Quarterly Report • Oct 23, 2014
Quarterly Report
Open in ViewerOpens in native device viewer
Dovre Group Plc Interim report October 23, 2014 at 8:45 a.m.
Q3: Profitability improving, operating result not yet satisfactory
Guidance for 2014 (unchanged): In 2014, Dovre Group's net sales will be EUR 95-105 million and operating result EUR 1.0-2.0 million.
The interim report is unaudited. Last year's corresponding period in parentheses.
| 7-9 | 7-9 | Change | 1-9 | 1-9 | Change | 1-12 | |
|---|---|---|---|---|---|---|---|
| EUR million | 2014 | 2013 | % | 2014 | 2013 | % | 2013 |
| Net sales | 24.7 | 24.1 | 2.3 | 73.5 | 73.7 | -0.4 | 98.5 |
| Operating result | 0.3 | 0.8 | -63.8 | 0.6 | 1.9 | -68.1 | 2.4 |
| % of net sales | 1.1 % | 3.2 % | 0.8 % | 2.6 % | 2.4 % | ||
| Result | 0.1 | 0.3 | -67.8 | -0.1 | 0.8 | -107.7 | 1.2 |
| % of net sales | 0.4 % | 1.4 % | -0.1 % | 1.1 % | 1.2 % | ||
| Net cash flow from operations | 0.1 | 1.2 | -88.7 | -1.1 | 0.9 | -219.6 | 3.7 |
| Change in cash and cash | |||||||
| equivalents | 7.7 | 11.6 | -33.5 | 7.7 | 11.6 | -33.5 | 13.7 |
| Debt-equity ratio (Gearing), % | -30.0 % | -40.5 % | -26.0 | -30.0 % | -40.5 % | -26.0 | -50.0 % |
| Earnings per share, EUR: | |||||||
| Basic | 0.00 | 0.01 | -67.8 | 0.00 | 0.01 | -107.7 | 0.02 |
| Diluted | 0.00 | 0.01 | -68.0 | 0.00 | 0.01 | -107.7 | 0.02 |
The Group's net sales trended up during the third quarter, and in September we recorded all time high net sales. Our operating profit, burdened by lower sales margins than last year, increased investments in future growth as well as non-recurring items, was not satisfactory. As a result we have cut our rental and outsourcing costs as well as personnel expenses. These measures will reach their full effect starting the beginning of 2015. At the same time, we continue investing in future growth.
In Project Personnel, we are now starting to see positive results from our strengthened sales team. During the third quarter, we signed two important frame agreements, one with Aramco Overseas Company and one with a Fortune 500 oil and gas company with operations in Canada. Dovre Club is growing as expected, providing access to a growing pool of qualified international project professionals.
The entire oil and gas sector in Norway, our largest market, has dipped significantly compared to last year. Despite that, we have been able to grow and gain market share there, albeit at lower margins than last year. Our Canadian operations continue to perform well, but profits are lower than in the stellar year 2013. The United States have improved consistently throughout the year, and business in the Middle East is growing rapidly. Russia is performing solidly and profitably. Following the postponement of startup of new major projects in Australia, we have reduced our presence and costs to a minimum.
In Consulting, demand has increased in the second half of 2014 as predicted in our Q2 interim report. Profitability has improved, and the operating profit in Q3 improved compared to last year.
After a slow start to the year, our Consulting in Norway has picked up considerably, and has a strong order stock for the rest of the year. Finland and Sweden have secured important orders in Q3 and have improved their order stock for the rest of 2014.
The restructuring of our associated companies, SaraRasa Biomass and Bioindo, into a single entity, SaraRasa Group, is in process. The company's pellet plant in Indonesia has been in commercial operation throughout Q3. Additional investments, which will increase production and decrease production costs of the plant, are ongoing. In addition to the existing plant, SaraRasa Group has plans for additional pellet plant projects. At the moment, SaraRasa Group is seeking new investors to develop these projects.
In July, the Board of Directors nominated the new, strengthened Group Executive Team. During Q3, the Executive Team revisited the Group strategy. The revised strategy was released on October 23, 2014. In accordance with the revised strategy, we will focus on offering project advisory services and project personnel to owners of large projects. We will continue to expand our client base beyond oil and gas.
In the first half of the year, Dovre Group signed a five-year frame agreement with BP Norge AS. The frame agreement covers the delivery of project personnel for BP Norge's projects. It also includes a four-year option. In Q2, the Group withdrew from biorenewables consulting. The withdrawal has no impact on the Group's net sales.
In Q3, one of the most important events in the Project Personnel business area was the signing of a threeyear frame agreement with Aramco Overseas Company for project personnel services in July. Aramco Overseas Company is a subsidiary of Saudi Aramco, which is one of the world's largest oil companies. In September, the Group was also awarded a frame agreement with a Fortune 500 oil and gas company for project management personnel primarily in Western Canada. The agreement is valid for one year, with the option for two one-year extensions.
In Q3, the Group's Consulting business area improved its operating result compared to 2013. This was due to the business area's positive performance in Norway. In addition, having withdrawn from biorenewables consulting, there are no further costs from these operations that could impact the business area's result.
In Project Personnel, profitability has been affected by proportionally large investments in future growth, most importantly in developing the Dovre Club platform and strengthening our sales organization. Investment in
growth lowers operating result in the short-term, but increases net sales and improves profitability in coming years.
The Group reported EUR 0.1 million of non-recurring items in the income statement in both Q2 and Q3.
In Q3, Dovre Group's net sales increased by 2.3%, totaling EUR 24.7 (24.1) million. In local currencies, the Group's net sales increased by approx. 6%. Net sales for Project Personnel increased by 3% in euros, totaling EUR 22.8 (22.2) million. Net sales for Consulting decreased by 3.4% in euros, totaling EUR 1.8 (1.9) million. In local currencies net sales for Consulting remained on the same level as in Q3/2013.
During the period under review, Dovre Group's net sales were EUR 73.5 (73.7) million. The Group's net sales decreased by 0.4% in euros, but in local currencies the Group's net sales increased by approx. 7%. During the period under review, Project Personnel accounted for 93 (91) % and Consulting for 7 (9) % of the Group's net sales. Net sales for Project Personnel grew by 1.0% and were EUR 68.0 (67.4) million. In local currencies, Project Personnel's net sales grew by almost 9%. Net sales for Consulting decreased both in euros and in local currencies and were EUR 5.5 (6.3) million.
By market area, EMEA's share of the Group's net sales during the period grew, accounting for 59 (54) % of the Group's net sales. The growth in its share of net sales was due to the positive development of the Group's Middle Eastern operations. AMERICAS' share of the Group's net sales was 36 (41) % and APAC's 5 (6) %. In APAC, Russia's share increased and Australia's decreased.
| Net sales by | Change in | Change in | |||||||
|---|---|---|---|---|---|---|---|---|---|
| reporting | local | local | |||||||
| segment | 7-9 | 7-9 | Change | currencies | 1-9 | 1-9 | Change | currencies | 1-12 |
| EUR million | 2014 | 2013 | % | % | 2014 | 2013 | % | % | 2013 |
| Project Personnel | 22.8 | 22.2 | 3.0 | 6.6 | 68.0 | 67.4 | 1.0 | 8.7 | 89.9 |
| Consulting | 1.8 | 1.9 | -3.4 | 0.1 | 5.5 | 6.3 | -13.3 | -8.0 | 8.5 |
| Other functions | 0.0 | 0.0 | 0.0 | 0.1 | -100.0 | 0.1 | |||
| Group total | 24.7 | 24.1 | 2.3 | 5.9 | 73.5 | 73.7 | -0.4 | 7.1 | 98.5 |
| Change in | Change in | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Net sales by | local | local | |||||||
| market area | 7-9 | 7-9 | Change | currencies | 1-9 | 1-9 | Change | currencies | 1-12 |
| EUR million | 2014 | 2013 | % | % | 2014 | 2013 | % | % | 2013 |
| EMEA | 14.0 | 13.2 | 5.9 | 10.2 | 43.0 | 39.5 | 9.0 | 17.3 | 54.2 |
| AMERICAS | 9.2 | 9.7 | -5.3 | -1.8 | 26.6 | 30.2 | -11.9 | -4.6 | 39.2 |
| APAC | 1.5 | 1.2 | 25.0 | 24.9 | 3.9 | 4.1 | -5.8 | -2.1 | 5.2 |
| Group total | 24.7 | 24.1 | 2.3 | 5.9 | 73.5 | 73.7 | -0.4 | 7.1 | 98.5 |
Dovre Group's markets by area are:
In Q3, the Group's operating result was EUR 0.3 (0.8) million, which is 1.1 (3.2) % of net sales. Project Personnel business area's operating result was EUR 0.6 (1.0) million. Consulting business area's operating result was EUR 0.2 (0.1) million. The operating result of Other functions was EUR -0.5 (-0.3) million.
In Q3, our operating result was affected by increased competition as well as a non-recurring item, EUR 0.1 million, which was due to changes in the Group's management.
During the period under review, the Group's operating result was EUR 0.6 (1.9) million, which is 0.8 (2.6) % of net sales. Project Personnel business area's operating result was EUR 1.7 (2.9) million. Consulting business area's operating result was EUR 0.4 (0.4) million. The operating result of Other functions was EUR -1.3 (-1.1) million.
In addition to the non-recurring item recorded in Q3, during the period under review the Group's operating result was affected by non-recurring items, EUR 0.1 million in total, related to the Group's withdrawal from biorenewables consulting as well as the settlement of a dispute between the company and its former employee, both in Q2. Excluding non-recurring items, the Group's operating result during the period was EUR 0.8 million.
| Operating result by | |||||||
|---|---|---|---|---|---|---|---|
| reporting segment | 7-9 | 7-9 | Change | 1-9 | 1-9 | Change | 1-12 |
| EUR million | 2014 | 2013 | % | 2014 | 2013 | % | 2013 |
| Project Personnel | 0.6 | 1.0 | -41.8 | 1.7 | 2.9 | -40.0 | 3.8 |
| Consulting | 0.2 | 0.1 | 36.5 | 0.4 | 0.4 | -4.6 | 0.7 |
| Other functions | -0.5 | -0.3 | -50.2 | -1.3 | -1.1 | -17.1 | -1.8 |
| Unallocated | 0.0 | -0.1 | 52.8 | -0.2 | -0.2 | -23.2 | -0.3 |
| Group total | 0.3 | 0.8 | -63.8 | 0.6 | 1.9 | -68.1 | 2.4 |
In Q3, the Group's result before taxes was EUR 0.3 (0.6) million, including EUR 0.2 (-0.1) million of currency exchange gains that were recorded in the Group's financing income and expenses. The result also includes EUR -0.1 (-0.1) million of the results of the Group's associates SaraRasa Biomass Pte Ltd. and SaraRasa Bioindo Pte Ltd.
In Q3, the Group's earnings per share were EUR 0.00 (0.01). The Group's return on average capital employed before taxes (ROI) was 5.8 (11.0) %.
During the period under review, the Group's result before taxes was EUR 0.4 (1.7) million including EUR -0.4 (-0.2) million of the results of its associates. The Group's result after taxes was EUR -0.1 (0.8) million.
During the period under review, the Group's earnings per share were EUR 0.00 (0.01). The Group's return on average capital employed before taxes (ROI) was 2.2 (10.6) %.
On September 30, 2014, the Group balance sheet total was EUR 37.9 (41.8) million. The Group's cash and cash equivalents totaled EUR 7.7 (11.6) million. The reduction in the Group's cash and cash equivalents was mainly due to the extraordinary dividend paid by the company to its shareholders in April 2014. The parent company and the subsidiaries have unused credit limits.
On September 30, 2014, the Group's equity ratio was 57.4 (68.0) % and the debt-equity ratio, gearing, -30.0 (-40.5) %. The Group's interest-bearing liabilities amounted to EUR 1.2 (1.2) million, accounting for 3.2 (2.9) % of the Group's shareholders' equity and liabilities. The Group's interest-bearing liabilities were all current.
Net cash flow from operating activities including the Group's discontinued operations was EUR -1.1 (0.5) million, which includes EUR -1.1 (-1.7) million change in working capital.
Net cash flow from investing activities was EUR -1.0 (3.6) million. Gross investments totaled EUR 0.3 (0.3) million.
Net cash flow from financing activities was EUR -4.3 (-1.3) million. The Group drew a total of EUR 0.1 (0.2) million in new current loans. In Q2, the Group paid a total of EUR 4.4 million in dividends. In Q3/2013, the Group paid a total of EUR 1.3 million in dividends.
The balance sheet goodwill totaled EUR 7.2 (7.2) million on September 30, 2014. No indications of impairment exist.
The Group's CFO Tarja Leikas resigned in July 2014. Heidi Karlsson, M.Sc. (Economy), was appointed the Group's new CFO as of July 24, 2014. Ms Karlsson has previously worked as the Group's CFO in 2010- 2013. Stein Berntsen was appointed as President of Consulting and member of the Group's Executive Team as of July 24, 2014. Mr Berntsen was previously Director of the Group's consulting operations in Norway.
As of July 24, 2014, the Group's Executive Team includes Patrick von Essen (CEO), Heidi Karlsson (CFO), Arve Jensen (President, Project Personnel), and Stein Berntsen (President, Consulting).
During the period under review, the average number of personnel employed by the Group was 479 (469), of which 427 (409) were employed by Project Personnel and 48 (55) by Consulting. On September 30, 2014, Dovre Group employed 489 (481) people. 41 (41) % of employees in the Project Personnel business area were independent contractors.
| Personnel | 7-9 | 7-9 | Change | 1-9 | 1-9 | Change | 1-12 |
|---|---|---|---|---|---|---|---|
| Average | 2014 | 2013 | % | 2014 | 2013 | % | 2013 |
| Project Personnel | 433 | 418 | 3.6 | 427 | 409 | 4.4 | 411 |
| Consulting | 49 | 53 | -7.5 | 48 | 55 | -12.7 | 53 |
| Other functions | 4 | 6 | -33.3 | 4 | 5 | -20.0 | 5 |
| Group total | 486 | 477 | 1.9 | 479 | 469 | 2.1 | 469 |
On September 30, 2014, Dovre Group's share capital was EUR 9,603,084.48 and the total number of shares 63,065,751. There were no changes in the Group's share capital in Q3. The increase in the number of shares, 75,000, in Q3 was due to subscription of new shares with the company's 2010A stock option plan. The new shares were entered in the Finnish trade register on September 10, 2014.
In January – September, 2014, approximately 15.8 (11.8) million Dovre Group shares were exchanged on the NASDAQ OMX Helsinki Ltd., corresponding to a trade of approximately EUR 8.8 (5.7) million. The lowest quotation was EUR 0.45 (0.38) and the highest EUR 0.69 (0.59). On September 30, 2014, the closing quotation was EUR 0.47 (0.46). The period-end market capitalization was approximately EUR 29.6 (28.9) million.
On September 30, 2014, the number of registered shareholders of Dovre Group Plc totaled 3,600 (3,083). 0.9 (1.0) % of the Group's shares are nominee-registered. The company has not received any flagging notifications during the period under review.
On September 30, 2014, members of the Group's Board of Directors and the CEO held 4,771,588 (4,985,962) shares in the company, representing a total of 7.6 (7.9) % of all shares.
Dovre Group has two option plans, 2010 and 2013. Each stock option entitles the holder to subscribe for one share in Dovre Group Plc.
The share subscription period and price per series under the 2010 option plan are as follows:
The share subscription period and price per series under the 2013 option plan are as follows:
Under the Group's 2010 option plan, the Group has granted a total of 535,000 2010A stock options and a total of 395.000 2010B stock options.
In Q3, the Group has granted a total of 45,000 2010C stock options, a total of 75,000 2013A stock options, and a total of 310,000 2013B stock options to the Group's key personnel. In Q3, a total of 100,000 2013B stock options were returned to the company.
At the end of the period, a total of 1,555,000 options were outstanding under the 2010 option plan and a total of 3,000,000 options under the 2013 option plan. The company has in reserve 1,565,000 of the options outstanding under the 2013 option plan.
Certain significant developments have affected the Group's short-term risks and uncertainties. In the Project Personnel business area these include decreased levels of investment in the Norwegian oil and gas sector as well as lower oil prices. So far our operations in Russia have not been impacted by trade sanctions. However, there is a risk that if sanctions escalate, our operations may be affected. In addition, the business area expands its business to new geographical market areas. Growth in new market areas requires investments and includes risks. The business area's other challenges are maintaining its competitiveness and profitability as well as its key resources in an ever more competitive market environment. Project Personnel business is project-based by nature, thus adding an element of uncertainty to forecasting. Dovre Group is responsible for the work performed by its consultants. However, the company has no overall responsibility for project deliveries.
In the Consulting business area, general economic uncertainty does not affect as directly the demand for the Group's consulting services. This is mainly due to the fact that one of our main clients, the Norwegian public sector, aims to invest counter-cyclically. Project delivery involves minor risks due to both clients and the Group's own personnel such as project delays or loss of key personnel.
Dovre Group has invested in a project development company specialized in renewable energy, SaraRasa Biomass Pte Ltd., and in its first development project, SaraRasa Bioindo Pte Ltd. SaraRasa Bioindo's production unit is located in Indonesia and is thus exposed to high country risk. Other significant risks include risks relating to commercial agreements, including feedstock purchase and end-product sale agreements. The company has started commercial production at the production unit and is currently making additional investments to increase production and to decrease production costs. The project development company has also made plans for other production plants.
The Group's reporting currency is euro. The Group's most important functional currencies are the Canadian dollar, the Norwegian crown, and the US dollar. Currency fluctuations can affect the company's net sales,
and assets and liabilities in foreign currencies can also result in foreign exchange gains or losses. The Group is hedging its currency positions.
In the face of many global uncertainties, our clients are increasingly cautious about investments. We expect that global demand will pick up in 2015 at the earliest. Our main markets are, however, in politically stable countries with strong underlying economies. With strong focus on sales and having already signed three major frame agreements since June, we are well placed for continued growth in the Project Personnel business area. In the Consulting business area, we have a strong order stock, which includes clients from both the public and the private sectors.
We expect our fixed costs to decrease in Q4/2014 and further in Q1/2015. However, we will maintain our increased focus on sales and continue investing in future growth.
The Group's guidance for 2014, released on July 21, 2014, remains unchanged: In 2014, Dovre Group's net sales will be EUR 95-105 million and operating result EUR 1.0-2.0 million.
In its meeting on October 22, 2014, the Board of Directors of Dovre Group Plc has approved the company's revised strategy and long-term goals for 2015-2019. The revised strategy has been released as a stock exchange bulletin on October 23, 2014. In accordance with the revised strategy, the company will focus on providing project personnel and project advisory services to owners of large projects.
In the revised strategy, the company targets EUR 200 million in net sales and EUR 10 million in operating result in 2019.
Dovre Group organizes a briefing on the Q3/2014 interim report and the Group's revised strategy on October 23, 2014 at 10:00 a.m., at Unioninkatu 20-22, Helsinki.
A video recording of the presentation will be available on the company's website www.dovregroup.com on the afternoon of October 23, 2014. The presentation is in English.
Helsinki, October 22, 2014
DOVRE GROUP PLC BOARD OF DIRECTORS
For additional information, please contact:
Dovre Group Plc Patrick von Essen, CEO Heidi Karlsson, CFO tel. +358-20-436 2000 email: [email protected] www.dovregroup.com
Dovre Group releases its financial statements bulletin for January 1 – December 31, 2014 on Thursday, February 12, 2015. An electronic version of the Annual Report 2014, including the financial statements, will be published during week 10 in 2015.
Dovre Group releases its 2015 interim reports as follows:
The Annual General Meeting is provisionally scheduled for Wednesday, March 25, 2015. The company's Board of Directors will give a separate notice of the Annual General Meeting later.
Distribution NASDAQ OMX Helsinki Ltd Major media www.dovregroup.com
The interim report is unaudited.
| 7-9 | 7-9 | Change | 1-9 | 1-9 | Change | 1-12 | |
|---|---|---|---|---|---|---|---|
| EUR thousand | 2014 | 2013 | % | 2014 | 2013 | % | 2013 |
| NET SALES | 24 653 | 24 089 | 2.3 | 73 475 | 73 740 | -0.4 | 98 544 |
| Other operating income | 29 | 54 | -47.0 | 106 | 82 | 28.9 | 132 |
| Material and services | -66 | -63 | 5.1 | -290 | -181 | 59.7 | -274 |
| Employee benefits expense | -21 830 | -20 947 | 4.2 | -65 122 | -64 097 | 1.6 | -85 857 |
| Depreciation and amortization | -74 | -92 | -20.3 | -296 | -296 | -0.1 | -402 |
| Other operating expenses | -2 433 | -2 268 | 7.3 | -7 263 | -7 333 | -1.0 | -9 736 |
| OPERATING RESULT | 280 | 773 | -63.8 | 611 | 1 914 | -68.1 | 2 407 |
| Financing income | 201 | 36 | 463.8 | 301 | 391 | -22.9 | 478 |
| Financing expenses | -56 | -87 | -35.5 | -164 | -395 | -58.5 | -552 |
| Share of results in associates | -116 | -92 | 26.1 | -387 | -234 | 65.4 | -294 |
| RESULT BEFORE TAX | 308 | 629 | -51.0 | 361 | 1 675 | -78.4 | 2 039 |
| Tax on income from operations | -201 | -296 | -32.1 | -424 | -862 | -50.8 | -825 |
| RESULT FOR THE PERIOD, | |||||||
| continuing operations | 107 | 333 | -67.8 | -63 | 813 | -107.7 | 1 214 |
| Discontinued operations: | |||||||
| Result for the period, discontinued | |||||||
| operations | 4 349 | -100.0 | 4 349 | ||||
| RESULT FOR THE PERIOD | 107 | 333 | -67.8 | -63 | 5 162 | -101.2 | 5 563 |
| Other comprehensive income: | |||||||
| Other comprehensive income to be classified as profit or loss in |
|||||||
| subsequent periods: | |||||||
| Translation differences | 644 | -384 | 267.7 | 698 | -1 342 | 152.0 | -2 014 |
| Other comprehensive income for | |||||||
| the period, net of tax | 644 | -384 | 267.7 | 698 | -1 342 | 152.0 | -2 014 |
| TOTAL COMPREHENSIVE | |||||||
| INCOME FOR THE PERIOD | 751 | -51 | -1 574.2 | 635 | 3 820 | -83.4 | 3 549 |
| Earnings/share, EUR | |||||||
| Basic, continuing operations | 0.00 | 0.01 | -67.8 | 0.00 | 0.01 | -107.7 | 0.02 |
| Diluted, continuing operations | 0.00 | 0.01 | -68.0 | 0.00 | 0.01 | -107.7 | 0.02 |
| Basic, discontinued operations | 0.00 | -100.0 | 0.07 | -100.0 | 0.07 | ||
| Diluted, discontinued operations | 0.00 | -100.0 | 0.07 | -100.0 | 0.07 | ||
| Basic, result for the period | 0.00 | 0.01 | -67.8 | 0.00 | 0.08 | -101.2 | 0.09 |
| Diluted, result for the period | 0.00 | 0.01 | -68.0 | 0.00 | 0.08 | -101.2 | 0.09 |
| Average number of shares | |||||||
| Basic | |||||||
| Diluted | 63 015 751 | 62 915 751 | 62 982 418 | 62 909 084 | 62 910 751 | ||
| 63 476 964 | 63 089 864 | 63 478 168 | 63 194 083 | 63 225 292 |
| EUR thousand | Sept. 30, 2014 |
Sept. 30, 2013 |
Change % |
Dec. 31, 2013 |
|---|---|---|---|---|
| ASSETS | ||||
| Non-current assets | ||||
| Intangible assets | 761 | 809 | -6.0 | 754 |
| Goodwill | 7 155 | 7 205 | -0.7 | 6 972 |
| Tangible assets | 155 | 151 | 3.1 | 145 |
| Investments in associates | 670 | 1 049 | -36.2 | 967 |
| Other receivables | 716 | 25 | 2 739.4 | 26 |
| Deferred tax assets | 309 | 118 | 161.8 | 306 |
| Non-current assets | 9 765 | 9 357 | 4.4 | 9 170 |
| Current assets | ||||
| Trade receivables and other receivables | 19 237 | 19 878 | -3.2 | 16 854 |
| Tax receivable, income tax | 210 | 37 | 466.9 | 24 |
| Cash and cash equivalents | 7 716 | 11 601 | -33.5 | 13 737 |
| Current assets | 27 163 | 31 517 | -13.8 | 30 615 |
| Assets held of sale | 933 | 933 | 0.0 | 933 |
| TOTAL ASSETS | 37 861 | 41 807 | -9.4 | 40 718 |
| EQUITY AND LIABILITIES | ||||
| Shareholders' equity | ||||
| Share capital | 9 603 | 9 603 | 0.0 | 9 603 |
| Reserve for invested non-restricted equity | 402 | 352 | 14.1 | 352 |
| Revaluation reserve | 0 | 34 | -100.0 | 21 |
| Translation differences | -209 | -236 | -11.5 | -907 |
| Retained earnings | 11 933 | 15 883 | -24.9 | 16 297 |
| Shareholders' equity | 21 729 | 25 636 | -15.2 | 25 366 |
| Non-current liabilities | ||||
| Deferred tax liability | 592 | 651 | -9.0 | 609 |
| Other non-current liabilities | 29 | 25 | 13.2 | 26 |
| Non-current liabilities | 620 | 676 | -8.2 | 635 |
| Current liabilities | ||||
| Short-term liabilities, interest-bearing | 1 196 | 1 207 | -0.9 | 1 048 |
| Trade payables and other liabilities | 14 226 | 13 298 | 7.0 | 13 077 |
| Tax liability, income tax | 53 | 991 | -94.7 | 564 |
| Current provisions | 37 | 0 | 100.0 | 28 |
| Current liabilities | 15 512 | 15 495 | 0.1 | 14 717 |
| TOTAL EQUITY AND LIABILITIES | 37 861 | 41 807 | -9.4 | 40 718 |
| a) | Share capital |
|---|---|
| EUR thousand | a) | b) | c) | d) | e) | f) |
|---|---|---|---|---|---|---|
| SHAREHOLDERS' EQUITY Jan. 1, 2013 | 9 603 | 346 | 79 | 1 101 | 11 884 | 23 013 |
| Comprehensive income | ||||||
| Result for the period | 5 162 | 5 162 | ||||
| Other comprehensive income | ||||||
| Translation differences | -5 | -1 337 | 0 | -1 342 | ||
| Transfers between items | -40 | 40 | 0 | |||
| Total comprehensive income | 0 | 0 | -45 | -1 337 | 5 202 | 3 820 |
| Transactions with shareholders | ||||||
| Stock options exercised | 6 | 6 | ||||
| Share based compensation | 55 | 55 | ||||
| Dividend distribution | -1 258 | -1 258 | ||||
| Total transactions with shareholders | 0 | 6 | 0 | 0 | -1 203 | -1 197 |
| SHAREHOLDERS' EQUITY Sept. 30, 2013 | 9 603 | 352 | 34 | -236 | 15 883 | 25 636 |
| EUR thousand | a) | b) | c) | d) | e) | f) |
| SHAREHOLDERS' EQUITY Jan. 1, 2014 | 9 603 | 352 | 21 | -907 | 16 297 | 25 366 |
| Comprehensive income | ||||||
| Result for the period | -63 | -63 | ||||
| Other comprehensive income | ||||||
| Translation differences | 698 | 698 | ||||
| Transfers between items | -21 | 21 | 0 | |||
| Total comprehensive income | -21 | 698 | -42 | 635 | ||
| Transactions with shareholders | ||||||
| Stock options exercised | 50 | 50 | ||||
| Share based compensation | 87 | 87 | ||||
| Dividend distribution | -4 409 | -4 409 | ||||
| Total transactions with shareholders | 0 | 50 | 0 | 0 | -4 322 | -4 272 |
| SHAREHOLDERS' EQUITY Sept. 30, 2014 | 9 603 | 402 | 0 | -209 | 11 933 | 21 729 |
| 7-9 7-9 1-9 1-9 |
1-12 |
|---|---|
| 2014 2013 2014 2013 EUR thousand |
2013 |
| Cash flow from operating activities | |
| Operating result, continued operations 280 773 611 1 914 |
2 407 |
| Operating result, discontinued operations 0 0 0 4 432 |
4 432 |
| Adjustments: | |
| Depreciation / Amortization 74 92 296 298 |
404 |
| Gain on disposal of investment 0 0 0 -4 080 |
-4 080 |
| Personnel expenses 37 20 118 55 |
292 |
| Non-cash transactions 0 0 0 |
0 8 |
| Adjustments, total 111 112 414 -3 727 |
-3 376 |
| Changes in working capital | |
| Trade and other receivables, increase (-) / | |
| decrease (+) -546 367 -1 731 -3 940 |
-1 486 |
| Trade and other payables, increase (+) / | |
| decrease (-) 273 -71 657 2 267 |
2 342 |
| Changes in working capital, total -273 296 -1 074 -1 673 |
856 |
| Interest paid -5 -6 -16 -16 |
-26 |
| Interest received 8 18 41 59 |
74 |
| Other financial expenses paid and received 15 2 -3 73 |
38 |
| Income taxes paid -6 -45 -1 085 -570 |
-1 167 |
| Net cash generated by operating activities 130 1 150 -1 112 492 |
3 238 |
| Cash flow from investing activities | |
| Investments in tangible and intangible assets -56 -39 -294 -323 |
-384 |
| Proceeds from available-for-sale financial assets 0 0 0 |
0 3 932 |
| Disposal of shares in Group companies, net of disposed cash 0 0 0 3 932 |
0 |
| Purchase of shares in associates -27 -11 -27 -11 |
-11 |
| Loan receivables, increase (-) / decrease (+) -354 0 -649 |
0 0 |
| Net cash generated by investing activities -437 -50 -970 3 598 |
3 537 |
| Cash flow from financing activities | |
| Stock options exercised 21 0 50 |
6 6 |
| Proceeds from short-term loans 55 36 58 216 |
216 |
| Repayments of short-term loans 0 0 -7 -271 |
-404 |
| Dividends paid 0 -1 258 -4 409 -1 258 |
-1 258 |
| Net cash generated by financing activities 76 -1 222 -4 308 -1 307 |
-1 440 |
| Translation differences 334 -215 369 -489 |
-905 |
| Change in cash and cash equivalents 103 -337 -6 021 2 294 |
4 430 |
| Cash and cash equivalents at beginning of the period 7 613 11 938 13 737 9 307 |
9 307 |
| Cash and cash equivalents at end of the period 7 716 11 601 7 716 11 601 |
13 737 |
The interim report has been prepared in line with IAS 34 and apart from the additions below the same accounting principles have been applied as in the 2013 financial statements. Key indicator calculations remain unchanged and have been presented in the 2013 financial statements.
As of January 1, 2014, the Group has adopted the following new, revised, and amended standards: IFRS 10 Consolidated Financial Statements (new); IFRS 11 Joint Arrangements (new); IFRS 12 Disclosure of Interests in Other Entities (new); IAS 27 Consolidated and Separate Financial Statements (amended); IAS 28 Investments in Associates (amended); IAS 32 Financial Instruments: Presentation (revised); IAS 36 Impairment of Assets (revised); and IAS 39 Financial Instruments: Recognition and Measurement (revised).
The Group's segment information is based on the Group's internal financial reporting and has been produced in accordance with IFRS standards. The Group does not allocate the parent company's intra-Group charges to segments. Unallocated expenses include customer agreements and relations and their amortization, share-based compensation recognized as expense in the income statement, financial items, and income taxes. The assets and liabilities of a segment are business items that a segment uses in its business or that can be allocated to a segment. Unallocated assets include customer agreements and relations, capitalized research and development expenses, cash and cash equivalents, available-for-sale investments, and tax assets. Pricing between segments is based on fair market price.
| 1-9/2014 EUR thousand |
Project Personnel |
Consulting | Other functions |
Un allocated |
Group total |
|---|---|---|---|---|---|
| Net sales | 68 005 | 5 470 | 0 | 0 | 73 475 |
| Operating result | 1 726 | 356 | -1 296 | -141 | 611 |
| Financing income and | |||||
| expenses Share of results in |
137 | 137 | |||
| associates | -387 | -387 | |||
| Income taxes | -424 | -424 | |||
| Result for the period | 1 726 | 356 | -1 683 | -462 | -63 |
| 1-9/2013 | Project | Other | Un | Group | |
| EUR thousand | Personnel | Consulting | functions | allocated | total |
| Net sales | 67 361 | 6 308 | 71 | 0 | 73 740 |
| Operating result | 2 874 | 373 | -1 107 | -226 | 1 914 |
| Financing income and | |||||
| expenses | -5 | -5 | |||
| Share of results in | |||||
| associates | -234 | -234 | |||
| Income taxes | -862 | -862 | |||
| Discontinued operations | 4 349 | 4 349 |
| EUR thousand | Sept. 30, 2014 | Sept. 30, 2013 | Dec. 31, 2013 |
|---|---|---|---|
| Carrying value, opening balance | 967 | 1 296 | 1 296 |
| Additions | 27 | 11 | 11 |
| Share of profit and loss in associates | -387 | -234 | -294 |
| Translation differences | 63 | -24 | -46 |
| At the end of the period | 670 | 1 049 | 967 |
Dovre Group Plc has one class of shares. The book value of the shares is EUR 0.15 per share. Each share entitles the shareholder to one vote. Dovre Group Plc's shares are traded on NASDAQ OMX Helsinki Ltd.
| EUR thousand | Number of shares |
Share capital |
Reserve for non-restricted equity |
|---|---|---|---|
| Dec. 31, 2012 | 62 895 751 | 9 603 | 346 |
| Stock options exercised | 20 000 | 6 | |
| Dec. 31, 2013 | 62 915 751 | 9 603 | 352 |
| Stock options exercised | 75 000 | 29 | |
| June 30, 2014 | 62 990 751 | 9 603 | 381 |
| Stock options exercised | 75 000 | 21 | |
| Sept. 30, 2014 | 63 065 751 | 9 603 | 402 |
In Q1, a total of 75,000 shares were subscribed for under Dovre Group Plc's 2010C option plan. The subscription period of the plan is March 1, 2014 – February 28, 2017. The increase in the company's number of shares was entered in the Finnish trade register on March 28, 2014.
In Q3, a total of 75,000 shares were subscribed for under Dovre Group Plc's 2010A option plan. The subscription period of the plan is March 1, 2012 – February 28, 2015. The increase in the company's number of shares was entered in the Finnish trade register on September 10, 2014.
After the registration, there are a total of 63,065,751 shares in the company. The increase has been recorded in the company's reserve for non-restricted equity.
Dovre Group Plc's Annual General Meeting held on March 28, 2014, decided that shareholders be paid a dividend of EUR 0.02 per share and an extraordinary dividend of EUR 0.05 per share, corresponding to approx. EUR 4.4 million. The dividend was paid on April 8, 2014.
In its meeting on March 27, 2014, the Board of Directors decided to lower the subscription price for stock options granted under the 2010 plan by an amount equal to the extraordinary dividend paid in 2013 (by EUR 0.05 per share). The new subscription prices per series are as follows:
| 2010A | 2010B | 2010C | |
|---|---|---|---|
| Subscription period | 1.3.2012 - 28.2.2015 | 1.3.2013 - 28.2.2016 | 1.3.2014 - 28.2.2017 |
| New subscription price | EUR 0.28 | EUR 0.42 | EUR 0.33 |
The Board of Directors granted Patrick von Essen, the company's new CEO, a total of 130,000 stock options under the company's 2010C option plan upon assuming his position as the Group's CEO on April 1, 2014. Should von Essen exercise his options prior to February 28, 2015, the company shall pay him an amount equal to the difference between the subscription prices of the 2010A and 2010C series. The company recalculated the fair value of the 2010C stock options (EUR 0.19) using the Black & Scholes model and charged the expense for March 2014. The difference between the 2010A and 2010C series was treated as cash compensation.
On August 21, 2014, the Board of Directors granted Heidi Karlsson, the Group's new CEO, a total of 45,000 stock options under the company's 2010C option plan. The company re-calculated the fair value of the 2010C stock options (EUR 0.14) using the Black & Scholes model and charged the expense for August 2014.
In accordance with terms of the 2013 stock option plan, the subscription price of the 2013A series was lowered by an amount equal to the dividend paid in 2013 (by EUR 0.07 per share). The new subscription price is EUR 0.47. The subscription period is March 1, 2015 – February 29, 2018.
On August 21, 2014, the Board of Directors granted Heidi Karlsson, the Group's new CEO, a total of 75,000 stock options under the company's 2013A option plan. The company re-calculated the fair value of the 2013A stock options (EUR 0.11) using the Black & Scholes model. The fair value of stock options previously granted under the plan is EUR 0.17.
In 2014, the Board of Directors has granted a total of 960,000 option rights under its 2013B option plan to key employees. Of these the Group's CEO Patrick von Essen has been granted a total of 300,000, other members of the Executive Team a total of 260,000, and other key employees a total of 400,000 option rights. The share subscription price for the 2013B series is EUR 0.60, which is the trade volume weighted average rating in NASDAQ OMX Helsinki Ltd during February 1 – March 31, 2014, and the subscription period March 1, 2016 – February 28, 2019. The fair value of the stock options, EUR 0.09, was calculated using the Black & Scholes model. The key variables used were as follows:
| Share price at grant date | EUR 0.48 |
|---|---|
| Expected volatility | 28% |
| Expected option life | 5 years |
| Risk-free rate | 0.88% |
During the period under review, the Group has charged a total of EUR 87 (55) thousand of share-based compensation as expense in the income statement.
| Sept. 30, 2014 | |||||
|---|---|---|---|---|---|
| EUR thousand | a) | b) | c) | d) | e) |
| Non-current financial assets | |||||
| Loan receivables from associates | 687 | 687 | 687 | ||
| Receivables | 29 | 29 | 29 | ||
| Current financial assets | |||||
| Trade receivables | 16 143 | 16 143 | 16 143 | ||
| 16 859 | 16 859 | 16 859 | |||
| Non-current financial liabilities | |||||
| Other liabilities | 29 | 29 | 29 | ||
| Current financial liabilities | |||||
| Interest-bearing liabilities | 1 196 | 1 196 | 1 196 | ||
| Derivatives – liabilities | 32 | 32 | 32 | ||
| Trade payables | 5 926 | 5 926 | 5 926 | ||
| 32 | 7 151 | 7 183 | 7 183 | ||
| Sept. 30, 2013 | |||||
| EUR thousand | a) | b) | c) | d) | e) |
| Non-current financial assets | |||||
| Receivables | 25 | 25 | 25 | ||
| Current financial assets | |||||
| Derivatives – receivables | 12 | 12 | 12 | ||
| Trade receivables | 16 758 | 16 758 | 16 758 | ||
| 16 783 | 12 | 16 795 | 16 795 | ||
| Non-current financial liabilities | |||||
| Other liabilities | 25 | 25 | 25 | ||
| Current financial liabilities | |||||
| Interest-bearing liabilities | 1 207 | 1 207 | 1 207 | ||
| Trade payables | 5 447 | 5 447 | 5 447 | ||
| 6 679 | 6 679 | 6 679 |
The Group's financial assets and liabilities at fair value through profit or loss consist of currency derivatives. The fair value of derivatives is determined using the appropriate quoted market price and commonly used option valuation methods. This corresponds to level 2 in the hierarchy required by IFRS 13 Fair Value Measurement.
Collateral for own commitments
| EUR thousand | Sept. 30, 2014 | Sept. 30, 2013 |
|---|---|---|
| Floating charges | 3 079 | 3 081 |
| Pledged shares | 933 | 933 |
| Future minimum lease payments for non-cancellable operating leases | ||
| EUR thousand | Sept. 30, 2014 | Sept. 30, 2013 |
| Not later than one year | 504 | 528 |
| Later than one year and not later than five years | 1 043 | 154 |
Total 1 547 682
The Group's operating leases include business premises, warehouse space, and cars. The leases have varying lengths, index clauses, renewal rights, and other terms. In 2014, the Group has agreed four new leases for business premises.
Loans to associates EUR thousand Loan receivable Interest income Sararasa Bioindo Pte. Ltd. Sept. 30, 2014 687 26
| 1-3 2014 |
1-3 2013 |
4-6 2014 |
4-6 2013 |
7-9 2014 |
7-9 2013 |
10-12 2013 |
|
|---|---|---|---|---|---|---|---|
| EUR thousand | |||||||
| NET SALES | 24 694 | 24 335 | 24 128 | 25 316 | 24 653 | 24 089 | 24 804 |
| Other operating income | 42 | 4 | 35 | 24 | 29 | 54 | 50 |
| Material and services | -88 | -49 | -136 | -69 | -66 | -63 | -93 |
| Employee benefits expense | -21 759 | -21 264 | -21 533 | -21 886 | -21 830 | -20 947 | -21 760 |
| Depreciation and amortization | -118 | -109 | -104 | -94 | -74 | -92 | -106 |
| Other operating expense | -2 450 | -2 600 | -2 380 | -2 465 | -2 433 | -2 268 | -2 402 |
| OPERATING RESULT | 320 | 316 | 11 | 825 | 280 | 773 | 493 |
| % of net sales | 1.3 % | 1.3 % | 0.0 % | 3.3 % | 1.1 % | 3.2 % | 2.0 % |
| Financing income | 74 | 82 | 27 | 273 | 201 | 36 | 87 |
| Financing expenses | -58 | -39 | -50 | -269 | -56 | -87 | -157 |
| Share of results in associates | -76 | -68 | -195 | -74 | -116 | -92 | -60 |
| RESULT BEFORE TAX | 260 | 291 | -207 | 755 | 308 | 629 | 364 |
| % of net sales | 1.1 % | 1.2 % | -0.9 % | 3.0 % | 1.3 % | 2.6 % | 1.5 % |
| Income taxes RESULT EXCL. DISCONTINUED |
-167 | -239 | -56 | -327 | -201 | -296 | 37 |
| OPERATIONS | 92 | 53 | -263 | 428 | 107 | 333 | 401 |
| % of net sales | 0.4 % | 0.2 % | -1.1 % | 1.7 % | 0.4 % | 1.4 % | 1.6 % |
| Result from discontinued operations | 0 | 156 | 0 | 4 193 | 0 | 0 | 0 |
| RESULT FOR THE PERIOD | 92 | 208 | -263 | 4 621 | 107 | 333 | 401 |
| % of net sales | 0.4 % | 0.9 % | -1.1 % | 18.3 % | 0.4 % | 1.4 % | 1.6 % |
The Group's key financial performance indicators have been calculated for the Group's continuing operations excluding result for the period, return on equity, and earnings per share, which include both continuing and discontinued operations.
| 7-9 | 7-9 | 1-9 | 1-9 | 1-12 | |
|---|---|---|---|---|---|
| EUR million | 2014 | 2013 | 2014 | 2013 | 2013 |
| Net sales | 24.7 | 24.1 | 73.5 | 73.7 | 98.5 |
| Operating result | 0.3 | 0.8 | 0.6 | 1.9 | 2.4 |
| % of net sales | 1.1 % | 3.2 % | 0.8 % | 2.6 % | 2.4 % |
| Result before taxes | 0.3 | 0.6 | 0.4 | 1.7 | 2.0 |
| % of net sales | 1.2 % | 2.6 % | 0.5 % | 2.3 % | 2.1 % |
| Result | 0.1 | 0.3 | -0.1 | 0.8 | 1.2 |
| % of net sales Result for the period incl. |
0.4 % | 1.4 % | -0.1 % | 1.1 % | 1.2 % |
| discontinued operations | 0.3 | 5.2 | 5.6 | ||
| % of net sales | 1.4 % | 7.0 % | 5.5 % | ||
| Return on equity, % | 2.0 % | 5.2 % | -0.4 % | 28.3 % | 23.0 % |
| Return on investment, % *) | 5.8 % | 11.0 % | 2.2 % | 10.6 % | 10.2 % |
| Interest-bearing liabilities | 1.2 | 1.2 | 1.2 | 1.2 | 1.0 |
| Cash and cash equivalents | 7.7 | 11.6 | 7.7 | 11.6 | 13.7 |
| Debt-equity ratio (Gearing), % | -30.0 % | -40.5 % | -30.0 % | -40.5 % | -50.0 % |
| Equity-ratio, % | 57.4 % | 68.0 % | 57.4 % | 68.0 % | 62.3 % |
| Balance sheet total | 37.9 | 41.8 | 37.9 | 41.8 | 40.7 |
| Gross investments | 0.1 | 0.1 | 0.3 | 0.3 | 0.4 |
| % of net sales | 0.4 % | 0.2 % | 0.5 % | 0.5 % | 0.4 % |
| Research & Development costs | 0.0 | 0.0 | 0.1 | 0.1 | 0.2 |
| % of net sales | 0.1 % | 0.2 % | 0.1 % | 0.2 % | 0.2 % |
| Personnel average for the period | 486 | 477 | 479 | 469 | 469 |
| Personnel at the end of the period Earnings per share, EUR |
489 | 481 | 489 | 481 | 468 |
| Basic | 0.00 | 0.01 | 0.00 | 0.01 | 0.02 |
| Diluted | 0.00 | 0.01 | 0.00 | 0.01 | 0.02 |
| Earnings per share, EUR (incl. discontinued operations) |
|||||
| Basic | 0.01 | 0.08 | 0.09 | ||
| Diluted | 0.01 | 0.08 | 0.09 | ||
| Equity per share, EUR | 0.34 | 0.41 | 0.34 | 0.41 | 0.40 |
*) Return on capital employed before taxes (ROI) has been calculated for continuing operations
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.