Quarterly Report • Nov 5, 2009
Quarterly Report
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Interim report January 1 – September 30, 2009
BTS' net turnover increased by 10 percent during the nine-month period and amounted to MSEK 432.7 (393.0) Adjusted for changes in exchange rates, growth was -8 percent. Growth varied significantly among the units: BTS Other markets 3 percent, BTS Europe -11 percent, BTS USA -3 percent and APG -21 percent (growth figure calculated in local currencies).
Operating profit before amortization of intangible assets (EBITA) decreased by 4 percent during the nine-month period and amounted to MSEK 53.7 (56.1). Operating profit during the nine-month period was affected by MSEK 7.7 (6.6) for amortization of intangible assets attributable to acquisitions; the increase is due to a higher dollar rate. Operating profit (EBIT) decreased by 7 percent and amounted to MSEK 46.0 (49.5).
The operating margin before amortization of intangible assets (EBITA margin) was 12 (14) percent. The operating margin (EBIT margin) was 11 (13) percent.
The Group's profit before tax for the nine-month period decreased by 4 percent and amounted to MSEK 45.0 (46.9).
Earnings were positively impacted by improved earnings in BTS North America, APG and parts of BTS Europe and by changes in exchange rates. However, earnings were negatively impacted by an overall decrease in earnings in other parts of BTS Europe and in BTS Other markets.
BTS' net turnover increased by 19 percent and amounted to MSEK 146.1(122.5) during the third quarter. Adjusted for changes in exchange rates, growth was 6 percent.
Operating profit before amortization of intangible assets (EBITA) increased by 29 percent during the third quarter and amounted to MSEK 19.3 (15.0). Operating profit during the third quarter was affected by MSEK 2.4 (2.3) for amortization of intangible assets attributable to acquisitions. Operating profit (EBIT) increased by 33 percent to MSEK 16.9 (12.7). The operating margin before amortization of intangible assets (EBITA margin) was 13 (12) percent. The operating margin (EBIT margin) was 12 (10) percent. Profit before tax for the third quarter increased by 39 percent and amounted to MSEK 16.6 (11.9).
Earnings were positively impacted by improved earnings in BTS North America, APG, parts of BTS Europe and by changes in exchange rates. However, earnings were negatively impacted by an overall decrease in earnings in other parts of BTS Europe and in BTS Other markets.
Demand for training and consultancy services has weakened compared to the previous year. Demand for BTS' services has been better than for the market as a whole.
The severe recession is a having a major impact on many of BTS' clients. BTS considers that it is has gained a significantly better position than its competitors, through a well-diversified customer base, an underweight of clients in the most exposed sectors, very competitive solutions as well as client projects of a strategic and long-term nature.
BTS has a small market share and the company sees good opportunities to increase this during the recession. BTS' recession strategy is based on:
This strategy was successful during 2008 and 2009, as BTS is considered to have performed significantly better than the overall market.
Continued positive trends were noted on the US market during the third quarter, whereas the market in Europe developed negatively.
BTS offers the most comprehensive range of tailored simulation solutions on the market today, a well developed sales organisation and at the same time, is the only company in the world that can serve large international companies on a global basis within this area. BTS to a greater extent, can satisfy existing clients' needs for additional services and solutions, which generates good growth opportunities both in the near-term and long-term.
New clients secured during the nine-month period included Belgacom, Bombardier, Burger King, Deloitte, Genpact, GSK, HSBC, Huhtamaki, McAfee, McDonalds, MetLife, Orange, Pfizer Mexico, SingTel, Sodexo, Vattenfall Germany, Vestas and Woolworths Ltd, among others.
Operative units
Net turnover per operative unit
| Jul-Sept | Jul-Sept | Jan-Sept | Jan-Sept | Rolling 12 month |
Full-year | |
|---|---|---|---|---|---|---|
| MSEK | 2009 | 2008 | 2009 | 2008 | 2008/2009 | 2008 |
| North America* | 105.9 | 83.4 | 311.2 | 267.1 | 413.5 | 369.4 |
| Europe | 27.1 | 25.4 | 84.9 | 92.6 | 130.5 | 138.2 |
| Other markets | 13.1 | 13.7 | 36.6 | 33.3 | 44.1 | 40.8 |
| Total | 146.1 | 122.5 | 432.7 | 393.0 | 588.1 | 548.4 |
| *North America | ||||||
| BTS | 76.2 | 59.6 | 224.9 | 181.4 | 297.7 | 254.2 |
| APG | 29.7 | 23.8 | 86.3 | 85.7 | 115.8 | 115.2 |
| Total | 105.9 | 83.4 | 311.2 | 267.1 | 413.5 | 369.4 |
Operating profit before amortization of intangible assets (EBITA) per operative unit
| Jul-Sept | Jul-Sept | Jan-Sept | Jan-Sept | Rolling 12 month |
Full-year | |
|---|---|---|---|---|---|---|
| MSEK | 2009 | 2008 | 2009 | 2008 | 2008/2009 | 2008 |
| North America* | 19.6 | 10.0 | 51.8 | 35.1 | 63.4 | 46.7 |
| Europe | -1.9 | 1.8 | -1.6 | 16.0 | 12.9 | 30.5 |
| Other markets | 1.6 | 3.2 | 3.5 | 5.0 | 1.1 | 2.6 |
| Total | 19.3 | 15.0 | 53,7 | 56.1 | 77.4 | 79.8 |
| *North America | ||||||
| BTS | 18.0 | 10.3 | 48.3 | 32.6 | 59.5 | 43.8 |
| APG | 1.6 | -0.3 | 3.5 | 2.5 | 3.9 | 2.9 |
| Total | 19.6 | 10.0 | 51.8 | 35.1 | 63.4 | 46.7 |
Net turnover for BTS' operations in North America amounted to MSEK 224.9 (181.4) during the nine-month period. Adjusted for changes in exchange rates, revenue decreased by 3 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 48.3 (32.6) during the nine-month period. The operating margin before amortization of intangible assets (EBITA margin) was 21 (18) percent.
Net turnover amounted to MSEK 76.2 (59.6) during the third quarter. Adjusted for changes in exchange rates, revenue increased by 10 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 18.0 (10.3) during the third quarter. The operating margin before amortization of intangible assets (EBITA margin) was 24 (17) percent.
The deterioration in US' market conditions has impacted revenue in BTS USA negatively but the company is considered to have performed significantly better than the market as a whole. Continued positive trends were noted on the market during the third quarter.
The operating margin has increased due to improved cost efficiency.
Net turnover for APG amounted to MSEK 86.3 (85.7) during the nine-month period. Adjusted for changes in exchange rates, revenue decreased by 21 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 3.5 (2.5) during the nine-month period. The operating margin before amortization of intangible assets (EBITA margin) was 4 (3) percent.
Net turnover amounted to MSEK 29.7 (23.8) during the third quarter. Adjusted for changes in exchange rates, revenue increased by 8 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 1.6 (-0.3) during the third quarter. The operating margin before amortization of intangible assets (EBITA margin) was 5 (-1) percent.
The deterioration in US' market conditions has had a significant adverse effect on APG due to the company's client and product mix. The action program that was carried out during the first half year in order to increase the gross margin, reduce fixed costs and improve sales efficiency has led to an increase in revenues and earnings during the third quarter in conjunction with an improved market.
Net turnover for Europe amounted to MSEK 84.9 (92.6) during the nine-month period. Adjusted for changes in exchange rates, revenue decreased by 11 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK -1.6 (16.0) during the nine-month period. The operating margin before amortization of intangible assets (EBITA margin) was -2 (17) percent.
Net turnover amounted to MSEK 27.1 (25.4) during the third quarter. Adjusted for changes in exchange rates, revenue increased by 5 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK -1.9 (1.8) during the third quarter. The operating margin before amortization of intangible assets (EBITA margin) was -7 (7) percent.
BTS Europe has displayed negative earnings during the past two quarters; MSEK -1.9 during the third quarter compared to MSEK -2.9 during the second quarter. The deterioration in earnings in BTS Europe compared with the previous year was MSEK -3.7 during the third quarter compared to MSEK -13.2 during the second quarter. BTS Europe is expected to generate positive earnings during the fourth quarter of the year.
Net turnover for Other markets amounted to MSEK 36.6 (33.3) during the ninemonth period. Adjusted for changes in exchange rates, revenue increased by 3 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 3.5 (5.0) during the nine-month period. The operating margin before amortization of intangible assets (EBITA margin) was 10 (15) percent.
Net turnover amounted to MSEK 13.1 (13.7) during the third quarter. Adjusted for changes in exchange rates, revenue decreased by 13 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 1.6 (3.2) during the third quarter. The operating margin before amortization of intangible assets (EBITA margin) was 13 (23) percent.
The operating margin has deteriorated due to recruitments, marketing investments and lower cost efficiency.
BTS' cash flow from operating activities amounted to MSEK 53.3 (21.2) during the nine-month period. The cash flow from operating activities amounted to MSEK 33.4 (13.1) during the third quarter.
Cash and cash equivalents amounted to MSEK 86.5 (61.5) at the end of the period. The company's interest-bearing loans, which relate to previously completed acquisitions, amounted to MSEK 70.0 (84.1) at the end of the period.
BTS' solidity was 56 (53) percent at the end of the period.
The company had no outstanding conversion loans at the balance sheet date.
The number of employees in BTS Group AB as of September 30 was 253 (255). The average number of employees during the nine-month period was 261 (243).
The Company's net turnover amounted to MSEK 2.5 (0.5) and the profit after net financial items amounted to MSEK 15.2 (3.4). Cash and cash equivalents amounted to MSEK 0 (0).
The current market conditions mean that the estimates for 2009 are more uncertain than normal. Profit before tax is expected to be in line with the previous year.
BTS is exposed to a number of risks and uncertainties in it operations, which are mentioned in the Annual Report 2008. As of September 30, 2009, it is assessed that no new significant risks or uncertainties have arisen.
In order to prepare the financial statements in conformity with IFRS the Corporate Management is required make assessments and estimates and make assumptions that affect the application of the accounting principles and the recognized amounts of assets, liabilities, income and costs. The estimates and assumptions are based on historical experience and a number of other factors that are regarded as reasonable under the existing circumstances. Actual outcomes can deviate from these estimates and assessments. Estimates and assumptions are reviewed regularly.
This interim report is prepared in accordance with IAS 34, Interim Financial Reporting and the Swedish Annual Accounts Act. The accounting principles and calculation methods applied are in line with the accounting principles used in the preparation of the most recent financial statements.
Revised IAS 1 – Presentation of Financial Statements has been applied from January 1, 2009. Among other things, the amendment means that income and expenses previously recognized as changes in equity now shall be recognized in a separate statement directly after the income statement. Another change is that new names for the financial statements can, but does not have to, be used. BTS, however, has elected to use the old names.
IFRS 8 – Operating Segments effective for annual periods as of January 1, 2009. The new standard means that the segment information is presented on the basis of a management approach, which means that it is presented in the way used in the internal reporting. The application of IFRS 8 does not imply any difference in relation to classification of operating segments compared with previous reporting under IAS 14.
IFRS 2 (Amendment) – Share-Based Payment is applied from January 1, 2009. The amendment of the standard has not had any material impact on the consolidated financial statements.
As announced previously, a Nominating Committee has been appointed. BTS' two largest shareholders, in consultation with the Chairman of the Board, Michael Grindfors have appointed the following persons to serve on the Nominating Committee:
Anders Dahl has been appointed Chairman of the Nominating Committee.
The Nominating Committee is tasked with making recommendations on candidates for the board of directors as well as submitting proposals concerning remuneration to board members and auditors.
Shareholders in BTS Group AB are welcome to submit proposals to the Chairman of the Nominating Committee at the following address: BTS Group AB, Grevgatan 34, 114 53 Stockholm, Sweden.
It is intended to announce nomination of board members in the notice convening the next Annual General Meeting.
Year-end Report February 18, 2010
Stockholm, November 5, 2009
Henrik Ekelund President
This report has not been the subject of separate examination by BTS' auditor.
Contact information
| Henrik Ekelund CEO | Phone: | +46 8 587 070 00 |
|---|---|---|
| Stefan Brown CFO |
Phone: | +46 8 587 070 62 |
| Thomas Ahlerup | Phone: | +46 8 587 070 02 |
| Senior Vice President Corporate Communications | Mobile: | +46 76 800 5755 |
For additional information visit our home page www.bts.com
| BTS Group AB (publ) Grevgatan 34 114 53 Stockholm SWEDEN |
|
|---|---|
| Phone. Fax. |
+46 8 587 070 00 +46 8 587 070 01 |
| Corporate registration number: | 556566-7119 |
| INCOME STATEMENT, Summary | 3 months ended | 9 months ended | 12 months ended | |||
|---|---|---|---|---|---|---|
| KSEK | Sept 30 | Sept 30 | Sept 30 | Sept 30 | Sept 30 | Dec 31 |
| 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |
| Revenue | 146 145 | 122 458 | 432 701 | 392 988 | 588 083 | 548 370 |
| Operating expenses | -126 089 | -106 785 | -376 643 | -335 147 | -507 679 | -466 183 |
| Depreciation tangible assets Amortization intangible assets |
-751 -2 400 |
-686 -2 264 |
-2 354 -7 741 |
-1 730 -6 625 |
-2 993 -10 472 |
-2 369 -9 356 |
| Operating result | 16 905 | 12 723 | 45 963 | 49 486 | 66 939 | 70 462 |
| Financial income and expenses | -327 | -837 | -988 | -2 539 | -1 325 | -2 876 |
| Result before tax | 16 578 | 11 886 | 44 975 | 46 947 | 65 614 | 67 586 |
| Taxes | -5 809 | -4 141 | -15 628 | -15 624 | -22 552 | -22 548 |
| Result for the period | 10 769 | 7 745 | 29 347 | 31 323 | 43 062 | 45 038 |
| attributable to equity holders of the parent | 10 769 | 7 745 | 29 347 | 31 323 | 43 062 | 45 038 |
| Earnings per share, before dilution of shares, SEK Number of shares at end of the period |
0,60 18 048 300 |
0,43 | 1,63 | 1,74 18 048 300 18 048 300 18 048 300 18 048 300 |
2,39 | 2,50 18 048 300 |
| Average number of shares before dilution of shares | 18 048 300 | 18 048 300 18 048 300 18 048 300 18 048 300 | 18 048 300 | |||
| Earnings per share, after dilution of shares, SEK | 0,60 | 0,43 | 1,63 | 1,74 | 2,39 | 2,50 |
| Average number of shares after dilution of shares | 18 048 300 | 18 048 300 18 048 300 18 048 300 18 048 300 | 18 048 300 | |||
| Dividend per share | 1,20 | |||||
| GROUP STATEMENT OF COMPREHENSIVE INCOME | 3 months ended | 6 months ended | 12 months ended | |||
| KSEK | Sept 30 | Sept 30 | Sept 30 | Sept 30 | Sept 30 | Dec 31 |
| 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |
| Result for the period | 10 769 | 7 745 | 29 347 | 31 323 | 43 062 | 45 038 |
| Other comprehensive income: | ||||||
| Income/expenses in shareholders' equity | - | - | - | - | - | - |
| Other comprehensive income for the year, net of tax | - | - | - | - | - | - |
| Total comprehensive income for the year | 10 769 | 7 745 | 29 347 | 31 323 | 43 062 | 45 038 |
| attributable to equity holders of the parent | 10 769 | 7 745 | 29 347 | 31 323 | 43 062 | 45 038 |
| BALANCE SHEET , Summary KSEK |
09-30-09 | 09-30-08 | 12-31-08 | |||
| Assets | ||||||
| Goodwill | 147 862 | 142 558 | 161 216 | |||
| Other intangible assets | 18 992 | 27 448 | 28 612 | |||
| Tangible assets | 9 309 | 7 164 | 8 727 | |||
| Other fixed assets | 4 725 | 4 368 | 5 003 | |||
| Accounts receivable | 96 760 | 122 716 | 147 184 | |||
| Other current assets | 58 036 | 42 161 | 34 904 | |||
| Cash and bank | 86 477 | 61 536 | 65 887 | |||
| Total assets | 422 161 | 407 951 | 451 533 | |||
| Equity and liabilities | ||||||
| Equity | 235 565 | 216 517 | 250 908 | |||
| Interest bearing - non current liabilities Non interest bearing - non current liabilities |
333 137 |
88 - |
450 166 |
|||
| Interest bearing - current liabilities | 69 987 | 84 218 | 81 690 | |||
| Non interest bearing - current liabilities | 116 139 | 107 128 | 118 319 | |||
| Total equity and liabilities | 422 161 | 407 951 | 451 533 | |||
| CASH FLOW STATEMENT, Summary | ||||||
| KSEK | Jan-Sep | Jan-Sep | Jan-Dec | |||
| 2009 | 2008 | 2008 | ||||
| Cash flow from current operations | 53 261 | 21 243 | 37 506 | |||
| Cash flow from investment activities | -3 936 | -23 907 | -28 572 | |||
| Cash flow from financing operations | -25 738 | -3 428 | -15 967 | |||
| Change in liquid funds Liquid funds, opening balance |
23 587 65 887 |
-6 092 67 473 |
-7 033 67 473 |
|||
| Effect of exchange rate changes on cash | -2 997 | 155 | 5 447 | |||
| Liquid funds, closing balance | 86 477 | 61 536 | 65 887 |
| Total Equity | Total Equity | Total Equity | |
|---|---|---|---|
| 09-30-09 | 09-30-08 | 12-31-08 | |
| Opening balance | 250 908 | 198 603 | 198 603 |
| Dividend to shareholders | -21 658 | -21 658 | -21 658 |
| Conversion differences | -23 305 | 7 777 | 28 342 |
| Miscellaneous | 273 | 472 | 583 |
| Result for the period | 29 347 | 31 323 | 45 038 |
| Closing balance | 235 565 | 216 517 | 250 908 |
| KEY RATIOS | 3 months ended 9 months ended |
12 months ended | ||||
|---|---|---|---|---|---|---|
| Sept 30 2009 |
Sept 30 2008 |
Sept 30 2009 |
Sept 30 2008 |
Sept 30 2009 |
Dec 31 2008 |
|
| Revenues, KSEK | 146 145 | 122 458 | 432 701 | 392 988 | 588 083 | 548 370 |
| EBITA (Earnings before interest, tax and amortization), | ||||||
| KSEK | 19 306 | 14 987 | 53 705 | 56 111 | 77 411 | 79 818 |
| EBIT (Operating result), KSEK | 16 905 | 12 723 | 45 963 | 49 486 | 66 939 | 70 462 |
| EBITA margin (Earnings before interest, tax and | ||||||
| amortization margin), % | 13 | 12 | 12 | 14 | 13 | 15 |
| EBIT margin (Operating margin ), % | 12 | 10 | 11 | 13 | 11 | 13 |
| Profit margin, % | 7 | 6 | 7 | 8 | 7 | 8 |
| Operational capital, KSEK | 219 212 | 266 877 | ||||
| Return on equity, % | 19 | 20 | ||||
| Return on operational capital, % | 29 | 31 | ||||
| Solidity at end of the period, % | 56 | 53 | 56 | 53 | 56 | 56 |
| Cash flow, KSEK | 32 864 | 10 256 | 23 587 | -6 092 | 22 646 | -7 033 |
| Liquid funds at end of the period, KSEK | 86 477 | 61 536 | 86 477 | 61 536 | 86 477 | 65 887 |
| Average number of employees | 257 | 249 | 261 | 243 | 261 | 249 |
| Number of employees at end of the period | 253 | 255 | 253 | 255 | 253 | 267 |
| Revenues for the year per employee, KSEK | 2 253 | 2 202 |
Earnings attributable to the parent company´s shareholders divided by number of shares
Operating result before interest, tax and amortization as a percentage of revenues.
Operating result after depreciation as a percentage of revenues.
Result for the period as a percentage of revenues.
Total balance sheet reduced by liquid funds and other interest bearing assets and reduced by non-interest bearing liabilities.
Result for the period (converted into whole year) as a percentage of average equity.
Operating result as a percentage of average operational capital.
Equity as a percentage of total balance sheet.
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