Halvårsrapport

August 18, 2011 at 10:33 AM CEST
Supporting Materials:

 

 


Release no. 09/2011

  

H1 / 2011

  

The Interim Report has not been audited

  

PROFILE:

Columbus IT operates as an IT consultancy firm in the market for integrated business solutions based on Microsoft Business Solutions which is primarily for medium-sized international companies. Columbus IT is a service organization with a headcount of 1,000. Our customer base consists of more than 5,000 small and medium-sized enterprises and units of large companies.

www.columbusit.com.

 

 
Interim Report

 

CEO, Thomas Honoré: "Columbus IT realized an increase in revenues of 3% compared to H1 last year, which is in line with expectations. EBITDA is not in line with expectations, especially due to a disappointing development in the French subsidiary, as the restructuring takes longer than expected. EBITDA was also negatively affected by the development in the American, Polish and Dutch companies as well as in the Danish NSC company. This has resulted in an adjustment of the expected EBITDA for 2011. The Russian, Norwegian, British and Baltic companies are experiencing a positive development. EBITDA for the Group amounted to DKK 8.2M. Columbus IT continues investing in the vertical strategy with focus on food, manufacturing and retail and is following the announced plan. The management has initiated a number of projects with the objective to increase earnings in the consultancy as well as the software business. Combined with the existing strategy, we believe that Columbus IT is on course”.

 

  • Revenues for H1/2011 totaled DKK 455.4M (DKK 441.8M in H1/2010), corresponding to an increase of 3%.
  • Earnings before depreciation (EBITDA) for H1/2011 totaled DKK 8.2M (DKK 16.1M in H1/2010), corresponding to a decrease of 49% compared to H1/2010. The result is not in line with the management’s expectations.
  • Revenues in the ISV segment totaled DKK 19.3M in H1/2011 (DKK 16.7M in H1/2010), corresponding to an increase of 16% compared to H1/2010. EBITDA for the period totaled DKK 4.8M (DKK 7.7M in H1/2010), corresponding to a decrease of 38% compared to 2010. EBITDA decreased despite the increase in revenues due to a changed product mix with lower margin. Furthermore, costs increased.
  • Revenues in the Nordic region amounted to DKK 195.2M in H1/2011 (DKK 204.7M in H1/2010), corresponding to a decrease of 5% compared to H1/2010. EBITDA for the period totaled DKK 14.2M (DKK 15.7M in H1/2010), corresponding to a decrease of 10% compared to 2010. The decrease is mainly caused by declining market share in the Danish NAV business, which is, however, to some extent compensated for by the progress in the Norwegian company.
  • Revenues in Western Europe amounted to DKK 89.1M in H1/2011 (DKK 80.7M in H1/2010), corresponding to an increase of 10% compared to H1/2010. All Western European companies, except the French company experience growth. EBITDA for the period totaled DKK 6.0M (DKK 2.1M in H1/2010), corresponding to an increase of 286% compared to 2010. All countries generated increased EBITDA, and the main reason for this increase is progress in the British subsidiary as well as reduced loss in the French subsidiary.
  • Revenues in Eastern Europe amounted to DKK 90.4M in H1/2011 (DKK 80.8M in H1/2010), corresponding to an increase of 12% compared to H1/2010. EBITDA for the period totaled DKK 4.9M (DKK 1.2 in H1/2010), corresponding to an increase of 308% compared to 2010. The increase is mainly caused by a positive EBITDA in the Lithuanian company which had a significant loss in H1/2010. The Russian company also contributes considerably to the improved earnings.
  • Revenues in North America amounted to DKK 61.2M in H1/2011 (DKK 57.7M in H1/2010), corresponding to an increase of 6% compared to H1/2010. EBITDA for the period totaled DKK 2.5M (DKK 5.7M in H1/2010), corresponding to a decrease of 56% compared to 2010. The decrease in EBITDA despite increased revenues is caused by new hired employees, increased marketing costs and an increase in provision for bad debt.           
  • As at 30 June 2011, total equity amounted to DKK 282.7M (DKK 245.5M as at 30 June 2010), resulting in a solvency ratio of 55% (46% in 2010). The increase is influenced by the capital increase in July 2010.
  • Based on the realized EBITDA for H1 as well as the market expectations, the management of the company has reassessed the previously announced expectations of an EBITDA in the level of DKK 55M, to an EBITDA in the level of DKK 40M, while the expectations to revenues is being maintained in the level of DKK 930M.

 

 

                        Ib Kunøe                                             Thomas Honoré

Chairman                                            CEO

Columbus IT Partner A/S                   Columbus IT Partner A/S

 

For further information, please contact:

CEO Thomas Honoré, or CFO Hans Henrik Thrane, T: +45 70 20 50 00

 

 

Translation: In the event of any inconsistency between this document and the Danish language version, the Danish language version shall be the governing version.


Key Figures and Ratios

 

 

 
DKKm
      H1 2011 H1 2010 2010
Income statement            
Net revenues       455.4 441.8 867.4
External project costs       -121.4 -124.2 -235.3
Gross earnings H1       334.0 317.6 632.1
Staff expenses       -248.8 -231.2 -451.4
Other external costs       -76.9 -68.4 -132.2
Other operating income       1.0 1.1 2.8
Other operating costs       -1.1 -3.0 -1.1
EBITDA       8.2 16.1 50.1
Depreciation excl. goodwill       -13.0 -9.5 -22.7
EBITA       -4.8 6.6 27.4
Amortization and write down of goodwill       0.0 0.0 0.0
EBIT       -4.8 6.6 27.4
Result in associated companies       0.4 -0.9 -0.2
Net financial items       -2.2 1.4 -1.0
Pre-tax earnings       -6.4 7.1 26.2
Tax on H1 earnings       -1.7 -1.8 -12.6
Earnings H1       -8.2 5.4 13.6
             
Allocated thus:            
Shareholders of Columbus IT Partner A/S       -9.1 4.2 11.4
Minority interests       0.9 1.2 2.2
        -8.2 5.4 13.6
             
Balance sheet            
Long-term assets       236.9 251.6 239.3
Short-term assets       277.8 285.7 296.2
Total assets       514.7 537.4 535.5
             
Group shareholders’ equity       275.5 233.7 287.8
Minority interests       7.1 11.7 12.2
Debt       231.9 291.9 235.5
Total liabilities       514.7 537.4 535.5
             
Cash flow            
Cash flow from operations       -5.1 6.4 9.6
Net cash flow from investments       -4.1 -2.1 -3.0
Cash flow from financing activities       -2.0 -9.8 -7.7
Total cash flow       -11.3 -5.5 -1.1
-            
Key ratios            
Gross margin II       1.8% 3.7% 5.8%
Operating profit margin (EBIT margin)       -1.0% 1.5% 3.2%
Equity ratio       53.5% 43.5% 53.8%
Return on equity       -3.3% 1.8% 4.0%
Average number of shares, in thousands       105,739 79,305 92,385
Net asset value per share (BV)       2.61 2.95 2.72
Earnings per share (EPS)       -0.08 0.07 0.12
Cash flow per share       -0.07 0.08 0.10
Share price, end of period       2.27 2.58 2.46
Headcount at the end of the period       938 884 883

 

The key figures and ratios have been calculated in accordance with the Danish Society of Financial Analysts’ ”Recommendations and Key Figures 2010”.
 
 

 


 

 

Developments in H1/2011

Columbus IT's net revenues amounted to DKK 455.4M in H1/2011 (DKK 441.8M in H1/2010), corresponding to an increase of 3%. Adjusted for foreign currency translation revenues have increased by 1%.

 

The Group’s revenues primarily derive from sale of consultancy services, sale of software and maintenance subscriptions to Microsoft’s business systems as well as sale of own software and subscriptions related to these.

 

 

Revenues H1 2011 H1 2010 Development
Group DKKm DKKm 2010-2011
Software 78.8 76.2 3%
Maintenance 81.2 93.6 -13%
Consultancy 286.9 264.0 9%
Other 8.5 8.0 6%
Total 455.4 441.8 3%

 

Revenues from sale of software licenses increased to DKK 78.8M in H1/2011 (DKK 76.2M in H1/2010), corresponding to an increase of 3%.

 

Revenues from sale of maintenance subscriptions decreased to DKK 81.2M in H1/2011 (DKK 93.6M in H1/2010), corresponding to a decrease of 13%. The decrease in maintenance subscriptions is caused by a global subscription campaign launched by Microsoft in 2010 towards all existing customers. Besides, the possibility for 3-year subscriptions was launched in 2010.

 

Revenues from sale of consultancy services increased to DKK 286.9M in H1/2011 (DKK 264.0M in H1/2010), corresponding to an increase of 9%. The development in revenues from sale of consultancy services must be seen in relation to the Group’s average number of employees which increased marginally by 1%. The improvement is caused by improved efficiency compared to 2010.

 

Staff costs increased to DKK 248.8M in H1/2011 (DKK 231.2M in H1/2010), corresponding to an increase of 8%. Adjusted for foreign currency translation staff costs increased by 4%. The increase in staff costs is influenced by a general staff increase in high-paid countries and some decline in low-paid countries, provisions for severance pay and increase in holiday pay obligations.

 

Other external costs increased to DKK 76.9M in H1/2011 (DKK 68.4M in H1/2010), corresponding to an increase of 12%. Adjusted for foreign currency translation other external costs increased by 10%. This increase is primarily caused by costs related to previously announced strategic projects, which are necessary for the continued focus on development of verticals and improvement of efficiency.

 

 

      Revenues EBITDA Headcount
      (DKKm) (DKKm) (as at 30 June)
  Group   H1 H1 H1 H1 H1 H1
      2011 2010 2011 2010 2011 2010
  ISV   19.3 16.7 4.8 7.7 49 47
VAR Nordic region   195.2 204.7 14.2 15.7 289 305
Western Europe   89.1 80.7 6.0 2.1 166 147
Eastern Europe   90.4 80.8 4.9 1.2 325 298
North America   61.2 57.7 2.5 5.7 90 75
  Parent company   0.1 1.2 -24.0 -16.3 18 12
  Total   455.4 441.8 8.2 16.1 938 884

 

 

The Group’s EBITDA decreased to DKK 8.2M in H1/2011 (DKK 16.1M in H1/2010), corresponding to a decrease of 49%. Adjusted for foreign currency translation EBITDA decreased by 48%. The development is negatively influenced by the previously announced investments in projects, lack of sales in the Danish NAV activities as well as a more complicated restructuring in France than expected, while the US subsidiary experienced less sales and increased bad debts. In Poland both revenues and EBITDA are negatively influenced by tough pressure on prices. The British, Russian, Estonian and Lithuanian companies contributed with a substantial positive development.

 

The Group’s total balance sheet as at 30 June 2011 amounted to DKK 514.7M (DKK 537.4M as at 30 June 2010), corresponding to a decrease of 4%.

 

As at 30 June 2011 the Group’s development projects amounted to DKK 45.5M (DKK 47.4M as at 30 June 2010), corresponding to a decrease of 4%.

 

As at 30 June 2011 the Group’s trade receivables amounted to DKK 168.9M (DKK 166.6M as at 30 June 2010), corresponding to an increase of 1%. This increase must be seen in relation to a total increase in revenues compared to 2010 of 3% as well as a continued increased focus on reducing trade receivables.

 

As at 30 June 2011 the Group’s contract work in progress amounted to DKK 22.7M (DKK 24.0M as at 30 June 2010), corresponding to a decrease of 5%. This is a positive development as a result of constant focus on current invoicing.

 

The total equity as at 30 June 2011 amounted to DKK 282.7M (DKK 245.5M as at 30 June 2010), corresponding to an increase of 15%. The solvency ratio increased to 54% (44% as at 30 June 2010). The increase is influenced by a capital increase of DKK 47.4M in July 2010.

 

Cash flow from the Group’s operating activities amounted to DKK -5.1M in H1/2011 (DKK 6.4M in H1/2010). The cash flow is especially influenced by the considerably lower EBITDA, just as the net working capital of the company decreased from a positive contribution of DKK 1.5M in H1/2010 to DKK -4.2M in H1/2011.

 

In this interim report tax has been recognized as DKK 1.7M as a consequence of positive taxable income in primarily Norway and UK. In France where we are still generating a loss, losses have not been capitalized due to the uncertainty about the future utilization.

 

 

Segment developments

 

 

ISV - To-Increase H1 H1 Development
Revenues 2011 2010 2010-2011
  DKKm DKKm  
Software 9.4 6.9 36%
Maintenance 6.6 5.4 22%
Consultancy 3.2 4.5 -30%
Other 0.2 -0.1 290%
Total 19.3 16.7 16%

 

 

Revenues in the Group’s software company, To-Increase, increased to DKK 19.3M in H1/2011 (DKK 16.7M in H1/2010), corresponding to an increase of 16%.

 

EBITDA in To-Increase decreased to DKK 4.8M in H1/2011 (DKK 7.7M in H1/2010), corresponding to a decrease of 38%. EBITDA decreased despite the increase in revenues due to a changed product mix with lower margin. Besides, costs increased.

 

The company accounted for 4% of the Group’s total revenues in H1/2011 (4% in H1/2010).

 

 

VAR – Nordic region H1 H1 Development
Revenues 2011 2010 2010-2011
  DKKm DKKm  
Software 16.4 19.3 -15%
Maintenance 27.1 36.3 -26%
Consultancy 149.4 147.2 2%
Other 2.3 1.8 28%
Total 195.2 204.7 -5%

 

 

Revenues for the Nordic region decreased to DKK 195.2M in H1/2011 (DKK 204.7M in H1/2010), corresponding to a decrease of 5%.

 

The decrease in revenues is primarily caused by a total decrease of 10% in the Group’s Danish companies, corresponding to DKK 15.9M.

 

Revenues in the Group’s Norwegian company increased to DKK 56.6M in H1/2011 (DKK 50.2M in H1/2010), corresponding to an increase of 13%. Adjusted for foreign currency translation growth in revenues in the Norwegian subsidiary is 10%.

 

The region accounted for 43% of the Group’s total revenues in H1/2011 (46% in H1/2010).

 

EBITDA for the region decreased to DKK 14.2M in H1/2011 (DKK 15.7M in H1/2010), corresponding to a decrease of 10%. The decrease is mainly caused by the divestment of the NAV activities in an independent company, which has not lead to the expected growth in revenues and earnings.

 

 

VAR – Western Europe H1 H1 Development
Revenues 2011 2010 2010-2011
  DKKm DKKm  
Software 17.6 18.7 -6%
Maintenance 15.4 17.9 -14%
Consultancy 54.4 42.1 29%
Other 1.7 1.9 -8%
Total 89.1 80.7 10%

 

In Western Europe revenues increased to DKK 89.1M in H1/2011 (DKK 80.7M in H1/2010), corresponding to an increase of 10%.

 

Revenues in the British subsidiary increased to DKK 41.7M in H1/2011 (DKK 37.2M in H1/2010), corresponding to an increase of 12%. Adjusted for foreign currency translation, revenues in the company increased by 13%.

 

Revenues in the Dutch subsidiary increased to DKK 14.5M in H1/2011 (DKK 10.9M in H1/2010), corresponding to an increase of 33%.

 

Likewise, revenues in the Spanish subsidiary increased to DKK 10.2M in H1/2011 (DKK 8.8M in H1/2010), corresponding to an increase of 16%.

 

The region accounted for 20% of the Group’s total revenues in H1/2011 (18.3% in H1/2010).

 

EBITDA for the region increased to DKK 6.0M in H1/2011 (DKK 2.1M in H1/2010), corresponding to an increase of 286%.

 

EBITDA in the British subsidiary increased to DKK 7.9M in H1/2011 (DKK 7.0M in H1/2010), corresponding to an increase of 13%. Adjusted for foreign currency translation EBITDA in the British subsidiary increased by 15%.

 

EBITDA in the Spanish subsidiary increased to DKK 1.0M in H1/2011 (DKK 0.4M in H1/2010). The Spanish market is still difficult due to uncertainty about market conditions and financing.

 

EBITDA in the French subsidiary increased to DKK -2.8M in H1/2011 (DKK -4.8M in H1/2010), corresponding to an increase of 42%. As expected the restructuring process in the French subsidiary has required considerable resources. Despite the improvement, the restructuring process has taken longer than expected. The management will continuously evaluate the possibilities in the French market.

 

 

VAR – Eastern Europe H1 H1 Development
Revenues 2011 2010 2010-2011
  DKKm DKKm  
Software 23.7 20.3 17%
Maintenance 17.2 17.4 -1%
Consultancy 47.6 41.8 14%
Other 1.9 1.4 36%
Total 90.4 80.8 12%

 

Revenues in Eastern Europe increased to DKK 90.4M in H1/2011 (DKK 80.8M in H1/2010), corresponding to an increase of 12%.

 

The Russian subsidiary is the primary reason for the region’s increase in revenues. Revenues in the Russian subsidiary increased to DKK 52.3M in H1/2011 (DKK 41.7M in H1/2010), corresponding to an increase of 25.4%. Adjusted for foreign currency translation, revenues in the subsidiary increased by 28%.

 

Revenues in the Baltic countries amounted to DKK 29.4M in H1/2011 (DKK 29.5M in H1/2010) and are in line with last year.

 

Revenues in the Polish subsidiary decreased to DKK 8.7M in H1/2011 (DKK 9.6M in H1/2010), corresponding to a decrease of 9%. The Polish market is influenced by pressure on prices.

 

The region accounted for 20% of the Group’s total revenues in H1/2011 (18.3% in H1/2010).

 

The region’s EBITDA increased to DKK 4.9M in H1/2011 (DKK 1.2M in H1/2010), corresponding to an increase of 308%.

 

EBITDA in the Russian subsidiary increased to DKK 3.4M in H1/2011 (DKK 1.9M in H1/2010), corresponding to an increase of 75%. Adjusted for foreign currency translation EBITDA in the Russian subsidiary increased by 82%.

 

EBITDA in the Baltic countries was improved considerably in H1/2011 compared to last year, and amounted to DKK 2.0M (DKK -1.2M in H1/2010). The development in EBITDA of the Baltic countries is mainly caused by the Estonian subsidiary, where customers’ need for assistance after the conversion to EUR as at 31 December 2010 has increased the billing rate considerably. In the Lithuanian subsidiary the negative development from 2010 has been brought under control.

 

EBITDA in the Polish subsidiary decreased to DKK -0.5M in H1/2011 (DKK 0.5M in H1/2010). The decrease is mainly caused by lacking revenues.

 

 

VAR – North America H1 H1 Development
Revenues 2011 2010 2010-2011
  DKKm DKKm  
Software 11.8 10.9 8%
Maintenance 14.9 15.4 -4%
Consultancy 32.3 29.9 8%
Other 2.3 1.6 44%
Total 61.2 57.7 6%

 

In North America revenues increased to DKK 61.2M in H1/2011 (DKK 57.7M in H1/2010), corresponding to an increase of 6%. Adjusted for foreign currency translation revenues in the region increased by 13%.

 

EBITDA in the region decreased to DKK 2.5M in H1/2011 (DKK 5.7M in H1/2010), corresponding to a decrease of 56%. Adjusted for foreign currency translation EBITDA in the region decreased by 44%.

 

Liquidity status

Columbus IT held cash funds of DKK 54.6M as at 30 June 2011 (DKK 65.8M as at 30 June 2010). The cash funds are mainly placed in a number of foreign subsidiaries. Compared to last year the Group’s short-term debt to credit institutions has been reduced considerably to DKK 17.7M as at 30 June 2011 (DKK 53.9M as at 30 June 2010), primarily due to the received net proceeds from the capital increase performed in H2/2010. The liquidity resources of the Group are in the level of DKK 140M with the existing credit facilities.

 

Uncertainty factors and significant risks

Determining the carrying amount of some assets and liabilities requires judgments, estimates and assumptions concerning future events. The judgments, estimates and assumptions made are based on historical experience and other factors, which management assesses to be liable, but which by their nature are associated with uncertainty and unpredictability. The assumptions may prove incomplete or incorrect, and unexpected events or circumstances may arise. It may be necessary to change previous estimates as a result of changes to the assumptions on which the estimates were based or due to new information or subsequent events.

 

Estimates which are of material importance to the presentation of the accounts, are among other things applied to statement of impairment, goodwill and other long term assets as well as trade receivables, selling price of contract work in progress, valuation of deferred tax assets, deferred debt and contingent liabilities and assets, cf. detailed description in the Annual Report 2010.

 

The Company is also subject to risks and uncertainties which may lead to actual results differing from these estimates. Columbus IT’s business risks are unchanged compared to the risks described in the Annual Report 2010.

 

Significant events after balance date

There have been no events since 30 June 2011 which could significantly affect the evaluation of the Group’s financial position and revenues.


Management Report

 

We have today considered and approved the interim financial report for the period 1 January 2011 – 30 June 2011 for Columbus IT Partner A/S.

 

The interim financial report has been prepared in accordance with IAS 34 and additional Danish interim reporting requirements for listed companies. The interim financial report is unaudited and has not been reviewed by the Company’s auditor.

 

We consider the accounting policies applied to be appropriate to the effect that the interim financial report gives a true and fair view of the Group’s assets, liabilities and financial position at 30 June 2011, and of the results of the Group’s operations and cash flows during the first half year of 2011.

 

We consider the management report to give a true and fair view of the development in the Group’s business activities and financial situation, the financial result for the period and the Group’s financial position as a whole together with a true and fair description of the significant risks and uncertainty factors which the Group faces.

 

 

Ballerup, 18 August 2011

 

 

 Executive Board

 

 

 

Thomas Honoré

CEO

 

 

 

Board of Directors

 

 

 

 

 

 

 
Ib Kunøe
Chairman
Jørgen Cadovius
Deputy Chairman
Claus Hougesen Sven Madsen Ulla Krossteig
 

Total Income Statement

 

 

DKK ´000       H1 2011 H1 2010 2010
             
Net revenue       455,387 441,832 867,362
External project costs       -121,397 -124,191 -235,260
Gross earnings       333,990 317,641 632,102
             
Staff expenses       -248,778 -231,187 -451,385
Other external costs       -76,892 -68,388 -132,245
Other operating income       1,019 1,061 2,761
Other operating expense       -1,122 -2,985 -1,113
Earnings before depreciation (EBITDA)       8,218 16,143 50,120
             
Depreciation       -12,980 -9,498 -22,689
Earnings before write down of goodwill (EBITA)     -4,762 6,645 27,431
             
Write down of goodwill       0 0 0
Operating profit (EBIT)       -4,762 6,645 27,431
             
Results in associated companies     413 -932 -241
Financial income       4,480 6,628 9,961
Financial expense       -6,575 -5,217 -10,968
Pre-tax earnings       -6,444 7,123 26,184
             
Tax on the result of the period       -1,735 -1,760 -12,591
Result for the period     -8,179 5,363 13,593
             
Foreign exchange rate translation re. subsidiaries     -3,211 7,917 7,187
Other total income       -3,211 7,917 7,187
             
Total recognized income for the period       -11,390 13,280 20,780
             
Allocation of the result of the period:            
Shareholders of Columbus IT Partner A/S       -9,104 4,213 11,381
Minority interests       925 1,150 2,212
        -8,179 5,363 13,593
             
Allocation of other total income:            
Shareholders of Columbus IT Partner A/S       -12,378 7,383 18,080
Minority interests       988 534 2,700
        -11,390 7,917 20,780
             
             
Earnings per share (EPS) of DKK 1.25       -0.08 0.05 0.12
Earnings per share, diluted (EPS-D) of DKK 1.25       -0.08 0.07 0.12
               

 

 


 

 


Assets

 

 

DKK ´000     H1 2011 H1 2010 2010
           
Goodwill     155,744 157,908 157,312
Royalties     1,998 4,153 3,285
Development projects finalized     40,852 43,334 44,915
Development projects in progress     4,662 4,038 1,785
Total intangible assets     203,257 209,433 207,298
           
Leasehold improvement     192 403 297
Plant and operating equipment     7,904 8,468 7,016
Total tangible assets     8,096 8,872 7,313
           
Holdings in associated companies     1,565 423 1,152
Financial assets     1,565 423 1,152
           
Deferred tax assets     23,988 32,912 23,552
Total long-term assets     236,905 251,641 239,315
           
Inventories     641 1,185 913
           
Trade receivable     168,919 166,577 173,790
Contract work in progress     22,733 24,035 21,356
Corporation tax     7,140 1,228 9,246
Other receivables     14,783 14,944 13,278
Accruals     8,903 11,918 9,155
Total receivables     224,212 218,702 226,825
           
Cash     54,639 65,838 68,447
           
Total short-term assets     277,757 285,725 296,184
           
Total assets     514,662 537,366 535,500
 

 
Liabilities

 

 

DKK ´000     H1 2011 H1 2010 2010
           
Equity          
Share capital     132,174 99,131 132,174
Reserves on foreign currency translation     -10,733 -6,519 -7,458
Retained profit     154,105 141,096 163,131
Parent Company shareholders’ equity     275,546 233,708 287,847
Minority interests’ equity     7,185 11,743 12,176
Total equity     282,732 245,451 300,023
           
Deferred tax     433 836 439
Credit institutions     0 1,849 0
Financial leasing obligations     47 0 110
Other debt     1,270 1,299 1,270
Total long-term debt     1,750 3,984 1,819
           
Credit institutions     17,670 53,886 11,855
Financial leasing obligations     1,436 4,992 4,026
Client prepayments     22,669 26,103 24,467
Trade accounts payable     53,678 69,402 63,782
Corporation tax     14,102 1,680 12,830
Other debt     116,869 123,295 110,942
Accruals     3,757 8,573 5,755
Total short-term debt     230,181 287,930 233,657
           
Total debt     231,930 291,915 235,477
           
Total liabilities     514,662 537,366 535,500

 

 

 


 

Consolidated Statement of Changes in Equity

 

 

DKK ´000          
           
H1/2011 Share
capital
Reserves on foreign currency translation Retained profit Minority interest Equity
           
Balance at 1 January 2011 132,174 -7,458 163,131 12,176 300,023
           
Result for the period  0 0 -9,104 952 -8,179
Other total income (foreign exchange rate adjustment – foreign companies) 0 -3,274 0 62 -3,212
Total recognized income for the period  0 -3,274 -9,104 988 -11,391
Incentive scheme 0 0 79 0 79
Disposal of minority interests 0 0 0 -768 -768
Payment of dividends 0 0 0 -5,210 -5,210
Balance at 30 June 2011 132,174 -10,733 154,105 7,185 282,732
           
H1/2010          
           
Balance at 1 January 2010 99,131 -14,157 137,140 10,060 232,173
           
Result for the period  0 0 4,213 1,150 5,363
Other total income (foreign exchange rate adjustment – foreign companies) 0 7,383 0 534 7,918
Total recognized income for the period  0 7,383 4,213 1,684 13,280
Incentive scheme 0 0 0 0 0
Disposal of minority interests 0 0 0 0 0
Payment of dividends 0 0 0 0 0
Balance at 30 June 2010 99,131 -6,774 141,353 11,744 245,451
           
           
2010          
           
Balance at 1 January 2010 99,131 -14,157 137,140 10,060 232,173
           
Result for the period  0 0 11,381 2,212 13,593
Other total income (foreign exchange rate adjustment – foreign companies) 0 6,699 0 488 7,187
Total recognized income for the period  0 6,699 11,381 2,700 20,780
Capital increase 33,043 0 17,183 0 50,226
Costs related to capital increase 0 0 -2,807 0 -2,807
Incentive scheme 0 0 234 0 234
Payment of dividends 0 0 0 -584 -584
Balance at 31 December 2010 132,174 -7,458 163,131 12,176 300,023
           
           
           

 

 


 

Consolidated Cash Flow Statement

 

 

DKK ´000 H1 2011 H1 2010 2010
       
Result for the period (EBIT) -4,762 6,645 27,431
Depreciations and write downs 12,980 9,498 22,689
Transferred share based payment 79 0 234
Net adjustments of development projects -8,366 -9,214 -18,488
Changes in working capital -4,177 1,522 -22,456
Cash flow from primary activities -4,246 8,450 9,410
       
Interest received, etc. 4,195 278 9,961
Interest paid, etc. -6,290 -1,375 -10,968
Corporation tax paid 1201 -922 1,231
Cash flow from operating activities -5,140 6,431 9,634
       
Acquisition of tangible assets -3,010 -1,877 -2,876
Acquisition of intangible assets -340 -121 -112
Disposal of tangible assets 35 32 104
Acquisition of minority interests -768 0 0
Acquisition of associated companies 0 -123 -160
Cash flow from investing activities -4,083 -2,089 -3,044
       
Proceeds from capital increase 0 0 47,419
Overdraft facilities 3,162 -9,809 -54,544
Dividends paid to minority shareholders -5,210 0 -584
Cash flow from financing activities -2,048 -9,809 -7,709
       
Cash flow -11,271 -5,467 -1,118
       
Cash funds at the beginning of the year 68,447 66,346 66,346
Exchange rate adjustments -2,542 4,959 3,218
       
Cash funds at the end of the period 54,639 65,838 68,447

 

 


 

 

Note 1: Accounting policies

 

The consolidated interim financial report is prepared in accordance with IAS 34, Presentation of Interim Financial Reporting, as approved by the EU, and additional Danish disclosure requirements for interim financial reports of listed companies. No interim report has been prepared for the Parent Company. The interim financial report is presented in Danish kroner (DKK), which is the Parent Company’s functional currency.

 

The accounting policies applied in the interim financial report are prepared in accordance with International Financial Reporting Standards, as approved by the EU, and additional Danish disclosure requirements for interim financial reports of listed companies. For more information on the accounting policies, we refer to our Annual Report for 2010.

 


 

Note 2: Segment data

 

 

The Group presents segment data according to IFRS 8, Operating Segments.

 

In order to support decisions about allocation of resources and assessment of performance of the segments, the Group’s internal reporting to the Board of Directors of the parent company is based on the following grouping of operating segments:

 

 

Strategic business areas                                                Description                                                                          Geographical segment

                                                                                                                                                                                                                               


ISV (Independent Software Vendor)                               Development and sale of own ERP software                                 No specific area
                                                                                products to resellers and strategic partners                                                                  

                                                                                                                                                                                                                               

                                                                                                                                                                                                               


VAR (Value Added Resellers)                           Sale and implementation of standard ERP                    The Nordic region
                                                                                software products to end users                                         Western Europe

                                                                                                                                                                                 Eastern Europe

                                                                                                                                                                                 North America

                                                                                                                                                                                                                               

 

 

 

H1/2011   ISV VAR Parent Company Total
Gross revenue   25,181 449,164 373 474,719
Intercompany revenue    -5,859 -13,212 -261 -19,332
Net revenue   19,323 435,952 112 455,387
           
Gross earnings   18,424 315,292 275 333,990
Earnings before depreciation (EBITDA)   4,764 27,503 -24,049 8,218
Operating result (EBIT)   -2,288 21,929 -24,403 -4,762
Results in associated companies   0 0 413 413
Pre-tax earnings   -3,424 8,806 -11,826 -6,444
Result for the period   -3,413 7,061 -11,826 -8,179
           
Segment assets   86,464 314,590 113,609 514,662
Segment liabilities   41,237 221,936 -27,642 235,531
Capital investments   250 2,760 0 3,010
Depreciations   -7,052 -5,574 -354 -12,980
Holdings in associated companies   0 0 1,565 1,565
           
Average number of employees   47 856 16 918
           
           
           
           

 

 

 

 

 


 

 

Note 2: Segment data, continued

 

 

H1/2010   ISV VAR Parent Company Total
Gross revenue   22,415 429,308 1,160 452,883
Intercompany revenue    -5,710 -5,341 0 -11,051
Net revenue   16,705 423,967 1,160 441,832
           
Gross earnings   20,667 295,814 1,160 317,641
Earnings before depreciation (EBITDA)   7,728 24,692 -16,276 16,143
Operating profit (EBIT)   3,040 20,354 -16,750 6,645
Results in associated companies   0 0 -932 -932
Pre-tax earnings   2,282 9,148 -4,306 7,123
Result for the period   2,279 7,390 -4,306 5,363
           
Segment assets   63,727 352,270 121,370 537,366
Segment liabilities   22,618 250,239 19,058 291,915
Capital investments   595 1,282 0 1,877
Depreciations   -4,687 -4,338 -473 -9,498
Holdings in associated companies   0 0 423 423
           
Average number of employees   47 849 11 906

 

 

2010   ISV VAR Parent Company Total
Gross revenue   57,642 840,162 1,963 899,766
Intercompany revenue    -21,202 -11,202 0 -32,405
Net revenue   36,440 828,959 1,963 867,362
           
Gross earnings   33,251 596,888 1,963 632,102
Earnings before depreciation (EBITDA)   18,395 66,071 -34,346 50,120
Operating profit (EBIT)   7,714 55,146 -35,429 27,431
Results in associated companies   0 0 -241 -241
Pre-tax earnings   6,154 28,279 -8,250 26,183
Result for the period   4,664 21,312 -12,383 13,593
           
Segment assets   118,488 337,200 79,813 535,500
Segment liabilities   21,278 216,238 -2,039 235,477
Capital investments   17,627 3,850 0 21,476
Depreciations   -10,681 -10,925 -1,083 -22,689
Amortizations   0 0 0 0
Holdings in associated companies   0 0 1,152 1,152
           
Average number of employees   48 833 12 893
 

 

Note 3: Net Revenue

 

 

DKK ´000 H1 2011 H1 2010 2010
       
Sale of products:      
Software licenses and IP rights 78,848 76,202 141,680
Software subscriptions 81,173 91,941 167,428
Other 0 916 1,383
Total sale of products 160,021 169,059 310,491
       
Sale of services:      
Support 7,118 14,393 27,765
Sales value of finished projects 271,444 270,786 534,870
Change in contract work in progress 16,804 -12,405 -5,764
Total sale of services 295,366 272,774 556,871
       
Total net sales 455,387 441,832 867,362
       
Contract work in progress at beginning of the period 79,385 85,149 -85,149
Contract work in progress at end of the period 96,189 72,744 79,385
Total change in contract work in progress 16,804 -12,405 -5,764
 

Note 4: Incentive Scheme

 

The CEO of the company has been granted an incentive scheme containing a share warrant scheme. The share warrant scheme is granted at the market share price. The share warrant scheme is based on the employment period. The share warrant schemes will not be adjusted for subsequent capital increases.

 

On the basis of a Black & Scholes’ calculation, the scheme has a total forecast market value of up to DKK 0.7M that will be expended in 2011, 2012 and 2013.

 

 

Specification of outstanding warrants   Number of warrants Exercise rate per warrant
DKK ´000   H1/2011 H1/2010 H1/2011 H1/2010
           
Outstanding at the beginning of the period   666,666 1,150,000 0 2.51
Granted during the period   1,300,000 0 2.45 0
Lost due to termination of employment   666,666 100,000 0 0
Used during the period   0 0 0 0
Expired during the period   0 383,334 0 0
Annulled during the period   0 0 0 0
Outstanding at the end of the period   1,300,000 666,666 2.45 2.51

 

 

 

 


 

Note 5: Trade Receivable

 

 

DKK ´000 H1 2011 H1 2010 2010
       
Receivables (gross) at 30 June  186,196 187,591 189,096
       
Allowance for doubtful debts at 1 January  15,306 18,648 18,648
Change in allowance for doubtful debts during the period 4,500 6,870 3,416
Loss realized during the period -2,529 -4,505 -6,758
Allowance for doubtful debts at 30 June  17,277 21,014 15,306
       
Balance at 30 June  168,919 166,577 173,790

 

 

Direct depreciation of receivables is performed if the value, based on an individual estimate of the individual accounts receivable’s ability to pay, is reduced, e.g. in the event of suspension of payments, bankruptcy or the like. The book value of depreciation is based on an individual estimate.