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Enento Group Oyj Earnings Release 2019
3262_rns_2020-02-11_f43512fb-6c31-42aa-a701-29e5a52ab93a.pdf
Earnings Release
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ASIAKASTIETO GROUP PLC
FINANCIAL STATEMENTS
1.1.–31.12.2019
Intelligent decisions.
Bigger dreams.
asiakastieto Group's Financial Statement Release 1.1. – 31.12.2019 1 (42)
ASIAKASTIETO GROUP PLC, STOCK EXCHANGE RELEASE 11 FEBRUARY 2020 AT 11.00 EET
Asiakastieto Group’s Financial Statement Release 1.1. – 31.12.2019: Net sales grew as expected
SUMMARY
Asiakastieto Group Plc acquired on 29 June 2018 the shares in UC AB. As a result of the acquisition, UC's consolidated balance sheet has been consolidated as part of Asiakastieto Group Plc's consolidated balance sheet from 30 June 2018 and UC's consolidated income statement as part of Asiakastieto Group Plc's consolidated income statement from 1 July 2018. In this financial statement release, the reported figures for the review period 1 January–30 June do not include UC's figures.
The figures presented in this financial statement release are based on the audited 2019 financial statements.
October – December 2019 in brief
- Net sales amounted to EUR 39,2 million (EUR 35,9 million), an increase of 9,1 % (at comparable exchange rates, an increase of 11,1 %).
- Adjusted EBITDA excluding items affecting comparability was EUR 13,6 million (EUR 12,2 million), an increase of 11,3 % (at comparable exchange rates an increase of 12,9 %).
- Adjusted EBITDA excluding IFRS 16 impact was EUR 13,0 million (EUR 12,2 million), an increase of 6,6 % (at comparable exchange rates an increase of 8,3 %).
- Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to the acquisitions was EUR 11,6 million (EUR 10,9 million), an increase of 6,5 %.
- Operating profit (EBIT) was EUR 7,8 million (EUR 7,1 million). Operating profit included items affecting comparability of EUR 3,8 million (EUR 3,7 million), mainly arising from amortisation from fair value adjustments of EUR 3,0 million (EUR 2,9 million) related to acquisitions as well as M&A and integration expenses.
- New products and services represented 4,4 % (7,8 %) of net sales.
- Free cash flow amounted to EUR 6,9 million (EUR 7,9 million). The effect of items affecting comparability on free cash flow was EUR -0,7 million (EUR -2,6 million).
- Earnings per share were EUR 0,23 (EUR 0,21).
- Comparable earnings per share were EUR 0,32 (EUR 0,30)¹.
January – December 2019 in brief
- Net sales amounted to EUR 146,0 million (EUR 98,1 million), an increase of 48,7 %.
- Adjusted EBITDA excluding items affecting comparability was EUR 51,5 million (EUR 36,1 million), an increase of 42,7 %.
- Adjusted EBITDA excluding IFRS 16 impact was EUR 49,3 million (EUR 36,1 million), an increase of 36,4 %.
- Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to the acquisitions was EUR 42,6 million (EUR 32,0 million), an increase of 33,0 %.
- Operating profit (EBIT) was EUR 27,8 million (EUR 16,7 million). Operating profit included items affecting comparability of EUR 14,8 million (EUR 15,3 million), mainly arising from amortisation from fair value adjustments of EUR 11,6 million (EUR 5,9 million) related to acquisitions, M&A expenses and redundancy-related expenses associated with the restructuring of operations.
- The UC KYC was closed down in the second quarter in Sweden. The effect of closing down the service was EUR -0,3 million on adjusted EBITDA and EUR -1,5 million on adjusted EBIT.
- New products and services represented 4,0 % (8,8 %) of net sales.
- Free cash flow amounted to EUR 32,1 million (EUR 15,9 million). The effect of items affecting comparability on free cash flow was EUR -2,7 million (EUR -8,5 million).
- Earnings per share were EUR 0,82 (EUR 0,56).
- Comparable earnings per share were EUR 1,20 (EUR 0,78)¹.
¹ The comparable earnings per share does not contain amortisation from fair value adjustments related to the acquisitions or their tax impact.
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| KEY FIGURES | 1.10. – 31.12.2019 | 1.10. – 31.12.2018 | 1.1. – 31.12.2019 | 1.1. – 31.12.2018 |
|---|---|---|---|---|
| EUR million | ||||
| Net sales | 39,2 | 35,9 | 146,0 | 98,1 |
| Net sales growth, % | 9,1 | 146,4 | 48,7 | 74,6 |
| Operating profit (EBIT) | 7,8 | 7,1 | 27,8 | 16,7 |
| EBIT margin, % | 19,8 | 19,8 | 19,0 | 17,0 |
| Adjusted EBITDA | 13,6 | 12,2 | 51,5 | 36,1 |
| Adjusted EBITDA margin, % | 34,7 | 34,0 | 35,3 | 36,8 |
| Adjusted EBITDA excluding IFRS 16 impact | 13,0 | 12,2 | 49,3 | 36,1 |
| Adjusted EBITDA excluding IFRS 16 impact margin, % | 33,3 | 34,0 | 33,8 | 36,8 |
| Adjusted operating profit (EBIT) | 11,6 | 10,9 | 42,6 | 32,0 |
| Adjusted EBIT margin, % | 29,5 | 30,2 | 29,2 | 32,7 |
| New products and services of net sales, % | 4,4 | 7,8 | 4,0 | 8,8 |
| Free cash flow | 6,9 | 7,9 | 32,1 | 15,9 |
| Net debt to adjusted EBITDA, x | 2,7 | pro forma 3,3 | 2,9 | pro forma 3,3 |
Asiakastieto Group has prepared unaudited pro forma financial information to demonstrate the impacts of the UC acquisition, completed on 29 June 2018, on the result of operations and financial position of the Group and to improve the comparability of financial information. In this financial statement release, unaudited pro forma financial information is shown for the year 2018 as if the share transaction had been completed already on 1 January 2017. The pro forma financial information is indicated as Pro forma information in each instance where it appears in this financial statement release. The pro forma financial reporting principles are described in Note 1 to this interim report.
The figures in the pro forma summary for the comparison period 1 January–30 December 2018 are presented as pro forma figures, as if the acquisition of UC had taken place already at the beginning of 2017. The second half-year figures for 1 July–31 December 2018 are presented as actual reported figures.
PRO FORMA JANUARY–DECEMBER 2019 IN BRIEF
- Net sales amounted to EUR 146,0 million (EUR 134,3 million), an increase of 8,7 % (at comparable exchange rates, an increase of 10,6 %).
- Adjusted EBITDA excluding items affecting comparability was EUR 51,5 million (EUR 42,1 million), an increase of 22,5 % (at comparable exchange rates an increase of 23,9 %).
- Adjusted EBITDA excluding IFRS 16 impact was EUR 49,3 million (EUR 42,1 million), an increase of 17,1 % (at comparable exchange rates an increase of 18,4 %).
- Adjusted EBIT excluding items affecting comparability and amortisation from fair value adjustments related to the acquisitions was EUR 42,6 million (EUR 37,7 million), an increase of 13,1 %.
- Operating profit (EBIT) was EUR 27,8 million (EUR 19,2 million). Operating profit included items affecting comparability of EUR 3,3 million (EUR 7,3 million) and amortisation from fair value adjustments related to the acquisitions of EUR 11,6 million (EUR 11,1 million).
- The UC KYC was closed down in Sweden. The effect of closing down the service was EUR -0,3 million on adjusted EBITDA and EUR -1,5 million on adjusted EBIT.
- New products and services represented 4,0 % (7,8 %) of net sales.
- Earnings per share were EUR 0,82 (EUR 0,54).
- Comparable earnings per share were EUR 1,20 (EUR 0,90)¹.
¹ The comparable pro forma earnings per share does not contain amortisation from fair value adjustments related to the acquisitions or their tax impact.
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| PRO FORMA KEY FIGURES | ||
|---|---|---|
| EUR million | Actual | |
| 1.1. – 31.12.2019 | 1.1. – 31.12.2018 | |
| Net sales | 146,0 | 134,3 |
| Net sales growth, % | 8,7 | 3,6 |
| Operating profit (EBIT) | 27,8 | 19,2 |
| EBIT margin, % | 19,0 | 14,3 |
| Adjusted EBITDA | 51,5 | 42,1 |
| Adjusted EBITDA margin, % | 35,3 | 31,3 |
| Adjusted EBITDA excluding IFRS 16 impact | 49,3 | 42,1 |
| Adjusted EBITDA excluding IFRS 16 impact, % | 33,8 | 31,3 |
| Adjusted operating profit (EBIT) | 42,6 | 37,7 |
| Adjusted EBIT margin, % | 29,2 | 28,1 |
| New products and services of net sales, % | 4,0 | 7,8 |
| Net debt to adjusted EBITDA, x | 2,9 | 3,3 |
asiakastieto
Asiakastieto Group's
Financial Statement Release 1.1. – 31.12.2019
Net sales, EUR million
- The growth of net sales in the final quarter of 2019 was 9,1 % at reported exchange rates and 11,1 % at comparable exchange rates compared with the corresponding quarter of the previous year.
- The Proff acquisition carried out at the beginning of the third quarter increased the reported net sales compared to the previous year.
- The development of net sales from consumer-related risk management services in the Risk Decisions business area remained strong in Sweden in the fourth quarter. The transition to higher value-added services has helped accelerate the development of net sales.
Adjusted EBITDA excluding IFRS 16 impact, EUR million
- Compared with the adjusted EBITDA for the corresponding quarter of 2018, adjusted EBITDA for the fourth quarter of 2019 excluding IFRS 16 impact increased by 6,6 % at reported exchange rates and 8,3 % at comparable exchange rates.
- Adjusted EBITDA was increased year-on-year by the organic growth of net sales, the cost-efficiency effect of actions taken to leverage synergies and the Proff acquisition. The year-on-year development of EBITDA in the fourth quarter was kept moderate by expensed investments made in the Group's strategy process and the preparation of the IT production platform renewal project.
- Adjusted EBITDA margin excluding IFRS 16 impact was 33,3 % (34,0 %).
Adjusted operating profit (EBIT), EUR million
- Compared with the reference period, adjusted operating profit (EBIT) in the fourth quarter increased by 6,5 %.
- Amortisation related to capitalised development costs increased from the comparison period.
- Adjusted EBIT margin was 29,5 % (30,2 %).
asiakastieto
Asiakastieto Group's
Financial Statement Release 1.1. – 31.12.2019
New services' share of net sales, %
- New services accounted for 4,4 % of net sales in the fourth quarter.
- Due to integration projects and the retargeting of the development portfolio at Nordic projects, the net sales contribution of new services remained below the long-term target level in the fourth quarter, but nevertheless turned to an increase. The Group has remained active in making service development investments, and the aim is to increase the share of net sales represented by new services in the next financial year.
- Eight new services were launched in the fourth quarter.
Free cash flow, EUR million
- Free cash flow was affected in the fourth quarter by the negative development of net working capital and the high level of investments in software and service development.
- Items affecting comparability reduced cash flow from operating activities in the fourth quarter by EUR 0,7 million (EUR 2,6 million). The items affecting comparability consisted primarily of integration-related payments.
FUTURE OUTLOOK
Net sales: Asiakastieto Group expects its net sales growth in 2020 to be close to the upper limit of its long-term target range (5-10 %), weighted to the first half of the year.
EBITDA: Asiakastieto Group expects its adjusted EBITDA margin to grow somewhat in 2020 in comparison to previous year.
Capital expenditure: Asiakastieto Group expects its capitalised product development and software expenses in 2020 to exceed the previous year's level.
The outlook is based on the assumption that exchange rates prevail at the current level.
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JUKKA RUUSKA, CEO
"Asiakastieto Group grew in line with our expectations in the final quarter of the financial year 2019. Net sales increased at comparable exchange rates by 11,1 % to EUR 39,2 million (EUR 35,3 million). The Group's net sales were boosted particularly by the strong growth of the SME and Consumers business, with the Proff acquisition completed in July being a key factor. The Risk Decisions business also continued to grow, although the rate of growth was slower than in the preceding quarters.
Adjusted EBITDA excluding the impact of IFRS 16 grew at comparable exchange rates by 8,3 %, reaching EUR 13,0 million (EUR 12,0 million). The development of profitability was slightly lower than the rate of growth of net sales due to the acquired Proff business having a diluting effect on the EBIT margin as well as non-recurring investments allocated in the fourth quarter to the renewal of the Group's strategy and the preparation of the IT production platform renewal programme.
The Group's adjusted operating profit excluding non-recurring items and other adjustable items grew in the fourth quarter by 6,5 % and amounted to EUR 11,6 million (EUR 10,9 million). New services' share of net sales turned to a slight increase after the previous quarter and stood at 4,4 %.
The housing transaction market is quickly becoming more digital in both of our markets, Finland and Sweden. Our services make it possible to carry out housing transactions where it suits the customer best. They eliminate the need to set up meetings at the bank. Instead, the deed of sale and other documents related to the transaction can be signed digitally from home or the real estate agent's office, for example. Finland's first digital housing transaction was completed with the help of our housing transaction service in December.
We look back on 2019 as the year of Asiakastieto Group's Nordic growth. Our Nordic visibility has been expanded, our integration measures are progressing in line with our objectives and we have transitioned to normal operation at the organisational level. In late 2019, we started to work on defining our new strategy for 2020-2023. In addition to the Executive Team, the strategy development effort incorporates the views of nearly a hundred Asiakastieto employees. We made progress with our future-oriented efforts during the year as planned. Our Nordic growth story will go on."
NET SALES
The net sales figures for the comparison period 1 January 2018–31 December 2018 are presented as pro forma figures as if the acquisition of UC had taken place already at the beginning of 2017. The actual figures for the interim period and their reference figures are presented in the Condensed Financial Statements section of this financial statement release.
October – December
Asiakastieto Group's net sales in the fourth quarter amounted to EUR 39,2 million (EUR 35,9 million), increasing by 9,1 % at reported exchange rates and 11,1 % at comparable exchange rates compared with the corresponding quarter of the previous year. Net sales from new products and services were EUR 1,7 million (EUR 2,8 million), representing 4,4 % (7,8 %) of the total net sales for the fourth quarter. The key drivers of net sales growth in the final quarter of the year were the continued strong development of the sales of the Risk Decisions business area's consumer-related risk management services in Sweden and the growth effect of the Proff acquisition, which strengthened the Group's Nordic business information services and is reported under the SME and Consumers business area. The number of banking days with a volume effect was the same as last year in both of the main market areas, Finland and Sweden.
Net sales of the Risk Decisions business area amounted to EUR 24,1 million (EUR 23,1 million) in the fourth quarter. Compared with the corresponding quarter in the previous year, net sales of the business area increased by 4,0 % at reported exchange rates and 5,8 % at comparable exchange rates. The demand for consumer-related risk management services and positive credit information, in particular, continued to see strong growth in the final quarter of the year in Sweden, although the rate of growth was more moderate than in the previous quarters. In Finland, the business area's rate of growth slowed as the interest ceiling on consumer credit, which entered into force at the beginning of September, had
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a negative impact on service demand. Net sales were favourably affected by sales being increasingly focused on value-added services thanks to service development.
Net sales of the SME and Consumers business area amounted to EUR 10,9 million (EUR 8,5 million) in the fourth quarter. The year-on-year growth of business area's net sales was 28,7 % at reported exchange rates and 31,7 % at comparable exchange rates. The Proff acquisition strengthened Asiakastieto's business information service offering aimed at the SME sector, and the consolidation of Proff's net sales into the SME and Consumers business area from the start of the third quarter was a key factor in the reported year-on-year growth of the business area in the fourth quarter. The net sales of online consumer services continued to develop favourably in Sweden in the fourth quarter, while the net sales of the business area's other services saw moderate development. The demand for offline products aimed at the SME sector developed negatively, as expected, but the order volumes of online services continued to grow in Sweden.
Net sales of the Customer Data Management business area amounted to EUR 2,1 million (EUR 2,3 million) in the fourth quarter. The business area's net sales decreased by 11,2 % at reported exchange rates and 10,1 % at comparable exchange rates compared with the corresponding quarter in the previous year. The volume of Emaileri's electronic communications services declined substantially year-on-year, while the net sales of B2B customer management services in Sweden contracted due to the negative development of customer turnover. The sales of B2C customer management services developed favourably in Finland in the fourth quarter thanks to active sales efforts. The business area is increasing the efficiency of sales, and service development now focuses on the Nordic service offering and the utilisation of unstructured data.
Net sales of the Digital Processes business area amounted to EUR 2,2 million (EUR 2,0 million) in the fourth quarter. The year-on-year growth of business area's net sales was 9,1 % at reported exchange rates and 10,3 % at comparable exchange rates. The business area's growth in the fourth quarter was driven by the good development of real estate and collateral information services in both markets as well as the strong positive development of the volume of compliance services in Finland. The volume of the housing price estimation service for banks, launched in Finland in the second quarter, began to show positive development in the fourth quarter. In Sweden, the Tambur housing transaction service has achieved a high coverage of the transaction volume in the market, and investments to further develop the service are continuing in close cooperation with key customers.
January – December (actual reported 2019 vs. pro forma 2018)
Asiakastieto Group's net sales in the review period amounted to EUR 146,0 million (EUR 134,3 million), an increase of 8,7 % year-on-year at reported exchange rates and 10,6 % at comparable exchange rates. Net sales from new products and services were EUR 5,9 million (EUR 10,5 million), which was 4,0 % (7,8 %) of the total net sales for the review period. In the Risk Decisions business area, sales of consumer-related risk management services continued to see strong development throughout the review period, especially in Sweden, which had a significant effect on the development of the Group's net sales. The consolidation of the Proff companies' figures starting from the beginning of the third quarter increased the reported net sales of the review period. During the review period, the number of banking days with a volume effect was the same as last year in both Finland and Sweden.
The net sales of the Risk Decisions business area in the review period amounted to EUR 95,5 million (EUR 88,0 million). The business area's net sales increased by 8,5 % year-on-year at reported exchange rates and by 10,3 % at comparable exchange rates. Demand for consumer-related risk management services continued to see strong growth during the review period, especially in Sweden. The growth of consumer-related credit markets and the increase of commercial volume boosted the demand for consumer information services, and the demand for positive credit information was strong during the review period. In Finland, the interest rate ceiling on consumer credit, which entered into force at the beginning of September, began to have a negative impact on service demand, which kept the development of net sales moderate in the final quarter of the period under review. With the coverage of positive credit information being very high in Sweden, positive credit information has become a significant factor in the granting of consumer credit also in Finland, with significant potential for further growth. A growing number of lenders are making use of positive credit information, which also helps increase the coverage of the information. The customer gains achieved, as well as the service development-driven and increasingly strong emphasis of sales on value-added services, also had a
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positive effect on net sales. The sales of business information services saw moderately positive development during the review period, particularly due to new services.
The net sales of the SME and Consumers business area during the review period amounted to EUR 33,9 million (EUR 29,7 million). The business area's net sales increased by 14,1 % year-on-year at reported exchange rates and by 16,7 % at comparable exchange rates. The Proff acquisition strengthened Asiakastieto's business information service offering aimed at the SME sector, and Proff's net sales have been consolidated into the SME and Consumers business area from the start of the third quarter. The development of the net sales of online consumer services in Sweden remained strong during the review period, while the sales of offline reports and analyses aimed at the Swedish SME segment decreased. The focus of sales efforts in the Swedish SME segment has shifted increasingly towards subscription-based online services, for which net sales are recognised over the subscription period. The service packages and certificates aimed at Finnish SMEs saw moderately positive development during the review period.
The net sales of the Customer Data Management business area in the review period amounted to EUR 8,1 million (EUR 8,9 million). The business area's net sales decreased by 9,2 % year-on-year at reported exchange rates and by 8,0 % at comparable exchange rates. The decision made at the beginning of the second quarter of 2018 to discontinue selling B2C customer management services in Sweden resulted in a significant decrease in net sales compared with the previous year. In addition, the volume of Emaileri's electronic communications services declined substantially year-on-year, while the net sales of B2B customer management services in Sweden contracted during the review period. In Finland, the development of B2C customer management services was positive during the review period thanks to active sales efforts. According to our estimate, the coming into force of the EU's General Data Protection Regulation (GDPR) in May 2018 has had a negative effect on demand for customer management services, as companies have been uncertain about the effects of the regulation on the content and use of information used for the targeting of marketing efforts. The business area is increasing the efficiency of sales, and service development now focuses on the Nordic service offering and the utilisation of unstructured data.
The net sales of the Digital Processes business area in the review period amounted to EUR 8,4 million (EUR 7,6 million). The business area's net sales increased by 11,2 % year-on-year at reported exchange rates and by 12,3 % at comparable exchange rates. The business area's net sales saw positive development in real estate and collateral services in both markets and particularly strong development in compliance services in Finland. The Tambur service launched in Sweden in April 2018 increased the business area's net sales during the review period, and the service's housing transaction volumes continued to grow during the period under review. The service has achieved a significant position in the Swedish housing transaction market. The business area launched a housing price estimation service for banks in the second quarter and a housing transaction service that enables the digitalisation of the housing sales process in the final quarter in the Finnish market. The new services launched in the Finnish market are supported by the business area's strong expertise and experience in the production and development of corresponding services in Sweden.
FINANCIAL RESULTS
The financial result figures for the comparison period 1 January 2018–31 December 2018 are presented as pro forma figures as if the acquisition of UC had taken place already at the beginning of 2017. The actual figures for the interim period and their reference figures are presented in the Condensed Financial Statements section of this financial statement release.
October – December
Asiakastieto Group's operating profit (EBIT) for the fourth quarter amounted to EUR 7,8 million (EUR 7,1 million). Operating profit included items affecting comparability of EUR 3,8 million (EUR 3,7 million), mainly arising from amortisation from fair value adjustments of EUR 3,0 million (EUR 2,9 million) related to acquisitions as well as M&A and integration expenses.
Fourth-quarter adjusted EBITDA excluding items affecting comparability was EUR 13,6 million (EUR 12,2 million). Adjusted EBITDA increased by EUR 1,4 million at reported exchange rates and by EUR 1,6 million at comparable exchange rates.
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Adjusted EBITDA excluding IFRS 16 impact was EUR 13,0 million (EUR 12,2 million) for the fourth quarter. Adjusted EBITDA excluding IFRS 16 impact increased by EUR 0,8 million at reported exchange rates and by EUR 1,0 million at comparable exchange rates.
Adjusted operating profit (EBIT) excluding items affecting comparability and amortisation from fair value adjustments related to the acquisitions was increased by EUR 0,7 million in the fourth quarter to EUR 11,6 million (EUR 10,9 million). Adjusted EBIT margin for the fourth quarter declined slightly year-on-year. The growth rate of profitability was slightly lower than the rate of growth of net sales due to the acquired Proff business having a diluting effect on the EBIT margin as well as non-recurring directly expensed investments allocated in the fourth quarter to the preparation of the IT production platform renewal project and the Group's strategy process. Amortisation related to capitalised development costs increased compared with the corresponding quarter in the previous year.
The Group's depreciation and amortisation in the fourth quarter amounted to EUR 5,1 million (EUR 4,3 million). Of the depreciation and amortisation, EUR 3,0 million (EUR 2,9 million) resulted from amortisation from fair value adjustments related to the acquisitions. The Group's depreciation on right-of-use assets (IFRS 16) in the fourth quarter amounted to EUR 0,6 million (EUR 0 million).
Net financial expenses in the fourth quarter were EUR 0,8 million (EUR 0,8 million). Financial expenses related to lease liabilities (IFRS 16) were EUR 0,0 million (EUR 0) in the fourth quarter, and recognised exchange rate loss was EUR 0,0 million (EUR 0,0 million).
The Group's profit before income taxes for the fourth quarter was EUR 7,0 million (EUR 6,3 million).
The tax amount booked as expense for the fourth quarter was EUR -1,6 million (EUR -1,4 million).
The Group's profit for the fourth quarter was EUR 5,4 million (EUR 4,9 million).
January – December (actual reported 2019 vs. pro forma 2018)
Asiakastieto Group's operating profit (EBIT) for the review period amounted to EUR 27,8 million (EUR 19,2 million). Operating profit included items affecting comparability of EUR 3,3 million (EUR 7,3 million), mainly arising from M&A and integration expenses and redundancy-related expenses associated with the restructuring of operations as well as amortisation from fair value adjustments of EUR 11,6 million (EUR 11,1 million) related to acquisitions.
Adjusted EBITDA for the review period excluding items affecting comparability amounted to EUR 51,5 million (EUR 42,1 million). Adjusted EBITDA increased by EUR 9,5 million at reported exchange rates and by EUR 9,9 million at comparable exchange rates.
Adjusted EBITDA excluding IFRS 16 impact was EUR 49,3 million (EUR 42,1 million) for the review period. Adjusted EBITDA excluding IFRS 16 impact increased by EUR 7,2 million at reported exchange rates and by EUR 7,6 million at comparable exchange rates.
Adjusted operating profit (EBIT) for the review period excluding items affecting comparability and amortisation from fair value adjustments related to the acquisitions increased by EUR 4,9 million to EUR 42,6 million (EUR 37,7 million). The adjusted EBIT margin for the review period improved year-on-year. The improvement in the adjusted EBIT margin was attributable to good net sales growth supported by the scalable business model as well as a considerable decrease in IT costs. The actions taken to leverage synergies reduced personnel expenses and other operating expenses in the review period compared with the reference period. During the review period, strategic investments were made in areas including Nordic integration, personnel competence and service marketing, while maintaining growth in profitability. Amortisation related to capitalised development costs increased compared with the corresponding period in the previous year.
The UC KYC service was closed down in Sweden during the review period because the future cash flows generated by the service concept — which was developed in 2017–2018 and was functional as such — are unlikely to cover the necessary continued development and future overhead expenses associated with the service. The Group will continue to invest in the development of services that make it easier for customers to meet compliance obligations with respect to KYC-related services, among other things. The write-down of capitalised development expenses arising from the closure of the
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service had an impact of EUR -1,5 million on adjusted operating profit and EUR -0,3 million on adjusted EBITDA in the review period. The closure of the service does not have a significant impact on the Group's net sales or cash flow.
The Group's depreciation and amortisation for the review period amounted to EUR 20,5 million (EUR 15,5 million). Of the depreciation and amortisation, EUR 11,6 million (EUR 11,1 million) resulted from amortisation from fair value adjustments related to the acquisitions. The Group's depreciation on right-of-use assets (IFRS 16) in the review period amounted to EUR 2,3 million (EUR 0).
Net financial expenses during the review period were EUR 2,9 million (EUR 3,1 million). Financial expenses related to lease liabilities (IFRS 16) were EUR 0,2 million (EUR 0) in the review period, and recognised exchange rate loss was EUR 0,1 million (EUR 0,0 million).
The Group's profit before income taxes for the review period was EUR 24,9 million (EUR 16,2 million).
The tax amount booked as expense for the review period was EUR -5,2 million (EUR -3,3 million).
The Group's profit before income taxes for the review period was EUR 19,7 million (EUR 12,9 million).
CASH FLOW
In the review period, cash flow from operating activities amounted to EUR 41,9 million (EUR 19,5 million). The effect of the change in the Group's working capital on cash flow was EUR 1,6 million (EUR 0,2 million). The impact of items affecting comparability on operating cash flow was EUR -2,7 million (EUR -8,5 million). Withholding taxes related to the cash components of rewards paid under the long-term incentive plan for the management had an impact on operating cash flow of EUR -1,1 million (EUR -0,9 million) during the review period.
The Group paid EUR 4,9 million (EUR 3,6 million) in taxes during the review period.
Cash flow from investing activities for the review period amounted to EUR -19,4 million (EUR -90,8 million). The cash flow from investment activities consisted of the payment of the transaction price for the Proff acquisition as well as acquisitions of property, plant and equipment and intangible assets.
Cash flow from financing activities for the review period amounted to EUR -35,0 million (EUR 85,2 million). The cash flow from financing activities for the review period consisted of dividend payment, capital repayment, the repayment of a credit limit of EUR 10 million and repayments of lease liabilities (IFRS 16).
STATEMENT OF FINANCIAL POSITION
At the end of the review period, the Group's total assets were EUR 543,3 million (EUR 545,9 million). Total equity amounted to EUR 310,7 million (EUR 321,3 million) and total liabilities to EUR 232,6 million (224,6 million). Of the total liabilities, EUR 166,2 million (EUR 170,1 million) were non-current interest-bearing liabilities, EUR 24,1 million (EUR 25,5) deferred tax liabilities, EUR 7,9 million (EUR 4,4) non-current pension liabilities, EUR 2,3 million (EUR 0,1) current, interest-bearing liabilities and EUR 32,1 million (EUR 24,4 million) current, non-interest-bearing liabilities. Goodwill amounted to EUR 351,4 million (EUR 348,7 million) at the end of the review period.
Asiakastieto Group's cash and cash equivalents at the end of the review period were EUR 20,4 million (EUR 33,2 million), and net debt was EUR 148,1 million (EUR 137,0 million). The effect of IFRS 16 transition on net debt reported for the review period was EUR 9,7 million.
CAPITAL EXPENDITURE
The majority of Asiakastieto Group's capital expenditure is related to the development of products and services as well as investments in IT infrastructure. Other capital expenditure mainly comprises purchases of company cars and office equipment. The Group's gross capital expenditure in the review period amounted to EUR 12,4 million (EUR 5,6 million). Capital expenditure on intangible assets was
asiakastieto Group's Financial Statement Release 1.1. – 31.12.2019 11 (42)
EUR 11,6 million (EUR 4,6 million) and capital expenditure on property, plant and equipment was EUR 0,8 million (EUR 0,9 million).
The product development activities of Asiakastieto Group involve development of the product and service offering. During the review period, the capitalised development and software costs of the Group amounted to EUR 11,6 million (EUR 4,6 million). The Group had no material research activities.
Asiakastieto Group's gross investments in the review period, compared with pro forma investments in the reference period, amounted to EUR 12,4 million (EUR 8,9 million)¹. Capital expenditure on intangible assets was EUR 11,6 million (EUR 7,7 million) and capital expenditure on property, plant and equipment was EUR 0,8 million (EUR 1,2 million).
PERSONNEL
The average number of personnel employed by Asiakastieto Group during the final quarter of the year was 399 (453) and during the financial year 2019 428 (315). At the end of the financial year, the number of personnel was 422 (447), of whom 172 (164) worked in the Group's companies in Finland, 210 (283) in the Swedish companies, 39 (0) in the Norwegian company and 1 (0) in the Danish company. The change in the number of personnel in the Swedish subsidiaries is mainly due to the outsourcing of UC Affärsfakta AB's telesales operations, while the change in the Norwegian and Danish subsidiaries is due to the Proff acquisition.
During the financial year 2019, the personnel expenses of the Group amounted to EUR 38,6 million (EUR 26,8 million) and included an accrued cost of EUR 850 thousand (EUR 415 thousand) from the management's long-term incentive plan. See further details in section 2.7. Concerning transactions with related parties, see the notes to the condensed financial statements, Transactions with related parties.
- Sales, Marketing and Communications 40 %
- Business Areas 27 %
- IT and technology 22 %
- Administration, Finance and HR 11 %
Key figures describing the Group's personnel:
| PERSONNEL | ||||
|---|---|---|---|---|
| 1.10. – 31.12.2019 | 1.10. – 31.12.2018 | 1.1. – 31.12.2019 | 1.1. – 31.12.2018 | |
| Average number of personnel | 399 | 453 | 428 | 315 |
| Full time | 389 | 443 | 417 | 305 |
| Part time and temporary | 10 | 10 | 11 | 10 |
| Geographical distribution | ||||
| Finland | 165 | 165 | 162 | 162 |
| Sweden | 196 | 288 | 246 | 153 |
| Norway | 37 | - | 19 | - |
| Denmark | 1 | - | 1 | - |
| Wages and salaries for the period (EUR million) | 7,1 | 7,4 | 28,5 | 20,2 |
¹ Pro forma gross investments have been calculated by combining the historical capital expenditures of Asiakastieto Group and UC during the reference period 1 January–30 June 2018 and reported gross capital expenditure for the reference period 1 July–31 December 2018. Gross investments are fixed asset acquisitions with long-term effect, from which no sales of property or disposal of business have been deducted.
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OTHER EVENTS DURING THE REVIEW PERIOD
Asiakastieto Group Plc's General Meeting of shareholders on 28 March 2019
The General Meeting of shareholders held on 28 March 2019 confirmed the financial statements for the financial period ended on 31 December 2018 and discharged the members of the Board of Directors and the Chief Executive Officer from liability.
The Meeting approved the Board of Directors' proposal to distribute funds of EUR 0,95 per share. The funds were paid to shareholders registered in the company's shareholder register held by Euroclear Finland Ltd on the payment record date of 1 April 2019. It was decided that the funds would be paid on 11 April 2019.
The Annual General Meeting decided, in accordance with the proposal of the Shareholders' Nomination Board, that the number of the company's Board members is six (6). In accordance with the proposal of the Shareholders' Nomination Board, Petri Carpén, Patrick Lapveteläinen, Carl-Magnus Månsson and Martin Johansson were re-elected as members of the Board of Directors. Petri Nikkilä and Tiina Kuusisto were elected as new Board members.
The General Meeting of shareholders decided that the annual remuneration is EUR 50 000 for the chairman of the Board of Directors and EUR 35 000 for the members. In addition, an attendance fee of EUR 500 is paid for attending a Board meeting. The Chairmen of the Committees shall receive an attendance fee of EUR 500 and members of the Committees EUR 400 per committee meeting. No remuneration is paid to the members of the Shareholders' Nomination Board. Reasonable travel expenses for attendance to meetings are paid to Board members and members of the Shareholder's Nomination Board.
Authorised Public Accountants firm PricewaterhouseCoopers Oy was selected as the auditor of the Company, and Authorised Public Accountant Martin Grandell as the auditor in charge. The auditor's fee is paid according to a reasonable invoice approved by the Audit Committee of Board of Directors.
Authorisation for issue of shares
The Annual General Meeting authorised the Board of Directors to resolve on one or more issuances, which include the right to issue new shares or dispose of the shares in the possession of the company. The authorisation would consist of up to 1 500 000 shares in the aggregate. The Board of Directors was authorised to decide on a directed issue. The authorisation is proposed to be used for material arrangements from the company's point of view, such as financing or implementing business arrangements or investments or for other such purposes for which a weighty financial reason for issuing shares would exist, as determined by the Board of Directors.
The Board of Directors was authorised to resolve on all other terms and conditions of the issuance of shares, including the payment period, grounds for the determination of the subscription price and subscription price or allocation of shares free of charge or that the subscription price may be paid besides in cash also by other assets either partially or entirely.
The authorisation is effective for 18 months from the close of the Annual General Meeting until 28 September 2020. The authorisation revoked the corresponding share issue authorisation granted to the Board of Directors by the Annual General Meeting on 22 March 2018. The authorisation has not been used as of 11 February 2020.
Asiakastieto Group Plc's Board of Directors decided on 11 February 2019 on a directed share issue related to the reward payment from the performance period 2015–2018 of the Matching Share Plan 2015 and from the performance period 2016–2018 of the Performance Share Plan 2016. In the share issue, 39 328 new Asiakastieto Group Plc shares were issued without consideration to the key employees participating in the Matching Share Plan 2015 and the Performance Share Plan 2016 in accordance with the terms and conditions of each plan. The decision on a directed issue of shares was based on the authorisation given to the Board of Directors by the Annual General Meeting on 22 March 2018.
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Asiakastieto Group Plc's Board of Directors decided on 10 February 2020 on a directed share issue related to the reward payment from the performance period 2018-2019 of the Matching Share Plan 2018. In the share issue, approximately 14 000 new Asiakastieto Group Plc shares will be issued without consideration to the key employees participating in the Matching Share Plan 2018 in accordance with the terms and conditions of plan. The decision on a directed issue of shares was based on the authorisation given to the Board of Directors by the Annual General Meeting on 28 March 2019.
Authorisation for repurchasing own shares
The Annual General Meeting authorised the Board of Directors to decide on the repurchase of a maximum of 1 500 000 of the company's own shares, in one or several instalments. The shares will be repurchased with the Company's unrestricted shareholders' equity, and the repurchases will reduce funds available for the distribution of profits. The shares can be repurchased, for example, to develop the company's capital structure, carry out or finance potential corporate acquisitions or other business arrangements, to be used as a part of the company's incentive programme or to be otherwise conveyed further, retained as treasury shares, or cancelled.
In accordance with the resolution of the Board of Directors, shares may be repurchased also in a proportion other than that in which shares are owned by the shareholders (directed acquisition) at the market price of the shares at marketplaces on which the company shares are traded or a price otherwise established on the market at the time of the repurchase. The Board of Directors decides how shares are repurchased. Among other means, derivatives may be used in acquiring the shares. According to the authorisation, the Board of Directors decides on any other matters related to the repurchase of shares.
The authorisation is effective for 18 months from the close of the Annual General Meeting until 28 September 2020. The authorisation revoked the corresponding authorisation to repurchase the Company's shares granted to the Board of Directors by the Annual General Meeting on 22 March 2018. The authorisation has not been used as of 11 February 2019.
Meeting of the Board of Directors on 28 March 2019
The organizational meeting of the Board of Directors elected from among its members Patrick Lapveteläinen as Chairman of the Board of Directors.
The Board of Directors has in its organisation meeting evaluated the independence of the Directors according to the Finnish Corporate Governance Code. The Board noted that all members of the Board are independent of the Company and all except Patrick Lapveteläinen and Martin Johansson are independent of the significant shareholders. The Board of Directors noted the Company is in compliance with recommendation 10 of the CG Code.
The Board of Directors re-nominated Petri Carpén and Carl-Magnus Månsson as members of the Audit Committee and nominated Martin Johansson as a new member of the Committee. Petri Carpén was elected chairman of the committee.
Changes in Asiakastieto Group's Executive team
Karl-Johan Werner started as Asiakastieto Group's Director of Customer Data Management business area on 4 March 2019. He replaced Esa Kumpu in the Executive Management Team. Esa Kumpu left Asiakastieto Group on 31 March 2019 to pursue new challenges outside Asiakastieto Group.
Elina Stråhlman has been appointed Asiakastieto Group's CFO. She started in her position on 16 September 2019. Elina Stråhlman replaced Antti Kauppila in Asiakastieto Group's Executive Management Team. Antti Kauppila continues at Asiakastieto Group in the position of the Group's Head of Financial Planning & Analysis.
Jörgen Olofsson has been appointed Asiakastieto Group's CIO and member of the Executive Management Team. He started in this position on 1 October 2019. Jörgen Olofsson replaced acting CIO Anders Hugosson on the Executive Management Team.
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Asiakastieto Group's Deputy CEO Anders Hugosson left the company on 31 January 2020. He left also his role as CEO of UC Group, which he had held since 2007. Anders Hugosson has not been a member of the Asiakastieto Group's Executive Management Team effective from 1 October 2019.
Asiakastieto Group acquired Proff, the leading business information service in Norway and Denmark, to strengthen its business information offering in the Nordic region
Asiakastieto Group acquired the shares of the business information service Proff in Norway, Sweden and Denmark from its previous owner Eniro under an agreement signed on 20 May 2019. The transaction was completed on 1 July 2019. More detailed information on the acquisition is presented under Note 2.3. Corporate Acquisitions in the notes to the condensed financial statements.
The acquisition strengthens Asiakastieto's position in the market as the leading provider of business information services in the Nordic countries. Proff's business information services in Norway, Sweden and Denmark have altogether approximately three million unique monthly visitors, and Proff's freemium business information services correspond to Asiakastieto's allabolag.se service in Sweden and asiakastieto.fi/yritykset service in Finland.
Asiakastieto Group expects the acquisition to add value by creating the leading Nordic business information service as well as synergy opportunities, which are expected to lead to faster growth and improved cost efficiency. The objective is to achieve annual synergies of at least SEK 8 million, expected to be realised to their full extent by the year 2021.
Asiakastieto Group acquires the business of Solidinfo.SE and strengthens company information services in Sweden
On 12 February 2019, UC Affärsinformation AB, part of Asiakastieto Group, signed an agreement to buy the business operations of Solidinfo.SE from Social Media Support Sverige AB. Through the acquisition of these business operations, Asiakastieto Group strengthened its business information service offering in Sweden. The core of the Solidinfo.SE service consists of a free-of-charge business and financial information search service, similar to the business information service on Swedish companies provided by UC Affärsinformation AB. The transaction was closed on 28 February 2019, and it has no material effect on Asiakastieto Group's cash flow or financial position. The acquisition price is not disclosed.
Asiakastieto Group outsources its telemarketing unit in Sweden
Asiakastieto Group Plc and UC Affärsfakta AB signed an agreement regarding the outsourcing of telesales operations in Affärsfakta on 14 May 2019. The letter of intent was signed on 16 January 2019. Asiakastieto Group transferred the telesales operations in Sweden from 1 September 2019 onward to Affärsfakta i Sverige AB, founded by the current management of UC Affärsfakta AB. By outsourcing telesales, Asiakastieto Group increases its efficiency, encourages an entrepreneurial approach to the operations and releases capital to be used for its core business.
Along with the outsourcing, approximately 100 employees from the telesales unit in Sweden transferred their employment to Affärsfakta i Sverige AB with their current benefits and obligations. Affärsfakta i Sverige AB operates in four locations in Sweden. Krister Ahlberg, former CEO of the telesales unit in Sweden, will continue as CEO in Affärsfakta i Sverige AB.
Adjustments of financial guidance
Due to the Acquisition of Proff, Asiakastieto Group updated its previously published outlook, which did not incorporate the impact of the Acquisition. The updated outlook also incorporates the expected impacts of the devalued Swedish krona on the Group's consolidated euro-denominated full financial year figures.
The Company released on 1 July 2019 a Stock Exchange Release in which it adjusted the financial guidance for 2019 as follows:
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Net sales: Asiakastieto Group expects its net sales growth in 2019 to be in the middle of the range of its long-term target (5–10 %) compared to the previous year's pro forma net sales.
EBITDA: Asiakastieto Group expects its adjusted EBITDA, excluding the effect of IFRS 16 transition, to grow in 2019 at a percentage rate that exceeds the rate of net sales growth compared to the previous year's pro forma adjusted EBITDA.
Capital expenditure: Asiakastieto Group expects its capitalised product development and software expenses in 2019 to exceed the previous year's level on a pro forma basis.
SHARES AND SHAREHOLDERS
The Company has one share class. Each share carries one vote at the General Meeting of shareholders and each share confers an equal right to dividends and net assets of the Company. The shares have no nominal value. The shares of the Company are incorporated in the book-entry securities system maintained by Euroclear Finland Ltd.
A total of 39 328 new shares were subscribed for in Asiakastieto Group Plc's share issue directed to the company key personnel without payment. The shares were registered in the Trade Register on 8 March 2019. After the registration, the company's shares totalled 23 993 292. The new shares produce the right to dividends and other distribution of assets as well as other shareholder rights as of the registration date 8 March 2019. Trading in the new shares commenced on 11 March 2019.
On 31 December 2019, the total number of shares was 23 993 292 (23 953 964), and the share capital of the Company amounted to EUR 80 000 (EUR 80 000).
According to the book-entry securities system, the Company had 2 726 (2 546) shareholders on 31 December 2019. A list of the largest shareholders is available on the Company's investor pages at investors.asiakastieto.fi.
- Finance and insurance institutions 43,3 %
- Foreign shareholders 43,0 %
- General government 6,7 %
- Households 3,7 %
- Companies and housing companies 2,8 %
- Non-profit organisations 0,5 %
| SHARE-RELATED KEY FIGURES | ||
|---|---|---|
| 1.1. – 31.12.2019 | 1.1. – 31.12.2018 | |
| EUR (unless otherwise stated) | ||
| Share price development | ||
| Highest price | 34,70 | 32,60 |
| Lowest price | 22,00 | 21,10 |
| Average price | 26,56 | 27,82 |
| Closing price | 31,50 | 24,60 |
| Market capitalisation, EUR million | 755,8 | 589,3 |
| Trading volume, pcs | 2 509 597 | 3 533 838 |
| Total exchange value of shares, EUR million | 66,6 | 98,3 |
FLAGGING NOTIFICATIONS AND MANAGERS' TRANSACTIONS
Flagging notifications in the review period
Notifications according to Chapter 9, Section 10 of the Securities Markets Act on 16 August 2019
Asiakastieto Group Plc received on 15 August 2019 an announcement under Chapter 9, Section 5 of the Securities Markets Act, according to which the holding of Kayne Anderson Rudnick Investment Management LLC had increased above the threshold of 5 per cent. The holding of Kayne Anderson Rudnick Investment Management LLC is 1 211 137 shares, corresponding to 5,05 per cent of the Company's shares and voting rights.
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Managers' transactions
Transactions by Asiakastieto Group's management during the review period have been published as Stock Exchange Releases and they can be read on the Company's investor pages at investors.asiakastieto.fi
RISKS AND UNCERTAINTIES IN THE NEAR FUTURE
The demand for the Group's products and services depends on the activity of the business operations of its customers. Slow economic growth or a declining economy may result in a weakening demand for the services of Asiakastieto Group.
A general tendency to seek cost savings in business activities and the tightening competition in the Group's business sector may cause downward pricing pressure, which may have a negative effect on revenue and profit.
Asiakastieto Group believes that its continued success will be influenced by its ability to meet customers' needs through the development of products and services that are easy to use and that seek to increase customers' business process efficiency, offer cost savings, and facilitate better business decisions. Potential deficiencies in the management of the product development portfolio, as well as a shortage of development resources, may delay the introduction of new services or enhancements to the market and therefore weaken the Group's results.
Well-functioning information technology and the good availability of services are essential conditions for the business operations of Asiakastieto Group. Notwithstanding the current solutions for high availability and protection solutions in accordance with best practices, the realisation of external or internal threats can never be completely eliminated. The realisation of risks of this kind could result in misuse, modification or illegal publication of information and could have legal consequences or cause reputational harm, loss of revenue, claims or regulatory actions.
Execution of M&A activities and integration will require time from key personnel and causes uncertainty within personnel as well as activating competitors in their recruitment efforts. The Group has planned and carried out activities to mitigate these risks. Estimated synergy benefits and expenses related to the combination process are based on estimates which are by their nature uncertain and subject to numerous risks and uncertainties related to business, the economy and competition.
Asiakastieto Group Plc (Asiakastieto) has received a claim for additional compensation from Eniro AB (publ.) in relation to the acquisition of Proff companies from Eniro's subsidiaries Eniro Sverige AB, Eniro Holding AS and Eniro Danmark A/S. Eniro presents in its claim that the purchase price set out in the agreement and upon which the transaction was consummated was incorrect due to a "clerical error" on Eniro's side. The claim amounts to SEK 21 530 833,33. Asiakastieto Group Plc deems the claim to be without any merit. The matter has been submitted for arbitration.
PROPOSAL CONCERNING THE DISTRIBUTION OF FUNDS
At the end of the financial year 2019, distributable funds of the Group's parent company amounted to EUR 390 068 633,22, of which the profit for the financial year was EUR 28 999 233,88. The Board of Directors proposes to the Annual General Meeting convening on 27 March 2020 that from the financial year ended 31 December 2019, funds be distributed EUR 0,95 per share, EUR 22 793 627,40 in total based on the Company's registered total number of shares at the time of the proposal, as follows:
| PROPOSAL CONCERNING THE DISTRIBUTION OF FUNDS | ||
|---|---|---|
| EUR / share | EUR | |
| From the invested unrestricted equity reserve as a repayment of capital | 0,95 | 22 793 627,40 |
| To be retained in unrestricted equity | 367 275 005,82 | |
| Total | 390 068 633,22 |
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The equity repayment from the reserve for invested unrestricted shareholders’ equity will be paid to a shareholder registered in the company’s shareholders’ register held by Euroclear Finland Ltd on the payment record date of 31 March 2020. The Board of Directors proposes that the funds be paid on 9 April 2020.
The remunerations to be paid on the basis of the company’s management’s Long-term Incentive Plan 2018 -2019 are further expected to result in an issuance of 14 000 new shares in Asiakastieto Group Plc, entitling to the distribution of funds from the financial year 2019. Thus, the proposed total amount of distributed funds would increase by approximately EUR 14 000.
FUTURE OUTLOOK
Net sales: Asiakastieto Group expects its net sales growth in 2020 to be close to the upper limit of its long-term target range (5-10 %), weighted to the first half of the year.
EBITDA: Asiakastieto Group expects its adjusted EBITDA margin to grow somewhat in 2020 in comparison to previous year.
Capital expenditure: Asiakastieto Group expects its capitalised product development and software expenses in 2020 to exceed the previous year’s level.
The outlook is based on the assumption that exchange rates prevail at the current level.
The outlook is subject to risks related to, among other factors, the economic development of the operating countries of the Group as well as the development of the business operations of the Group. The most significant risks related to business operations include, for example, risks related to the success of product and service development activities, launches of new products and services and risks related to competitive tenders and to losing significant customer accounts.
Asiakastieto Group’s business risks have been described in more detail on the Company’s investor pages at investors.asiakastieto.fi and in the company’s listing prospectus, approved by the Financial Supervisory Authority on 10 September 2018, and also available on the investor pages of the company website.
Helsinki, 11 February 2020
ASIAKASTIETO GROUP PLC
Board of Directors
For further information:
Jukka Ruuska
CEO
Asiakastieto Group Plc
Tel. +358 10 270 7111
Distribution:
Nasdaq Helsinki
Major media
investors.asiakastieto.fi
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CONDENSED FINANCIAL STATEMENTS AND NOTES 1.1. – 31.12.2019
The figures presented in this financial statement release are based on the audited 2019 financial statements. The amounts presented in the financial statement release are rounded, so the sum of individual figures may differ from the sum reported.
- Consolidated statement of comprehensive income, financial position, cash flows and changes in equity
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | ||||
|---|---|---|---|---|
| EUR thousand | 1.10. – 31.12.2019 | 1.10. – 31.12.2018 | 1.1. – 31.12.2019 | 1.1. – 31.12.2018 |
| Net sales | 39 188 | 35 910 | 145 957 | 98 135 |
| Other operating income | 161 | -11 | 293 | 86 |
| Materials and services | -6 305 | -5 912 | -24 499 | -18 334 |
| Personnel expenses¹ | -9 486 | -9 965 | -38 574 | -26 763 |
| Other operating expenses | -11 377 | -9 111 | -37 111 | -28 055 |
| Work performed by the entity and capitalised | 650 | 492 | 2 218 | 1 630 |
| Depreciation and amortisation | -5 070 | -4 276 | -20 503 | -9 995 |
| Operating profit | 7 762 | 7 126 | 27 782 | 16 704 |
| Finance income | 41 | -107 | 154 | 7 |
| Finance expenses | -808 | -686 | -3 029 | -2 195 |
| Finance income and expenses | -767 | -793 | -2 875 | -2 188 |
| Profit before income tax | 6 995 | 6 333 | 24 906 | 14 516 |
| Income tax expense | -1 596 | -1 406 | -5 197 | -3 598 |
| Profit for the period | 5 399 | 4 926 | 19 710 | 10 918 |
| Items that may be reclassified to profit or loss: | ||||
| Translation differences on foreign units | 6 402 | 717 | -5 305 | 5 450 |
| Hedging of net investments in foreign units | -1 474 | -858 | 1 186 | -858 |
| Income tax relating to these items | 295 | 172 | -237 | 172 |
| 5 222 | 31 | -4 357 | 4 763 | |
| Items that will not be reclassified to profit or loss: | ||||
| Remeasurements of post-employment benefit obligations | -3 634 | -687 | -3 634 | -687 |
| Income tax relating to these items | 749 | 142 | 749 | 142 |
| -2 885 | -546 | -2 885 | -546 | |
| Other comprehensive income for the period, net of tax | 2 337 | -515 | -7 242 | 4 218 |
| Total comprehensive income for the period | 7 736 | 4 411 | 12 467 | 15 136 |
¹ Personnel expenses include an accrued expense related to the long-term incentive plan to the management amounting to EUR 160 thousand for the fourth quarter 1 October–31 December 2019, EUR 226 thousand for the reference period 1 October–31 December 2018, EUR 850 thousand for the financial year 2019 and EUR 415 thousand for the financial year 2018.
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asiakastieto
Asiakastieto Group's
Financial Statement Release 1.1. – 31.12.2019
| EUR thousand | 1.10. – 31.12.2019 | 1.10. – 31.12.2018 | 1.1. – 31.12.2019 | 1.1. – 31.12.2018 |
|---|---|---|---|---|
| Profit attributable to: | ||||
| Owners of the parent company | 5 399 | 4 926 | 19 710 | 10 918 |
| Total comprehensive income attributable to: | ||||
| Owners of the parent company | 7 736 | 4 411 | 12 467 | 15 136 |
| Earnings per share attributable to the owners of the parent during the period: | ||||
| Basic, EUR | 0,23 | 0,21 | 0,82 | 0,56 |
| Diluted, EUR | 0,22 | 0,21 | 0,82 | 0,56 |
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| CONSOLIDATED STATEMENT OF FINANCIAL POSITION | ||
|---|---|---|
| EUR thousand | 31.12.2019 | 31.12.2018 |
| ASSETS | ||
| Non-current assets | ||
| Goodwill | 351 368 | 348 654 |
| Other intangible assets | 135 460 | 137 877 |
| Property, plant and equipment | 2 356 | 3 285 |
| Right-of-use assets | 9 591 | - |
| Deferred tax assets | 740 | 1 127 |
| Financial assets and other receivables | 86 | 187 |
| Total non-current assets | 499 601 | 491 130 |
| Current assets | ||
| Account and other receivables | 23 328 | 21 526 |
| Cash and cash equivalents | 20 361 | 33 215 |
| Total current assets | 43 688 | 54 741 |
| Total assets | ||
| 543 289 | 545 871 | |
| EUR thousand | ||
| 31.12.2019 | 31.12.2018 | |
| EQUITY AND LIABILITIES | ||
| Equity attributable to owners of the parent | ||
| Share capital | 80 | 80 |
| Invested unrestricted equity reserve | 340 173 | 351 690 |
| Translation differences | 407 | 4 592 |
| Accumulated losses | -29 985 | -35 071 |
| Equity attributable to owners of the parent | 310 675 | 321 290 |
| Share of equity held by non-controlling interest | 0 | 0 |
| Total equity | 310 675 | 321 290 |
| Liabilities | ||
| Non-current liabilities | ||
| Financial liabilities | 166 225 | 170 113 |
| Pension liabilities | 7 915 | 4 445 |
| Deferred tax liabilities | 24 137 | 25 482 |
| Total non-current liabilities | 198 277 | 200 040 |
| Current liabilities | ||
| Financial liabilities | 2 276 | 130 |
| Advances received | 10 247 | 6 375 |
| Account and other payables | 21 814 | 18 036 |
| Total current liabilities | 34 337 | 24 541 |
| Total liabilities | ||
| 232 614 | 224 581 | |
| Total equity and liabilities | ||
| 543 289 | 545 871 |
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| EUR thousand | Attributable to owners of the parent | Total | Share of equity held by non-controlling interest | Total equity | |||
|---|---|---|---|---|---|---|---|
| Share capital | Invested unrestricted equity reserve | Translation differences | Accumulated losses | ||||
| Equity at 1.1.2019 | 80 | 351 690 | 4 592 | -35 071 | 321 290 | 0 | 321 290 |
| Profit for the period | - | - | - | 19 710 | 19 710 | - | 19 710 |
| Other comprehensive income for the period | |||||||
| Hedging of net investments | - | - | 1 120 | -172 | 948 | - | 948 |
| Defined benefit plans | - | - | - | -2 885 | -2 885 | - | -2 885 |
| Translation differences | - | - | -5 305 | - | -5 305 | - | -5 305 |
| Total comprehensive income for the period | - | - | -4 185 | 16 653 | 12 467 | - | 12 467 |
| Transactions with owners | |||||||
| Distribution of funds | - | -11 517 | - | -11 277 | -22 794 | - | -22 794 |
| Management's incentive plan | - | - | - | -289 | -289 | - | -289 |
| Equity at 31.12.2019 | 80 | 340 173 | 407 | -29 985 | 310 675 | 0 | 310 675 |
| EUR thousand | Attributable to owners of the parent | Total | Share of equity held by non-controlling interest | Total equity | |||
| --- | --- | --- | --- | --- | --- | --- | --- |
| Share capital | Invested unrestricted equity reserve | Translation differences | Accumulated losses | ||||
| Equity at 1.1.2018 | 80 | 112 355 | - | -31 336 | 81 099 | - | 81 099 |
| Adoption of amendment to IFRS 2 | - | - | - | 594 | 594 | - | 594 |
| Adoption of IFRS 9 | - | - | - | -24 | -24 | - | -24 |
| Adoption of IFRS 15 | - | - | - | -22 | -22 | - | -22 |
| Adjusted equity at the beginning of the period | 80 | 112 355 | - | -30 787 | 81 648 | - | 81 648 |
| Profit for the period | - | - | - | 10 918 | 10 918 | - | 10 918 |
| Other comprehensive income for the period | |||||||
| Hedging of net investments | - | - | -858 | 172 | -686 | - | -686 |
| Defined benefit plans | - | - | - | -546 | -546 | - | -546 |
| Translation differences | - | - | 5 450 | - | 5 450 | - | 5 450 |
| Total comprehensive income for the period | - | - | 4 592 | 10 544 | 15 136 | - | 15 136 |
| Transactions with owners | |||||||
| Distribution of dividend | - | - | - | -14 347 | -14 347 | - | -14 347 |
| Management's incentive plan | - | - | - | -481 | -481 | - | -481 |
| Directed share issue | - | 240 131 | - | - | 240 131 | - | 240 131 |
| Share issue and listing new shares related costs | - | -796 | - | - | -796 | - | -796 |
| Share of equity held by non-controlling interest related to the acquisition of subsidiary | - | - | - | - | - | 0 | 0 |
| Equity at 31.12.2018 | 80 | 351 690 | 4 592 | -35 071 | 321 290 | 0 | 321 290 |
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CONSOLIDATED STATEMENT OF CASH FLOWS
| EUR thousand | 1.10. – 31.12.2019 | 1.10. – 31.12.2018 | 1.1. – 31.12.2019 | 1.1. – 31.12.2018 |
|---|---|---|---|---|
| Cash flow from operating activities | ||||
| Profit before income tax | 6 995 | 6 333 | 24 906 | 14 516 |
| Adjustments: | ||||
| Depreciation and amortisation | 5 070 | 4 276 | 20 503 | 9 995 |
| Finance income and expenses | 767 | 793 | 2 875 | 2 188 |
| Profit (-) / loss (+) on disposal of property, plant and equipment | -17 | -1 | -66 | -71 |
| Management's incentive plan | 160 | 226 | -289 | -481 |
| Other adjustments | 12 | -134 | -177 | -1 181 |
| Cash flows before change in working capital | 12 987 | 11 494 | 47 752 | 24 966 |
| Change in working capital: | ||||
| Increase (-) / decrease (+) in account and other receivables | 774 | 2 215 | - 618 | 834 |
| Increase (+) / decrease (-) in account and other payables | -1 595 | -3 993 | 2 191 | -633 |
| Change in working capital | - 729 | -1 777 | 1 573 | 200 |
| Interest expenses paid | -1 217 | -1 042 | -2 755 | -2 092 |
| Interest income received | 41 | 4 | 201 | 7 |
| Income taxes paid | -882 | -442 | -4 852 | -3 554 |
| Cash flow from operating activities | 10 200 | 8 236 | 41 920 | 19 527 |
| Cash flows from investing activities | ||||
| Purchases of property, plant and equipment | -471 | -43 | -779 | -893 |
| Purchases of intangible assets | -4 016 | -1 322 | -11 638 | -4 799 |
| Purchases of subsidiaries, net of cash acquired | - | -366 | -7 327 | -85 247 |
| Proceeds from sale of property, plant and equipment | 98 | 23 | 370 | 170 |
| Cash flows from investing activities | -4 390 | -1 709 | -19 374 | -90 769 |
| Cash flows from financing activities | ||||
| Proceeds from interest-bearing liabilities | - | 169 593 | - | 269 573 |
| Repayments of interest-bearing liabilities | -10 534 | -170 000 | -12 216 | -170 000 |
| Dividends paid and other profit distribution | - | - | -22 794 | -14 347 |
| Cash flows from financing activities | -10 534 | -407 | -35 010 | 85 226 |
| Net increase / decrease in cash and cash equivalents | -4 723 | 6 120 | -12 464 | 13 985 |
| Cash and cash equivalents at the beginning of the period | 24 743 | 26 974 | 33 215 | 18 919 |
| Net change in cash and cash equivalents | -4 723 | 6 120 | -12 464 | 13 985 |
| Translation differences of cash and cash equivalents | 341 | 121 | -390 | 311 |
| Cash and cash equivalents at the end of the period | 20 361 | 33 215 | 20 361 | 33 215 |
asiakastieto Group's Financial Statement Release 1.1. – 31.12.2019
2. Notes
2.1. Accounting policies
This financial statement release has been prepared in accordance with IAS 34 Interim Financial Reporting. The accounting policies and methods applied in the financial statement release are the same as those applied in the financial statements for the financial year ended 31 December 2019.
The preparation of financial statements in accordance with IFRS requires Asiakastieto Group's management to use estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the reported amounts of income and expenses for the review period. In addition, it is necessary to exercise judgement in applying the accounting policies. As estimates and assumptions are based on the understanding at the end of the interim period, they include risks and uncertainties. The actual results may differ from the estimates and assumptions made. Critical accounting estimates and judgements are disclosed in more detail under Note 3 to the consolidated financial statements for the year 2019.
The foreign subsidiaries' income statements and cash flows have been converted into euro on a monthly basis using the monthly average exchange rate issued by the European Central Bank, and balance sheets have been converted using the exchange rate issued by the European Central Bank on the end date of the period. Conversion of the profit for the period using different exchange rates for the income statement and balance sheet causes a translation difference in the balance sheet recognised in equity. The change in equity is recognised in other comprehensive income.
The amounts presented in the financial statement release are consolidated figures. The amounts presented are rounded, so the sum of individual figures may thus differ from the sum reported. The figures presented in this financial statement release are based on the audited 2019 financial statements.
Changes in Accounting policies
Asiakastieto Group has adopted new IFRS 16 Leases standard starting 1 January 2019. Description of the new standard and details concerning the adoption can be found in Note 2 to the Group Consolidated Financial Statements for 2019.
IFRS 16 Leases standard establishes principles for the recognition, measurement, presentation and disclosure of leases and note requirements. As a result of the implementation of the standard, the differentiation between operating leases and finance leases will no longer apply and lessees must treat all leases the same way, so that the lessee recognises an asset (the right to use the leased asset) and a lease liability for all leases, unless the lease term is 12 months or less, or the lease agreement has low value. In the income statement, depreciation on the right-of-use asset and interest expenses on the lease liability are recognised instead of a lease expense. The lease rent payment is divided into interest expense and debt repayment.
The Group has applied the simplified approach for adoption, and the figures for the comparison year have not been adjusted. All agreements with a lease term of less than 12 months and low value agreements are recognised as straight-line expenses during the duration of the agreement. All right-of-use assets and corresponding lease liabilities have been measured at the value corresponding to the present value of the lease rent payments and any residual payments. Discount rates used in the net present value calculations vary between $1,2\%$ and $2,5\%$, weighted average being $1,7\%$. All right-of-use assets have been valued at the lease liability as at the adoption date (adjusted for prepaid or accrued rent). The Group has applied practical expedients and has not recognised a liability for lease agreements ending during 2019. IFRS 16 mainly affects the accounting of the Group's operating leases. As the Group's finance leases have already been treated as right-of-use assets and financial liabilities, the adoption of the new standard has no effect with regard to these items.
Lessors are still required to categorise lease agreements as either financial leases or operating leases. The IFRS 16 accounting treatment of leases from the lessor's side is essentially unchanged compared to current standards. As the Group does not operate as a lessor to a significant degree, the adoption of the standard will not have a significant effect on the Group's future financial statements in this regard.
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Reconciliation between operating lease commitments in the financial statements 2018 and IFRS 16 lease liabilities:
| LEASE LIABILITIES | |
|---|---|
| EUR thousand | 1.1.2019 |
| Operating lease commitments 31 Dec 2018 | 18 712 |
| Short-term lease agreements | -254 |
| Low-value lease agreements | -371 |
| Agreements assessed as service agreements | -5 091 |
| Lease liabilities before discounting 1 Jan 2019 | 12 996 |
| Discounted lease liabilities using incremental borrowing rate 1 Jan 2019 | 11 876 |
| Finance lease liabilities 31 Dec 2018 | 394 |
| Adjustment for value added tax for finance lease liabilities | -76 |
| Lease liabilities 1 Jan 2019 | 12 194 |
| Short-term lease liability | 2 181 |
| Long-term lease liability | 10 013 |
| Total | 12 194 |
Right-of-use assets have been recognised at the value corresponding the lease liability on the adoption date.
| RIGHT-OF-USE ASSETS | ||
|---|---|---|
| EUR thousand | 31.12.2019 | 1.1.2019 |
| Premises | 9 318 | 11 760 |
| Machinery and equipment | 273 | 434 |
| Total | 9 591 | 12 194 |
At the end of the financial year 2018, the Group had EUR 18,7 million in undiscounted non-cancellable lease commitments based on operating leases and finance lease liabilities for EUR 0,4 million. At the implementation, EUR 12,2 million was recognised as right-of-use assets and EUR 12,2 million was recognised as lease liabilities, of which EUR 2,2 million were short-term and EUR 10,0 million long-term lease liabilities.
The Group leases office premises, IT equipment and cars. The duration of lease agreements varies between less than 12 months to 9 years and part of the agreements include extension options. Lease agreements are negotiated on an agreement by agreement basis and they include normal and ordinary agreement terms and conditions.
Adoption of the IFRS 16 standard has a significant impact on adjusted EBITDA, which is one of the main key performance indicators used to present the development of profitability. As a result, the Group will present an alternative performance measure, Adjusted EBITDA excluding the IFRS 16 impact, starting 1 January 2019. The impact of implementing the IFRS 16 standard on adjusted EBITDA has been described in Note 2. Key financial information for the Group.
New standards and interpretations not yet adopted
Asiakastieto Group adopts new and amended standards and interpretations on their effective date or, if the date is other than the first day of the financial year, from the beginning of the subsequent financial year.
The IFRS standards and IFRIC interpretations that have already been published but are not yet in effect are not expected to have a material impact on Asiakastieto Group.
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2.2. Net Sales
| NET SALES BY BUSINESS AREA | ||||
|---|---|---|---|---|
| EUR thousand | 1.10. – 31.12.2019 | 1.10. – 31.12.2018 | 1.1. – 31.12.2019 | 1.1. – 31.12.2018 |
| Risk Decisions | 24 069 | 23 135 | 95 486 | 65 192 |
| SME and Consumers | 10 883 | 8 458 | 33 931 | 19 565 |
| Customer Data Management | 2 071 | 2 333 | 8 127 | 7 042 |
| Digital Processes | 2 164 | 1 985 | 8 413 | 6 337 |
| Total | 39 188 | 35 910 | 145 957 | 98 135 |
On 20 June 2018, Asiakastieto Group's Board of Directors decided on a new organisational structure. Asiakastieto Group's new organisation from 1 July 2018 onwards consists of two types of unit: business areas and functional units. The net sales are presented for the reference year using these new business areas. Net sales for reference periods have been restated to match the current fiscal year business area allocation of products. Certain products have been moved from Customer Data Management to SME and Consumers business area.
Asiakastieto Group specified revenue recognition of customer specific projects at the time of applying the IFRS 15 standard to comply in a more accurate way to the transfer of control of a service. The impact of the application of the IFRS 15 standard on the net sales of the Risk Decisions business area for the financial year 2018 was EUR 117 thousand.
2.3. Corporate acquisitions
Acquisition of Proff companies
Asiakastieto Group acquired the shares of the business information service Proff in Norway, Sweden and Denmark from its previous owner Eniro under an agreement signed on 20 May 2019. The transaction was completed on 1 July 2019. The purchase consideration for the acquisition was SEK 120,0 million, which was paid in cash in one instalment. Interest of 5 per cent per annum, calculated for the period between 1 January – 1 July 2019, was added to the purchase consideration. The interest payable at completion was SEK 3,0 million. After the completion of the transaction, the Proff companies became subsidiaries of Asiakastieto Group Plc, and they continue to operate as their own companies.
The acquisition strengthens Asiakastieto Group's position in the market as the leading provider of business information services in the Nordic countries. Proff's business information services in Norway, Sweden and Denmark have altogether approximately three million unique monthly visitors, and Proff's freemium business information services correspond to Asiakastieto Group's allabolag.se service in Sweden and asiakastieto.fi/yritykset service in Finland.
The Proff companies' net sales in 2018 amounted to approximately SEK 101 million, and they employ approximately 60 persons. The acquired business operations consist of the Proff and Proff Forvalt business information services. Proff is an internet-based service for free-of-charge business and financial information. The business is based on the visibility purchased by companies, display advertising and a subscription-based revenue model. Proff Forvalt is a fee-based service that offers comprehensive financial and background information on companies and credit ratings to its Norwegian customers.
The EBITDA margin of the Proff companies, adjusted by Asiakastieto Group's management's estimated carve-out adjustments and items affecting comparability, was approximately 16 % in 2018. The combined net cash of the Proff companies amounted to approximately SEK 37 million on 31 December 2018.
The Group has made an allocation of the consideration for intangible assets identified and recognised in the acquisition. In the allocation of the purchase consideration, EUR 3,0 million was allocated to customer relations, which will be amortised in 3–5 years, EUR 0,6 million to trademarks, which will be amortised in 5 years, and EUR 1,9 million to technology, which will be amortised in 3–5 years. The fair
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value of acquired accounts receivable is EUR 0,8 million, which corresponds to their book value at the moment of acquisition. The accounts receivable are expected to be entirely collectable. Goodwill resulting from the acquisition is EUR 5,8 million. Goodwill is not deductible in taxation.
The goodwill recognised in connection with the acquisition consists of synergies directed at the customer relations, technology and cost structure of the target of acquisition and the acquiring party, expected future income from the target's know-how and new technologies based on existing technologies, expected future income from new customer relations, and the knowledge and capabilities of the personnel of the target of acquisition.
The figures from the Proff companies' balance sheet and income statement have been included in Asiakastieto Group's consolidated balance sheet and income statement starting from 1 July 2019. At the moment of acquisition, there were no material mutual business operations between the Group and the acquired companies that should have been taken into account in the combination of business activities.
| CONSIDERATION TRANSFERRED | |
|---|---|
| EUR thousand | |
| Cash paid | 11 380 |
| Interest paid | 288 |
| Total cost of acquisition | 11 667 |
| NET ASSETS ACQUIRED | |
| --- | --- |
| EUR thousand | |
| Customer relations | 3 027 |
| Trademarks | 645 |
| Technology | 1 903 |
| Other intangible assets | 639 |
| Property, plant and equipment | 508 |
| Loan and other receivables | 3 |
| Account and other receivables | 1 282 |
| Cash and cash equivalents | 4 326 |
| Deferred tax liabilities | -1 212 |
| Interest-bearing liabilities | -501 |
| Advances received | -3 449 |
| Account and other payables | -1 268 |
| Net assets acquired | 5 902 |
| GOODWILL ARISING FROM BUSINESS COMBINATION | |
| --- | --- |
| EUR thousand | |
| Consideration transferred | 11 667 |
| Net assets acquired | 5 902 |
| Goodwill | 5 766 |
| EFFECTS OF ACQUISITION ON CASH FLOW | |
| --- | --- |
| EUR thousand | |
| Purchase price paid in cash | -11 667 |
| Cash and cash equivalents of the acquired entity | 4 326 |
| -7 341 |
Expenses of EUR 0,5 million related to the acquisition of Proff companies' shares and the companies' integration in the review period have been recognised in the item "Other operating expenses" of the
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statement of consolidated income”. The expenses are mainly related to advisor fees for the acquisition of shares and execution of the transaction.
Acquisition of business of Solidinfo.SE
On 12 February 2019, UC Affärsinformation AB, part of Asiakastieto Group, signed an agreement to buy the business operations of Solidinfo.SE from Social Media Support Sverige AB. Through the acquisition of these business operations, Asiakastieto Group strengthened its business information service offering in Sweden. The core of the Solidinfo.SE service consists of a free-of-charge business and financial information search service, similar to the business information service on Swedish companies provided by UC Affärsinformation AB. The transaction was closed on 28 February 2019, and it has no material effect on Asiakastieto Group’s cash flow or financial position. The acquisition price is not disclosed.
Purchase of shares in UC AB
Asiakastieto Group Plc’s Board of Directors and the then owners of UC AB informed on 24 April 2018 that they had agreed on the combination of the companies. Pursuant to the terms of the combination agreement, Asiakastieto Group Plc acquired on 29 June 2018 the shares in UC AB for a total consideration of EUR 338,9 million. The consideration consisted of EUR 98,8 million in cash and 8 828 343 newly issued shares in the Company.
In addition, the sellers of Asiakastieto Group Plc and UC shares signed a shareholder agreement concerning the control of UC’s credit register and credit register information. The company owned jointly by the sellers received, as part of the transaction, a small number of UC’s B shares, granting their holders certain administrative rights. The B shares do not entitle holders to dividends or UC’s results or balances.
In the allocation of the purchase consideration, EUR 20,3 million was allocated to customer relations, which will be amortised in 8–20 years, EUR 31,0 million to trademarks, which will be amortised in 15 years, and EUR 65,4 million to technology, which will be amortised in 5–12 years. Goodwill in the amount of EUR 227,0 million was recognised in connection with the acquisition. Advisory fees of EUR 7,3 million relating to the purchase of the shares and the integration of the companies were recognised as expenses in the financial year 2018.
The consolidated income statement 2018 includes EUR 36,6 million in UC AB’s post-acquisition net sales and EUR 0,8 million in UC AB’s profit. The full-year net sales of the Group created by the acquisition would have amounted to EUR 134,3 million and profit for the period EUR 12,9 million if the business combination had taken effect at the beginning of the financial year 2018. UC’s balance sheet has been consolidated into Asiakastieto Group’s balance sheet starting from 30 June 2018, and the figures of the income statement from 1 July 2018.
2.4. Equity
| CHANGES IN NUMBER OF SHARES | ||
|---|---|---|
| Number of shares | Total number of shares | |
| 1.1.2018 | 15 102 178 | |
| Shares issued to the management’s incentive system | 23 443 | 15 125 621 |
| Directed share issue | 8 828 343 | 23 953 964 |
| 31.12.2018 | 23 953 964 | |
| 1.1.2019 | 23 953 964 | |
| Shares issued to the management’s incentive system | 39 328 | 23 993 292 |
| 31.12.2019 | 23 993 292 |
A total of 39 328 new shares were subscribed for in Asiakastieto Group Plc’s share issue targeted at the company’s key personnel without payment and registered in the Trade Register on 8 March 2019.
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The new shares produce the right to dividends and other distribution of assets as well as other shareholder rights as of the registration date 8 March 2019. Trading in the new shares commenced on 11 March 2019. The issuance of shares related to share-based remuneration is disclosed in the notes to the condensed financial statements, in Note 2.7 Transactions with related parties.
A total of 23 443 new shares were subscribed for in Asiakastieto Group Plc's share issue targeted at the company's key personnel without payment and registered in the Trade Register on 29 May 2018. The new shares produce the right to dividends and other distribution of assets as well as other shareholder rights as of the registration date 29 May 2018. Trading in the new shares commenced on 30 May 2018. The issuance of shares related to share-based remuneration is disclosed in the notes to the condensed financial statements, in Note 2.7 Transactions with related parties.
On 29 June 2018, Asiakastieto Group Plc issued 8 828 343 new shares as part of the consideration for the acquisition of UC AB. On 10 September 2018, the Financial Supervisory Authority approved the listing prospectus prepared by the Company. On 11 September 2018, Nasdaq Helsinki Ltd approved the listing of the new shares. Trading in the new shares commenced on 12 September 2018.
For the financial year 2018, Asiakastieto Group Plc distributed EUR 0,95 of funds per share, totalling EUR 22,8 million. The dividend and capital repayment were paid on 11 April 2019. For the financial year 2017, Asiakastieto Group Plc paid a dividend of EUR 0,95 per share, totalling EUR 14,3 million. The dividend payment date was 4 April 2018.
2.5. Financial liabilities
| FINANCIAL LIABILITIES OF THE GROUP | ||
|---|---|---|
| EUR thousand | 31.12.2019 | 31.12.2018 |
| Non-current | ||
| Loans from financial institutions | 158 797 | 169 849 |
| Lease liabilities | 7 428 | - |
| Financial leasing debts | - | 264 |
| Total | 166 225 | 170 113 |
| Current | ||
| Lease liabilities | 2 276 | - |
| Financial leasing debts | - | 130 |
| Total | 2 276 | 130 |
| Total financial liabilities | 168 501 | 170 243 |
Of the loans from financial institutions, EUR 105,4 million (EUR 169,9 million) are EUR-denominated and EUR 63,3 million (EUR 64,5) are SEK-denominated on 31 December 2019.
On 18 October 2018, Asiakastieto Group Plc signed an agreement on the refinancing of its long-term loans. The company entered into a loan agreement on a total of EUR 180 million of financing with Danske Bank A/S, OP Corporate Bank Plc and Nordea Bank Plc. Asiakastieto Group Plc used this financing to refinance the EUR 75 million term loan and revolving credit facility agreement entered into with Danske Bank A/S and Pohjola Bank Plc on 28 November 2014 and to refinance the financing agreement entered into with Danske Bank A/S and OP Corporate Bank Plc on 31 May 2018, concerning a bridge loan of EUR 100 million.
The new agreement consists of a term loan of EUR 160 million and a revolving credit facility of EUR 20 million. The company drew down the term loan on 25 October 2018, partially in euro and partially in Swedish krona in accordance with the terms of the loan agreement. The loans mature in October 2023. Of the revolving credit facility, EUR 0 was utilised on 31 December 2019 (EUR 10 million).
To facilitate efficient cash management in the Group a multi-currency cash pool arrangement was implemented during the second quarter with Danske Bank A/S. An overdraft of EUR 15,0 million was included in the cash pool arrangement. The overdraft had not been utilised on 31 December 2019.
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The loans include a financial covenant reviewed on a quarterly basis, which is Net debt to EBITDA calculated in accordance with the financing agreement. The relation of the Group's net debt to EBITDA adjusted according to the terms of the financing agreement was 2,8 (3,4) on 31 December 2019. The covenant limit in accordance with the financing agreement was 4,0 (4,5) on 31 December 2019.
2.6. Lease agreement commitments
| LEASE AGREEMENT COMMITMENTS | ||
|---|---|---|
| EUR thousand | 31.12.2019 | 31.12.2018 |
| No later than 1 year | 223 | 4 406 |
| Later than 1 year and no later than 5 years | - | 12 000 |
| Later than 5 years | - | 2 306 |
| Total | 223 | 18 712 |
Lease agreement commitments are not shown for the interim period, unless the lease period is 12 months or less or the value of the lease agreement is low. The Group does not report low value agreements or IT service agreements as minimum rents. The reference period is based on IAS 17 standard, the review period is based on IFRS 16 standard.
As a result of adoption of IFRS 16 standard, lease agreement commitments have decreased due to recognition of short-term and long-term lease liabilities on the balance sheet. A reconciliation between Financial Statements 2018 lease commitments and IFRS 16 lease liabilities has been presented in note 2.1 Accounting Policies.
2.7. Transactions with related parties
Related parties of the Group consist of group entities and shareholders having a significant influence over the Group. The shareholders who have had the right to nominate a representative to the Company's Board of Directors are considered as having significant influence in the Company. In addition, the key management persons, including the Board of Directors, CEO and Executive Team, are related parties of the Group, as well as their close family members and companies, where the above-mentioned persons exercise controlling power.
| THE FOLLOWING TRANSACTIONS WERE CARRIED OUT WITH RELATED PARTIES | |||
|---|---|---|---|
| 1.1.-31.12.2019 | |||
| EUR thousand | Sales of | ||
| goods and | |||
| services | Purchases | ||
| of goods | |||
| and services | Finance | ||
| income and | |||
| expenses | |||
| Shareholders having a significant influence over | |||
| the Group | 11 622 | -556 | -788 |
| Total | 11 622 | -556 | -788 |
| 31.12.2019 | |||
| EUR thousand | Receivables | Liabilities | |
| Shareholders having a significant influence over the Group | 1 188 | 53 268 | |
| Total | 1 188 | 53 268 | |
| 1.1.-31.12.2018 | |||
| EUR thousand | Sales of | ||
| goods and | |||
| services | Purchases | ||
| of goods | |||
| and services | Finance | ||
| income and | |||
| expenses | |||
| --- | --- | --- | --- |
| Shareholders having a significant influence over | |||
| the Group | 5 389 | -482 | -181 |
| Total | 5 389 | -482 | -181 |
| 31.12.2018 | |||
| EUR thousand | Receivables | Liabilities | |
| Shareholders having a significant influence over the Group | 1 091 | 57 516 | |
| Total | 1 091 | 57 516 |
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Transactions with related parties have been carried out on an arm's length basis. During the review period, the Group's related party transactions with key persons in management and members of the Board of Directors consisted of normal salaries and fees.
Long-term incentive plans for the management
Long-term incentive plan for the management 2015–2018
In March 2015, the Board of Directors established an incentive plan for the management of the Group. The plan was based on the Group's management making personal investments in Asiakastieto Group Plc's shares and the opportunity for the Group's management to be awarded further shares on the basis of meeting long-term performance criteria and a commitment to the company. In order to participate in the plans and receive an award from the plans, the members of the Group's management acquired, in the personnel offering, the number of shares determined by the Board of Directors. The long-term incentive plan contained two elements: a performance-based share plan and a matching share plan.
The possible award was contingent on the continuation of employment or service at the time of payment award and meeting of the shareholding requirement. The awards paid out through the performance-based share plan and the matching share plan of the year 2015 corresponded to a value of 108 000 shares at a maximum, including also the cash proportion.
In June 2016, the Board of Directors of Asiakastieto Group Plc resolved to continue the key employee performance share plan as resolved by the Board in March 2015. Should the targets of the plan be attained in full, the payable rewards would correspond to a maximum total of 72 000 Asiakastieto Group shares, including also the cash proportion.
The long-term incentive plan to the management was within the scope of IFRS 2. For the period under review, an accrued expense of EUR 27 thousand (EUR 246 thousand) has been recognised in personnel expenses.
Performance-based Share Plan 2015
The performance-based share plan award for the period March 2015–March 2018 was based on the total shareholder return calculated on the Asiakastieto Group Plc's share, adjusted for dividends paid. The share plan's performance period ended on 31 March 2018 and the rewards were paid out on 29 May 2018.
Matching Share Plan 2015 and Performance-based Share Plan 2016
The acquisition of personnel shares within the matching share plan 2015 entitled the participant to be awarded one additional share for each personnel share within the plan in four years' time, provided that the terms and conditions of the plan were met. The rewards earned under the matching share plan were paid to the participants on 8 March 2019.
The performance-based share plan 2016 award for the period July 2016–December 2018 was based on the total shareholder return calculated on the Asiakastieto Group Plc's share, adjusted for dividends paid. The rewards earned were paid to the participants on 8 March 2019.
In the directed issue, key persons participating in the performance-based share plans 2015 and 2016 were given altogether 39 328 new shares of Asiakastieto Group Plc without consideration, in accordance with the terms of the programme. Withholding tax of EUR 1,1 million was withheld from the shares issued and paid to the tax authorities. The resolution of a directed issue of shares was based on the authorisation given to the Board of Directors by the Annual General Meeting on 22 March 2018. The new shares were registered in the Trade Register on 8 March 2019, and they became the subject of public trading on 11 March 2019.
Long-term incentive plan for the management 2018–2021
The target group of the share-based long-term incentive plan decided on by the Board of Directors in August 2018 includes approximately 40 key persons of Asiakastieto Group, including the members of the Executive Team. In order to participate in the plan and receive rewards under the plan, the
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participant must purchase Asiakastieto Group Plc's shares or allocate previously held Asiakastieto shares to the programme in the number determined by the Board of Directors.
The possible award for the commitment period depends on the continuation of employment or service at the time of payment award and meeting of the shareholding requirement. The award for the commitment period will be paid after the end of the commitment period in 2020. Furthermore, the possible award for the performance period is based on total shareholder return (TSR) on Asiakastieto Group Plc share and the Group's adjusted EBITDA in 2020. The award for the performance period will be paid in two increments in 2021.
Awards payable under the plan will not total more than the value of approximately 300 000 Asiakastieto Group Plc shares, including also the amount paid in cash. For the financial year, an accrued expense of EUR 823 thousand (EUR 169) has been recognised in personnel expenses.
Long-term incentive plan for the management 2020 – 2022
In December 2019, the Board of Directors decided on a new share-based long-term incentive plan for key persons of Asiakastieto Group. The target group of the plan includes approximately 35 key persons, including the members of the Executive Team.
The incentive plan consists of one performance period covering the calendar years 2020–2022. The potential rewards from the plan will be paid partly in Asiakastieto Group Plc shares and partly in cash after the end of the performance period. The potential rewards are based on the achievement of targets set for the total shareholder return (TSR) of the Asiakastieto Group Plc share and the Group's cumulative adjusted EBITDA in 2020–2022. The rewards are also dependent on the continuation of the participants' employment or service contracts at the time of payment.
The rewards to be paid from the plan correspond to an approximate maximum total of 100 000 Asiakastieto Group Plc shares, including the proportion to be paid in cash.
向西区
asiakastieto
Asiakastieto Group's
Financial Statement Release 1.1. - 31.12.2019
NOTE 1. CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information is presented to illustrate the impact of the acquisition of UC and the related bridge financing on Asiakastieto Group's results of operations. To finance the acquisition of UC, the Group entered on 31 May 2018 into a financing agreement of EUR 100,0 million concerning a bridge loan. The bridge loan was drawn down on 29 June 2018, and it was replaced by refinancing of the loans on 25 October 2018. The consolidated pro forma financial information purports to reflect the effect of the bridge loan facility to financial expenses in Asiakastieto Group's consolidated statements of income during the periods presented. The effective interest rate used for pro forma purposes for the bridge loan facility was 1,7 per cent. More information on the acquisition of UC is presented under Note 2.3. Corporate Acquisitions in the Notes to the condensed financial statements.
Consolidated pro forma statement of income data
| CONSOLIDATED PRO FORMA STATEMENT OF INCOME | ||
|---|---|---|
| EUR million | Actual | |
| 1.1. - 31.12.2019 | 1.1. - 31.12.2018 | |
| Net sales | 146,0 | 134,3 |
| Other operating income | 0,3 | 0,1 |
| Materials and services | -24,5 | -22,8 |
| Personnel expenses | -38,6 | -40,7 |
| Other operating expenses | -37,1 | -38,2 |
| Work performed by the entity and capitalised | 2,2 | 2,0 |
| Depreciation and amortisation | -20,5 | -15,5 |
| Operating profit | 27,8 | 19,2 |
| Finance income | 0,2 | 0,0 |
| Finance expenses | -3,0 | -3,1 |
| Finance income and expenses | -2,9 | -3,1 |
| Profit before income tax | 24,9 | 16,2 |
| Income tax expense | -5,2 | -3,3 |
| Profit for the period | 19,7 | 12,9 |
| Items that may be reclassified to profit or loss: | ||
| Translation differences on foreign units | -5,3 | 5,4 |
| Hedging of net investments in foreign units | 1,2 | -0,9 |
| Income tax relating to these items | -0,2 | 0,2 |
| -4,4 | 4,8 | |
| Items that will not be reclassified to profit or loss: | ||
| Remeasurements of post-employment benefit obligations | -3,6 | 0,5 |
| Income tax relating to these items | 0,7 | -0,1 |
| -2,9 | 0,4 | |
| Other comprehensive income for the period, net of tax | -7,2 | 5,2 |
| Total comprehensive income for the period | 12,5 | 18,0 |
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Accounting policies of the unaudited pro forma financial information
The pro forma financial information for the financial year ended 31 December 2018 combines historical consolidated statements of comprehensive income of Asiakastieto Group and UC and the impact of the acquisition of UC including the bridge financing to give effect to the transaction as if it had occurred on 1 January 2017. UC's balance sheet has been consolidated into Asiakastieto Group's balance sheet starting from 30 June 2018 and the figures of the income statement from 1 July 2018. Therefore, the figures for the third and fourth quarters of 2018 are taken into account in the pro forma calculations as actual reported figures.
The pro forma financial information for the financial year ended 31 December 2018 is prepared in accordance with the accounting policies applied in Asiakastieto Group's audited consolidated financial statements for the year ended 31 December 2019.
The unaudited pro forma financial information is prepared on the basis of the historical consolidated statements of comprehensive income of Asiakastieto Group and UC, prepared in accordance with IFRS. More information on Asiakastieto Group's historical performance is available in Asiakastieto Group's audited financial statements and Asiakastieto Group's half year financial report for the year 2018. The basis of presentation of the pro forma financial information and the notes to unaudited comprehensive pro forma income statements are also presented in more detail in the report. Asiakastieto Group's audited financial statements and half year report for the year 2018 are available at www.asiakastieto.fi.
All amounts are presented in millions of euros unless otherwise stated. The pro forma financial information set out here has been rounded. Accordingly, in certain instances, the sum of figures may not conform exactly to the total amount given for that column or row.
Additional pro forma information
The following tables present the basic and diluted pro forma earnings per share attributable to the owners of the parent company and the net sales distribution by business area, applying the same principles as those applied to the pro forma income statement information.
| PRO FORMA EARNINGS PER SHARE | ||
|---|---|---|
| Actual | ||
| EUR million | ||
| (unless otherwise stated) | 1.1. – 31.12.2019 | 1.1. – 31.12.2018 |
| Pro forma profit attributable to the owners of the parent company | 19,7 | 12,9 |
| Weighted average number of shares in issue, historical (pcs) | 23 986 073 | 15 116 115 |
| Pro forma adjustment regarding new shares (pcs) | - | - |
| New shares issued as part of consideration (pcs) | - | 8 828 343 |
| Pro forma weighted average number of shares in issue, basic (pcs) | 23 986 073 | 23 944 458 |
| Pro forma basic earnings per share (EUR) | 0,82 | 0,54 |
| Pro forma weighted average number of shares in issue, basic (pcs) | 23 986 073 | 23 944 458 |
| Management's incentive plan (pcs) | 27 219 | 46 465 |
| Pro forma number of shares, weighted average, diluted (pcs) | 24 013 292 | 23 990 923 |
| Pro forma diluted earnings per share (EUR) | 0,82 | 0,54 |
asiakastieto Group's Financial Statement Release 1.1. – 31.12.2019
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PRO FORMA NET SALES BY BUSINESS AREA
| EUR million | Actual | 1.1. – 31.12.2019 | 1.1. – 31.12.2018 |
|---|---|---|---|
| Risk Decisions | 95,5 | 88,0 | |
| SME and Consumers | 33,9 | 29,7 | |
| Customer Data Management | 8,1 | 8,9 | |
| Digital Processes | 8,4 | 7,6 | |
| Total | 146,0 | 134,3 |
Net sales for reference periods have been restated to match the current fiscal year business area allocation of products. Certain products have been moved from Customer Data Management to SME and Consumers business area.
Pro forma key figures
In addition to pro forma operating profit (EBIT) and pro forma EBITDA, Asiakastieto Group presents on a pro forma basis comparable earnings per share excluding amortisation from fair value adjustments related to the business acquisitions and their tax impact, adjusted operating profit (EBIT) and adjusted EBITDA, to reflect the financial development of its business operations and to enhance comparability from period to period. Information regarding the formulas for key figures and reasons for the use of alternative performance measures are presented in this financial statement release in Note 2 Key financial information for the group.
PRO FORMA KEY FIGURES
| EUR million | Actual | 1.1. – 31.12.2019 | 1.1. – 31.12.2018 |
|---|---|---|---|
| Net sales | 146,0 | 134,3 | |
| Net sales growth, % | 8,7 | 3,6 | |
| EBITDA | 48,3 | 34,8 | |
| EBITDA margin, % | 33,1 | 25,9 | |
| Adjusted EBITDA | 51,5 | 42,1 | |
| Adjusted EBITDA margin, % | 35,3 | 31,3 | |
| Adjusted EBITDA excluding IFRS 16 impact | 49,3 | 42,1 | |
| Adjusted EBITDA excluding IFRS 16 impact, % | 33,8 | 31,3 | |
| Operating profit (EBIT) | 27,8 | 19,2 | |
| EBIT margin, % | 19,0 | 14,3 | |
| Adjusted operating profit (EBIT) | 42,6 | 37,7 | |
| Adjusted EBIT margin, % | 29,2 | 28,1 | |
| Net sales from new products and services | 5,9 | 10,5 | |
| New products and services of net sales, % | 4,0 | 7,8 | |
| Earnings per share, basic, EUR | 0,82 | 0,54 | |
| Earnings per share, diluted, EUR | 0,82 | 0,54 | |
| Earnings per share, comparable, EUR¹ | 1,20 | 0,90 | |
| Net debt to adjusted EBITDA, x | 2,9 | 3,3 |
¹ The comparable pro forma earnings per share does not contain amortisation from fair value adjustments related to the acquisitions or their tax impact.
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Matching of pro forma alternative key figures to the closest IFRS key figure
PRO FORMA ADJUSTED EBITDA
| EUR million | Actual | |
|---|---|---|
| 1.1. – 31.12.2019 | 1.1. – 31.12.2018 | |
| Operating profit (IFRS) | 27,8 | 19,2 |
| Depreciation and amortisation | 20,5 | 15,5 |
| EBITDA | 48,3 | 34,8 |
| Items affecting comparability | ||
| M&A and integration related expenses | 2,0 | 4,2 |
| Redundancy payments | 1,2 | 2,1 |
| External expenses arising from significant regulatory changes | - | 0,9 |
| Compensation paid for damages | - | 0,1 |
| Legal actions | 0,1 | - |
| Total items affecting comparability | 3,3 | 7,3 |
| Adjusted EBITDA | 51,5 | 42,1 |
| IFRS 16 -lease expenses | 2,3 | - |
| Adjusted EBITDA excluding IFRS 16 impact | 49,3 | 42,1 |
PRO FORMA ADJUSTED OPERATING PROFIT
| EUR million | Actual | |
|---|---|---|
| 1.1. – 31.12.2019 | 1.1. – 31.12.2018 | |
| Operating profit (IFRS) | 27,8 | 19,2 |
| Amortisation from fair value adjustments related to acquisitions | 11,6 | 11,1 |
| Items affecting comparability | ||
| M&A and integration related expenses | 2,0 | 4,2 |
| Redundancy payments | 1,2 | 2,1 |
| External expenses arising from significant regulatory changes | - | 0,9 |
| Compensation paid for damages | - | 0,1 |
| Legal actions | 0,1 | - |
| Total items affecting comparability | 3,3 | 7,3 |
| Adjusted operating profit | 42,6 | 37,7 |
PRO FORMA COMPARABLE EARNINGS PER SHARE
| EUR million (unless otherwise stated) | Actual | |
|---|---|---|
| 1.1. – 31.12.2019 | 1.1. – 31.12.2018 | |
| Pro forma profit attributable to the owners of the parent company (IFRS) | 19,7 | 12,9 |
| Amortisation from fair value adjustments related to acquisitions | 11,6 | 11,1 |
| Tax impact of amortisation from fair value adjustments related to the acquisitions | -2,5 | -2,4 |
| Pro forma comparable profit attributable to the owners of the parent company | 28,8 | 21,6 |
| Pro forma weighted average number of shares in issue - basic (pcs) | 23 986 073 | 23 944 458 |
| Pro forma comparable earnings per share (EUR) | 1,20 | 0,90 |
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NOTE 2. KEY FINANCIAL INFORMATION FOR THE GROUP
Asiakastieto Group Plc presents alternative performance measures as additional information for key performance measures in the consolidated statements of income, financial position and cash flows prepared according to IFRS to reflect the financial development of its business operations and to enhance comparability from period to period. According to the management's view, alternative performance measures provide substantial supplemental information on the result of the Group's operations, financial position and cash flows to the management and investors, securities analysts and other parties. Alternative performance measures are not, as such, included in the consolidated financial statements prepared according to IFRS, but they are derived from the IFRS consolidated financial statements by adjusting items in the consolidated statements of income, financial position and cash flows and/or by proportioning them to each other. Alternative performance measures should not be considered as a substitute for measures in accordance with IFRS. All companies do not calculate alternative performance measures in a uniform way. Therefore, the company's alternative performance measures are not necessarily comparable with similarly named performance measures of other companies.
In addition, Asiakastieto Group Plc presents some performance measures reflecting the productivity of its business operations on a pro forma basis to describe the impact of UC's acquisition and bridge loan financing as if these transactions had been realised on an earlier date. The information on the preparation basis of Pro forma financial information and the unaudited pro forma income statements used as the basis for the calculation are found in Note 1, Consolidated pro forma financial information of the Group.
The alternative performance measures of this financial statement release have been calculated applying the same principles as presented in the Board of Directors' Annual Report for 2019.
| KEY INCOME STATEMENT AND CASH FLOW FIGURES AND RATIOS | ||||
|---|---|---|---|---|
| EUR million | 1.10. – 31.12.2019 | 1.10. – 31.12.2018 | 1.1. – 31.12.2019 | 1.1. – 31.12.2018 |
| Net sales | 39,2 | 35,9 | 146,0 | 98,1 |
| Net sales growth, % | 9,1 | 146,4 | 48,7 | 74,6 |
| EBITDA | 12,8 | 11,4 | 48,3 | 26,7 |
| EBITDA margin, % | 32,7 | 31,8 | 33,1 | 27,2 |
| Adjusted EBITDA | 13,6 | 12,2 | 51,5 | 36,1 |
| Adjusted EBITDA margin, % | 34,7 | 34,0 | 35,3 | 36,8 |
| Adjusted EBITDA excluding IFRS 16 impact | 13,0 | 12,2 | 49,3 | 36,1 |
| Adjusted EBITDA excluding IFRS 16 impact, % | 33,3 | 34,0 | 33,8 | 36,8 |
| Operating profit (EBIT) | 7,8 | 7,1 | 27,8 | 16,7 |
| EBIT margin, % | 19,8 | 19,8 | 19,0 | 17,0 |
| Adjusted operating profit (EBIT) | 11,6 | 10,9 | 42,6 | 32,0 |
| Adjusted EBIT margin, % | 29,5 | 30,2 | 29,2 | 32,7 |
| Free cash flow | 6,9 | 7,9 | 32,1 | 15,9 |
| Cash conversion, % | 53,7 | 69,4 | 66,4 | 59,6 |
| Net sales from new products and services | 1,7 | 2,8 | 5,9 | 8,6 |
| New products and services of net sales, % | 4,4 | 7,8 | 4,0 | 8,8 |
| Earnings per share, basic, EUR | 0,23 | 0,21 | 0,82 | 0,56 |
| Earnings per share, diluted, EUR | 0,22 | 0,21 | 0,82 | 0,56 |
| Earnings per share, comparable, EUR¹ | 0,32 | 0,30 | 1,20 | 0,78 |
¹ The comparable earnings per share does not contain amortisation from fair value adjustments related to the acquisitions or their tax impact.
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KEY BALANCE SHEET RATIOS
| EUR million | 1.10. – 31.12.2019 | 1.10. – 31.12.2018 | 1.1. – 31.12.2019 | 1.1. – 31.12.2018 |
|---|---|---|---|---|
| Balance sheet total | 543,3 | 545,9 | 543,3 | 545,9 |
| Net debt | 148,1 | 137,0 | 148,1 | 137,0 |
| pro forma | pro forma | |||
| Net debt to adjusted EBITDA, x | 2,7 | 3,3 | 2,9 | 3,3 |
| Return on equity, % | 7,0 | 6,2 | 6,2 | 5,4 |
| Return on capital employed, % | 6,5 | 5,7 | 5,8 | 5,2 |
| Gearing, % | 47,7 | 42,6 | 47,7 | 42,6 |
| Equity ratio, % | 58,3 | 59,6 | 58,3 | 59,6 |
| Gross investments | 4,5 | 1,8 | 12,4 | 5,6 |
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Matching of alternative key figures to the closest IFRS key figure
| EBITDA AND ADJUSTED EBITDA | ||||
|---|---|---|---|---|
| EUR thousand | 1.10. – 31.12.2019 | 1.10. – 31.12.2018 | 1.1. – 31.12.2019 | 1.1. – 31.12.2018 |
| Operating profit | 7 762 | 7 126 | 27 782 | 16 704 |
| Depreciation and amortisation | 5 070 | 4 276 | 20 503 | 9 995 |
| EBITDA | 12 832 | 11 402 | 48 284 | 26 699 |
| Items affecting comparability | ||||
| M&A and integration related expenses | 688 | 431 | 1 961 | 7 266 |
| Redundancy payments | -13 | 354 | 1 202 | 1 935 |
| External expenses arising from significant regulatory changes | - | 39 | - | 142 |
| Compensation paid for damages | - | - | - | 80 |
| Legal actions | 99 | - | 99 | - |
| Total items affecting comparability | 774 | 824 | 3 263 | 9 424 |
| Adjusted EBITDA | 13 606 | 12 226 | 51 547 | 36 122 |
| IFRS 16 -lease expenses | -574 | - | -2 281 | - |
| Adjusted EBITDA excluding IFRS 16 impact | 13 032 | 12 226 | 49 266 | 36 122 |
| EBIT AND ADJUSTED EBIT | ||||
| --- | --- | --- | --- | --- |
| EUR thousand | 1.10. – 31.12.2019 | 1.10. – 31.12.2018 | 1.1. – 31.12.2019 | 1.1. – 31.12.2018 |
| Operating profit | 7 762 | 7 126 | 27 782 | 16 704 |
| Amortisation from fair value adjustments related to the acquisitions | 3 037 | 2 913 | 11 572 | 5 915 |
| Items affecting comparability | ||||
| M&A and integration related expenses | 688 | 431 | 1 961 | 7 266 |
| Redundancy payments | -13 | 354 | 1 202 | 1 935 |
| External expenses arising from significant regulatory changes | - | 39 | - | 142 |
| Compensation paid for damages | - | - | - | 80 |
| Legal actions | 99 | - | 99 | - |
| Total items affecting comparability | 774 | 824 | 3 263 | 9 424 |
| Adjusted operating profit | 11 573 | 10 863 | 42 616 | 32 042 |
| FREE CASH FLOW | ||||
| --- | --- | --- | --- | --- |
| EUR thousand | 1.10. – 31.12.2019 | 1.10. – 31.12.2018 | 1.1. – 31.12.2019 | 1.1. – 31.12.2018 |
| Cash flow from operating activities | 10 200 | 8 236 | 41 920 | 19 527 |
| Paid interests and other financing expenses | 1 217 | 1 042 | 2 755 | 2 092 |
| Received interest and other financing income | -41 | -4 | -201 | -7 |
| Acquisition of tangible assets and intangible assets | -4 487 | -1 365 | -12 417 | -5 691 |
| Free cash flow | 6 889 | 7 909 | 32 057 | 15 921 |
Matching of pro forma alternative performance measures is shown in Note 1 Consolidated pro forma financial information of the Group to this financial statement release.
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Calculation formulas for alternative performance measures
FORMULAS FOR KEY FIGURES
EBITDA
Operating profit + depreciation and amortisation
Items affecting comparability
Material items outside ordinary course of business that concern i) M&A and integration related expenses, ii) redundancy payments, iii) compensations paid, iv) external expenses arising from significant regulatory changes and v) legal actions.
Adjusted EBITDA
EBITDA + items affecting comparability
Adjusted EBITDA excluding IFRS 16 impact
Adjusted EBITDA + IFRS 16 -lease expenses
Adjusted operating profit (EBIT)
Operating profit excluding amortisation from fair value adjustments related to the acquisitions + items affecting comparability
Net sales from new products and services
Net sales of new products and services is calculated as net sales of those products and services introduced within the past twenty-four months
Free cash flow
Cash flow from operating activities added by paid interests and other financing expenses, deducted by received interests and other financing income and deducted by acquisition of tangible and intangible assets
Cash conversion, %
$$
\frac{\text{Free cash flow}}{\text{EBITDA}} \times 100
$$
Net debt
Interest-bearing liabilities - Cash and cash equivalents
Net debt to adjusted EBITDA, x
$$
\frac{\text{Net debt}}{\text{Adjusted EBITDA}}
$$
Return on equity, %
$$
\frac{\text{Profit (loss) for the period}}{\text{Total equity (average for the period)}} \times 100
$$
Return on capital employed, %
$$
\frac{\text{Profit (loss) before taxes + Financial expenses}}{\text{Total assets - Non-interest-bearing liabilities (average for the period)}} \times 100
$$
Gearing, %
$$
\frac{\text{Interest-bearing liabilities – cash and cash equivalents}}{\text{Total equity}} \times 100
$$
Equity ratio, %
$$
\frac{\text{Total equity}}{\text{Total assets - Advances received}} \times 100
$$
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Earnings per share, basic
Profit for the period attributable to the owners of the parent company divided by weighted average number of shares in issue
Earnings per share, diluted
Profit for the period attributable to the owners of the parent company divided by weighted average number of shares in issue taken into consideration the possible impact of the Group's management's long-term incentive plan
Earnings per share, comparable
Profit for the period attributable to the owners of the parent company excluding amortisation from fair value adjustments related to the acquisitions and their tax impact divided by weighted average number of shares in issue
Gross investments
Gross investments are fixed asset acquisitions with long-term effect, from which no sales of property or disposal of business have been deducted. As a general rule, fixed assets comprise tangible assets and intangible assets
Purpose of use of alternative performance measures
EBITDA, adjusted EBITDA and adjusted EBIT are presented as alternative performance measures, as they, according to the Company's view, enhance the understanding of the Group's results of operations and are frequently used by analysts, investors and other parties.
Adjusted EBITDA excluding IFRS 16 impact is presented as an alternative performance measure starting 1 January 2019 as, according to the Company's view, it will improve the understanding of Group's profitability compared to the prior year. Implementation of IFRS 16 Lease Agreements standard will have a significant impact on adjusted EBITDA, which is one of the main alternative performance measures used to describe the development of Group profitability.
Net sales from new products and services is presented as an alternative performance measure, as it, according to the Company's views, describes the development and structure of the Company's net sales.
Free cash flow, cash conversion and gross investments are presented as alternative performance measures, as they provide, according to the Company's view, a good insight into the needs relating to the Group's business cash flow and are frequently used by analysts, investors and other parties.
Net debt, net debt to adjusted EBITDA, return on equity and return on capital employed are presented as alternative performance measures, as they are, according to the Company's view, useful measures of the Group's ability to obtain financing and pay their debts, and they are frequently used by analysts, investors and other parties.
Gearing and equity ratio are presented as alternative performance measures, as they, according to the Company's views, reflect the level of risk related to financing and help to monitor the level of capital employed in the Group's business.
Comparable earnings per share is presented as an alternative performance measure, as it, according to the Company's view, helps to reflect the profit attributable to the owners.
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Quarterly consolidated statements of income
| CONSOLIDATED STATEMENT OF INCOME | ||||||
|---|---|---|---|---|---|---|
| EUR thousand | Q4 2019 | Q3 2019 | Q2 2019 | Q1 2019 | Q4 2018 | Q3 2018 |
| Net sales | 39 188 | 36 681 | 35 565 | 34 522 | 35 910 | 31 410 |
| Other operating income | 161 | 99 | 8 | 25 | -11 | 33 |
| Materials and services | -6 305 | -6 435 | -6 150 | -5 609 | -5 912 | -5 532 |
| Personnel expenses | -9 486 | -8 778 | -10 481 | -9 828 | -9 965 | -9 905 |
| Other operating expenses | -11 377 | -8 735 | -8 660 | -8 339 | -9 111 | -8 158 |
| Work performed by the entity and capitalised | 650 | 492 | 510 | 566 | 492 | 366 |
| Depreciation and amortisation | -5 070 | -4 981 | -5 771 | -4 681 | -4 276 | -3 814 |
| Operating profit | 7 762 | 8 343 | 5 021 | 6 656 | 7 126 | 4 401 |
| Finance income | 41 | 13 | 90 | 10 | -107 | 114 |
| Finance expenses | -808 | -692 | -701 | -827 | -686 | -891 |
| Finance income and expenses | -767 | -679 | -611 | -818 | -793 | -776 |
| Profit before income tax | 6 995 | 7 664 | 4 410 | 5 838 | 6 333 | 3 624 |
| Income tax expense | -1 596 | -1 686 | -877 | -1 038 | -1 406 | -707 |
| Profit for the period | 5 399 | 5 978 | 3 533 | 4 800 | 4 926 | 2 917 |
| Items that may be reclassified to profit or loss: | ||||||
| Translation differences on foreign units | 6 402 | -3 491 | -4 256 | -3 960 | 717 | 4 733 |
| Hedging of net investments in foreign units | -1 474 | 776 | 996 | 888 | -858 | - |
| Income tax relating to these items | 295 | -155 | -199 | -178 | 172 | - |
| 5 222 | -2 870 | -3 460 | -3 249 | 31 | 4 733 | |
| Items that will not be reclassified to profit or loss: | ||||||
| Remeasurements of post-employment benefit obligations | -3 634 | - | - | - | -687 | - |
| Income tax relating to these items | 749 | - | - | - | 142 | - |
| -2 885 | - | - | - | -546 | - | |
| Other comprehensive income for the period, net of tax | 2 337 | -2 870 | -3 460 | -3 249 | -515 | 4 733 |
| Total comprehensive income for the period | 7 736 | 3 108 | 73 | 1 551 | 4 411 | 7 650 |
| Profit attributable to: | ||||||
| Owners of the parent company | 5 399 | 5 978 | 3 533 | 4 800 | 4 926 | 2 917 |
| Total comprehensive income attributable to: | ||||||
| Owners of the parent company | 7 736 | 3 108 | 73 | 1 551 | 4 411 | 7 650 |
| Earnings per share attributable to the owners of the parent during the period: | ||||||
| Basic, EUR | 0,23 | 0,25 | 0,15 | 0,20 | 0,21 | 0,12 |
| Diluted, EUR | 0,22 | 0,25 | 0,15 | 0,20 | 0,21 | 0,12 |
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Asiakastieto Group Plc
Tel. +358 10 270 7200
Hermannin rantatie 6
PO Box 16, FI-00581 Helsinki
Business ID 2194007-7
Investors.asiakastieto.fi