 | 4 448,9 | 1 432,8 | 2 490,3 | -2 536,5 | 12 718,9 | |
| Depreciation | 20,7 | 19,7 | 51,5 | 4,9 | 6,4 | - | 103,2 | |
| Operating profit/loss | 157,6 | 89,4 | 142,6 | 8,9 | 13,8 | -24,0 | 388,2 | |
| Net financial items | -48,6 | |||||||
| Profit/loss before taxes from continued operations | 157,6 | 89,4 | 142,6 | 8,9 | 13,8 | -24,0 | 339,6 | |
| Profit/loss from discontinued operations | - | - | -4,8 | - | - | - | -4,8 | |
| Minority interests | - | - | - | - | - | - | - | |
| Profit/loss before taxes | 334,8 | |||||||
| Employees in continued operations as of 31 December | 757 | 1 177 | 1 192 | 278 | 195 | 9 | 3 608 |
- Comparative figures for 2007 have been restated as a result of the allocation of group expenses to the segments.
2009
| (Amounts in MNOK) | Norway | Sweden | Denmark | Finland | The Baltics | Atea Service Center & Logistics | Other/ elimina- tions | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | 2 236,2 | 2 124,3 | 2 885,1 | 443,5 | 297,0 | 426,4 | -1 257,0 | 7 155,5 |
| Liabilities | 857,0 | 1 994,3 | 2 604,5 | 597,9 | 138,9 | 261,4 | -2 111,6 | 4 342,4 |
| Investment expenses | 26,2 | 1,2 | 85,5 | 12,1 | 3,4 | 7,3 | - | 135,7 |
Financial statements and notes
Atea Annual Report 2008
2008
| (Amounts in MNOK) | Norway | Sweden | Denmark | Finland | The Baltics | Atea Service Center & Logistics | Other/ elimina-tions | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | 2 520,4 | 2 297,1 | 3 321,3 | 503,6 | 391,1 | 379,2 | -1 130,6 | 8 282,1 |
| Liabilities | 1 309,0 | 2 228,9 | 3 178,1 | 659,0 | 205,9 | 212,6 | -2 365,5 | 5 428,1 |
| Investment expenses | 31,0 | 5,1 | 81,8 | 12,4 | 17,6 | 3,3 | - | 151,3 |
2007
| (Amounts in MNOK) | Norway | Sweden | Denmark | Finland | The Baltics | Atea Service Center & Logistics | Other/ elimina-tions | Total |
|---|---|---|---|---|---|---|---|---|
| Assets * | 2 100,3 | 1 900,3 | 2 757,6 | 610,2 | 511,4 | -1 158,9 | 6 720,9 | |
| Liabilities * | 1 158,5 | 1 917,8 | 2 937,9 | 701,7 | 353,4 | -2 449,0 | 4 620,3 | |
| Investment expenses | 5,1 | 7,2 | 101,4 | 8,7 | 8,2 | 1,8 | 132,4 |
- Comparative figures for 2007 have been restated as a result of the allocation of group expenses to the segments.
II - Business areas
Atea's secondary reporting format is the business areas distributor and resale. The distribution units in the Atea Group are Atea Logistics in Sweden and the Software Packaging and Distribution Centre in Latvia. The units for resale are all the other sales and delivery units in the five countries.
Below is an allocation of key figures to the business areas:
| Operating revenues
(Amounts in MNOK) | 2009 | 2008 | 2007 |
| --- | --- | --- | --- |
| Distributor | 2 437,8 | 2 483,6 | 2 510,4 |
| Resale | 14 592,6 | 14 776,6 | 13 260,4 |
| Group/eliminations * | -2 441,9 | -2 492,4 | -2 560,4 |
| Total | 14 588,6 | 14 767,8 | 13 210,3 |
| Assets
(Amounts in MNOK) | 2009 | 2008 | 2007 |
| Distributor | 426,4 | 379,2 | 511,4 |
| Resale | 7 986,1 | 9 033,5 | 7 368,4 |
| Group/eliminations * | -1 257,0 | -1 130,6 | -1 158,9 |
| Total | 7 155,5 | 8 282,1 | 6 720,8 |
Total assets are allocated based on where the assets are located.
| Investments
(Amounts in MNOK) | 2009 | 2008 | 2007 |
| --- | --- | --- | --- |
| Distributor | 7,3 | 3,3 | 8,2 |
| Resale | 128,4 | 148,0 | 122,4 |
| Group/eliminations | - | - | - |
| Total | 135,7 | 151,3 | 130,6 |
- Comparative figures for 2007 have been restated as a result of the allocation of group expenses to the segments.
Financial statements and notes
Atea Annual Report 2009
III - Analysis of operating revenues by category
| (Amounts in MNOK) | 2009 | 2008 | 2007 |
|---|---|---|---|
| Consulting and services revenues | 3 121,4 | 2 932,7 | 2 173,6 |
| Product revenues | 13 975,2 | 14 426,6 | 13 634,1 |
| Eliminations * | -2 508,0 | -2 591,5 | -2 597,3 |
| Total operating revenues | 14 588,6 | 14 767,8 | 13 210,3 |
- Comparative figures for 2007 have been restated as a result of the allocation of group expenses to the segments.
Note 6 Discontinued operations
Below is a summary of transactions reported as discontinued operations in the past two years. The net profit from these businesses is presented on a separate line in the income statement.
2009
No discontinued operations were reported in 2009.
2008
No discontinued operations were reported in 2008.
Note 7 Property, plant and equipment
| (Amounts in MNOK) | Buildings & property | Vehicles & office machines | Furniture & fittings | Computer equipment | Total |
|---|---|---|---|---|---|
| Acquisitions | |||||
| Accumulated amount as of 1 January 2008 | 5,8 | 42,7 | 125,4 | 207,3 | 381,3 |
| Additions | - | ||||
| Ordinary | 0,4 | 10,8 | 18,2 | 57,1 | 86,6 |
| Business combinations (see Note 26) | 3,3 | 3,0 | 1,0 | 7,5 | 14,7 |
| Disposals 1) | -5,2 | -4,2 | -15,6 | -31,4 | -56,3 |
| Currency translation differences | 0,7 | 11,1 | 11,3 | 34,3 | 57,4 |
| Accumulated amount as of 31 December 2008 | 5,0 | 63,5 | 140,3 | 275,0 | 483,7 |
| Additions | |||||
| Ordinary | 0,6 | 5,1 | 6,1 | 25,3 | 37,0 |
| Change from prior years | -1,2 | 10,4 | -0,6 | 1,4 | 10,1 |
| Business combinations (see Note 26) | - | 3,9 | 0,3 | 4,7 | 8,9 |
| Disposals 1) | - | -2,9 | -4,5 | -5,7 | -13,1 |
| Currency translation differences | -0,6 | -9,9 | -12,4 | -38,0 | -60,9 |
| Accumulated amount as of 31 December 2009 | 3,8 | 70,0 | 129,1 | 262,7 | 465,7 |
| Depreciation and write-downs | |||||
| Accumulated amount as of 1 January 2008 | -0,3 | -24,9 | -102,5 | -150,1 | -277,8 |
| Disposals 1) | 0,4 | 0,9 | 13,4 | 28,8 | 43,5 |
| Depreciation | -0,2 | -8,4 | -10,4 | -41,8 | -60,9 |
| Currency translation differences | -0,0 | -5,6 | -9,3 | -25,1 | -40,0 |
| Accumulated amount as of 31 December 2008 | -0,2 | -37,9 | -108,8 | -188,2 | -335,2 |
| Change from prior years | -0,4 | -9,1 | 0,2 | -1,0 | -10,2 |
| Disposals 1) | - | 1,8 | 3,7 | 5,3 | 10,9 |
| Depreciation | 0,2 | -8,4 | -9,8 | -39,8 | -57,7 |
| Currency translation differences | -0,4 | 5,8 | 10,2 | 26,1 | 41,6 |
| Accumulated amount as of 31 December 2009 | -0,7 | -47,9 | -104,5 | -197,5 | -350,6 |
| Cost | 5,0 | 63,5 | 140,3 | 274,9 | 483,7 |
| Depreciation and write-downs | -0,2 | -37,9 | -108,8 | -188,2 | -335,2 |
| Book amount as of 31 December 2008 | 4,9 | 25,5 | 31,4 | 86,6 | 148,5 |
| Cost | 3,8 | 70,0 | 129,1 | 262,7 | 465,7 |
| Depreciation and write-downs | -0,7 | -47,9 | -104,5 | -197,5 | -350,6 |
| Book amount as of 31 December 2009 | 3,1 | 22,2 | 24,7 | 65,1 | 115,1 |
1) Gain/loss related to the retirement property, plant and equipment accounted for substantial amounts in 2007, 2008 and 2009.
Financial statements and notes
Also Annual Report 2009
Financial leases:
Computer equipment includes the following amounts where the group is a lessee under a finance lease:
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Accumulated cost-capitalised financial leases | 66,6 | 65,6 |
| Accumulated depreciation | -61,4 | -60,5 |
| Currency translation differences | -0,7 | - |
| Book amount as of 31 December | 4,5 | 5,0 |
Vehicles includes the following amounts where the group is a lessee under a finance lease:
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Accumulated cost-capitalised financial leases | 12,9 | 8,1 |
| Accumulated depreciation | -5,1 | -3,6 |
| Currency translation differences | -0,5 | - |
| Book amount as of 31 December | 7,3 | 4,5 |
The maturity of the financial leases are presented in Note 14.
Operating leases:
The future minimum lease payments under non-cancellable operating leases are as follows:
| 2009 | Maturity within 1 year | 1-5 years | Maturity after more than 5 years |
|---|---|---|---|
| Payment for leased premises (gross) | 23,9 | 30,2 | - |
| Subleasing of premises | -0,2 | - | - |
| Net payments after deduction of subleasing | 23,6 | 30,2 | - |
| Other leases | 22,1 | 12,1 | - |
| Total future lease payments | 45,7 | 42,3 | - |
| 2008 | Maturity within 1 year | 1-5 years | Maturity after more than 5 years |
| --- | --- | --- | --- |
| Payment for leased premises (gross) | 94,3 | 306,0 | 11,8 |
| Subleasing of premises | 7,1 | 34,0 | - |
| Net payments after deduction of subleasing | 101,4 | 340,0 | 11,8 |
| Other leases | 47,8 | 72,3 | 0,5 |
| Total future lease payments | 149,2 | 412,3 | 12,3 |
Financial statements and notes
Alisa Annual Report 2009
Note 8 Goodwill and intangible assets
| (Amounts in MNOK) | Goodwill 1) | Contracts and customer relationships | Computer software and rights | Total other intangible assets |
|---|---|---|---|---|
| Acquisitions | ||||
| Accumulated value as of 1 January 2008 | 2 006,0 | 166,7 | 139,9 | 185,7 |
| Additions | ||||
| Ordinary | - | - | 64,7 | 64,7 |
| Changes from prior years | -7,9 | 7,8 | - | 7,8 |
| Business combinations (see Note 26) | 263,7 | 49,5 | 3,5 | 53,0 |
| Disposals 2) | -13,2 | - | -9,7 | -9,7 |
| Currency translation differences | 291,5 | 29,7 | 19,7 | 49,3 |
| Accumulated amount as of 31 December 2008 | 2 540,1 | 256,2 | 218,0 | 474,3 |
| Additions | ||||
| Ordinary | - | - | 98,7 | 98,7 |
| Changes from prior years | 15,5 | -10,9 | 17,7 | 6,8 |
| Business combinations (see Note 26) | 34,4 | 27,0 | 0,8 | 27,8 |
| Disposals | -0,3 | - | -0,3 | -0,3 |
| Currency translation differences | -265,4 | -30,1 | -24,8 | -54,9 |
| Accumulated amount as of 1 January 2009 | 2 324,3 | 242,3 | 310,0 | 552,4 |
| Depreciation and write-downs | ||||
| Accumulated amount as of 1 January 2008 | - | -55,1 | -65,9 | -121,0 |
| Disposals 2) | -0,1 | - | 9,0 | 9,0 |
| Depreciation | -0,0 | -58,1 | -39,1 | -97,2 |
| Currency translation differences | - | -9,4 | -7,9 | -17,3 |
| Accumulated amount as of 31 December 2008 | -0,1 | -122,6 | -103,8 | -226,4 |
| Changes from prior years | 0,0 | - | -17,3 | -17,3 |
| Disposals 2) | - | -0,8 | 0,0 | -0,8 |
| Depreciation | - | -54,9 | -48,8 | -103,7 |
| Currency translation differences | - | 15,2 | 11,6 | 26,8 |
| Accumulated amount as of 31 December 2009 | -0,0 | -163,1 | -158,3 | -321,4 |
| Cost | 2 540,1 | 256,3 | 218,0 | 474,3 |
| Accumulated depreciation and write-downs | -0,1 | -122,6 | -103,8 | -226,4 |
| Book amount as of 31 December 2008 | 2 540,0 | 133,7 | 114,2 | 247,9 |
| Cost | 2 324,3 | 242,2 | 310,0 | 552,2 |
| Accumulated depreciation and write-downs | -0,0 | -163,1 | -158,3 | -321,4 |
| Book amount as of 31 December 2009 | 2 324,3 | 79,2 | 151,7 | 230,9 |
1) Goodwill and other assets are allocated to the group's cash-generating units identified according to country of operation (segment). Recoverable amounts for cash generating units are estimated based on calculating the asset's value in use. Cash flow forecasts are used based on the budget for revenues, margin mix, gross margins, costs and capital employment costs for 2009, as well as year-over-year revenue growth of 0-4.3% *) depending on the geographical market for the period from 2010 to 2014. Cash flows beyond these five years are based on estimated growth rates (depending on the geographical area) of 2.0 to 3.5% for an indefinite period. Risk is taken into account through a discount rate that reflects the weighted average cost of capital (WACC) for the individual cash-generating units. The calculations did not result in any write-downs of assets in 2008 or 2009. It is assumed that the goodwill that arises from the acquisitions is related primarily to expectations of synergies (market power, buying power, cost savings, etc.) for the new combined business. It is also assumed that the remaining goodwill that arises is related to excess value (employee value etc.) in the acquired businesses. In order to realise synergies as soon as possible the acquired companies are generally integrated quickly into the acquiring units. It has not been found to be practically feasible to quantify the effect of the acquired companies on the profit for 2009 for the period of time they have been owned by Atea.
* Determined primarily by external market analyses
2) Gain/loss on the disposal of property, plant and equipment accounted for substantial amounts in 2008 and 2009.
Financial statements and notes
Atea Annual Report 2009
Note 9 Trade and other receivables
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Provisions for bad debts as of 1 January | -35,9 | -26,1 |
| Additional provisions | -6,1 | -14,4 |
| Used provisions | 8,1 | 0,8 |
| Amount written off as uncollectable | 1,1 | - |
| Amount collected during the year | 2,9 | 3,7 |
| Foreign exchange effect on bad debts | 3,6 | 0,2 |
| Provisions for bad debts as of 31 December | -26,4 | -35,9 |
| Trade receivables | 3 237,8 | 3 681,1 |
| Provisions for bad debts | -26,4 | -35,9 |
| Book value of trade receivables | 3 211,4 | 3 645,2 |
| Prepaid expenses | 188,3 | 226,3 |
| Advances to suppliers | 4,1 | 10,7 |
| Other current receivables | 117,5 | 181,1 |
| Other receivables | 310,0 | 418,2 |
| Total trade receivables and other current receivables | 3 521,4 | 4 063,4 |
| Other long-term receivables 1) | 66,0 | 59,4 |
| Foreign exchange effect on other long-term receivables | -10,3 | 14,2 |
| Total other long-term receivables | 55,7 | 73,6 |
1) Concerns postponed compensation for the sale of the consulting business in Denmark in 2006.
There is no concentration of credit risk with respect to trade receivables, as the group has a large number of customers spread across several countries. Maximum exposure to receivables corresponds to MNOK 3,211.4 (MNOK 3,645.2 in 2008).
The group has a maximum limit of MNOK 1,465.6 through a factoring agreement. As of 31 December 2009 the group has drawn a total of MNOK 167.2 from this facility. All trade receivables have been pledged as security for this facility. See Note 14 for additional information.
The group has recognised a write-down of MNOK 2.9 on trade receivables in the income statement for 2009 (MNOK 3.3 in 2008).
Regarding credit risk, see also note 3.1.2.
Maturity analysis for non-due trade receivables
| 2009 | 2008 | |
|---|---|---|
| Maturity < 30 days | 2 803,4 | 3 149,7 |
| Maturity 31-90 days | 55,4 | 63,8 |
| Maturity > 91 days | 0,3 | 4,1 |
| Total MNOK | 2 859,1 | 3 217,6 |
| Maturity analysis for overdue trade receivables | 2009 | 2008 |
| Maturity < 30 days | 325,6 | 342,2 |
| Maturity 31-90 days | 23,2 | 90,9 |
| Maturity > 91 days | 30,0 | 30,3 |
| Total MNOK | 378,7 | 463,5 |
Financial statements and notes
Alisa Annual Report 2009
Note 10 Inventories
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Provisions for write-downs as of 1 January | -6,0 | -4,2 |
| Additional provisions | -3,3 | -4,4 |
| Used provisions | 4,2 | 2,1 |
| Foreign exchange effect on inventories | 0,3 | 0,5 |
| Provisions for write-downs as of 31 December | -4,8 | -6,0 |
| Cost price of inventories | 373,6 | 400,9 |
| Accumulated provisions for write-downs | -4,8 | -6,0 |
| Book value as of 31 December | 368,7 | 394,9 |
| Cost price of spare parts inventory | 40,4 | 38,2 |
| Accumulated depreciation | -15,8 | -13,0 |
| Book value as of 31 December | 24,6 | 25,2 |
| Net inventory in the balance sheet | 393,4 | 420,1 |
Write-down of inventories and depreciation of spare parts inventory, recognised as an expense and included in cost of goods sold amounted to MNOK 10.3 (MNOK 18.6 in 2008 and MNOK 6.8 in 2007). Inventory of spare parts are written-down over the average length of service contracts. Cost of sales for the full year 2009 was MNOK 10,996.5.
Note 11 Liquidity reserve
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Cash and cash equivalents | ||
| Cash in hand and on deposit | 194,5 | 568,2 |
| - of which restricted funds | -0,6 | -23,8 |
| Unrestricted cash | 193,9 | 544,4 |
| Unutilised short-term borrowing facilities | 1 210,6 | 631,7 |
| Short-term overdraft facility | 132,0 | - |
| Liquidity reserve | 1 536,5 | 1 176,1 |
| Loan facilities | ||
| Short-term overdraft facility (see Note 14) | 132,0 | - |
| - of which utilised | - | - |
| Short-term loan facility (see Note 14) | 225,9 | 386,8 |
| - of which utilised | 225,9 | 386,8 |
| Factoring agreement (see Note 14) | 1 373,5 | 1 472,9 |
| - of which utilised | 162,9 | 841,2 |
Financial statements and notes
Also Annual Report 2009
Note 12 Paid-in equity, options, shareholders
| (Amounts in MNOK) | Number of shares | Share capital | Share premium | Total paid-in equity | Currency translation differences | Option programmes | Total Re-serves | ||
|---|---|---|---|---|---|---|---|---|---|
| Issued | Treasury shares | Issued | Treasury shares | ||||||
| As of 1 January 2008 | 95,5 | -1,0 | 955,3 | -10,0 | 598,1 | 1 543,4 | -18,4 | 28,2 | 9,8 |
| Employee share options, employee contributions | - | - | - | - | - | - | - | 10,2 | 10,2 |
| Change in treasury shares | - | -2,8 | - | -27,9 | - | -27,9 | - | - | - |
| Comprehensive income, foreign currency | - | - | - | - | - | - | 383,8 | - | 383,8 |
| As of 31 December 2008 | 95,5 | -3,8 | 955,3 | -37,9 | 598,1 | 1 515,5 | 365,4 | 38,4 | 403,8 |
| As of 1 January 2009 | 95,5 | -3,8 | 955,3 | -37,9 | 598,1 | 1 515,5 | 365,4 | 38,4 | 403,8 |
| Employee share options, employee contributions | - | - | - | - | - | - | - | 8,3 | 8,3 |
| Change in treasury shares | - | 0,9 | - | 8,9 | - | 8,9 | - | - | - |
| Comprehensive income, foreign currency | - | - | - | - | - | - | -369,1 | - | -369,1 |
| As of 31 December 2009 | 95,5 | -2,9 | 955,3 | -29,0 | 598,1 | 1 524,4 | -3,7 | 46,7 | 43,0 |
The total number of outstanding ordinary shares of Atea ASA as of 31 December 2009 was 95,527,022 shares with a nominal value of NOK 10 each (95,527,022 shares in 2008 and 95,527,022 in 2007).
Treasury shares
In 2009 Atea ASA sold 889,066 treasury shares at an average price of NOK 28.23 per share (purchased a net total of 2,788,325 treasury shares at an average price of NOK 25.07 per share in 2008. The purchase was made as part of the buyback programme approved by Atea ASA's General Meeting of 24 April 2008. The minimum and maximum price that may be paid for each share is NOK 10 (nominal value) and NOK 200, respectively, in accordance with the authorisation. The authorisation was valid for purchases made in 2008).
Share options
Share options have been allotted to the management and selected employees. Each share option allows for the subscription of one share in Atea ASA. The fair value of the options is calculated when they are allotted and expensed over the vesting period. A cost of MNOK 8.3 has been recognised as an expense in 2009 relating to the share option programmes (MNOK 10.2 in 2008 and MNOK 4.8 in 2007). In addition, employer's social security tax expenses of MNOK 8.3 were recognised in 2009 (MNOK -3.2 in 2008 and MNOK 5.4 in 2007).
Movement in outstanding options
| Weighted average exercise price in NOK per share 2009 | Number of options (in thousands) | Weighted average exercise price in NOK per share 2008 | Number of options (in thousands) | |
|---|---|---|---|---|
| As of 1 January | 28,35 | 4 129 | 31,50 | 2 786 |
| Allotted | 20,34 | 356 | 27,99 | 1 606 |
| Exercised | 27,41 | -573 | 30,46 | -29 |
| Lapsed/terminated | 44,31 | -38 | 29,01 | -234 |
| Rejected | - | - | - | - |
| Expired | 31,61 | -184 | - | - |
| As of 31 December | 27,15 | 3 690 | 28,35 | 4 129 |
| Of which fully vested | 3,41 | 356 | 30,08 | 1 938 |
Financial statements and notes
Atea Annual Report 2009
Expiry dates, issue dates and exercise prices for outstanding share options (in thousands) at the end of the year:
| Options | |||||
|---|---|---|---|---|---|
| Expiration date | Allotted to key employees | Allotment date | Exercise price in NOK per share | 2009 | 2008 |
| 31.05.2009 | 01.06.2006 | 28,40 | - | 1 201 | |
| 31.05.2009 | 06.11.2006 | 28,40 | - | 170 | |
| 31.05.2009 | 05.01.2007 | 32,00 | - | 637 | |
| 31.05.2009 | 22.02.2007 | 42,00 | - | 30 | |
| 31.12.2009 | 01.08.2005 | 13,79 | - | 100 | |
| 31.12.2009 | 01.08.2005 | 13,79 | 100 | - | |
| 31.12.2009 | 01.06.2006 | 28,40 | 1 086 | - | |
| 31.12.2009 | 06.11.2006 | 28,40 | 70 | - | |
| 31.12.2009 | 05.01.2007 | 32,00 | 358 | - | |
| 31.12.2009 | 22.02.2007 | 42,00 | 30 | - | |
| 31.05.2011 | 16.08.2007 | 43,50 | 145 | 185 | |
| 31.05.2011 | 07.03.2008 | 32,40 | 100 | 100 | |
| 31.05.2011 | 14.03.2008 | 32,80 | 150 | 150 | |
| 31.05.2011 | 01.04.2008 | 32,40 | - | 150 | |
| 31.05.2011 | 03.04.2008 | 32,40 | 175 | 175 | |
| 31.05.2011 | 20.08.2008 | 32,50 | 50 | 50 | |
| 30.11.2011 | 01.06.2006 | 25,00 | 17 | 25 | |
| 30.11.2011 | 16.08.2007 | 25,00 | 158 | 175 | |
| 30.11.2011 | 01.04.2008 | 20,00 | 100 | - | |
| 30.11.2011 | 30.04.2008 | 25,00 | 200 | 200 | |
| 30.11.2011 | 17.11.2008 | 19,20 | 518 | 581 | |
| 30.11.2011 | 17.11.2008 | 25,00 | 100 | 150 | |
| 30.11.2011 | 26.02.2008 | 36,50 | 33 | 50 | |
| 30.11.2011 | 01.04.2009 | 29,20 | 253 | - | |
| 30.11.2012 | 17.06.2009 | 25,00 | 36 | - | |
| 30.11.2012 | 06.11.2009 | 38,90 | 10 | - | |
| Total | 3 690 | 4 129 |
On 17 November 2008, 400,000 options with exercise prices between NOK 39.50 and 43.50 were repriced at an exercise price of NOK 25.00. The weighted average fair value of the repricing is NOK 2.39 per option. On 18 January 2009, 2,137,515 options expiring on 31 May 2009 were repriced to an expiration date of 31 December 2010. The weighted average fair value of the repricing is NOK 0.60 per option.
The conditions for the utilisation of the different share option programmes are set for each programme on an individual basis. The fair value of options allotted, using the Black-Scholes valuation model, was MNOK 1.2 in 2009 (MNOK 7.2 in 2008 and MNOK 13.5 in 2007).
Most important variables used in the calculations in 2009:
Share price at the allotment date
The share price is set equal to the market price at the allotment date (NOK 16.40-38.90).
Exercise price per option
As illustrated above.
Volatility
Volatility measured at the standard deviation of expected share price returns is based on statistical analysis of the share price performance. The expected volatility has been set, therefore, at 46.00%.
Option's duration
Up to 3.5 years.
Dividends
The prerequisites for the calculations made until 1 April 2009 do not assume the distribution of a dividend from Atea ASA in the years to come. The calculations made for options allotted on 17 June 2009 and 6 November 2009 assume a dividend of NOK 1.00 annually in the years to come.
Risk-free interest rate
Assumed risk-free interest rate is 2.00% - 3.09% (varies in relation to the duration and allotment date).
Financial statements and notes
Atea Annual Report 2009
Variables in the model for the allotment of options in 2009
| Weighted average share price at the time of allotment | 17,9 |
|---|---|
| Weighted average exercise price | 20,34 |
| Weighted average fair value | 3,41 |
| Weighted average volatility | 46% |
| Weighted average risk-free interest rate | 2,24% |
| Weighted average expected life (years) | 1,71 |
Principal shareholders
Shareholders with a stake of 1% or more of total outstanding shares as of 31 December 2009:
| Shareholders | Shares | % |
|---|---|---|
| CONSOLIDATED HOLDING AS | 24 333 490 | 25,47% |
| DANSKE BANK A/S | 6 029 828 | 6,31% |
| STATE STREET BANK & TRUST CO. | 4 340 594 | 4,54% |
| ATEA ASA | 2 899 169 | 3,03% |
| GOLDMAN SACHS INT. - EQUITY - | 2 821 619 | 2,95% |
| BANK OF NEW YORK MELLON | 1 983 344 | 2,08% |
| ALFRED BERG BAMBAK | 1 337 000 | 1,40% |
| VPF NORDEA KAPITAL | 1 275 420 | 1,34% |
| NORDEA BANK DENMARK AS | 1 070 788 | 1,12% |
| VPF NORDEA AVKASTNING | 1 066 800 | 1,12% |
| SKANDINAVISKA ENSKILDA BANKEN AB | 1 000 000 | 1,05% |
| JPMORGAN CHASE BANK | 957 873 | 1,00% |
| OTHERS | 46 411 097 | 48,58% |
| Total number of shares | 95 527 022 | 100,00% |
Shares and options owned by key employees are board members as of 31 December 2009:
| Shares 1) | Options | Maturity date for share options | |
|---|---|---|---|
| Key employees in the Group | |||
| Claus Hougesen | President and CEO of Atea ASA | 531 490 | 240 000 |
| Rune Falstad | Executive Vice President and CFO of Atea ASA | 11 500 | 250 000 |
| Jesper Mathiasen | Director of business development at Atea ASA | 4 300 | 175 000 |
| Peter Trans | Managing Director of Atea A/S (Denmark) | 397 494 | 200 000 |
| Juha Sihvonen | Managing Director of Atea Oy (Finland) | - | 150 000 |
| Lars Pettersson | Managing Director of Atea AB (Sweden) | 3 000 | 136 667 |
| Steinar Sønsteby | Managing Director of Atea AS (Norway) | 1 500 | 200 000 |
| Arunas Bartusevicius | Managing Director of UAB Atea (The Baltics) | - | 100 000 |
Board members of Atea ASA
| Ib Kunoe | Board Chairman | 28 756 190 | - |
|---|---|---|---|
| Cathrine Foss Stene | Member of the Board | - | - |
| Kristine Markusson Madsen | Member of the Board | - | - |
| Sven Madsen | Member of the Board | 117 500 | - |
| Sigrun Ingrid Hjelmqvist | Member of the Board | 1 000 | - |
| Truls Berntsen 2) | Member of the Board (employee elected) | - | - |
| Karin S. Løkke | Member of the Board (employee elected) | 3 700 | - |
| Marthe Dyrud 2) | Member of the Board (employee elected) | 1 500 | 3 334 |
| Jørn Goldstein | Member of the Board (employee elected) | 500 | - |
1) Direct and indirect ownership.
2) Marthe Dyrud was elected as a new employee representative on 7 December 2009. She replaced Truls Berntsen.
Financial statements and notes
Atea Annual Report 2009
Change for the year and explanation of the share options owned by key employees in the group are as follow:
| Number of share options as of 1 January 2009 | Number of share options allotted in 2009 | Number of share options exercised in 2009 | Number of share options as of 31 December 2009 | Exercise price for the share options (NOK) | |
|---|---|---|---|---|---|
| Claus Hougesen 1) | 240 | - | - | 240 | 28,40 |
| Rune Falstad 2) | 250 | - | - | 250 | 13,79 / 32,40 |
| Jesper Mathiasen 3) | 175 | - | - | 175 | 43,50 / 19,20 |
| Peter Trans 1) | 200 | - | - | 200 | 28,40 |
| Lars Pettersson 4) | 270 | - | 133 | 137 | 28,40 / 19,20 |
| Juha Sihvonen 5) | 150 | - | - | 150 | 32,80 |
| Steinar Sønsteby 1) | 200 | - | - | 200 | 28,40 |
| Arunas Bartusevicius 6) | 100 | - | - | 100 | 32,40 |
1) All options are exercisable as of 31 December 2009.
2) 200,000 options are exercisable as of 31 December 2009.
3) 141,666 options are exercisable as of 31 December 2009.
4) 70,000 options are exercisable as of 31 December 2009.
5) 100,000 options are exercisable as of 31 December 2009.
6) 66,666 options are exercisable as of 31 December 2009.
Note 13 Trade payables and other current liabilities
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Trade payables | 2 162,2 | 2 244,9 |
| Total trade payables | 2 162,2 | 2 244,9 |
| Government withholdings and taxes | 347,2 | 350,8 |
| Advances from customers | 432,4 | 398,1 |
| Accrued expenses and other current liabilities | 731,9 | 826,3 |
| Total other current liabilities | 1 511,5 | 1 575,2 |
| Total trade payables and other current liabilities | 3 673,7 | 3 820,1 |
| Maturity analysis for trade payables | 2009 | 2008 |
| Maturity < 30 days | 2 066,5 | 2 080,9 |
| Maturity 31-90 days | 95,2 | 162,5 |
| Maturity > 91 days | 0,5 | 1,5 |
| Total MNOK | 2 162,2 | 2 244,9 |
Note 14 Borrowings
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Long-term loans | ||
| Long-term interest-bearing loans | 7,1 | 6,4 |
| Financial leases expiring more than one year in the future | 5,3 | 9,0 |
| Total long-term loans | 12,4 | 15,4 |
| Short-term loans | ||
| Short-term loan facility | 225,9 | 386,8 |
| Factoring facility | 162,9 | 841,2 |
| Short-term interest-bearing loans | 4,3 | 11,1 |
| First year instalments for financial leases | 10,8 | 5,0 |
| Total short-term loans | 403,9 | 1 244,1 |
| Total loans | 416,3 | 1 259,5 |
Financial statements and notes
Also Annual Report 2009
Total borrowings include secured liabilities of MNOK 393.1 in 2009 (MNOK 1,228.0 in 2008).
Short-term loan facility
As of 31 December 2009, the Group had drawn MNOK 225.9 on a short term facility provided by Nordea Bank Danmark A/S. The facility was structured as an overdraft facility that was used to finance the purchase of the shares in Atea Holding AB in 2006, as well as the purchase of shares in UAB Sonex in 2008. Amounts drawn on the facility are classified as short-term debt.
Factoring facility
The group has a factoring facility agreement with Nordea Finans in Norway, Sweden, Finland and Denmark for the factoring of the receivables in the Group. The Group can borrow up to a maximum of 80% of the outstanding trade receivables through this agreement. In 2008 the factoring limit in Norway was raised from MNOK 250 to MNOK 350 and as of 31 December 2009 the factoring limit for the Group as a whole was MNOK 1,465.6. The actual drawdown available based on this agreement is based on the size of the trade receivables. As at 31 December 2009 the total drawdown available under this facility was MNOK 1,373.5, and MNOK 162.9 of this had been utilised. Drawings on the facility are classified as short-term debt.
All trade receivables in Atea AS, Atea Sverige AB, Atea Finland Oy and Atea A/S are pledged as security for the facility. The facility has standard terms and conditions for this type of financing.
Overdraft facility
The Group has an overdraft facility of MNOK 132.0 provided by Nordea Bank Norge ASA. None of this facility had been utilised as at 31 December 2009. Amounts drawn on this facility are classified as short-term debt.
Atea ASA's shares in Atea Danmark Holding A/S, Atea AS, Atea Holding AB and Atea Finland Holding OY have been pledged as security for the short-term loan facility, factoring facilities and overdraft facility. Atea Danmark Holding A/S, Atea A/S, Atea AS, Atea Holding AB, Atea Sverige AB, Atea Finland Holding OY and Atea Finland OY have also furnished a guarantee as security for the loan facilities. The facilities have standard terms and conditions.
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| 6 months or less | 398,5 | 1 241,6 |
| 6-12 months | 5,4 | 2,5 |
| 1-5 years | 12,4 | 15,4 |
| Total | 416,3 | 1 259,5 |
| Interest on the date of the balance sheet was as follows: | 2009 | 2008 |
| Long-term interest-bearing loans | 1,6 % | 3,5 % |
| Payments after 2009 for financial leases | 2,4 % | 4,6 % |
| Short-term loan facility | 3,6 % | 5,3 % |
| Factoring facility | 2,4 % | 4,7 % |
| Short-term interest-bearing loans | 1,9 % | 3,8 % |
| First year instalments for financial leases | 2,4 % | 4,6 % |
| Average interest rate | 3,1 % | 5,8 % |
| Maturity analysis for loans 2009 - MNOK 1) | Less than | |
| --- | --- | --- |
| 1 month | 1-3 months | |
| Financial leases | 3,6 | 3,6 |
| Short-term loan facility | - | - |
| Factoring facility | - | 163,9 |
| Other interest-bearing loans | - | - |
| Total | 3,6 | 167,5 |
1) Includes interest payable
| Maturity analysis for loans 2008 - MNOK 1) | Less than 1 month | 1-3 months | 3 months to 1 year | 1-5 years | Total |
|---|---|---|---|---|---|
| Financial leases | 1,7 | 1,7 | 1,7 | 10,3 | 15,4 |
| Short-term loan facility | - | - | 407,4 | - | 407,4 |
| Factoring facility | - | 850,8 | - | - | 850,8 |
| Other interest-bearing loans | - | - | 11,6 | 7,1 | 18,7 |
| Total | 1,7 | 852,5 | 420,7 | 17,4 | 1 292,3 |
1) Includes interest payable
Financial statements and notes
Atea Annual Report 2009
Note 15 Classification of financial instruments
| 2009 - MNOK | Loans and receivables | Amortised cost | Fair value 1) |
|---|---|---|---|
| Financial assets | |||
| Trade receivables | 3 211,4 | 3 211,4 | |
| Other receivables 2) | 117,3 | 117,3 | |
| Derivative contracts | 1,0 | 1,0 | |
| Cash and cash equivalents | 194,5 | 194,5 | |
| Financial liabilities | |||
| Interest-bearing long-term liabilities | 12,4 | 12,4 | |
| Other long-term liabilities 3) | 22,9 | 21,4 | |
| Trade payables | 2 162,2 | 2 162,2 | |
| Interest-bearing current liabilities | 403,9 | 403,9 | |
| Derivative contracts | 0,6 | 0,6 | |
| Other current liabilities 4) | 1 264,9 | 1 264,9 |
1) Book value is a reasonable estimate of fair value in cases where these numbers are identical.
2) Less prepaid expenses
3) Interest not charged, discounted amortised cost at 3M NIBOR as of 31 December 2009 assuming an average repayment period of 2 years
4) Less provisions for restructuring and other provisions
| 2008 - MNOK | Loans and receivables | Amortised cost | Fair value 1) |
|---|---|---|---|
| Financial assets | |||
| Trade receivables | 3 645,2 | 3 645,2 | |
| Other receivables 2) | 182,8 | 182,8 | |
| Derivative contracts | 3,2 | 3,2 | |
| Cash and cash equivalents | 568,2 | 568,2 | |
| Financial liabilities | |||
| Interest-bearing long-term liabilities | 15,4 | 15,4 | |
| Other long-term liabilities 3) | 47,5 | 43,7 | |
| Trade payables | 2 244,9 | 2 244,9 | |
| Interest-bearing current liabilities | 1 244,1 | 1 244,1 | |
| Derivative contracts | 5,1 | 5,1 | |
| Other current liabilities 4) | 1 343,0 | 1 343,0 |
1) Book value is a reasonable estimate of fair value in cases where these numbers are identical.
2) Less prepaid expenses
3) Interest not charged, discounted amortised cost at 3M NIBOR as of 31 December 2008 assuming an average repayment period of 2 years
4) Less provisions for restructuring and other provisions
Financial statements and notes
Also Annual Report 2009
Note 16 Taxes
Specification of income tax expenses
(Amounts in MNOK)
| 2009 | 2008 | |
|---|---|---|
| Tax payable | 14,6 | 9,8 |
| Change in deferred tax | -117,9 | -107,7 |
| Total income tax expenses | -103,3 | -97,9 |
| Of which associated with continued operations | -103,3 | -97,9 |
| Of which associated with discontinued operations | - | - |
Calculation of income tax expenses
(Amounts in MNOK)
| 2009 | 2008 | |
|---|---|---|
| Profit/loss before taxes | 279,1 | 334,7 |
| Tax calculated at the applicable tax rates in the respective countries 1) | 74,3 | 92,5 |
| Tax effect of the following items: | ||
| - Non-tax-deductible expenses/income 2) | 7,0 | 27,7 |
| - Change in write-down of off-balance-sheet deferred tax assets | -184,7 | -220,8 |
| Correction of tax expenses from previous years | - | 2,7 |
| Total income tax expenses | -103,3 | -97,9 |
2009
| Opening balance value as of 01.01.09 | Recognised in P/L | Recognised in other comprehensive income | Acquisitions/ disposals | Other | Ending balance as of 31.12.09 | |
|---|---|---|---|---|---|---|
| Tax effect on temporary differences | ||||||
| Tangible fixed assets | 73,8 | -30,2 | 1,5 | 45,1 | ||
| Inventories | 9,9 | 0,5 | 10,4 | |||
| Long-term receivables | -109,0 | 83,3 | -25,6 | |||
| Receivables | 7,8 | -3,2 | 4,6 | |||
| Provisions and accruals | 27,3 | -21,6 | 5,7 | |||
| Retirement benefits | 0,8 | -0,8 | - | |||
| Capital gain and loss account | 11,7 | 4,0 | 15,7 | |||
| Accruals reserve | 4,6 | -1,3 | 3,3 | |||
| Tax loss carryforward 3) | 1 660,6 | 147,4 | -742,3 | 1 065,7 | ||
| Other differences | 0,2 | -0,2 | - | |||
| Total deferred tax assets | 1 687,7 | 94,6 | 83,3 | - | -740,8 | 1 124,9 |
| Deferred tax assets not recognised on balance sheet | -1 468,8 | -806,9 | ||||
| Deferred tax assets recognised on the balance sheet 4) | 218,9 | 318,0 | ||||
| Intangible assets 5) | -90,7 | 24,2 | -6,9 | -73,4 | ||
| Other financial liabilities | - | -0,9 | 0,6 | -0,3 | ||
| Total deferred tax liabilities 6) | -90,7 | 23,3 | - | -6,9 | 0,6 | -73,7 |
| Change in deferred tax | 1 597,0 | 117,9 | 83,3 | -6,9 | -740,2 | 1 051,2 |
| Net deferred tax assets recognised on balance sheet 6) | 128,2 | 244,3 |
Financial statements and notes
Alisa Annual Report 2009
2008
| Opening balance value as of 01.01.08 | Recognised in P/L | Recognised in other comprehensive income | Acquisitions/ disposals | Other | Ending balance as of 31.12.09 | |
|---|---|---|---|---|---|---|
| Tax effect on temporary differences | ||||||
| Tangible fixed assets | 57,7 | 16,1 | 73,8 | |||
| Inventories | 9,6 | 0,3 | 9,9 | |||
| Long-term receivables | 3,6 | -112,7 | -109,0 | |||
| Receivables | 3,3 | 4,5 | 7,8 | |||
| Provisions and accruals | 31,6 | -4,3 | 27,3 | |||
| Retirement benefits | - | 0,8 | 0,8 | |||
| Capital gain and loss account | 5,9 | 5,8 | 11,7 | |||
| Accruals reserve | 7,2 | -2,6 | 4,6 | |||
| Tax loss carryforward 3) | 1 826,3 | 97,1 | -262,8 | 1 660,6 | ||
| Other differences | - | 0,2 | 0,2 | |||
| Total deferred tax assets | 1 945,2 | 117,9 | -112,7 | -262,8 | 1 687,7 | |
| Deferred tax assets not recognised on balance sheet | -1 847,8 | -1 468,8 | ||||
| Deferred tax assets recognised on the balance sheet 4) | 97,4 | - | - | - | 218,9 | |
| Intangible assets | -66,1 | -10,8 | -13,5 | -0,3 | -90,7 | |
| Other financial liabilities | -0,6 | 0,6 | - | |||
| Total deferred tax liabilities | -66,7 | -10,2 | - | -13,5 | - | -90,7 |
| Change in deferred tax | 1 878,5 | 107,7 | -112,7 | -13,5 | -263,1 | 1 597,0 |
| Net deferred tax assets recognised on balance sheet | 30,7 | 128,2 |
1) Nominal tax before deductions by country: MNOK 40.6 in Norway (28% tax rate); MNOK 26.5 in Sweden (26.3%); MNOK -4,9 in Finland (26%); MNOK 21.2 in Denmark (25%); and MMNOK 0.0 in the Baltic States, including Atea Service Center in Riga (15%).
2) The non-deductible expenses for the year include expenses that are not tax deductible pursuant to the Danish rules.
3) Tax loss carryforward as of 31 December 2009 is MNOK 3,835 (calculated deferred tax assets are MNOK 318), see Note 23.
4) Atea recognises deferred tax assets on its balance sheet when it has been deemed adequately probable that the operations in the individual country will generate a taxable profit that the tax loss carryforward can be used to offset. Taking into account the historical losses and cyclical nature, future earnings are not satisfactorily deemed probable until the individual company has actually reported a taxable profit for a period. In calculating the tax asset that is to be recognised, the expected profit is only taken into account for a limited future period (normally limited to a maximum of 4-5 years). At the end of 2009 tax assets deemed probable have been recorded on the balance sheet for the operations in Norway, Sweden and Denmark.
5) MNOK 55.1 of which is goodwill, and the remainder is primarily intangible assets from acquisitions.
6) Net deferred tax liability recorded on the balance sheet as of 31 December 2009 is MNOK 73.4. This liability is related primarily to depreciable excess values from business combinations, as well as deferred tax liabilities that can not be set off against corresponding deferred tax assets.
The Group's tax loss carryforward as of 31 December 2009 expires as follows:
| (Amounts in MNOK) | 2010 | 2011 | 2012 | 2013 or later | No expiration deadline | Total |
|---|---|---|---|---|---|---|
| Norway | - | - | - | - | 3 540,8 | 3 540,8 |
| Sweden | 11,2 | 16,1 | - | 77,0 | - | 104,3 |
| Denmark | - | - | - | - | 171,6 | 171,6 |
| Finland | - | - | - | - | 3,5 | 3,5 |
| The Baltics | - | - | - | - | 15,0 | 15,0 |
| TOTAL | 11,2 | 16,1 | - | 77,0 | 3 730,9 | 3 835,2 |
Financial statements and notes
Atea Annual Report 2009
Note 17 Retirement benefit obligations
A major portion of the group's employees in Norway are covered by pension plans entitling them to defined future pension benefits. The pension benefits are mainly dependent on the number of contribution years, wage level upon reaching retirement age and the size of the social security benefits. Almost all of the foreign subsidiaries have pension plans that are contribution plans.
The pension agreements for the Norwegian companies in the group are financed through group insurance plans with two life insurance companies. The group's obligations cover 311 employees as of 31 December 2009. Pension obligations are based on the following economic assumptions:
| (%) | 2009 1) | 2008 | 2007 |
|---|---|---|---|
| Discount rate | 4,4 % | 3,8 % | 2,5 % |
| Expected return on plan assets | 5,6 % | 5,8 % | 5,8 % |
| Annual expected wage inflation | 3,0 % | 3,0 % | 3,0 % |
| Adjustment of statutory basic amount | 4,0 % | 3,8 % | 4,3 % |
| Future increase in pension benefits | 1,3 % | 1,5 % | 2,0 % |
1) The group's choice of pension assumptions deviates from the Norwegian Accounting Standards Board's recommended pension assumptions NRS (V) with regard to wage inflation. Wage inflation is a factor that will vary between the various companies, industries, etc. Atea operates in an industry with substantial pressure on the margins and focus on cost reductions. It has been assessed that there is no room for general wage inflation as suggested in the recommendation..
Enhancement of the efficiency of the sales and delivery processes will also open up the possibility of cost reductions by changing the composition of the employees and competence profiles.
Net pension costs are determined as follows:
| (Amounts in MNOK) | 2009 | 2008 | 2007 1) |
|---|---|---|---|
| Present value of pension benefits earned during the period | 11,5 | 9,6 | 12,3 |
| Interest cost of pension obligations | 7,0 | 7,9 | 5,9 |
| Expected return on plan assets | -7,9 | -7,0 | -5,6 |
| Employer's social security tax | - | - | - |
| Recognised effect of plan changes 1) | - | - | -5,9 |
| Recognised effect of actuarial gains or losses | 3,1 | 1,1 | -4,5 |
| Pension costs, defined benefit plans | 13,6 | 11,5 | 2,2 |
| Pension costs, defined contribution plans | 122,6 | 100,4 | 95,7 |
| Pension costs for the year (see Note 19) | 136,3 | 112,0 | 97,9 |
1) Plan changes of MNOK 5.9 have been recognised as income due to a voluntary transition from a defined benefit to a defined contribution pension plan in 2007.
Actual pension obligations and the net pension obligations entered on the balance sheet are reconciled as follows:
| (Amounts in MNOK) | 2009 | 2008 | 2007 |
|---|---|---|---|
| Gross pension obligations | 180,6 | 195,6 | 147,3 |
| Plan assets at market value 1) | 151,8 | 145,7 | 125,0 |
| Net pension obligations at market value | 28,9 | 49,9 | 22,3 |
| Unrecognised effect of actuarial gains and losses | -29,4 | -47,0 | -26,0 |
| Employer's social security tax | - | - | 3,1 |
| Net pension obligations | -0,5 | 2,9 | -0,5 |
| Of which recognised on the balance sheet as plan assets (long-term receivables) 2) | 1,5 | - | 1,3 |
| Of which recognised on the balance sheet as pension obligations (long-term liabilities) 2) | 0,9 | 2,9 | 0,8 |
1) Plan assets at market value are not allocated to any main categories/asset classes. This is due to the fact that the group's pension plans are fully insured (100% insured plan) with Storebrand Kapitalforsikring.
2) The group has two defined benefit plans, each of which report net pension assets and net pension liabilities that cannot be offset.
Financial statements and notes
Atea Annual Report 2009
Movement in the obligation recognised on the balance sheet
| (Amounts in MNOK) | 2009 | 2008 | 2007 |
|---|---|---|---|
| Beginning of the year | 2,9 | -0,5 | 3,7 |
| Change due to divestment of businesses | - | - | - |
| Change due to acquisition of businesses | - | - | - |
| Total expenses, see above | 13,6 | 11,5 | 2,2 |
| Premiums paid | -17,0 | -8,1 | -6,4 |
| End of the year | -0,5 | 2,9 | -0,5 |
In March 2007 Atea ASA and Atea AS introduced a defined contribution pension plan. The employees could choose whether they wanted to convert to the defined contribution plan or retain the defined benefit plan. All new employees after March 2007 were enrolled in the defined benefit plan. The agreement covers all employees over age 20 who work at least 20% of a full-time position. The defined contribution plan corresponds to 2% of wages between 1 to 12 times the National Insurance basic amount. The contributions are managed by Storebrand Kapitalforsikring.
Note 18 Provisions
| (Amounts in MNOK) | Restructuring | Profit-sharing and bonuses | Discontinued operations | Legal and tax claims | Fixed price loss on contracts | Total |
|---|---|---|---|---|---|---|
| As of 1 January 2009 | 66,0 | 118,6 | 2,7 | - | - | 187,3 |
| Recognised during the year: | ||||||
| Additional provisions during the year | 17,9 | 325,6 | 1,1 | - | - | 344,7 |
| Unutilised provisions reversed | -5,3 | - | - | - | - | -5,3 |
| Currency translation differences | -3,9 | -10,0 | -0,1 | - | - | -14,0 |
| Reversed, unutilised provisions from last year | - | - | - | - | - | - |
| Used during the year | -36,3 | -331,0 | -1,1 | - | - | -368,4 |
| As of 31 December 2009 | 38,5 | 103,3 | 2,6 | - | - | 144,4 |
| (Amounts in MNOK) | Restructuring | Profit-sharing and bonuses | Discontinued operations | Legal and tax claims | Fixed price loss on contracts | Total |
| --- | --- | --- | --- | --- | --- | --- |
| As of 1 January 2008 | 83,6 | 105,7 | 0,1 | - | 0,7 | 190,1 |
| Recognised during the year: | ||||||
| Additional provisions during the year | 5,4 | 159,6 | 1,3 | - | - | 166,3 |
| Unutilised provisions reversed | -4,8 | - | - | - | - | -4,8 |
| Reversed, unutilised provisions from last year | - | - | - | - | - | - |
| Used during the year | -18,2 | -146,7 | 1,4 | - | -0,7 | -164,1 |
| As of 31 December 2008 | 66,0 | 118,6 | 2,7 | - | - | 187,3 |
Provisions are recognised when Atea has a valid liability and it can be proven probable that a financial settlement will take place as a result of this liability, and that the size of the amount can be measured reliably. Provisions reflects the best estimate of the liability at the balance sheet date.
All provisions booked at year-end 2009, except provisions for empty office space, are expected to be utilised in 2010. Provisions for empty office space (MNOK 38.5) will be utilised over the remaining term of the corresponding lease agreements (2010-2013). When provisions for empty office space are made the cost according to the leasing agreement is compared with expected rental income (price and timing of subleasing). The judgements involve uncertainty and represent the management's best estimate at the balance sheet date.
Restructuring
The amounts are mainly related to costs for unused office premises that are not tied to revenues of future periods.
Discontinued operations
Includes provisions towards the buyer and the divested entity undertaken in connection with discontinued operations (see note 6).
Legal and tax claims
Atea ASA does not have any legal claims against the company.
Profit-sharing and bonuses
Includes provisions related to profit and revenue related bonuses to management and employees.
Fixed-price loss contracts
Any expected excess of total contract costs over total contract revenue is recognised as an expense (liability) when identified.
Financial statements and notes
0
Atea Annual Report 2009
Note 19 Employee benefit expense and remunerations
| (Amounts in MNOK) | 2009 | 2008 | 2007 |
|---|---|---|---|
| Wages and salaries | 1 882,5 | 1 785,2 | 1 484,9 |
| Employer's social security tax | 312,2 | 293,7 | 255,9 |
| Option plans for the management and employees | 16,6 | 8,5 | 14,8 |
| Pension costs (see Note 17) | 136,3 | 112,0 | 97,9 |
| Other personnel expenses | 149,0 | 167,6 | 135,9 |
| Total employee compensation and benefit expenses | 2 496,6 | 2 367,0 | 1 989,3 |
| Average number of employees (continued operations) | 4 366 | 4 289 | 3 256 |
President and CEO of Atea ASA
Claus Hougesen received a salary of DKK 2,838,000 in 2009 (DKK 3,000,000 in 2008). The value of payments in kind for 2009 was DKK 156,478 (DKK 160,146 in 2008). The President and CEO is not entitled to any special compensation upon the termination of his employment.
Executive Vice President and CFO of Atea ASA
Rune Falstad received a salary of NOK 2,223,484 in 2009 (NOK 2,307,868 in 2008) and a performance-based bonus of NOK 788,500 (earned in 2008). The value of payments in kind for 2009 was NOK 217,492 (NOK 168,745 in 2008), and the annual defined benefit pension earned (service cost) was NOK 102,146 (NOK 102,271 in 2008).
Managing Director of Atea A/S (Denmark)
Peter Trans received a salary of DKK 1,982,500 in 2009 (DKK 2,333,000 in 2008). Benefits related to a defined contribution pension scheme were DKK 69,482 (DKK 70,000 in 2008). The value of payments in kind for 2009 was DKK 74,133 (DKK 36,994 in 2008).
Managing Director of Atea Sverige AB
Lars Pettersson received a salary of SEK 3,153,888 in 2009 (SEK 3,215,212 in 2008) and a performance-based bonus (earned in 2008) of SEK 1,500,000 (SEK 1,500,000 in 2008). The value of payments in kind for 2009 was SEK 121,004 (SEK 287,926 in 2008). Benefits related to a defined contribution pension scheme were SEK 825,183 (SEK 810,000 in 2008).
Managing Director of Atea AS (Norway)
Steinar Sønsteby received a salary of NOK 2,277,692 in 2009 (NOK 2,270,192 in 2008). The value of payments in kind for 2009 was NOK 158,676 (NOK 203,892 in 2008), and the annual defined benefit pension earned (service cost) was NOK 71,537 (NOK 93,599 in 2008).
Managing Director of Atea Finland Oy
Juha Sihvonen received a salary of EUR 160,118 in 2009. The value of payments in kind for 2009 was EUR 36,544. Juha Sihvonen started at Atea Finland Oy on 1 May 2008 and received a salary of EUR 140,698 and bonus of EUR 80,000 in 2008 (earned in 2008). The value of payments in kind was EUR 26,819 in 2008.
Managing Director of UAB Atea
In 2009 Arunas Bartusevicius received a salary of LTL 257,674 (LTL 414,734 in 2008) and payments in kind of LTL 5,113 (LTL 14,238 in 2008).
Business Development Director for Atea ASA
In 2009 Jesper Mathiasen received a salary of DKK 1,408,419 (DKK 1,440,000 in 2008), and a performance-based bonus (earned in 2008) of DKK 415,200 (DKK 180,000 in 2008). The value of payments in kind was DKK 181,952 (DKK 170,805 in 2008).
Shares and options owned by key employees are described in Note 12.
Remuneration to the Board of Directors of Atea ASA
NOK 1,057,500 was paid in fees to the Board of Directors of Atea ASA in 2009 (NOK 900,000 in 2008). Fees to the Chairman of the Board amounted to NOK 300,000, fees to the employee representatives amounted to NOK 100,000 each and the rest of the Board of Directors received a fee of NOK 150,000 each. Shares and options owned by the Board of Directors are described in Note 12.
Remuneration of executive management
Key group employees are defined here as the managers that report directly to the President and CEO and are part of the group management.
The Board of Directors will submit the following declaration for the General Meeting's approval pursuant to Section 6-16a of the Norwegian Public Limited Companies Act.
1. Salaries and other remuneration of the executive management in the previous financial year
In accordance with the guidelines established by the company's Board of Directors, the salary and other remuneration payable to the President and CEO is determined by the Board of Directors, while salaries and other remunerations payable to other members of the executive management (group's senior managers) are determined by the President and CEO in consultation with the Board Chairman.
To obtain the management that the Board of Directors finds to be satisfactory, salaries and other remunerations are determined based on the principle that the overall compensation package for each individual shall be competitive and adapted to the market conditions. The variations that exist in the various countries and the size and complexity of the businesses are taken into account when establishing the terms.
Compensation of the executive management is based primarily on a fixed salary. In addition to a fixed salary, members of the executive management receive certain benefits in kind, including company cars, telephone/Internet and journals/newspapers. The type of pension scheme that members of the executive management are members of varies. Some of them are members of the pension scheme that applies to the company they are employed in, while others receive special compensation. The terms of employment for the executive management vary with regard to their entitlement to severance or termination payments in connection with the termination of their employment. All the members of the executive management have received share options earlier.
The Board of Directors believes that the effect on the company and the shareholders of the compensation agreements that were entered into or amended in accordance with the description above in the previous financial year has been positive due to the fact that the company has been able to hold on to and attract the human resources that are required to fulfil the company's objectives.
Financial statements and notes
Atea Annual Report 2009
- Guidelines for salaries and other remuneration to the executive management in the coming financial year
The Board of Directors shall determine the salary and other remuneration paid to the President and CEO.
Salaries and remunerations payable to other members of the executive management shall be determined by the President and CEO in consultation with the Board Chairman. The combined salary and remuneration payable to individuals shall be competitive and adapted to the market conditions.
In addition to a salary (with the addition of ordinary benefits in kind such as company cars, telephony/IT, journals, etc.) and pension scheme, which shall in general be in accordance with what has been paid earlier this year, it shall be possible to award bonuses and share options. Share options shall be allotted based on the following principles:
i) Share options can be allotted up until the General Meeting of 2010. The share options shall be used in connection with recruitment and to hold on to key managers and employees.
ii) The allotment shall be made by the President and CEO in consultation with the Board Chairman.
iii) Unless the Board Chairman consents otherwise in special cases, a vesting period shall be established for the share options. As a rule the total number of options that are allotted to individual employees shall be earned over a period of three years, with one-third of the options being earned each year.
iv) The exercise price shall not be set lower than the market price of the share at the time of allotment.
Loans to employees of group companies
Employees have loans from group companies totalling NOK 481,432 as of 31 December 2009.
Audit fees
The table below shows Deloitte’s total charges for auditing and other services in 2009. All amounts are exclusive of VAT.
| (Amounts in NOK 1,000) | 2009 | 2008 |
|---|---|---|
| Audit fees | 6 141 | 6 601 |
| Attestation services | 859 | 1 083 |
| Tax advisory services | 819 | 847 |
| Other non-audit services | 1 301 | 1 433 |
| 9 121 | 9 964 |
Note 20 Corporate structure of the Atea Group
| From date | Local currency * | Voting rights / ownership (%) | Equity as of 31.12.09 | Profit/loss for the year | Primary activity | |
|---|---|---|---|---|---|---|
| Norway | ||||||
| Atea AS | NOK | 100,00% | 1 372,2 | 168,5 | IT-infrastructure | |
| Uni Networks AS | 22.12.2009 | NOK | 100,00% | 1,2 | - | IT-infrastructure |
| Atea Finans AS | NOK | 90,10% | 5,8 | 3,9 | Leasing | |
| Total | NOK | 1 379,2 | 172,4 | |||
| Denmark | ||||||
| Atea Danmark Holding A/S | DKK | 100,00% | 378,8 | -72,1 | Holding | |
| Atea A/S | DKK | 100,00% | -532,0 | 287,0 | IT-infrastructure | |
| PCS-gruppen A/S | DKK | 100,00% | - | -0,0 | IT-infrastructure | |
| ACI A/S | 13.08.2009 | DKK | 100,00% | - | 3,4 | IT-infrastructure |
| Vagtcentralen Security Point | 13.08.2009 | DKK | 100,00% | - | 3,9 | IT-infrastructure |
| AC Sikring A/S | 13.08.2009 | DKK | 100,00% | - | 6,6 | IT-infrastructure |
| dmsave A/S | DKK | 100,00% | 45,3 | 17,0 | IT-infrastructure | |
| Kompetencecenteret A/S | DKK | 100,00% | 22,1 | 0,4 | IT-infrastructure | |
| Topnordic Danmark A/S | DKK | 100,00% | 288,9 | -81,2 | IT-infrastructure | |
| Ementor Consulting A/S | DKK | 100,00% | 1,1 | -0,5 | IT-infrastructure | |
| Atea Danmark A/S | DKK | 100,00% | 73,6 | 1,7 | IT-infrastructure | |
| Atea Finans A/S | DKK | 90,10% | 2,9 | 1,2 | Leasing | |
| Total | NOK | 280,7 | 167,4 | |||
| Sweden | ||||||
| Atea Holding AB | SEK | 100,00% | 263,8 | -24,5 | Holding | |
| Atea AB | SEK | 100,00% | -581,0 | 67,4 | IT-infrastructure | |
| Spintop AB | SEK | 100,00% | 4,5 | -0,6 | IT-infrastructure | |
| Atea Information Management AB | SEK | 100,00% | 436,9 | 28,3 | IT-infrastructure | |
| Topnordic AB | SEK | 100,00% | 5,2 | -0,9 | IT-infrastructure | |
| Atea Finans AB | SEK | 90,10% | 2,9 | 2,7 | Leasing | |
| Total | NOK | 132,4 | 72,4 |
Financial statements and notes
Atea Annual Report 2009
The Baltics
| UAB Atea Baltic | LTL | 78,75% | 93,3 | -5,0 | Holding |
|---|---|---|---|---|---|
| SIA Sonex Tech. Latvia | LVL | 100,00% | 12,1 | -1,6 | IT-infrastructure |
| UAB Tetraneta | LTL | 100,00% | 5,7 | 0,5 | IT-infrastructure |
| UAB Solver | LTL | 100,00% | 3,5 | 0,3 | IT-infrastructure |
| UAB Atea | LTL | 100,00% | 42,3 | 4,5 | IT-infrastructure |
| AS Alarm Est Int. | EEK | 80,00% | 1,6 | -0,3 | IT-infrastructure |
| SIA Atea Softex Latvia | LVL | 100,00% | 0,3 | -0,0 | IT-infrastructure |
| OU Atea | EEK | 100,00% | -0,9 | -1,0 | IT-infrastructure |
| Total | NOK | 157,9 | -2,6 |
Finland
| Atea Finland Holding Oy | EUR | 100,00% | 5,7 | -11,0 | Holding | |
|---|---|---|---|---|---|---|
| Atea Finland Oy | EUR | 100,00% | -173,4 | -4,4 | IT-infrastructure | |
| A Communications Oy | 31.10.2009 | EUR | 100,00% | 12,1 | 2,2 | IT-infrastructure |
| Topnordic Finland Oy | EUR | 82,00% | 0,1 | - | IT-infrastructure | |
| Atea Finans Oy | EUR | 90,10% | 0,9 | -0,4 | Leasing | |
| Total | NOK | -154,5 | -13,5 |
Atea Service Center & Logistics
| Atea Logistikk AB | SEK | 100,00% | 167,6 | 16,0 | IT-infrastructure |
|---|---|---|---|---|---|
| Atea Service Center SIA | LVL | 100,00% | -2,6 | 0,0 | IT-infrastructure |
| Total | NOK | 165,0 | 16,0 |
- Total translated from local currency to NOK
Note 21 Net financial items
| (Amounts in MNOK) | |||
|---|---|---|---|
| 2009 | 2008 | 2007 | |
| Interest income 1) | 37,8 | 64,0 | 56,4 |
| Other financial income | 52,5 | 87,1 | 116,4 |
| Total financial income | 90,3 | 151,1 | 172,8 |
| Interest expenses on loans 1) | 74,5 | 125,9 | 96,7 |
| Interest expenses on financial leases 1) | 0,5 | 0,7 | 1,5 |
| Other financial expenses | 70,2 | 91,1 | 123,2 |
| Total financial expenses | 145,2 | 217,7 | 221,4 |
| Total net financial items | -55,0 | -66,7 | -48,6 |
Foreign exchange effects recognised as an expense/income on the income statement as follows:
| (Amounts in MNOK) | |||
|---|---|---|---|
| 2009 | 2008 | 2007 | |
| Included in operating profit/loss 2) | 3,9 | -6,0 | - |
| Included in net financial income 2) | 52,1 | 84,6 | 116,1 |
| Included in net financial expenses 2) | 56,3 | 84,4 | 117,0 |
| Total | -0,3 | -5,9 | -0,9 |
1) Interest paid in 2009 totals MNOK 75.0 (MNOK 126.6 in 2008 and MNOK 98.2 in 2007). Interest received in 2009 totals MNOK 37.8 (MNOK 64.0 in 2008 and MNOK 56.4 in 2007).
2) Foreign exchange effects are related to short-term asset and liability items.
Financial statements and notes
Atea Annual Report 2009
Note 22 Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to shareholders of the company by the weighted average number of ordinary shares in issue during the year.
| (Amounts in MNOK) | 2009 | 2008 | 2007 |
|---|---|---|---|
| Profit/loss for the year from continued operations | 382,4 | 432,6 | 427,9 |
| Profit/loss for the year from discontinued operations | - | -0,0 | -4,8 |
| Group's profit/loss for the year | 382,4 | 432,6 | 423,1 |
| Weighted average number of outstanding shares (in millions) | 95,5 | 95,5 | 95,0 |
| Basic earnings per share for continued operations (NOK) | 4,00 | 4,53 | 4,50 |
| Basic earnings per share for discontinued operations (NOK) | - | -0,00 | -0,05 |
| Basic earnings per share for the group (NOK) | 4,00 | 4,53 | 4,45 |
Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company's dilutive potential ordinary shares are share options issued. A calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the company's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
| (Amounts in MNOK) | 2009 | 2008 | 2007 |
|---|---|---|---|
| Profit/loss for the year from continued operations | 382,4 | 432,6 | 427,9 |
| Profit/loss for the year from discontinued operations | - | -0,0 | -4,8 |
| Group's profit/loss for the year | 382,4 | 432,6 | 423,1 |
| Weighted average number of diluted outstanding shares (in millions) | 95,8 | 95,7 | 96,2 |
| Diluted earnings per share for continued operations (NOK) | 3,99 | 4,52 | 4,45 |
| Diluted earnings per share for discontinued operations (NOK) | - | -0,00 | -0,05 |
| Diluted earnings per share for the group (NOK) | 3,99 | 4,52 | 4,40 |
Note 23 Contingent liabilities and assets
Ordinary course of business
The Group has contingent liabilities in respect of bank and other guarantees and other matters arising in the ordinary course of business. It is not anticipated that any material liabilities will arise from the contingent liabilities. The group has given guarantees in the ordinary course of business amounting to MNOK 7,516.8 (MNOK 6,079.3 in 2008) to external parties (see note 24).
Legal disputes
Tax assessment of Merkantildata AS for 2003
The Norwegian tax authorities (Overligningsnemda) have denied the Atea Group (Merkantildata AS) the right to deduct a loss of MNOK 2,297 incurred as a consequence of an intercompany transfer of shares in connection with the spin-off and planned stock exchange listing of the business segment Ementor in 2001. In Atea's opinion the loss of MNOK 2,297 should be added to the cost price of the realised shares. The shares have been transferred again in 2003 in connection with the merger of the former business segments Eterra and Ementor, which would create a higher loss for tax purposes in the fiscal year 2003. Atea appealed the tax case to the Borgarting Court of Appeal. The Court of Appeal concluded in a judgment of 22 January 2009 that there were no grounds to revoke the assessment of the companies. The case was subsequently appealed to the Appeals Committee of the Supreme Court by Atea ASA, but the appeal was not allowed. Atea has accepted the Court of Appeal's judgment and has thus reduced the total tax loss carryforward accordingly, see note 16.
Financial statements and notes
Atea Annual Report 2009
Note 24 Commitments
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Guarantees to financial institutions 1) | 7 382,2 | 5 946,6 |
| Other guarantee commitments 2) | 134,6 | 132,8 |
| Total guarantees | 7 516,8 | 6 079,3 |
1) The major subsidiaries in each country (including the logistics company) have issued guarantees in favour of Nordea Bank and Nordea Finans as security for the short-term facility, factoring facility (see Note 14), cash pool facility and overdraft facility.
2) As a regular part of operations, guarantees are given for fulfilment of contracts, advances from customers and lease matters. Such guarantees usually involve a financial institution issuing a guarantee as security for the customer.
Pledged assets
As security for the group's credit facilities (see Note 14), Atea ASA has pledged the shares of all the major subsidiaries in Norway, Sweden, Denmark and Finland. The group's book equity for these entities totals MNOK 3,437.8 (MNOK 3,623.8 in 2008).
All trade receivables in Atea AS, Atea A/S, Atea Sverige AB and Atea Finland Oy are pledged as security for the factoring facility (see Note 15). The book value of trade receivables pledged as security totals MNOK 3,211.4 (MNOK 3,645.2 in 2008).
Note 25 Related parties
The group's related parties are owners and management (see Notes 12 and 19).
Gross intercompany sales were MNOK 2,442 for 2009, and are eliminated at the group level. MNOK 2,424 of this revenue represents sales from Atea Logistics to other group companies.
The transactions are generally carried out on ordinary commercial terms.
Note 26 Business combinations
The group acquired five companies/assets in 2009. The new units have been integrated into the Atea Group during the year. There are no separate figures for the revenues or revenues of the acquired units for the period from the acquisition date to the end of 2009.
In 2009 the group acquired the outsourcing and hosting activities of the Danish company Mondo Hosting A/S, all the shares of the Danish IP monitoring company AC Sikring A/S with the subsidiaries ACI A/S and Vagtcentralen Security Point A/S, business operations from Aprismo A/S, all the shares in the Finnish company A Communications Oy and all the shares in the Norwegian company Uni Networks AS. All of these companies or parts therefore are engaged in business areas within IT infrastructure in their respective countries.
Breakdown of the acquired net assets and goodwill is as follows:
| (Amounts in MNOK) | AC Sikring | Aprismo | Mondo | A Comm. | Uni Networks | Total | |
|---|---|---|---|---|---|---|---|
| Hosting | OnSite | ||||||
| Acquisition date | 13.08.09 | 14.12.09 | 26.06.09 | 26.06.09 | 31.10.09 | 22.12.09 | |
| Voting rights/ownership interest | 100,00% | 100,00% | 100,00% | 100,00% | 100,00% | 100,00% | |
| Acquisition cost: | |||||||
| Cost price | 7,5 | - | 8,0 | - | 16,8 | 4,0 | 36,3 |
| Adjustment of cost price | - | - | - | - | - | - | - |
| Liabilities assumed | - | - | 13,8 | -2,1 | 11,2 | 1,0 | 23,9 |
| Direct costs associated with acquisitions | 0,1 | - | - | - | - | 0,2 | 0,3 |
| Fair value of shares issued | - | - | - | - | - | - | - |
| Total acquisition cost | 7,6 | - | 21,8 | -2,1 | 27,9 | 5,2 | 60,5 |
| Carrying value of equity (see table below) | 1,3 | - | -8,2 | - | 10,8 | 1,5 | 5,4 |
| Identification of excess value: | |||||||
| Contracts and customer relationships | 1,4 | 0,0 | 20,8 | - | 4,2 | 0,7 | 27,0 |
| Computer software and rights | - | - | 0,7 | - | - | - | 0,7 |
| Fair value of tangible fixed assets | - | - | - | - | - | - | - |
| Deferred tax | -0,3 | -0,0 | -5,2 | - | -1,2 | -0,2 | -6,9 |
| Net excess value | 1,0 | 0,0 | 16,2 | - | 3,0 | 0,5 | 20,8 |
| Fair value of net assets acquired, excluding goodwill | 2,4 | 0,0 | 8,0 | - | 13,8 | 2,0 | 26,2 |
| Majority interests | 2,4 | 0,0 | 8,0 | - | 13,8 | 2,0 | 26,2 |
| Minority interests | - | - | - | - | - | - | - |
| Goodwill 1) | 5,3 | -0,0 | 13,8 | -2,1 | 14,1 | 3,2 | 34,3 |
1) Goodwill is related to the expected synergies in connection with the acquisitions.
Financial statements and notes
Atea Annual Report 2009
Assets and liabilities associated with the acquisitions in 2009 are as follow:
| (Amounts in MNOK) | AC Sikring | Aprismo | Mondo | A Comm. | Networks | Uni Total | |
|---|---|---|---|---|---|---|---|
| Hosting | OnSite | ||||||
| Tangible fixed assets | 4,8 | 0,1 | 3,6 | - | 0,5 | 0,0 | 8,9 |
| Goodwill | - | - | - | - | - | - | - |
| Other intangible assets | - | - | - | - | - | - | - |
| Deferred tax assets | 1,2 | - | - | - | - | 0,1 | 1,3 |
| Inventories | 3,1 | - | - | - | - | 0,3 | 3,4 |
| Other long-term receivables | - | - | - | - | - | - | - |
| Trade receivables | 1,9 | 0,0 | - | - | 7,0 | 0,8 | 9,8 |
| Uninvoiced income | 0,3 | - | - | - | - | - | 0,3 |
| Provisions for losses on receivables | - | - | - | - | - | - | - |
| Other short-term receivables and investments | 4,9 | - | 0,4 | - | 0,1 | 0,1 | 5,5 |
| Other short-term receivables, non-interest-bearing | 2,3 | - | - | - | - | - | 2,3 |
| Cash and cash equivalents | 0,0 | - | - | - | 9,4 | 1,6 | 11,0 |
| Minority interests | - | - | - | - | - | - | - |
| Interest-bearing long-term liabilities | - | - | -5,8 | - | - | - | -5,8 |
| Other long-term liabilities and provisions | - | - | - | - | - | - | - |
| Deferred tax liabilities | - | - | - | - | - | - | - |
| Trade payables | -1,1 | - | - | - | -2,5 | -0,7 | -4,3 |
| Interest-bearing loan facilities | -6,3 | - | - | - | - | - | -6,3 |
| Interest-bearing current leasing/borrowing liabilities | -2,9 | - | - | - | - | - | -2,9 |
| Other current liabilities | - | - | - | - | - | - | - |
| Other current liabilities and provisions | -6,8 | -0,1 | -6,4 | - | -3,7 | -0,8 | -17,9 |
| Net assets acquired | 1,3 | - | -8,2 | - | 10,8 | 1,5 | 5,4 |
Net cash proceeds in connection with the acquisitions are as follow:
| Consideration and costs in cash and cash equivalents | 7,5 | - | 8,0 | - | 21,6 | 4,0 | 41,1 |
|---|---|---|---|---|---|---|---|
| Cash and cash equivalents in acquired companies | -0,0 | - | - | - | -9,4 | -1,6 | -11,0 |
| Net cash proceeds in connection with the acquisitions | 7,5 | - | 8,0 | - | 12,2 | 2,4 | 30,1 |
If the acquisitions above and sales of businesses described in Note 6 had been carried out as of 1 January 2009, the Group's calculated
pro forma results for 2009 and 2008 would be as follows: (unaudited)
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Operating revenues | 14 624,0 | 15 089,6 |
| Operating profit/loss | 337,1 | 397,4 |
| Profit/loss for the year 1) | 385,7 | 424,6 |
| Ordinary earnings per share (NOK) 2) | 4,04 | 4,45 |
1) In the pro forma figures for both 2009 and 2008 a zero tax rate is assumed. It is assumed that carry forward losses and other negative temporary differences are utilised in the calculation of payable tax in all countries, and net change of deferred tax/tax asset is zero in the period.
2) Calculation based on number of shares as of 31 December.
Pro forma figures are meant to provide a basis for comparison based on the Group's composition at the end of 2009. Pro forma figures are encumbered with greater uncertainty than are the actual historical
figures, and will not necessarily reflect the results that would have been realised if the purchases and sales of businesses had actually been made at an earlier date.
Financial statements and notes
Also Annual Report 2009
During the period from 1 January 2010 to 17 March 2010 (date of the Board's approval of the annual accounts and notes) Atea has completed the following acquisitions / business combinations (100% of the shares were acquired in all cases):
| Company | Fair value of acquired assets, excl. goodwill | Goodwill | Revenue | EBITDA | |||||
|---|---|---|---|---|---|---|---|---|---|
| (Amounts in MNOK) | Fair value of acquired assets, excl. goodwill | ||||||||
| Country | Acquisition date | Acquisition cost | Book value of equity | Identified net excess value | |||||
| Calamus Danmark A/S) *) | Denmark | 05.01.10 | 32,0 | -22,0 | 11,0 | -11,0 | 43,0 | 243,8 | 17,8 |
| Office Document och Data i Södermanland) *) | Sweden | 17.02.10 | 3,0 | 0,8 | 1,6 | 2,4 | 0,6 | 24,6 | 2,2 |
| Office Document i Mälardalen | Sweden | 17.02.10 | 8,6 | 3,2 | 2,3 | 5,5 | 3,2 | 20,3 | 2,1 |
| COB Document i Borås) *) | Sweden | 12.02.10 | 12,0 | -2,6 | 4,4 | 1,8 | 10,2 | 49,3 | 7,2 |
| Office i Värmland **) | Sweden | 18.02.10 | 3,9 | 2,8 | 0,9 | 3,8 | 0,1 | 56,8 | 0,7 |
| Office Store i Värmland AB | Sweden | 18.02.10 | 0,8 | 0,5 | 0,0 | 0,5 | 0,2 | 13,6 | 0,3 |
| PALnet | Finland | 17.02.10 | 49,2 | 22,4 | 10,9 | 33,3 | 15,8 | 101,3 | 11,3 |
) Acquired from the Holding company Nordic Audivisual Group A/S
) Divergent financial year
**) Acquisition cost including earn out accruals
The Group acquired eight companies/assets in 2008. The new entities were integrated as a part of the Atea Group during the year. No separate figures exist for revenues and results of the acquired entities for the period from the date of acquisition to year-end in 2008.
In 2008 the Group acquired all the shares of the Norwegian companies Tomato and Kongsberg Systec, Swedish company Spintop
and 78.35% of the Baltic company Sonex. Swedish Telindus, danish TDC, Mondo and Netkoncept are asset deals.
All the companies or parts thereof operate in business areas related to IT infrastructure in their respective countries.
Breakdown of the acquired net assets and goodwill is as follows:
| (Amounts in MNOK) | Kongsberg | Total | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Tomato | Systec | Sonex | Spintop | Telindus | TDC | Mondo | Net-koncept | ||
| Acquisition date | 15.02.08 | 12.09.08 | 21.01.08 | 01,07.08 | 05.12.08 | 21.05.08 | 01.10.08 | 30.09.08 | |
| Voting rights/ownership interest | 100,00% | 100,00% | 78,35% | 100,00% | 100,00% | 100,00% | 100,00% | 100,00% | |
| Acquisition cost: | |||||||||
| Cost price | 68,1 | 58,0 | 140,4 | 56,4 | - | - | 5,7 | 5,6 | 334,2 |
| Adjustment of cost price | -26,3 | -26,3 | |||||||
| Liabilities assumed | - | - | - | - | - | - | - | 3,2 | 3,2 |
| Direct costs associated with acquisitions | 0,2 | 0,8 | 5,1 | - | - | 0,3 | 0,0 | 0,1 | 6,4 |
| Fair value of shares issued | - | - | - | - | - | - | - | - | - |
| Total acquisition cost | 68,3 | 32,4 | 145,4 | 56,4 | - | 0,3 | 5,7 | 8,9 | 317,4 |
| Carrying value of equity (see table below) | 8,3 | -0,8 | 2,3 | 15,0 | - | - | - | - | 17,6 |
| Identification of excess value: | |||||||||
| Contracts and customer relationships | 6,0 | 21,6 | 4,6 | 9,0 | - | - | 4,5 | 3,8 | 49,5 |
| Computer software and rights | - | - | - | - | - | - | - | - | - |
| Fair value of tangible fixed assets | - | . | 2,9 | - | - | - | - | - | 2,9 |
| Deferred tax | -1,7 | -6,0 | -1,1 | -2,5 | - | - | -1,1 | -0,9 | -13,5 |
| Net excess value | 4,3 | 15,5 | 6,4 | 6,5 | - | - | 3,4 | 2,8 | 39,0 |
| Fair value of net assets acquired, excluding goodwill | 12,6 | 7,5 | 8,7 | 21,5 | - | - | 3,4 | 2,8 | 56,6 |
| Majority interests | 12,6 | 7,5 | 6,8 | 21,5 | - | - | 3,4 | 2,8 | 54,7 |
| Minority interests | - | - | 6,8 | - | - | - | - | - | 1,9 |
| Goodwill 1) | 55,7 | 24,9 | 138,6 | 34,9 | - | 0,3 | 2,4 | 6,0 | 262,7 |
1) Goodwill is related to the expected synergies in connection with the acquisitions.
Financial statements and notes
Atea Annual Report 2009
Assets (excluding goodwill) and liabilities associated with the acquisitions are as follow:
| (Amounts in MNOK) | Kongsberg | Net- | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Tomato | Systec | Sonex | Spintop | Telindus | TDC | Mondo | koncept | Total | |
| Tangible fixed assets | 0,8 | 1,8 | 9,0 | 0,2 | - | - | 11,8 | ||
| Goodwill | - | 1,0 | - | - | - | - | 1,0 | ||
| Other intangible assets | 3,3 | 0,0 | 0,2 | - | - | - | 3,5 | ||
| Deferred tax assets | - | 0,6 | - | - | - | - | 0,6 | ||
| Inventories | 0,4 | 0,0 | 32,9 | - | - | - | 42,2 | ||
| Trade receivables | 15,4 | 42,9 | 55,5 | 6,5 | - | - | 120,2 | ||
| Other short-term receivables and investments | 1,0 | 6,2 | 8,1 | 3,4 | - | - | 18,7 | ||
| Cash and cash equivalents | 3,4 | 5,0 | 57,1 | 11,3 | 5,1 | - | 81,9 | ||
| Minority interests | - | - | - | - | - | - | - | ||
| Interest-bearing long-term liabilities | -0,8 | -2,5 | -40,3 | - | - | - | -43,7 | ||
| Other long-term liabilities and provisions | - | - | -0,7 | - | - | - | -0,7 | ||
| Deferred tax liabilities | -0,9 | - | - | - | - | - | -0,9 | ||
| Trade payables | -9,1 | -23,5 | -80,5 | - | - | - | -113,2 | ||
| Interest-bearing current liabilities | - | -35,9 | - | - | - | - | -35,9 | ||
| Other current liabilities and provisions | -5,1 | -12,2 | -39-1 | -6,4 | -5,1 | - | -67,9 | ||
| Net assets acquired | 8,3 | 8,0 | 2,3 | 15,0 | - | - | - | - | 17,6 |
Net cash payments in connection with the acquisitions are as follow:
| Consideration and costs in cash and cash equivalents | 48,1 | 58,0 | 133,5 | 43,2 | - | 0,3 | - | - | 294,5 |
|---|---|---|---|---|---|---|---|---|---|
| Cash and cash equivalents in acquired companies | -3,4 | -5,0 | -57,1 | -11,3 | -5,1 | - | - | - | -76,5 |
| Net cash proceeds in connection with the acquisitions | 44,7 | 53,0 | 76,4 | 31,9 | -5,1 | 0,3 | - | - | 218,0 |
If the acquisitions above and sales of businesses described in Note 6 had been carried out as of 1 January 2008, the Group's calculated
pro forma results for 2008 and 2007 would be as follows: (unaudited)
| (Amounts in MNOK) | 2008 | 2007 |
|---|---|---|
| Operating revenues | 15 089,6 | 14 448,8 |
| Operating profit/loss | 397,4 | 415,2 |
| Profit/loss for the year 1) | 424,6 | 408,6 |
| Ordinary earnings per share (NOK) 2) | 4,45 | 4,28 |
1) In the pro forma figures for both 2008 and 2007 a zero tax rate is assumed. It is assumed that carry forward losses and other negative temporary differences are utilised in the calculation of payable tax in all countries, and net change of deferred tax/tax asset is zero in the period.
2) Calculation based on number of shares as of 31 December 2008.
Pro forma figures are meant to provide a basis for comparison based on the Group's composition at the end of 2008. Pro forma figures are encumbered with greater uncertainty than are the actual historical
figures, and will not necessarily reflect the results that would have been realised if the purchases and sales of businesses had actually been made at an earlier date.
Note 27 Minority interests
| (Amounts in MNOK) | 2009 | 2008 | 2007 |
|---|---|---|---|
| Opening balance at the beginning of the year | 3,5 | - | - |
| Additions | - | 1,9 | - |
| Share of profit for the year | 0,2 | 1,6 | - |
| Closing balance at the end of the year | 3,7 | 3,5 | - |
Atea ASA acquired 78.35% of the shares in Sonex Group Holding UAB effective 21 January 2008. The group owns 90.1% of the financing companies in Norway, Sweden, Denmark and Finland. Atea ASA
acquired an additional 0.4% of the shares in Sonex Group Holding UAB in 2009.
Financial statements and notes
Atea Annual Report 2009
Income statement Atea ASA
| (Amounts in MNOK) | Note | 2009 | 2008 | 2007 |
|---|---|---|---|---|
| Operating revenues | 1 | - | - | 3,7 |
| Employee compensation and benefit expenses | 10 | 27,0 | 17,0 | 16,7 |
| Other operating expenses | -6,2 | -6,9 | 7,3 | |
| Operating profit/loss | -20,8 | -10,0 | -20,2 | |
| Financial income | 277,9 | 784,7 | 396,8 | |
| Financial expenses | 498,7 | 252,3 | 76,3 | |
| Net financial items | 11 | -220,8 | 532,4 | 320,5 |
| Profit/loss before taxes from continued operations | -241,6 | 522,4 | 300,2 | |
| Taxes on continued operations | 8 | 39,0 | -35,1 | -31,1 |
| Profit/loss for the year 1) | -280,6 | 557,5 | 331,3 | |
| Earnings per share 2) | ||||
| (Amounts in NOK) | ||||
| - earnings per share | -2,94 | 5,84 | 3,49 | |
| - diluted earnings per share | -2,93 | 5,82 | 3,44 |
1) Profit/loss for the year equals with total profit/loss since Atea ASA has no income and expenses that are not included in profit/loss for the year.
2) Both the time-weighted number of ordinary shares and time-weighted number of diluted shares are the same for the group (see Note 22).
Balance sheet
| (Amounts in MNOK) | Note | 2009 | 2008 |
|---|---|---|---|
| ASSETS | |||
| Deferred tax assets | 8 | 27,2 | 66,2 |
| Interest-bearing long-term receivables | 6 | 1 830,7 | 2 128,2 |
| Investments in subsidiaries | 2 | 1 425,2 | 1 415,9 |
| Fixed assets | 3 283,1 | 3 610,3 | |
| Other receivables | 3 | 158,1 | 288,4 |
| Cash and cash equivalents | 4 | 27,2 | 563,8 |
| Current assets | 185,3 | 852,1 | |
| Total assets | 3 468,4 | 4 462,4 | |
| EQUITY AND LIABILITIES | |||
| Share capital and premiums | 14 | 1 524,4 | 1 515,5 |
| Fund | 14 | 46,7 | 38,4 |
| Retained earnings | 739,5 | 1 095,9 | |
| Equity | 2 310,6 | 2 649,9 | |
| Interest-bearing long-term liabilities | 6 | 466,5 | 450,4 |
| Retirement benefit obligations | 9 | 0,9 | 0,9 |
| Long-term liabilities | 467,5 | 451,2 | |
| Trade payables | 5 | 3,2 | 2,1 |
| Interest-bearing current liabilities | 6 | 225,8 | 385,5 |
| Other current liabilities | 5 | 461,2 | 973,8 |
| Current liabilities | 690,3 | 1 361,3 | |
| Total liabilities | 1 157,7 | 1 812,5 | |
| Total equity and liabilities | 3 468,4 | 4 462,4 |
Oslo, 17 March 2010
Financial statements and notes
Atea Annual Report 2009
Statement of changes in equity
| (Amounts in MNOK) | Share capital 1) | Share premium reserve | Fund for employee option programmes | Fund for currency translation differences | Retained earnings | Total equity |
|---|---|---|---|---|---|---|
| Equity as of 1 January 2007 | 945,0 | 589,4 | 23,4 | - | 282,8 | 1 840,6 |
| Profit/loss for the year | - | - | - | - | 331,3 | 331,3 |
| Change in treasury shares | -10,0 | - | - | - | -32,9 | -42,9 |
| Employee share options, employee contributions | - | - | 4,8 | - | - | 4,8 |
| Issue of share capital | 10,3 | 8,7 | - | - | - | 19,0 |
| Equity as of 31 December 2007 | 945,3 | 598,1 | 28,2 | - | 581,2 | 2 152,8 |
| Equity as of 1 January 2008 | 945,3 | 598,1 | 28,2 | - | 581,2 | 2 152,8 |
| Profit/loss for the year | - | - | - | - | 557,5 | 557,5 |
| Change in treasury shares | -27,9 | - | - | - | -42,8 | -70,7 |
| Employee share options, employee contributions | - | - | 10,2 | - | - | 10,2 |
| Equity as of 31 December 2008 | 917,4 | 598,1 | 38,4 | - | 1 095,9 | 2 649,8 |
| Equity as of 1 January 2009 | 917,4 | 598,1 | 38,4 | - | 1 095,9 | 2 649,8 |
| Dividends | - | - | - | - | -91,7 | -91,7 |
| Profit/loss for the year | - | - | - | - | -280,6 | -280,6 |
| Change in treasury shares | 8,9 | - | - | - | 15,9 | 24,8 |
| Employee share options, employee contributions | - | - | 8,3 | - | - | 8,3 |
| Equity as of 31 December 2009 | 926,3 | 598,1 | 46,7 | - | 739,5 | 2 310,6 |
1) See also Note 14.
Cash flow statement
| (Amounts in MNOK) | Note | 2009 | 2008 | 2007 |
|---|---|---|---|---|
| Profit/loss before taxes | -241,6 | 522,4 | 300,2 | |
| Intercompany interest charges with no effect on cash flow | -100,3 | -172,3 | - | |
| Effect of currency fluctuations with no effect on cash flow | 297,6 | -402,3 | - | |
| Options | 3,3 | 1,3 | -3,0 | |
| Invoicing of management fee with no effect on cash flow | -15,0 | -15,1 | - | |
| Gains/losses on the sale of subsidiaries/businesses | - | - | -296,2 | |
| Change in trade payables | 1,1 | -2,0 | -0,3 | |
| Change in other accruals | 282,3 | -84,0 | 56,2 | |
| Net cash flow from operational activities | 227,4 | -152,0 | 56,9 | |
| Acquisition and capitalisation of subsidiaries | -3,9 | -132,8 | - | |
| Sale of subsidiaries | - | - | 1 595,7 | |
| Payments on loans to subsidiaries | 10,0 | - | -1 595,7 | |
| Net cash flow from investment activities | 6,1 | -132,8 | - | |
| Purchase/sale of treasury shares | 14 | 17,8 | -70,6 | -42,9 |
| Proceeds from new issues | 14 | - | - | 19,0 |
| Dividend distributions | -91,7 | - | - | |
| Payments of loans | -696,2 | 493,2 | 50,0 | |
| Net cash flow from financing activities | -770,1 | 422,6 | 26,1 | |
| Net change in cash and cash equivalents for the year | -536,6 | 137,8 | 83,0 | |
| Cash and cash equivalents at the start of the year | 4 | 563,8 | 426,0 | 343,0 |
| Cash and cash equivalents at the end of the year | 4 | 27,2 | 563,8 | 426,0 |
Financial statements and notes
Also Annual Report 2009
Note 1 General information, accounting principles and unusual items
About Atea ASA
These are the financial statements of Atea ASA, which is the holding company for the group and includes the group's top management and associated staff functions (9 employees).
See also Note 1 in the group's consolidated financial statements.
Operating revenues
The holding company's operating expenses (holding company cost), except for the part estimated to be related to the entity as a whole, are allocated to the reporting segments (country subsidiaries in all the countries).
Accounting principles
The accounting principles described for the Group are consistent with those used for the parent company. Critical accounting estimates and assessments in applying the group's accounting policies is mainly related to the valuation of assets (shares in subsidiaries with a book value of MNOK 1,425 and long-term receivables on subsidiaries with a book value of MNOK 1,831 as of 31 December 2009). See also Note 4 in the group's consolidated financial statements.
The accounts have been prepared in accordance with the International Financial Reporting Standard (IFRS) as stipulated by the EU.
There may be figures and percentages that do not always add up correctly due to rounding differences.
Note 2 Shares in subsidiaries
Financial year 2009
| (Amounts in MNOK) | Head office | Ownership and voting share (%) | Equity as of 31 December | Book value | Primary activity |
|---|---|---|---|---|---|
| Atea AS (Norway) | Oslo, Norway | 100 | 826,0 | 401,6 | IT infrastructure |
| Atea Holding AB (Sweden) | Stockholm, Sweden | 100 | 263,8 | 296,2 | IT infrastructure |
| Atea Holding A/S (Denmark) | Copenhagen, Denmark | 100 | 378,8 | 518,8 | IT infrastructure |
| Atea Holding Oy (Finland) | Helsinki, Finland | 100 | 5,7 | 57,2 | IT infrastructure |
| UAB Atea Baltic | Vilnius, Lithuania | 78,75 | 130,7 | 142,6 | IT infrastructure |
| Other dormant companies | 100 | 16,5 | 8,8 | ||
| Total shares in subsidiaries | 1 425,2 |
Financial year 2008
| (Amounts in MNOK) | Head office | Ownership and voting share (%) | Equity as of 31 December | Book value | Primary activity |
|---|---|---|---|---|---|
| Atea AS (Atea AS) | Oslo, Norway | 100 | 560,7 | 400,1 | IT infrastructure |
| Atea Holding AB (Sweden) | Stockholm, Sweden | 100 | 302,5 | 294,6 | IT infrastructure |
| Atea Holding A/S (Denmark) | Copenhagen, Denmark | 100 | 536,8 | 516,7 | IT infrastructure |
| Atea Holding OY (Finland) | Helsinki, Finland | 100 | 19,2 | 56,7 | IT infrastructure |
| UAB Atea Baltic | Vilnius, Lithuania | 78,35 | 506,1 | 138,9 | IT infrastructure |
| Other dormant companies | 100 | 15,9 | 8,8 | ||
| Total shares in subsidiaries | 1 415,9 |
Note 3 Other receivables
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Prepaid expenses | 1,0 | 0,7 |
| Receivables from subsidiaries | 149,0 | 287,7 |
| Other current receivables | 8,2 | 0,1 |
| Total other current receivables | 158,1 | 288,5 |
Financial statements and notes
Atea Annual Report 2009
Maturity analysis for receivables from subsidiaries 2009
| < 30 days | 31-90 days | > 91 days | |
|---|---|---|---|
| Norway | 3,7 | ||
| Sweden | 36,3 | ||
| Denmark | 71,1 | ||
| Finland | 15,1 | ||
| Baltic States | 22,7 | ||
| Total | 149,0 | ||
| Maturity analysis for receivables from subsidiaries 2008 | |||
| < 30 days | 31-90 days | > 91 days | |
| Norway | 3,7 | ||
| Sweden | 64,7 | ||
| Denmark | 154,9 | ||
| Finland | 26,4 | ||
| Baltic States | 38,0 | ||
| Total | 287,7 |
Note 4 Liquidity reserve
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Cash and cash equivalents | ||
| Cash and bank deposits 1) | 27,2 | 563,8 |
| - of which restricted funds | - | - |
| Unrestricted cash | 27,2 | 563,8 |
| Short-term overdraft facility | 132,0 | - |
| Liquidity reserve | 159,2 | 563,8 |
| Loan facilities (see Note 7) | ||
| Short-term overdraft facility | 132,0 | - |
| - of which utilised | - | - |
| Short-term loan facility | 225,8 | 385,5 |
| - of which utilised | 225,8 | 385,5 |
1) The subsidiaries' deposits in the parent company's cash pool of net MNOK 454.8 as of 31 December 2009 (MNOK 970.0 in 2008) are posted as liquid assets in Atea ASA, and as short-term balances with the subsidiaries (see Note 5).
Note 5 Trade payables and other current liabilities
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Trade payables to subsidiaries | 3,1 | 1,8 |
| Other trade payables | 0,1 | 0,4 |
| Total trade payables | 3,2 | 2,2 |
| Government withholdings and taxes | 0,5 | 0,3 |
| Short-term debt to subsidiaries | 454,8 | 970,0 |
| Accrued expenses and other current liabilities | 5,9 | 3,5 |
| Total other current liabilities | 461,2 | 973,8 |
| Total trade payables and other current liabilities | 464,4 | 976,0 |
| Maturity analysis for trade payables | 2009 | 2008 |
| --- | --- | --- |
| Maturity < 30 days | 0,1 | 2,2 |
| Maturity 31-90 days | - | - |
| Maturity > 91 days | - | - |
| Total MNOK | 0,1 | 2,2 |
Financial statements and notes
Atea Annual Report 2009
Note 6 Borrowings
(Amounts in MNOK)
| 2009 | 2008 | |
|---|---|---|
| Long-term receivables 1) | ||
| Long-term receivables from subsidiaries | 1 830,7 | 2 128,2 |
| Total receivables | 1 830,7 | 2 128,2 |
| Long-term loans 2) | ||
| Long-term debt to subsidiaries | 466,5 | 450,4 |
| Short-term loans 1) | ||
| Short-term loan facility | 225,8 | 385,5 |
| Total loans | 692,4 | 835,8 |
1) Interest is charged on long-term claims against subsidiaries at the 12-month interbank rate plus a company-specific margin calculated based on the subsidiaries' respective creditworthiness. The interest is calculated and falls due annually in arrears. The principal amount will not fall due for payment in the foreseeable future.
2) Interest is charged on long-term debt against subsidiaries at the three-month interbank rate plus a margin corresponding to the group's external debt. The interest is charged and added to the principal amount annually in arrears. The principal amount will not fall due for payment in the foreseeable future.
3) Terms and conditions for the company's revolving borrowing facilities are described in Notes 11 and 14 in the Group's consolidated financial statements.
| Maturity analysis for loans 2009 - MNOK | Less than 1 month | 1-3 months | 3 months to 1 year | 1-5 years | Total |
|---|---|---|---|---|---|
| Short-term loan facility | |||||
| Long-term debt to subsidiaries 1) | - | - | - | 559,7 | 559,7 |
| Total liabilities | - | - | 234,2 | 559,7 | 793,9 |
1) Includes interest over a period of five years. Repayment is not agreed on, but five years is considered a probable time horizon.
| Maturity analysis for loans 2008 - MNOK | Less than 1 month | 1-3 months | 3 months to 1 year | 1-5 years | Total |
|---|---|---|---|---|---|
| Short-term loan facility | |||||
| Long-term debt to subsidiaries 1) | - | - | - | 579,7 | 579,7 |
| Total liabilities | - | - | 405,4 | 579,7 | 985,2 |
1) Includes interest over a period of five years. Repayment is not agreed on, but five years is considered a probable time horizon.
Note 7 Classification of financial instruments
| 2009 - MNOK | Loans and receivables | Amortised cost | Fair value 1) |
|---|---|---|---|
| Financial assets | |||
| Interest-bearing long-term receivables | 1 830,7 | 1 830,7 | |
| Other receivables 2) | 157,1 | 157,1 | |
| Cash and cash equivalents | 27,2 | 27,2 | |
| Financial liabilities | |||
| Interest-bearing long-term liabilities | 466,5 | 466,5 | |
| Trade payables | 3,2 | 3,2 | |
| Interest-bearing current liabilities | 225,8 | 225,8 | |
| Other current liabilities 3) | 461,2 | 461,2 |
1) Book value provides a reasonable expression of fair value
2) Less prepaid expenses
Financial statements and notes
Alisa Annual Report 2009
2008 - MNOK
Loans and receivables
Amortised cost
Fair value 1)
Financial assets
| Interest-bearing long-term receivables | 2 128,2 | | 2 128,2 |
| --- | --- | --- | --- |
| Other receivables 2) | 287,8 | | 287,8 |
| Cash and cash equivalents | 563,8 | | 563,8 |
Financial liabilities
| Interest-bearing long-term liabilities | | 450,4 | 450,4 |
| --- | --- | --- | --- |
| Trade payables | | 2,1 | 2,1 |
| Interest-bearing current liabilities | | 385,5 | 385,5 |
| Other current liabilities 3) | | 973,8 | 973,8 |
1) Book value provides a reasonable expression of fair value
2) Less prepaid expenses
Note 8 Taxes
Calculation of income tax expense
(Amounts in MNOK)
| | 2009 | 2008 | 2007 |
| --- | --- | --- | --- |
| Profit/loss before taxes | -241,6 | 522,4 | 300,2 |
| Taxes calculated at the rate of 28% in Norway | -67,7 | 146,3 | 84,1 |
| Tax effect of: | | | |
| - permanent differences | 0,7 | 2,8 | -90,9 |
| - change in off-balance-sheet deferred tax assets | 106,0 | -184,2 | -24,3 |
| Total income tax expense | 39,0 | -35,1 | -31,1 |
Atea ASA does not have any tax payable because the company has a tax loss carryforward.
Deferred tax liabilities/assets
(Amounts in MNOK)
| | 2009 | 2008 | 2007 |
| --- | --- | --- | --- |
| Deferred tax assets | | | |
| Tangible fixed assets | 0,1 | 0,1 | 0,1 |
| Accounting provisions and accruals | 0,6 | 0,6 | 0,8 |
| Retirement benefits | 0,3 | 0,2 | 0,2 |
| Capital gain and loss account | 8,3 | 10,4 | 13,0 |
| Tax loss carryforward 1) | 415,4 | 346,3 | 516,7 |
| Total deferred tax assets | 424,7 | 357,7 | 530,9 |
| Deferred tax assets not recognised on balance sheet | 397,5 | 291,5 | 499,8 |
| Deferred tax assets recognised on balance sheet 2) | 27,2 | 66,2 | 31,1 |
1) There are no time restrictions on the utilisation of tax loss carryforwards
2) Atea ASA has substantial tax loss carryforwards. Deferred tax assets have been recognised in the accounts at the end of 2009 after a conservative assessment of the taxable profit in the coming years. The company is expected to report a taxable profit due to interest income on loans to subsidiaries, which exceed the company's other costs.
Financial statements and notes
Atea Annual Report 2009
Note 9 Retirement benefit obligations
Some of the company's employees are covered by pension schemes entitling them to defined future pension benefits. The pension benefits are mainly dependent on the number of earning years, wage level upon reaching pension age and the size of the social security benefit. The pension agreement is financed through a group insurance scheme with a life insurance company. The company's obligation covers 2 employees as of 31 December 2009. Pension obligations are based on the following economic assumptions:
| 2009 1) | 2008 | |
|---|---|---|
| Discount rate | 4,4% | 3,8 % |
| Expected return on plan assets | 5,6% | 5,8 % |
| Annual expected wage inflation | 3,0% | 3,0 % |
| Adjustment of statutory base amount | 4,0% | 3,8 % |
| Future increase in pension benefits | 1,3% | 1,5 % |
1) The Group's choice of pension assumptions deviates from the Norwegian Accounting Standards Board's recommended pension assumptions NRS (V) with regard to wage inflation. Wage inflation is a factor that will vary among different companies, industries, etc. Atea operates in an industry with substantial pressure on the margins and focus on cost reductions. It has been assessed that there is no room for general wage inflation as suggested in the recommendation. Enhancement of the efficiency of the sales and delivery processes will also open up the possibility of cost reductions by changing the composition of the employees and competence profiles
Net pension costs are determined as follows:
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Present value of pension benefits earned during the period | 0,1 | 0,2 |
| Interest cost of pension obligations | 0,0 | 0,0 |
| Expected return on plan assets | 0,0 | 0,0 |
| Payments to defined contribution scheme | 0,0 | 0,0 |
| Employer's social security tax | - | 0,0 |
| Recognised effect of plan changes / actuarial gains or losses | -0,1 | -0,1 |
| Pension costs | 0,0 | 0,1 |
Actual pension obligations and the net pension obligations entered on the balance sheet are reconciled as follows:
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Gross pension obligations | 0,6 | 0,7 |
| Plan assets at market value 1) | 0,6 | 0,5 |
| Net pension obligations at market value | 0,1 | 0,2 |
| Unrecognised effect of actuarial gains and losses | 0,9 | 0,7 |
| Employer's social security tax | 0,0 | 0,0 |
| Pension obligations recognised on the balance sheet | 1,0 | 0,9 |
1) Plan assets at market value are not allocated to any main categories/asset classes. This is due to the fact that the group's pension plans are fully insured (100% insured plan) with Storebrand Kapitalforsikring.
Movement in the obligation recognised on the balance sheet:
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Beginning of the year | 0,9 | 0,8 |
| Total expenses - see above | 0,1 | 0,1 |
| Premiums paid | - | 0,0 |
| End of the year | 1,0 | 0,9 |
In 2007 the company converted to a defined contribution scheme for four of its employees. See note 17 in the consolidated financial statements for a description of the defined contribution scheme. Contributions totalling NOK 49,692 were expensed in 2009.
Financial statements and notes
Atea Annual Report 2009
Note 10 Employee compensation and benefit expenses
| (Amounts in MNOK) | 2009 | 2008 | 2007 |
|---|---|---|---|
| Wages and salaries | 18,4 | 13,6 | 13,5 |
| Employer's social security tax | 1,0 | 0,9 | 1,5 |
| Option plans for the management and employees | 3,3 | 1,3 | 1,0 |
| Pension costs (see Note 9) | 0,1 | 0,1 | 0,1 |
| Other personnel expenses | 4,2 | 1,2 | 0,6 |
| Total employee compensation and benefit expenses | 27,0 | 17,2 | 16,7 |
| Number of employees | 9 | 10 | 9 |
Wages and remuneration to the President and CEO, CFO, Board of Directors and the employees' share option plans are described in Note 19 in the Group's consolidated financial statements. Loans to employees that are described in the same note apply to Atea ASA in their entirety.
Deloitte is the auditor of Atea ASA. The table below shows Deloitte's total charges for auditing and other services in 2009. All amounts are exclusive of VAT.
| (Amounts in NOK 1,000) | Auditor's fees | Attestation services | Tax advisory services | Other non-audit services | Total |
|---|---|---|---|---|---|
| Deloitte | 917 | 0 | 16 | 199 | 1 132 |
Note 11 Net financial items
| (Amounts in MNOK) | 2009 | 2008 | 2007 |
|---|---|---|---|
| Gain on sale of shares in subsidiaries 1) | - | - | 296,2 |
| Interest income from subsidiaries | 116,5 | 205,1 | 85,6 |
| Other interest income 2) | 11,8 | 10,0 | 15,0 |
| Foreign exchange effects 3) | 149,7 | 569,6 | - |
| Total financial income | 277,9 | 784,7 | 396,8 |
| Interest expenses from subsidiaries | 16,2 | 32,9 | 31,1 |
| Interest expenses from other loans 2) | 34,7 | 49,8 | 30,8 |
| Foreign exchange effects 3) | 447,3 | 167,0 | 11,8 |
| Other financial expenses | 0,5 | 2,6 | 2,6 |
| Total financial expenses | 498,7 | 252,3 | 76,3 |
| Net financial items | -220,8 | 532,4 | 320,5 |
1) Intercompany sales by Emtortor Sweden to Atea Holding AB. The gain equals the difference between the book value of the shares and the selling price.
2) Interest paid in 2009 totals MNOK 34.7 (MNOK 49.8 in 2008 and MNOK 30.8 in 2007). Interest received in 2009 totals MNOK 11.8 (MNOK 10.0 in 2008 and MNOK 15.0 in 2007).
3) Unrealised foreign exchange effects related to the company's long-term loans against subsidiaries totalled MNOK -297.6 in 2009 (MNOK 326.7 in 2008 and MNOK -10.6 in 2007). Net unrealised foreign exchange effects during the term of the loans is MNOK 18.5.
Note 12 Commitments
| (Amounts in MNOK) | 2009 | 2008 |
|---|---|---|
| Guarantees for subsidiaries | 1 205,0 | 1 375,0 |
| Other guarantee commitments | 1,0 | 1,0 |
| Total guarantees | 1 206,0 | 1 376,0 |
It is considered improbable (i.e. < 10%) that Atea ASA will incur any charges as a result of guarantee liabilities the company has incurred on behalf of the subsidiaries.
Financial statements and notes
Atea Annual Report 2009
Note 13 Sensitivity analysis
| Sensitivity analysis 2009 – MNOK | Interest rate risk | Foreign currency risk | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Amount affected | + 200 bp 1) | - 200 bp 1) | + 10% | - 10% | |||||
| Effect on profit/ loss | Other effects on equity | Effect on profit/ loss | Other effects on equity | Effect on profit/ loss | Other effects on equity | Effect on profit/ loss | Other effects on equity | ||
| Financial assets | |||||||||
| - NOK | -306,8 | -6,1 | - | 6,1 | - | - | - | - | - |
| - SEK | 604,6 | 12,1 | - | -12,1 | - | 60,5 | - | -60,5 | - |
| - DKK | 1 012,2 | 20,2 | - | -20,2 | - | 101,2 | - | -101,2 | - |
| - EUR | 226,3 | 4,5 | - | -4,5 | - | 22,6 | - | -22,6 | - |
| - USD | 0,7 | 0,0 | - | -0,0 | - | 0,1 | - | -0,1 | - |
| Effect on financial assets before taxes | 30,7 | - | -30,7 | - | 184,4 | - | -184,4 | - | |
| Tax rate (28%) | -8,6 | - | 8,6 | - | -51,6 | - | 51,6 | - | |
| Effect on financial assets after taxes | 22,1 | - | -22,1 | - | 132,7 | - | -132,7 | - | |
| Financial liability items | |||||||||
| - NOK | 692,4 | -13,8 | - | 13,8 | - | - | - | - | - |
| Effect on financial assets before taxes | -13,8 | - | 13,8 | - | - | - | - | - | |
| Tax rate (28%) | 3,9 | - | -3,9 | - | - | - | - | - | |
| Effect on financial assets after taxes | -10,0 | - | 10,0 | - | - | - | - | - | |
| Total increase/reduction | 12,2 | - | -12,2 | - | 132,7 | - | -132,7 | - |
1) Basis points
| Sensitivity analysis 2008 – MNOK | Interest rate risk | Foreign currency risk | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Amount affected | + 200 bp 1) | - 200 bp 1) | + 10% | - 10% | |||||
| Effect on profit/ loss | Other effects on equity | Effect on profit/ loss | Other effects on equity | Effect on profit/ loss | Other effects on equity | Effect on profit/ loss | Other effects on equity | ||
| Financial assets | |||||||||
| - NOK | -147,6 | -3,0 | - | 3,0 | - | - | - | - | - |
| - SEK | 676,4 | 13,5 | - | -13,5 | - | 67,6 | - | -67,6 | - |
| - DKK | 1 197,8 | 24,0 | - | -24,0 | - | 119,8 | - | -119,8 | - |
| - EUR | 268,7 | 5,4 | - | -5,4 | - | 26,9 | - | -26,9 | - |
| - USD | -0,7 | -0,0 | - | 0,0 | - | -0,1 | - | 0,1 | - |
| Effect on financial assets before taxes | 39,9 | - | -39,9 | - | 214,2 | - | -214,2 | - | |
| Tax rate (28%) | -11,2 | - | 11,2 | - | -60,0 | - | 60,0 | - | |
| Effect on financial assets after taxes | 28,7 | - | -28,7 | - | 154,2 | - | -154,2 | - | |
| Financial liability items | |||||||||
| - NOK | 835,8 | -16,7 | - | 16,7 | - | - | - | - | - |
| Effect on financial assets before taxes | -16,7 | - | 16,7 | - | - | - | - | - | |
| Tax rate (28%) | 4,7 | - | -4,7 | - | - | - | - | - | |
| Effect on financial assets after taxes | -12,0 | - | 12,0 | - | - | - | - | - | |
| Total increase/reduction | 16,7 | - | -16,7 | - | 154,2 | - | -154,2 | - |
1) Basis points
Financial statements and notes
Alisa Annual Report 2009
Note 14 Share capital, share premiums and other paid-in equity
| (Amounts in MNOK) | Number of shares | Share capital | Share premium | Total share capital and premiums | Fund for employee option programmes | ||
|---|---|---|---|---|---|---|---|
| Issued | Treasury shares | Issued | Treasury shares | ||||
| As of 1 January 2008 | 95,5 | -1,0 | 955,3 | -10,0 | 598,1 | 1 543,4 | 28,2 |
| Employee share options, of employee contributions | - | - | - | - | - | - | 10,2 |
| Change in treasury shares | - | -2,8 | - | -27,9 | - | -27,9 | - |
| As of 31 December 2008 | 95,5 | -3,8 | 955,3 | -37,9 | 598,1 | 1 515,5 | 38,4 |
| As of 1 January 2009 | 95,5 | -3,8 | 955,3 | -37,9 | 598,1 | 1 515,5 | 38,4 |
| Employee share options, employee contributions | - | - | - | - | - | - | 8,3 |
| Change in treasury shares | - | 0,9 | - | 8,9 | - | 8,9 | - |
| As of 31 December 2008 | 95,5 | -2,9 | 955,3 | -29,0 | 598,1 | 1 524,4 | 46,7 |
The total number of outstanding ordinary shares of Atea ASA as of 31 December 2009 was 95,527,022 shares with a nominal value of NOK 10 each (95,527,022 shares in 2008 and 95,527,022 in 2007).
Treasury shares
In 2009 Atea ASA sold 889,066 treasury shares at an average price of NOK 28.23 per share (purchased a net total of 2,788,325 treasury shares at an average price of NOK 25.07 per share in 2008. The purchase was made as part of the buyback programme approved by Atea ASA's General Meeting of 24 April 2008. The minimum and maximum price that may be paid for each share is NOK 10 (nominal value) and NOK 200, respectively, in accordance with the authorisation. The authorisation was valid for purchases made in 2008).
Share options
Share options have been allotted to the management and selected employees. Each share option allows for the subscription of one share in Atea ASA. The fair value of the options is calculated when they are allotted and expensed over the vesting period. A cost of MNOK 2.5 has been recognised as an expense in 2009 relating to the share option programmes (MNOK 2.0 in 2008 and MNOK -1.3 in 2007). In addition, employer's social security tax expenses of MNOK 0.9 were recognised in 2009 (MNOK -0.7 in 2008 and MNOK 2.3 in 2007).
Responsibility statement
We confirm to the best of our knowledge that;
- the consolidated financial statements for 2009 have been prepared in accordance with IFRS as adopted by the EU, as well as additional information requirements in accordance with the Norwegian Accounting Act, and that
-
the financial statements for the parent company for 2009 have been prepared in accordance with the IFRS as adopted by the EU, as well as additional information requirements in accordance with the Norwegian Accounting Act, and that
-
the information presented in the financial statements gives a true and fair view of the Company's and Group's assets, liabilities, financial position and result for the period viewed in their entirety, and that
- the Board of Directors' report gives a true and fair view of the development, performance and financial position of the Company and Group, and includes a description of the principal risks and uncertainties.
Sven Madsen
Sigrun Hjelmquist
Oslo, 17 March 2010
Financial statements and notes
Atea Annual Report 2009
Deloitte.
Deloitte AS
Karenslyst allé 20
Postboks 347 Skøyen
N-0213 Oslo
Norway
Tlf: +47 23 27 90 00
Faks: +47 23 27 90 01
www.deloitte.no
Translation from the original Norwegian version
To the Annual Shareholders' Meeting of Atea ASA
AUDITOR'S REPORT FOR 2009
We have audited the annual financial statements of Atea ASA as of 31 December 2009, showing a loss of NOK 280.6 million for the parent company and a comprehensive income of NOK 13.3 for the group. We have also audited the information in the Board of Directors' report concerning the financial statements, the going concern assumption, and the proposal for the coverage of the loss. The annual financial statements comprise the parent company's financial statements and the group accounts. The parent company's financial statements comprise the income statement, the balance sheet, the statement of cash-flows, the statement of changes in equity, and the accompanying notes. The group accounts comprise the statement of income and comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and the accompanying notes. International Financial Reporting Standards as adopted by the EU have been applied to prepare the financial statements. These financial statements are the responsibility of the Company's Board of Directors and Managing Director. Our responsibility is to express an opinion on these financial statements and on other information according to the requirements of the Norwegian Act on Auditing and Auditors.
We have conducted our audit in accordance with the Norwegian Act on Auditing and Auditors and generally accepted auditing practice in Norway, including standards on auditing adopted by Den norske Revisorforening. These auditing standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. To the extent required by law and generally accepted auditing practice, an audit also comprises a review of the management of the Company's financial affairs and its accounting and internal control systems. We believe that our audit provides a reasonable basis for our opinion.
In our opinion,
- the financial statements are prepared in accordance with law and regulations and give a true and fair view of the financial position of the Group as of 31 December 2009, and the results of its operations and its cash flows and the changes in equity for the year then ended, in accordance with International Financial Reporting Standards as adopted by the EU
- the Company's management has fulfilled its duty to see to proper and well arranged recording and documentation of accounting information in accordance with law and generally accepted bookkeeping practice in Norway
- the information in the Board of Directors' report concerning the financial statements, the going concern assumption, and the proposal for the coverage of the loss, is consistent with the financial statements and complies with law and regulations.
Oslo, 17 March 2010
Deloitte AS
Kjetil Nevstad (sign.)
State Authorised Public Accountant (Norway)
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/no/omoss for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms.
Member of Deloitte Touche Tohmatsu
Medlemmer av Den Norske Revisorforening
org.nr: 980 211 282
Corporate governance and company management
Good corporate governance contributes to the creation of value, and it builds trust externally and internally at the same time. Good corporate governance requires good, effective cooperation between the day-to-day management and Board of Directors, respect for the company's other stakeholders, and open, honest communication with the outside world. Below is a description of Atea ASA's foundation for good corporate governance. The company follows the Norwegian recommendation for good corporate governance of October 21, 2009.
Business operations
In accordance with Article 2 of the Articles of Association the objective of Atea ASA is as follows: «The objective of the company is to sell data processing services, computer equipment, systems and related activities, and to participate in other companies for financial purposes». The Articles of Association are available on the company's website.
Equal status
The Group's share capital consists of one class of shares. The Articles of Association do not contain any voting right restrictions. All the shares have equal status.
Purchase of own shares
At the Annual General Meeting of April 29, 2009, the Board of Directors was authorised to purchase the company's own shares. This authority is given in accordance with Section 9-4 of the Norwegian Public Limited Companies Act, and it grants the Board of Directors authority to allow Atea ASA and/or its subsidiaries to buy shares in Atea ASA for a maximum par value of MNOK 70 at prices of between NOK 10 and NOK 200. The Board of Directors is free to elect the methods to be used for the acquisition and sale of the company's own shares. This authority is valid until the Annual General Meeting in 2010 and will expire no later than June 30, 2010. After the acquisition, Atea ASA now holds 1,616,601 of its own shares, which corresponds to 1.69% of the total number of shares issued.
Free negotiability
The shares are freely negotiable. The Articles of Association do not contain any trading restrictions.
Share capital
The Group's equity totalled MNOK 2,813.0 at the end of 2009. This gives an equity ratio of 39.3 per cent. The Board of Directors continuously assesses the company's financial strength and capital requirements in light of the company's strategy and risk profile.
Authority to issue new shares
The Board of Directors was authorised by the Annual General Meeting of April 29, 2009 to increase the Group's share capital by a maximum of MNOK 100 through the issuance of a maximum of 10 million shares, each with a par value of NOK 10. It shall be possible to use this power of attorney to strengthen the company's equity, acquire complementary businesses and any associated obligations, and to issue shares as merger consideration and in connection with the establishment of cooperation with industrial or strategic partners. This authority had not been exercised as of December 31, 2009. This authority is valid until the Annual General Meeting in 2010 and will expire no later than June 30, 2010.
Dividend
The General Meeting declares the annual dividend based on a proposal from the Board of Directors. The company's dividend policy is to distribute 10-40 per cent of its annual profits as dividends in periods with surplus liquidity. Due to the company's solidity, the Board of Directors proposes a dividend of NOK 1.25 per share for the 2009 accounting year.
General Meeting
The General Meeting guarantees shareholders participation in the company's highest body.
Shareholders who represent at least 5 per cent of the shares may demand that an Extraordinary General Meeting be held to deal with a specific matter pursuant to Section 5-7 of the Norwegian Public Limited Companies Act.
The General Meeting shall normally be held by June 1, annually. Notice of the General Meeting shall be sent to all the shareholders with a known address and will be published on Atea ASA's website at least 21 days prior to the date of the Annual General Meeting. The recommendations from the Nominating Committee is also published on the website. Registration is by a written reply by letter or fax, or through the Internet. Importance is attached to the case documents containing adequate detail, so that the shareholders can make a decision on the matters that are to be discussed, and setting the registration deadline as close as practically possible to the actual meeting. Shareholders who do not participate in person may vote by proxy. The agenda is set by the Board of Directors, and the main items normally include: report by the President and CEO, approval of the annual report and accounts, election of members to the Board of Directors and the Nominating Committee, potentially new election of an auditor, as well as adoption of remuneration to the auditor and Board of Directors. As a minimum, the Board Chairman, a representative from the Nominating Committee, the auditor, the President and CEO, and the Chief Financial Officer will participate at the General Meeting. The General Meeting is chaired by an independent chairperson. In 2009 the Annual General Meeting was held on April 29, and 43.52 per cent of the total share capital was represented.
Nominating Committee
The Nominating Committee shall consist of the Board Chairman and two members elected by the General Meeting pursuant to Article 7 of the Articles of Association. The
Corporate Governance and Company Management
Atea Annual Report 2009
members who are elected by the General Meeting have a term of office of two years. A new committee was elected by the Annual General Meeting in 2009 and consists of:
- Karl Martin Stang (Chairman of the Nominating Committee)
- Carl Espen Wollebekk
- Ib Kunoe (Board Chairman)
Board of Directors
Election and composition of the Board of Directors
The General Meeting elects the shareholder-elected representatives to the Board of Directors. The Nominating Committee prepares the nominations for shareholder-elected board members prior to the election. Importance is attached to the combined Board of Directors having expertise in the work of boards and the company's principal operations, in addition to possessing the necessary independence in relation to the company's day-to-day management and the company's principal shareholders. Resolutions concerning the composition of the Board of Directors are made on the basis of a simple majority. The Board of Directors elects its own chairman and deputy chairman. This deviates from the Norwegian Code of Practice for Corporate Governance, which states that the Board Chairman should be elected by the General Meeting. The shareholder-elected board members are: Ib Kunoe (Board Chairman), Cathrine Foss Stene, Kristine M. Madsen, Sven Madsen and Sigrun Hjelmquist. Ib Kunoe is associated with Consolidated Holdings A/S and System Integration ApS, both of which are among the company's largest shareholders. Sven Madsen is financial director in Consolidated Holdings A/S. The other board members are independent in relation to the company's largest shareholders and the company's management. The board members are elected for a term of two years and may stand for re-election.
Independence of the Board of Directors
The Board of Directors considers itself to be independent of the Group's administrative management. Importance is attached to there not being any conflicts of interest between the shareholders, Board of Directors, corporate management and the company's other stakeholders.
Remuneration to the Board of Directors
The General Meeting determines the annual remuneration to the Board of Directors. This remuneration shall reflect the Board of Directors' responsibility, expertise, and time spent, and it is not dependent on results. The full annual remuneration is NOK 300 000 for the Board Chairman, NOK 150 000 for each shareholder-elected board member, and NOK 100 000 for each employee-elected board member.
For a detailed account of the remuneration paid to board members and their shareholdings in the company, see Notes 12 and 19, respectively, to the annual accounts.
Board of Directors' work
The Board of Directors has primary responsibility for management of the Group. The Board of Directors shall ensure proper organisation of the business operations, draw up plans/strategies and budgets, keep itself informed of the company's financial position and ensure that the operations, accounting and asset management are subjected to proper scrutiny. The function of the Board of Directors is primarily to safeguard the interests of all the shareholders; however, the Board of Directors also bears responsibility for the company's other stakeholders.
The guidelines for the work of the Board of Directors are set forth in separate rules of procedure. The rules of procedure contain, for example, provisions relating to board meeting notices, the Board of Directors' administrative procedures, division of work between the Board of Directors and the President and CEO, the Board of Directors' obligations and authority, impartiality requirements, confidentiality requirements, and the handling of insider information.
Internal control
To ensure that the company's operations are carried out in accordance with the current legislation and framework determined by the Board of Directors, guidelines have been adopted to ensure good internal control. These guidelines include routines for financial and economic reporting, communication and information management, authorisation, risk management, and ethics.
The Company has in 2009 prepared an audit committee which will become effective from 2010. Members of the audit committee are for the time being Sven Madsen and attorney Kristine Madsen. The responsibilities of the audit committee are amongst other things; (i) prepare the board's quality assurance of the financial reporting, (ii) monitor the company's internal control and the company's risk evaluation systems, (iii) have continuous contact with the company's auditor regarding audit of the annual accounts and the group accounts, (iv) review together with the company's auditor and monitor the auditor's independence, hereunder other services than auditing that has been delivered by the auditor and (v) provide its recommendations to the company's board with respect to election of auditor.
Notice and structure of meetings
The Board of Directors schedules fixed meetings every year. Normally six to eight meetings are held annually. Additional meetings are called as required. A total of 7 meetings were held in 2009.
Board members regularly receive information on the company's operational and financial performance, including monthly operating reports. The company's business plan, strategy, and risk are subjected to review and evaluation by the Board of Directors. The board members are free to consult the company's management if they feel a need to do so. The Board of Directors' discussions and minutes of meetings are confidential, unless the Board of Directors determines otherwise, or if there is clearly no need for such treatment. In addition to the board members, the President and CEO, Chief Financial Officer and the company secretary participate in the meetings. Other participants are invited as required. All matters of significant importance shall be submitted to the Board of Directors. This applies, for example, to approval of the annual and quarterly reports, strategy and strategic plans, acquisition and sale of businesses, and investments.
Use of Board Committees
The Group shall have a Nominating Committee pursuant to the Articles of Association. The Board of Directors has evaluated whether additional Board Committees should be established. In the opinion of the Board of Directors there should in addition to the audit committee be a compensation committee from 2010, which consists of Ib Kunoe (Board Chairman), Sven Madsen (board member) and Karl Martin Stang and Carl Espen Wollebekk from the Nominating Committee.
Insider trading
The Board of Directors has adopted instructions for Atea ASA's employees and primary insiders, which regulate trading in financial instruments and include provisions relating to the prohibition of trading, investigation and reporting requirements, ban on giving advice, duty of confidentiality, etc.
Board of Directors' self-evaluation
The Board of Directors perform an annual evaluation of how the board members function individually and as a group.
Remuneration of the President and CEO and key executives
The President and CEO's terms are set by the Board of Directors. In the opinion of the Board of Directors the President and CEO's terms shall be competitive. The remuneration of the President and CEO is specified in Note 19 to the annual accounts. The Board of Directors has established guidelines for remuneration of the company's key employees, and it will submit a separate statement to the General Meeting for its approval.
Corporate Governance and Company Management
Area Annual Report 2009 13
Information and communication Annual report and accounts—interim reporting
The Group ordinarily presents its preliminary annual accounts in the beginning of February. The complete accounts, Board of Directors' report, and annual report are made available to the shareholders and other stakeholders on the company's website 21 days prior to the General Meeting, at the latest. A printed copy of the annual report can be sent shareholders on request. Beyond this, interim accounts are reported on a quarterly basis.
Other market information
Open investor presentations are arranged in connection with the publication of the Group's annual and quarterly results. The President and CEO reviews the results and comments on the performance of each individual country and market, as well as the outlook. The Group's Chief Financial Officer also participates in these presentations. Investor-related information and presentations associated with the annual and quarterly results are available on the Group's website (www.atea.com/IR). Beyond this, the Group maintains a running dialogue and conducts presentations for analysts and investors.
The company's financial calendar with an overview of the dates for publication of the annual report, interim reports, etc., has been published on the company's website (www.atea.com/ir). The company's presentations, which are also published online on the Internet via a webcast, are available on the company's website (www.atea.com/webcast).
The Group considers informing the shareholders and investors on the Group's performance and its economic and financial status to be of vital importance. Importance is attached to making the same information available to the market and other stakeholders at the same time. Caution with regard to the unfair distribution of information shall therefore be exercised when talking to analysts and investors.
Takeovers
The Board of Directors has not prepared any general principles for how the Board should act in the event of a takeover bid. The company's Articles of Association do not however contain any defence mechanisms against the acquisition of shares, nor do they contain any other measures that restrict the opportunity to acquire shares in the company.
Auditor
Auditor's relationship to the Board of Directors
The auditor participates at the board meeting where the annual accounts are discussed. At this meeting, the Board of Directors is briefed on the annual accounts and any matters of particular concern to the auditor. The auditor has in addition contact with the audit committee according to what is provided above with respect to the committee's responsibilities.
Auditor's relationship to the corporate management
Deloitte has been the company's auditor since 2006. In addition to ordinary auditing, the auditing firm has provided consulting services related to accounting, tax and reporting. Reference is made to Note 19 to the annual accounts.
The corporate management holds regular meetings with the auditor. At this meeting the auditor's reports on the company's accounting principles, risk areas, internal control routines, etc., are reviewed.
The auditor's remuneration is approved by the company's General Meeting. Notice of how the remuneration breaks down between auditing and other services will be given at the General Meeting.
UN Global Compacts ten principles
Atea also support UN Global Compacts ten principles within the areas of human rights, labour standards, environment and anti-corruption. Atea will from 2011 and on report on activities related to the Global Compact with main focus on principles regarding environment.
Atea ASA, Brynsalleen 2, Box 6472 Etterstad, NO-0605 Oslo, Tel +47 22 09 50 00, org.no. 920 237 126, [email protected], www.atea.com
Norway: Atea AS, Brynsalleen 2, Box 6472 Etterstad, NO-0605 Oslo, Tel +47 22 09 50 00, org.no. 976 239 997, [email protected], www.atea.no
Denmark: Atea A/S, Lautrupvang 6, DK-2750 Ballerup, Tel +45 70 25 25 50, org.no 25511484, [email protected], www.atea.dk
Sweden: Atea AB, Box 18, SE-164 93 Kista, Tel +46 (0)8 477 47 00, org.no 556448-0282, [email protected], www.atea.se
Finland: Atea Oy, PL 39, FI-01621 Vantaa, Tel +358 (0)10 613 811, org.no 091 9156-0, [email protected], www.atea.fi
Latvia: SIA Atea, Unijas iela 11a, LV-1039 Riga, Latvia Tel. +371 67 919050, org.no 40003312822, [email protected], www.atea.lv
Lithuania: Atea UAB, Laixvės pr. 3, LT-04215 Vilnius, Tel +370 5 239 7899, org.no 300 125 003, [email protected], www.atea.lt
Estonia: ATEA OÜ, Peterbun tee 47, 11415 Tallinn, Eesti Tel. +372 6 835490, org.no 10916125 [email protected], www.atea.ee
Atea Service Center: Valnu Iela 3, 6th floor, LV-1050 Riga, Tel +371 7359 600, org.no 40003843889, [email protected], www.ateasca.com
Atea Logistics: Atea Logistics AB, Box 159, SE-351 04 Växjö, Tel +46 (0)470 77 16 00, org.no 556354-4690