Interim Report 1-9/2012. CEO Pekka Eloholma

Transcription

1 Interim Report 1-9/2012 CEO Pekka Eloholma 1

2 Forward-Looking Statements Certain sections of this presentation contain forward-looking statements based on the Affecto s current expectations, estimates, projections and assumptions. Words such as 'forecasts', estimates, expects, plans, and variations of these words and similar expressions are intended to identify forward-looking statements, which include, but are not limited to, Affecto's performance and profitability, market growth and industry developments. These statements involve certain risks and uncertainties, which are difficult to predict, and therefore actual future results and trends may differ materially from what is forecast in forward-looking statements. Affecto undertakes to update such statements with respect to new information and future events only within the limits of its statutory obligation to disclose information. 2

3 Q1/06 Q3/06 Q1/07 Q3/07 Q1/08 Q3/08 Q1/09 Q3/09 Q1/10 Q3/10 Q1/11 Q3/11 Q1/12 Q3/12 M Forerunner in Enterprise Information Management Net Sales, last 12 months Net sales: 127 M in 2011 Approx employees Sales per region 1-9/2012 Personnel by country 9/2012 Baltic 13 % Estonia 6 % Latvia 1 % Poland 1 % Denmark 11 % Finland 39 % Lithuania 22 % Finland 38 % Sweden 17 % Denmark 7 % Norway 20 % Sweden 13 % Norway 12 % 3

4 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 M EBIT margin Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Overview to Q3/2012 Net sales 28.4 M (27.9 M ) 40 Net Sales (M ) - Growth 2% 30 - Growth in consultancy sales, significant decrease in 3rd-party license sales - Increased cautiousness and slower decision-making by customers EBIT EBIT 1.2 M / 4% (2.1 M / 7%) % 9% - Good result in Finland, Norway, Baltic and Denmark 2 1 6% 3% - Disappointment in Sweden, increased loss, one-off costs 0-1 0% -3% 4

5 1 000 Profit development (1 000 EUR) 7-9/12 7-9/11 Net sales Other operating income 7 4 Changes in inventories of finished goods and work in progress Materials and services Personnel expenses Other operating expenses Other depreciation and amortisation Operational segment result IFRS3 amortisation Operating profit/loss Net financial expenses Profit before income tax Income tax Non-controlling interest Profit for the period Basic EPS 0,04 0, Increase in sales Q3/2011 Sales volume and prices Fixed costs Other - Personnel costs increased with the number of employees Variable costs Personnel costs Q3/2012 5

6 M M Segment comparison Net Sales By segment 7-9/12 7-9/11 Growth 2011 Net Sales Finland % Norway % Sweden % Denmark % Baltic % Other Total % Q3/11 Q3/12 By business line 7-9/12 7-9/11 Growth Information Management Solutions % Geographic Information Services % Other Group total % ,5 Finland Norway Sweden Denmark Baltic Operational Segment Result Result By segment 7-9/12 Margin 7-9/11 Margin 2011 Margin Finland % % % Norway % % % Sweden % % % Denmark % % % Baltic % % % Other Operational Segment Result % % % IFRS amortisation Operating profit % % % 2,0 1,5 1,0 0,5 0,0-0,5-1,0-1,5 Finland Norway Sweden Denmark Baltic Q3/11 Q3/12 6

7 Income statement (1 000 EUR) 7-9/12 7-9/11 1-9/12 1-9/ Last 12m Net sales Other operating income Changes in inventories of finished goods and work in progress Materials and services Personnel expenses Other operating expenses Other depreciation and amortisation Operational segment result IFRS3 amortisation Operating profit/loss Net financial expenses Profit before income tax Income tax Non-controlling interest Profit for the period Acquisition-related IFRS3 amortisation 0.5 M (0.5 M ) - Estimate: 2.1 M per year until 2014 Finance costs affected by fair value of interest-rate swap. Impact +0.1 M in Q1/ M in Q2/ M in Q3/12 Basic EPS 0,04 0,06 0,21 0,16 0,26 0,31 7

8 Balance sheet (1 000 EUR) 9/2012 9/ /2011 Property, plant and equipment Goodwill Other intangible assets Other long-term assets Long-term assets Receivables and inventories Cash and cash equivalents Current assets Total assets Equity for shareholders Non-controlling interest Significant changes since 12/ Dividend 2.4 M - Working capital has increased Interest-bearing net debt 19.1 M (16.4 M 12/11) Gearing 30% (27%) Equity ratio 52% (46%) Non-current liabilities Current liabilities Total equity and liabilities

9 Ownership structure 31 October 2012 Registered owners % Cantell Oy 10,6 % OP-Suomi Pienyhtiöt Fund 8,7 % Mika Laine 6,7 % Danske Suomi Kasvuosake Fund 5,5 % Taaleritehdas Arvo Markka Fund 4,6 % Evli Suomi Fund 4,5 % Ilmarinen Mutual Pension 4,3 % Säästöpankki Kotimaa Fund 3,7 % State Pension Fund 2,8 % Evli Pankki Oyj 1,9 % Other shareholders 42,3 % Affecto Management Oy 3,8 % Treasury shares 0,5 % Total 100,0 % 21.5 million shares in total Flaggings in 2012 Evli group exceeded 5% in January Danske Invest funds exceeded 5% in April Affecto Management Oy owns 3.8% of shares Treasury shares 0.5% acquired in May-June Note: Based on previous flagging announcements, Arendals Fossekompani ASA has over 5%, but shares are in nominee register 9

10 Market environment Uncertainty regarding the general economy has grown in Slower decision-making pace by customers - Decreased 3rd-party license sales, which may indicate customers to prefer further development of existing solutions We believe the underlying EIM market to be healthy - Analyst estimates for annual market growth are 6-8% on average for the next few years - Growth in 2012 will probably be below the average Some tentative signs of improvement in the market sentiment - Norway, Denmark - Finland (after the review period) 10

11 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Outlook Order backlog 47 M Order backlog (M ) Order backlog Q1 Q2 Q3 Q In 2012 the main focus continues to be on profitability improvement. Profitability (EBIT-%) is estimated to improve and net sales are estimated to grow in

12 12 Affecto's largest customers in 2011

13 Strategy and Business Development CEO Pekka Eloholma

14 Contents Overview to Affecto s strategy process Affecto s strategy Strategic development initiatives

15 Affecto s strategy process Strategy is gradually updated every year. Typically a larger strategy process is conducted every few years - Last major strategy update in 2011 No major changes during 2012: our offering, vision and customer promise have remained constant - Good progress with the development initiatives launched in

16 Strategy process - components Public targets - Descriptive targets: vision, mission, customer promise etc. - Financial targets Internal targets - Desired characteristics & targets in business practices - Related to personnel, customers, project type, competencies - Tools for transferring the public targets into practical business management goals in the line organisation Development projects - Group-wide initiatives for supporting the required changes Actions for creating employee commitment to the strategy

17 Vision, mission and customer promise Vision The leading North European Enterprise Information Management company in size, revenue, margin, customer and employee satisfaction Mission We fight for the right that every person should have the information that makes his/her work effective and inspiring Customer promise We improve our customers productivity and competitiveness by superior use of information

18 Offering: Solutions for better decisions Information infrastructure Information and performance management Collaborative decision making Business process & tailor-made software solutions Data integration Data warehouse Data Quality Master data management Information lifecycle management Analytics and reporting Budgeting and planning Dashboards and BI desktop for everyone Cost and profitability Risk management Collaborative BI Case management Document management Intranet, extranet and portals Solutions for critical business process optimization GIS Insurance solutions Supports the entire Enterprise Information Management value chain: Affecto Business Advisory, project management & implementation, Affecto Service Management, Affecto Academy

19 Cornerstones of our operations Strong specialization Strong local presence Common processes: Common platform: Sales Service delivery Management Brand Competence development IT systems

20 Competitive positioning Large multinational generalists like Accenture, Tieto, Cap Gemini Typically EIM/BI/ECM is just one minor offering Delivery model built for large-scale projects Affecto in the middle: large enough to be a reliable supplier, but small and local enough to be flexible No other similar-sized EIM/BI suppliers in Northern Europe Growth has been and will be possible Small local BI consultants, typically people Their delivery reliability is questionable regarding larger projects & long-term support

21 Financial targets: Profitable growth Long-term financial targets Organic revenue growth to clearly exceed the market growth, which is estimated to be 6-8% per year in the relevant markets Profitability: one of the highest in our segment, the listed Nordic IT service companies Dividend policy Dividend policy is to pay percent of the profit as dividend. The company may deviate from this policy due to the needs of business development and growth Updated in

22 Development Initiatives Initiative Taking Full Responsibility Information as an Asset The Affecto Way Building the Affecto Platform The Lean EIM Company Making Affecto Visible We Can Do It Practical description Sales Process Development Strategic Offerings Professional and Efficient Project Delivery Common IT and Finance Systems Management Processes Marketing and Branding Competence Development

23 The Affecto Sales approach - Common Sales process (high level) New Customers - Hunting for new business Existing Customers - Account management for continuous business Account team dialogue / feedback Targeted customers Affecto leads Marketing leads Partner leads Continuous business Project/Solution selling Projects/Solution delivery Offering: Business Advisory Solutions/Services Competency selling Education Software Advisory Software selling and delivery Competency selling and delivery Service management Strategic Partner Account Management

24 Sales process development Common sales process has been developed further - Tools for strategic account planning Common CRM system has been launched in to support the sales work - Salesforce, a cloud-based CRM - Improves visibility of group s sales pipeline

25 Offerings development Our solution offering evolves along our customers needs - Technology development has important role as an enabler, but is not the driving force We need to be able to help our customers to identify the information they need and to provide solutions for managing that information

26 We compete not only for customers orders, but also for the best employees Our business is based on the consultancy work performed by our employees. We need to be able to recruit new talented people and to offer the existing employees possibilities for competence development Great Place to Work as a tool for measuring attractiveness - Affecto achieved 9th place among the best European multinational companies in 2012 Affecto University as the umbrella brand for competence development activities - About people taking part in group-wide training events annually, in addition local training activities - On top of that, increased usage of e-learning activities

27 Looking forward: what next? Our task to identify and develop those technologies that we believe to be real businesses in future Gartner s predictions provide some official wisdom for the forecasting, but also other tools like Google Trends help Google Trend for Big Data shows explosive growth

28 Big Data Big Data has been the hottest term this year - Not yet a big business in Nordic countries, but has brought the better usage of corporate data into highlight - A few largest Nordic companies with large data amounts have made some implementations In-memory analytics tools (like SAP s HANA) will increase the analysis power and will increase real-life applications of big data analysis

29 Recent changes in customers interests Economic downturn has changed customer priorities: - Increased interest for solutions for performance management - Business analytics, corporate performance management, etc. - Less interest for sales & growth oriented solutions Other specific offerings with growing demand include - Business Advisory & BI Strategy - Continuous application maintenance services - Master Data Management (MDM)

30 Overall picture: BI and ECM continue as top priorities for customers IT investments CFOs of large companies continue to prioritise investments in BI, analytics and performance management solutions, as well as document management solutions Source: Gartner 2012 FEI Technology Study