Halvårsrapport
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.