Quarterly Report • Apr 29, 2009
Quarterly Report
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Interim Report January 1 – March 31, 2009
BTS' net turnover increased by 12 percent during the first quarter and amounted to MSEK 137.4 (122.3). Adjusted for changes in exchange rates, growth was -9 percent. Growth varied significantly among the units: BTS Other markets +22 percent, BTS Europe +/- 0 percent, BTS USA -8 percent and APG -27 percent (growth figure calculated using local currencies).
Operating profit before amortization of intangible assets (EBITA) increased by 4 percent during the first quarter and amounted to MSEK 14.1 (13.5). Operating profit during the first quarter was affected by MSEK 2.8 (2.2) for amortization of intangible assets attributable to acquisitions. The increase is due to a higher dollar rate. Operating profit (EBIT) amounted to MSEK 11.3 (11.3).
The operating margin before amortization of intangible assets (EBITA margin) was 10 (11) percent. The operating margin (EBIT margin) was 8 (9) percent.
The Group's profit before tax for the first quarter increased by 8 percent to MSEK 10.9 (10.1).
Earnings were positively impacted by a higher dollar rate, improved earnings in Other markets and by an improved net interest earnings. Earnings were negatively impacted by deterioration in earnings in APG and BTS Europe.
Demand for training and consultancy services weakened during the first quarter compared to the previous year. Demand for BTS' services has been better than the market as a whole, apart from APG which also continued to develop negatively during the first quarter. APG has been more exposed to the deterioration in market conditions on account of its client and product mix.
Many of BTS' clients are significantly affected by the severe recession. But BTS stands strong in a difficult market and assess that it is in a much better position than its competitors, through a well-diversified customer base, an underweight of clients in the most exposed sectors, very competitive solutions as well as client projects of a strategic and long-term nature.
BTS has a small market share and the company sees good opportunities to increase this during the recession. BTS' recession strategy is based on:
This strategy worked during 2008 and during the first quarter of 2009, when BTS is considered to have developed better that the total market.
More positive trends were noted on the US' market at the end of the first quarter.
BTS' offering has broadened considerably through product development and completed acquisitions and apart from world-leading business simulations also includes leading solutions within strategically important areas such as e.g. sales and management development and internet-based training solutions.
BTS offers the most comprehensive range of tailored simulation solutions on the market today, a well developed sales organization 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 solutions, which generates good growth opportunities both in the nearterm and long-term.
New clients secured during the first quarter included Deloitte, Fabege, HSBC, Indra, LRF, McDonalds, Munters and Sodexo, among others.
| Jan-Mar | rolling 12 month | Full-year | |
|---|---|---|---|
| 2009 | 2008 | 2008/2009 | 2008 |
| 97.1 | 84.9 | 381.6 | 369.4 |
| 30.2 | 29.1 | 139.3 | 138.2 |
| 10.1 | 8.3 | 42.6 | 40.8 |
| 137.4 | 122.3 | 563.5 | 548.4 |
| 68.5 | 55.8 | 266.9 | 254.2 |
| 28.6 | 29.1 | 114.7 | 115.2 |
| 97.1 | 84.9 | 381.6 | 369.4 |
| Operating profit before amortization of intangible assets (EBITA) per operative unit |
Jan-Mar | rolling 12 month | Full-year | |
|---|---|---|---|---|
| MSEK | 2009 | 2008 | 2008/2009 | 2008 |
| North America* | 10.7 | 9.6 | 47.8 | 46.7 |
| Europe | 3.2 | 3.9 | 29.8 | 30.5 |
| Other markets | 0.2 | 0.0 | 2.8 | 2.6 |
| Total | 14.1 | 13.5 | 80.4 | 79.8 |
| *North America | ||||
| BTS | 11.0 | 8.3 | 46.5 | 43.8 |
| APG | - 0.3 | 1.3 | 1.3 | 2.9 |
| Total | 10.7 | 9.6 | 47.8 | 46.7 |
Net turnover for BTS' North American operations amounted to MSEK 68.5 (55.8) during the first quarter. Adjusted for currency effects, revenue decreased by 8 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 11.0 (8.3) during the first quarter. The operating margin before amortization of intangible assets (EBITA margin) was 16 (15) percent.
The deterioration in US' market conditions has impacted revenue in BTS USA negatively but the company is considered to have performed better that the market as a whole. More positive trends were noted on the market at the end of the quarter.
The operating margin increased due to increased cost efficiency, notwithstanding the negative growth.
Net turnover for APG amounted to MSEK 28.6 (29.1) during the first quarter. Adjusted for currency effects, revenue decreased by 27 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK -0.3 (1.3) during the first quarter. The operating margin before amortization of intangible assets (EBITA margin) was -1 (5) percent.
The deterioration in US' market conditions has had a significant adverse effect on APG on account of the company's client and product mix. An action program is carried out in order to raise the gross margin and reduce costs.
Net turnover for Europe amounted to MSEK 30.2 (29.1) during the first quarter. Adjusted for currency effects, revenue was unchanged. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 3.2 (3.9) during the first quarter. The operating margin before amortization of intangible assets (EBITA margin) was 11 (13) percent.
The deterioration in market conditions has impacted revenue in BTS Europe negatively, but the outcome varies significantly among different markets. The decrease in the operating margin is due to an increase in the number of employees compared with the previous year.
Net turnover for Other markets amounted to MSEK 10.1 (8.3) during the first quarter. Adjusted for currency effects, revenue increased by 22 percent. Operating profit before amortization of intangible assets (EBITA) amounted to MSEK 0.2 (0.0) during the quarter. The operating margin before amortization of intangible assets (EBITA margin) was 2 (0) percent.
The trend in all markets (Australia, South Asia and South Africa) was positive during the first quarter.
An office was opened in Bangkok, Thailand.
BTS' cash flow from operating activities amounted to MSEK -24.1 (-17.0) during the first quarter. The weak cash flow during the first quarter corresponds well with the seasonal variations of BTS' cash flow with a weaker first half year and a stronger second half year. The deterioration compared with the previous year relates exclusively to a decrease in current liabilities.
Cash and cash equivalents amounted to MSEK 44.9 (43.4) at the end of the period. The company's interest-bearing loans, which relate to previously completed acquisitions, amounted to MSEK 87.7 (74.4) at the end of the period. Loans denominated in Swedish kronor have increased due to the change in the dollar rate on December 31, 2008 compared with the previous year. No currency risk is considered to exist as amortization and interest payments are made with cash flow generated in the US.
BTS solidity was 62 (54) 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 March 31 was 268 (243). The average number of employees during the first quarter was 267 (241).
The Company's net turnover amounted to MSEK 1.3 (0.5) and the profit after net financial items amounted to MSEK 5.4 (0.7). Cash and cash equivalents amounted to MSEK 4.8 (0.9).
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 March 31, 2009, it is assessed that no new significant risks or uncertainties have arisen.
In order to prepare the financial statements in conformity with IFRS the Corporate Management is required make assessments and estimates and make assumptions that affect the application of the accounting principles and the recognized amounts of assets, liabilities, income and costs. The estimates and assumptions are based on historical experience and a number of other factors that are regarded as reasonable under the existing circumstances. Actual outcomes can deviate from these estimates and assessments. Estimates and assumptions are reviewed regularly.
This interim report is prepared in accordance with IAS 34, Interim Financial Reporting and the Swedish Annual Accounts Act. The accounting principles and calculation methods applied are in line with the accounting principles used in the preparation of the most recent financial statements.
Revised IAS 1 – Presentation of Financial Statements has been applied from January 1, 2009. Among other things, the amendment means that income and expenses previously recognized as changes in equity now shall be recognized in a separate statement directly after the income statement. Another change is that new names for the financial statements can be used. BTS, however, has elected to use the old names as this amendment is not mandatory.
IFRS 8 – Operating Segments is effective for annual periods starting from January 1, 2009 but BTS has early adopted the standard. The new standard means that the segment information is presented on the basis of a management approach, which means that it is presented in the way used in the internal reporting. The application of IFRS 8 does not imply any difference in relation to classification of operating segments compared with previous reporting under IAS 14.
IFRS 2 (Amendment) – Share-Based Payments is applied from January 1, 2009. The amendment of the standard has not had any material impact on the consolidated financial statements.
Interim Report Apr – Jun August 18, 2009 Interim Report Jul – Sep November 5, 2009 Year-end Report February, 2010
Stockholm, April 29, 2009
Henrik Ekelund CEO
This report has not been the subject of separate examination by BTS' auditor.
Contact information
| Henrik Ekelund CEO | Phone: | 08-587 070 00 |
|---|---|---|
| Stefan Brown CFO |
Phone: | 08-587 070 62 |
| Thomas Ahlerup | Phone: | 08-587 070 02 |
| Senior Vice President Corporate Communications | Mobile: | 076-800 5755 |
For additional information visit: www.bts.com
BTS Group AB (publ) Grevgatan 34 114 53 Stockholm SWEDEN
| Phone. | +46 8 587 070 00 |
|---|---|
| Fax. | +46 8 587 070 01 |
| Corporate registration number: | 556566-7119 |
| INCOME STATEMENT, Summary | 3 months ended | 12 months ended | |||
|---|---|---|---|---|---|
| KSEK | Mar 31 | Mar 31 | Mar 31 | Dec 31 | |
| 2009 | 2008 | 2009 | 2008 | ||
| Revenue | 137,414 | 122,316 | 563,468 | 548,370 | |
| Operating expenses Depreciation tangible assets |
-122,492 -787 |
-108,324 -506 |
-480,350 -2,650 |
-466,183 -2,369 |
|
| Amortization intangible assets | -2,787 | -2,226 | -9,917 | -9,356 | |
| Operating result | 11,348 | 11,260 | 70,550 | 70,462 | |
| Financial income and expenses | -455 | -1,126 | -2,205 | -2,876 | |
| Result before tax | 10,893 | 10,134 | 68,345 | 67,586 | |
| Taxes | -3,717 | -3,415 | -22,850 | -22,548 | |
| Result for the period | 7,176 | 6,719 | 45,495 | 45,038 | |
| attributable to equity holders of the parent | 7,176 | 6,719 | 45,495 | 45,038 | |
| Earnings per share, before dilution of shares, SEK | 0.40 | 0.37 | 2.52 | 2.50 | |
| Number of shares at end of the period | 18,048,300 | 18,048,300 | 18,048,300 18,048,300 | ||
| Average number of shares before dilution of shares | 18,048,300 | 18,048,300 | 18,048,300 18,048,300 | ||
| Earnings per share, after dilution of shares, SEK | 0.40 | 0.37 | 2.52 | 2.50 | |
| Average number of shares after dilution of shares Proposed dividend per share |
18,048,300 | 18,048,300 | 18,048,300 18,048,300 1.20 |
||
| GROUP STATEMENT OF COMPREHENSIVE INCOME | 3 months ended | 12 months ended | |||
| KSEK | Mar 31 | Mar 31 | Mar 31 | Dec 31 | |
| 2009 | 2008 | 2009 | 2008 | ||
| Result for the period | 7,176 | 6,719 | 45,495 | 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 | 7,176 | 6,719 | 45,495 | 45,038 | |
| attributable to equity holders of the parent | 7,176 | 6,719 | 45,495 | 45,038 | |
| BALANCE SHEET , Summary KSEK |
03/31/09 | 03/31/08 | 12/31/08 | ||
| Assets | |||||
| Goodwill | 171,397 | 135,124 | 161,216 | ||
| Other intangible assets | 27,786 | 28,350 | 28,612 | ||
| Tangible assets | 9,624 | 5,381 | 8,727 | ||
| Other fixed assets | 4,946 | 4,149 | 5,003 | ||
| Accounts receivable | 124,730 | 108,835 | 147,184 | ||
| Other current assets | 49,089 | 29,481 | 34,904 | ||
| Cash and bank | 44,864 | 43,449 | 65,887 | ||
| Total assets | 432,436 | 354,769 | 451,533 | ||
| Equity and liabilities | |||||
| Equity | 269,800 | 192,179 | 250,908 | ||
| Interest bearing - non current liabilities | 452 | 90 | 450 | ||
| Non interest bearing - non current liabilities | 157 | - | 166 | ||
| Interest bearing - current liabilities | 87,737 | 74,394 | 81,690 | ||
| Non interest bearing - current liabilities | 74,290 | 88,106 | 118,319 | ||
| Total equity and liabilities | 432,436 | 354,769 | 451,533 | ||
| CASH FLOW STATEMENT, Summary | |||||
| KSEK | Jan-Mar | Jan-Mar | Jan-Dec | ||
| 2009 | 2008 | 2008 | |||
| Cash flow from current operations | -24,056 | -17,030 | 37,506 | ||
| Cash flow from investment activities | -1,205 | -18,787 | -28,572 | ||
| Cash flow from financing operations | 536 | 16,857 | -15,967 | ||
| Change in liquid funds | -24,725 | -18,960 | -7,033 | ||
| Liquid funds, opening balance | 65,887 | 67,473 | 67,473 | ||
| Effect of exchange rate changes on cash | 3,702 | -5,064 | 5,447 | ||
| Liquid funds, closing balance | 44,864 | 43,449 | 65,887 |
| Total Equity | Total Equity | Total Equity | |
|---|---|---|---|
| 03/31/09 | 03/31/08 | 12/31/08 | |
| 250,908 | 198,603 | 198,603 | |
| - | - | -21,658 | |
| 11,605 | -13,394 | 28,342 | |
| 111 | 251 | 583 | |
| 7,176 | 6,719 | 45,038 | |
| 269,800 | 192,179 | 250,908 | |
| KEY RATIOS | 3 months ended | 12 months ended | |||
|---|---|---|---|---|---|
| Mar 31 | Mar 31 | Mar 31 | Dec 31 | ||
| 2009 | 2008 | 2009 | 2008 | ||
| Revenues, KSEK | 137,414 | 122,316 | 563,468 | 548,370 | |
| EBITA (Earnings before interest, tax and amortisation), | |||||
| KSEK | 14,135 | 13,486 | 80,467 | 79,818 | |
| EBIT (Operating result), KSEK | 11,348 | 11,260 | 70,550 | 70,462 | |
| EBITA margin (Earnings before interest, tax and | |||||
| amortisation margin), % | 10 | 11 | 14 | 15 | |
| EBIT margin (Operating margin ), % | 8 | 9 | 13 | 13 | |
| Profit margin, % | 5 | 5 | 8 | 8 | |
| Operational capital, KSEK | 312,830 | 266,877 | |||
| Return on equity, % | 17 | 20 | |||
| Return on operational capital, % | 24 | 31 | |||
| Solidity at end of the period, % | 62 | 54 | 62 | 56 | |
| Cash flow, KSEK | -24,725 | -18,960 | -12,798 | -7,033 | |
| Liquid funds at end of the period, KSEK | 44,864 | 43,449 | 44,864 | 65,887 | |
| Average number of employees | 267 | 241 | 255 | 249 | |
| Number of employees at end of the period | 268 | 243 | 268 | 267 | |
| Revenues for the year per employee, KSEK | 2,210 | 2,202 |
Earnings per share Earnings attributable to the parent company´s shareholders divided by number of shares EBITA margin (Earnings before interest, tax and amortisation margin) Operating result before interest, tax and amortisation as a percentage of revenues. EBIT margin (Operating margin) Operating result after depreciation as a percentage of revenues. Profit margin Result for the period as a percentage of revenues. Operational capital Total balance sheet reduced by liquid funds and other interest bearing assets and reduced by non-interest bearing liabilities. Return on equity Result for the period (converted into whole year) as a percentage of average equity. Return on operational capital Operating result as a percentage of average operational capital. Solidity Equity as a percentage of total balance sheet. Organic growth Growth excluding aquisition
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