Q Interim Report January-December 2012

Transcription

1 Q4-212 Interim Report January-December 212 I am pleased to see that despite the tougher market conditions in Q4 we have continued gaining market share and generated a strong cash flow. Claus Hougesen CEO of Atea

2 Highlights Revenue of 6,32.9, down 3.% y-o-y EBITDA of 348.2, down 7.1% y-o-y EBITDA margin of 5.5%, down from 5.8% y-o-y Cash flow of 1,13.2, up 8.4% y-o-y Net cash positive at 49.3 at end of 212 Board proposes dividend of NOK 5.5, up from NOK 5. Revenue EBITDA Cash flow (YTD) Key figures Q4 Q4 Full year Full year Operating revenue () 6 32, ,2 2 93, ,8 Gross margin (%) 23,1 21,8 24,4 24, EBITDA () * 348,2 374,9 822,1 871,1 EBITDA margin (%) 5,5 5,8 3,9 4,3 EBIT () 268,7 311,4 557,6 651,3 Earnings per share (NOK) ** 2,83 3,21 5,6 5,96 Diluted earnings per share (NOK) ** 2,8 3,19 5,2 5,9 Operating cash flow () 1 13,2 1 43,1 812,4 1 46,4 Free cash flow () 1 39,5 989,3 565,5 868, Dec Dec 211 Net cash position () 299,7 53,4 49,3 283,2 Cash reserve () 1 191, , ,6 2 61, Working capital () 55, 47,8-57, -27,9 Working capital ratio (%) 2,9 % 2,2 % -,2 -,1 Equity ratio (%) 46,1 % 43,1 % 38,5 37,9 Number of employees * Before share-based compensation and expenses/income related to acquisitions. ** Excluding Atea ASA's number of own shares (73,61 end of Q4 212). 2

3 Market update Financial review full year 212 Group The financial turmoil in Europe continued to impact the Nordic IT infrastructure market in Q The market has decreased and margins have been under pressure. This is particularly the case in the hardware segment where the demand for servers and PCs has declined. IDC s preliminary figures for Atea s addressable market in the Nordics (Atea s Blue Box) in Q4 212 show a decline of 4.2%. The market data shows a hardware decline of 8.3%, a consulting and services decline of 1.6% and a software growth of 2.%. As the second largest IT infrastructure player in Europe, Atea has a stronger purchasing power than the majority of its competitors. Atea is therefore able to offer their customers competitive prices and win contracts with relatively higher margins. In Q4 212 Atea had an actual revenue decline of 1.5% in constant currency and an organic revenue decline of 2.4% in the Nordics. IDC s preliminary Q4 212 figures show a market decline of 4.2%, thus Atea is continuing to gain market share. Revenue was up 3.5% from 2,227.8 in 211 to 2,93.3 in 212. Hardware revenue was down.8%, consulting and services revenue was up 7.3% and software revenue was up 13.%. Organic growth in constant currency was 2.8% in a market which according to IDC increased by 3.4%. EBITDA for the full year ended at 822.1, down from in 211. EBITDA margin ended at 3.9%, down from 4.3% in 211, reflecting lower hardware revenue and margins in a tough market environment. Cash flow from operations was which is down from 1,46.4 in 211, reflecting extraordinarily strong cash flow in 211 combined with lower 212 earnings. The continued strong cash flow in 212 implies that the Group ended the year net cash positive at With the solid financial position the Board of Directors proposes to the General Assembly to pay NOK 5.5 per share in dividend for 212, up from NOK 5. in 211. This represents a dividend yield of 9.2% based on the share price at 31 December 212. Cash conversion EBITDA Operating cash flow 3

4 Financial review Q4 212 Group Group revenue was down 3.% from 6,519.2 in Q4 211 to 6,32.9 in Q Hardware revenue was down 9.5%, consulting and services revenue was up 5.3% and software revenue was up 8.1%. Organic revenue was down 2.8% in constant currency, in a market that according to IDC fell by 4.2%. The drop in hardware revenue reflects the tougher market conditions, including postponement of some deliveries to 213. EBITDA in Q4 212 ended at 348.2, down 7.1% y-o-y. Earnings were down in the Swedish market, mainly as a consequence of lower hardware margins due to price pressure. The total gross margin for the Group was 23.1%, up from 21.8% in Q HW revenue and growth -9,5% +,1% +4,5% +5,5% Q1 Q2 Q3 Q SW revenue and growth +8,1% +16,1% +15,2% ,4% Q1 Q2 Q3 Q Services revenue and growth +7,6% +5,2% +12,% +5,3% Q1 Q2 Q3 Q

5 Norway Revenue in Q4 212 was 1,921.8, down 6.% compared with a strong Q Product revenue was down 1.6%, while consulting and services revenue was up 14.7%. Organic revenue decreased by 7.9% in a market which according to IDC declined by 6.7%. This reflects reduced product deliveries, especially caused by postponements of deliveries to a few, major public customers. Organic consulting and services growth was 7.5%, well above IDC s preliminary figures which show a market decline of 2.3%. Consulting and services show a positive development as a result of increased focus Revenue EBITDA Full year 212 revenue ended at 6,353.4, up 9.4% y-o-y. Product revenue was up 9.5% and consulting and services revenue was up 8.9%. Organic revenue grew by 5.3%, which is driven by growth in products of 6.%. This increase can be explained by a strong 12.1% growth in software and a more moderate 4.6% growth in hardware, mainly caused by a slower pace within the client business towards the end of the year. Full year EBITDA ended at 275.3, up 6.8%, corresponding to an EBITDA margin of 4.3%. 16 EBITDA in Q4 212 ended at 15.6, up from 14.6 in Q Product margin ended at 13.7%, up from 12.% in Q4 211, influenced by more public deliveries in Q4 211 with a lower margin than average. Organic growth in cost of 1.8% reflects growth in the workforce of 12 employees mainly within services. EBITDA margin in Q4 212 ended at 5.5% versus 5.1% last year. 5

6 Sweden Revenue in Q4 212 ended at 2,33.6, down.4% (down.2% in constant currency) compared with last year. Product revenue was down.7% in constant currency, while consulting and services revenue was up 1.9%. Organic revenue in constant currency declined by.2% in a market which according to IDC decreased by 3.8%. Hardware revenue declined by 5.8% compared with a market which was down 8.9%. This is mainly caused by a slow-down in the private sector, especially within client and print business. Software revenue increased by 8.6% compared with a market growth of 4.6%. Atea is still taking a strong position within the licence business in the public sector. Atea in Sweden continues to gain market share Revenue EBITDA Full year 212 revenue ended at 6,637.5, up 1.9% (up 2.4% in constant currency) y-o-y. Product revenue was up 1.2% in constant currency and consulting and services revenue was up 7.1%. Increase in product revenue reflects a strong 15.2% increase in software and a 4.2% decrease in hardware. The decrease in hardware is mainly within client and print business and is related to private sector. Full year EBITDA ended at 21. compared with 261. in 211. The EBITDA margin ended at 3.% in 212, down from 4.% in % lower hardware margin and higher level of operational expenses beginning of the year are main causes of decline in EBITDA margin EBITDA in Q4 212 ended at 86.6 compared with in Q The product margin ended at 12.9%, which is.4% below last year s level, caused by price pressure and a less favourable product and customer mix. The total gross margin ended at 21.8% for Q4 212, down from 22.5% in Q In Q4 212 the number of employees has been reduced by 25, and severance payments of 8 have been charged. The full-year effect of these reductions will be 18 for 213. EBITDA margin ended at 4.3% versus 5.5% last year. 6

7 Denmark Revenue in Q4 212 ended at 1,741.9, down 1.7% (up 3.5% in constant currency) compared with last year. Product revenue was up 3.5%, while consulting and services revenue was up 3.2% in constant currency. Organic revenue growth in constant currency was 2.5% in a market which according to IDC declined by 2.7%. Hardware revenue was down.8% compared with a market which decreased by 3.2%. This reflects lower sales in public sector relating to client business. Software shows a strong increase of 21.3% compared with a market which declined by 2.7%. Atea in Denmark continues to gain market share Revenue EBITDA Full year 212 revenue was 5,729.6, down.6% (up 3.5% in constant currency) y-o-y. EBITDA for the year ended at 282.1, down from 285. in 211. EBITDA margin ended at 4.9% for both years EBITDA in Q4 212 ended at 124.5, down from in Q The product margin ended at 9.3% compared with 11.% in Q The tougher market implies tougher price competition, especially within client business and with public customers. Consulting and services margin was higher than last year, caused by less use of subcontractors. EBITDA margin ended at 7.1% compared with 7.3% last year. 7

8 Finland Revenue in Q4 212 ended at 424.8, down 15.2% (down 1.7% in constant currency) compared with last year. Product revenue was down 11.5%, while consulting and services revenue was down 2.8% in constant currency. Organic revenue in constant currency declined by 1.7% in a market which according to IDC decreased by 3.7%. This reduction is mainly explained by a decline in hardware business reflecting a weaker market in both private and public sector Revenue The Baltics Revenue in Q4 212 was 198., up 19.8% (up 26.% in constant currency) compared with last year. Organic revenue in constant currency declined by 1.5%, where hardware revenue was affected by postponements in EU funded public projects Revenue EBITDA in Q4 212 ended at 17.8, compared with 19.3 in Q Product margin was 1.% above last year s level, mainly because of a positive development in software margins EBITDA Full year 212 revenue was 1,67.5, down 6.4% (down 2.4% in constant currency) y-o-y. EBITDA for the year ended at 23.6, down from 47.9 last year, mainly reflecting the reduction in revenue. EBITDA margin ended at 1.5% compared with 2.8% for EBITDA in Q4 212 ended at 15.4, compared with 9.5 in Q Total gross margin was 22.9% compared with 17.8% in Q EBITDA margin ended at 7.8%, up from 5.7% in Q EBITDA Full year 212 revenue was 648.4, up 48.7% (up 55.% in constant currency) y-o-y. Organic growth in constant currency was 9.9%. EBITDA for the year ended at 37.8, up 89.5% (up 97.6% in constant currency) y-o-y. EBITDA margin ended at 5.8% compared with 4.6% for 211, reflecting a year with several successful acquisitions

9 Equity and cash flow Shareholders equity as of 31 December 212 was 3,834.8 corresponding to an equity ratio of 38.5%, up from 37.9% compared with 31 December 211. The Group generated an operational cash flow of 1,13.2 in Q4 212, which was 87.1 above the corresponding quarter last year. This is explained by a decrease in working capital through a further decrease in inventory and improvements in the relationship between trade receivables and trade payables. For the full year 212 the Group generated an operational cash flow of 812.4, which was 234. below the corresponding period last year. The working capital ratio as of 31 December 212 was -.2%, which is down from -.1% as of 31 December 211. Capital expenditure in Q4 212 amounted to 9.7. These were maintenance investments related to hosting centres, Atea s internal One Infrastructure project, ERP development, equipment for employees and other office-related investments. Shares Atea ASA had 8,343 shareholders as of 31 December 212 compared with 8,653 as of 3 September 212. The 1 largest shareholders as of 31 December 212 were: Main Shareholders * Shares % Systemintegration APS ** ,26 % State Street Bank & Trust Co. Ref: OM8 *** ,84 % JPMorgan Chase Bank A/C Columbia Wanger *** ,57 % Bank of New York Mellon *** ,51 % JPMorgan Chase Bank Spec Treaty Lendi Acct *** ,23 % Folketrygdfondet ,94 % Odin Norge ,94 % State Street Bank & Trust Co. Ref: OM6 *** ,78 % VPF Nordea Kapital ,71 % Goldman Sachs Int. - Equity - *** ,65 % Other ,57 % Total number of shares , % * Source: Verdipapirsentralen ** Includes shares held by Ib Kunøe *** Includes client nominee accounts As of 31 December 212, Chairman Ib Kunøe and close associates control a total of 28.6% of the shares, including the shares held in Systemintegration ApS. Cash flow related to sale of subsidiaries amounted to 6.1. At the end of Q4 212, the Group s net financial position was 49.3, up from at the end of Q Cash reserves, including unutilized credit facilities, as of 31 December 212, were 1,

10 Outlook IDC s forecast for 213 for Atea s addressable market in the Nordics (Atea s Blue Box) is growth of 1.9%. The consulting and services market is expected to grow by 3.2%, the software market is expected to grow by 4.8% and the hardware market is expected to decline by.4% IDC believes that the hardware market in 213 will be driven by declines in the client and server/storage markets, whereas network and other hardware areas will grow. The client market is currently undergoing a mobility shift where the immobile desktop PC s are declining, portable PC s are stagnating and smartphones and tablets are soaring. Growth in the product market will be driven by gradually increasing deployment of Windows 8 projects among others. There is a strong trend in the services market towards outsourcing of internal IT functions to external partners, and outsourcing of client management in particular. This trend is fuelled by an increasingly complex client environment with more and new types of devices, more operating systems and applications as well as increased demand for accessibility and availability. Atea is well positioned to grow further within this area. The uncertainty in the outlook primarily relates to macroeconomic developments. A macroeconomic downturn or increased uncertainties may result in hesitancy to commit to larger investment programs. However, because of the relatively short lifespan of the IT infrastructure environment, investments cannot be postponed for longer periods of time. Investments in IT infrastructure are an integral part of the solution to the major challenge facing the western world, which is increasing efficiency. IDC therefore believes that the IT infrastructure market in the Nordics will grow faster than GDP at an average annual rate of 3.% towards 215. Atea is well placed to take advantage of the opportunities ahead. In November 211, Atea launched the Together Towards the Top strategy, which sets the stage for Atea s development towards 215. Implementation of key initiatives has started according to plan. Key initiatives include market-oriented actions aimed at increasing services revenue, and in particular contracted services revenue, a dedicated sales focus on mid-market and international customer groups, as well as internal actions to improve gross margins, improve processes and lower the cost base. On this basis, Atea is expected to win further market shares and improve the profitability in the coming years. The goal of the strategy is to increase revenue to NOK 3 billion and EBITDA to NOK 1.8 billion by 215. A key assumption for achieving this financial goal was that the market conditions would be positive and that the market would grow at an average rate of 4.3% from 211 to 215. In light of the market development in 212 and IDC s expectations for 213, Atea will follow the development during 213 and will revisit the goal later in the year. 1

11 Consolidated statement of comprehensive income Q4 Q4 Full Year Full Year (amounts in ) Note Operating revenue , ,2 2 93, ,8 Goods consumed 4 86,2 5 97, , ,9 Employee benefits expense excl. share based comp 925,5 854,1 3 51, ,2 Other operating expenses 187, 192,9 765,3 762,6 EBITDA before share based compensation 2 348,2 374,9 822,1 871,1 Share based compensation 1,1,8 11,4 13,3 Expenses/income related to acquisition 1,2 3, 1,4, EBITDA 345,9 371,1 89,2 857,7 Depreciation 77,2 59,7 251,6 26,4 Operating profit/(loss) (EBIT) 2 268,7 311,4 557,6 651,3 Financial income 2,3 6,4 76,1 73, Financial expenses 3, 18,9 114,4 111,7 Net financial items -9,7-12,5-38,3-38,8 Profit/(loss) before tax, continued operations 259, 298,9 519,3 612,6 Tax on continued operations -25,6-27,8 11,1 11,7 Profit/(loss) for the period from cont. operations 284,6 326,7 58,2 6,8 Other comprehensive income Currency translation differences -31,7,2-11,1-7,6 Forward contracts - cash flow hedging -1,8 4,4-7,1 5,2 Income tax relating to components of other comprehensive income 9,3-1,3 26,2 5,7 Other comprehensive income -24,2 3,3-91, 3,3 Total comprehensive income for the period 26,4 33, 417,2 64,1 Of which non-controlling interests,8 6,5 2,2 7,8 11

12 Consolidated statement of financial position (amounts in ) Note 31 Dec Dec Jan 211 ASSETS Property, plant and equipment 33,5 195,9 157,9 Deferred tax assets 572,8 55,5 472,1 Goodwill 2 832, , ,7 Other intangible assets 33,3 334,8 341,2 Retirement benefit plans,, 4,1 Other long-term receivables 1, 33,4 46,2 Non-current assets 4 67,2 3 93, ,3 Inventories 58,6 557,2 483,7 Trade receivables 4 437, , ,3 Other receivables 767,5 633,9 573,4 Other financial assets,4 12,9 27,2 Cash and cash equivalents 18,4 485,4 44, Current assets 5 894,7 6 34,4 5 85,6 Total assets 9 961,9 1 27,7 9 63, EQUITY AND LIABILITIES Share capital and premium , , ,8 Other unrecognised reserves -91,1 -,1-3,3 Retained earnings , , ,7 Equity attributable to shareholder of Atea ASA 3 834, , ,2 Non-controlling interests, 3,5 1,1 Equity 3 834, , ,3 Interest-bearing long-term liabilities 64,6 14,5 2,5 Other long-term liabilities 1,4 66, 64,4 Retirement benefit obligations 3,9 7,3 13,1 Deferred tax liabilities 21,5 173, 165,1 Non-current liabilities 289,4 26,6 263,1 Trade payables 3 616, 3 593,3 3 12,3 Interest-bearing current liabilities 66,5 218,2 721,3 VAT, taxes and government fees 524,8 594,8 555,1 Provisions 16,8 132,3 17,4 Other current liabilities 1 517, , ,8 Other financial liabilities 6,,,8 Current liabilities 5 837,7 6 77,5 6 27,7 Total liabilities 6 127, ,2 6 29,7 Total equity and liabilities 9 961,9 1 27,7 9 63, 12

13 Consolidated statement of changes in equity (amounts in ) 31 Dec Dec 211 Equity at start of period 3 869, ,2 Currency translation differences -85,9 -,5 Forward contracts - cash flow hedging -5,1 3,7 Other comprehensive income -91,1 3,2 Profit/loss for the year 58,2 6,8 Total recognised income/expense for the year 417,2 64, Changes related to own shares - -3,8 Employee share-option schemes 8,3 14,3 Dividends paid -5,3-199,2 Issue of share capital 49,5 15,7 Non-controlling interests from acquistions -9,3-35,9 Equity at end of period 3 834, ,4 Consolidated statement of cash flow Q4 Q4 Full year Full year (amounts in ) Cash earnings 351,4 384,5 766,2 85,2 Changes in work. cap./accr. items 778,8 658,6 46,2 196,2 Cash flow from operations 1 13,2 1 43,1 812,4 1 46,4 Capital expenditures -9,7-53,8-246,9-178,1 Purch./sale of subs./assoc./investm. 6,1-11,1-148,8-179,5 Cash flow from investments -84,6-163,9-395,7-357,6 Change in debt -1 49,2-497,4-257,5-554,7 Equity transactions 28,6 5,7-45,8-52,1 Cash flow from financing -1 2,6-491,7-78,3-66,8 Change in cash 24,9 387,5-291,7 82, Cash, start of period 162, 92,8 485,4 44, Cash, end of period 18,4 485,4 18,4 485,4 Currency effects on cash and cash equivalents -6,5 5,1-13,4 -,6 13

14 Notes NOTE 1 General information and accounting policies Atea (the Group) consists of Atea ASA (the Company) and its subsidiaries. Atea ASA is a limited company incorporated and domiciled in Norway whose shares are listed on the Oslo Stock Exchange. These condensed consolidated interim financial statements ended 31 December 212 have been prepared in accordance with International Financial Reporting Standard (IFRS), IAS 34 Interim Financial Reporting. The condensed consolidated interim financial statements do not include all information and disclosures required in the annual financial statement, and should be read in accordance with the Group s Annual Report for 211, which has been prepared according to IFRS. The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements for the year ended 31 December 211. Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss. The Board confirms that these interim financial statements have been prepared on a going concern basis. This interim condensed consolidated financial information has not been subject to audit or review. As a result of rounding differences numbers or percentages may not add up to the total. The figures in the financial statement and tables are in Norwegian format, which means that comma has been used instead of a period sign in the decimal positions. In the text, comma has been used as 1 separator, while the period sign has been used in the decimal position. NOTE 2 Operating segment information Atea is primarily a complete provider of hardware and software products, as well as related consulting. The Group has operations in Norway, Sweden, Denmark, Finland and the Baltics. For management purposes, the Group is organised into these geographical areas. The performances in the above mentioned geographical areas are evaluated on a regular basis by Atea s senior management. In addition the Group operates Shared Services: Atea Logistics and Atea Global Services. Transfer prices between operating segments are on arm s length basis in a manner similar to transactions with third parties. Group costs represent expenses related to group and holding functions performed by management and other employees of Atea ASA. 14

15 Revenue Q4 Q4 Full Year Full Year (amounts in ) % change % change Norway 1 921,8 2 44, -6,% 6 353,4 5 89,3 9,4% Sweden 2 33,6 2 41,1 -,4% 6 637, ,9 1,9% Denmark 1 741, ,3-1,7% 5 729, ,2 -,6% Finland 424,8 51, -15,2% 1 67, ,6-6,4% The Baltics 198, 165,3 19,8% 648,4 436,1 48,7% Group Shared Services 925,3 1 3,5-1,2% 3 514, ,6-3,3% Eliminations * -924,5-1 35, -3 56, , Atea Group 6 32, ,2-3,% 2 93, ,8 3,5% EBITDA Q4 Q4 Full Year Full Year (amounts in ) % change % change Norway 15,6 14,6 1,% 275,4 257,8 6,8% Sweden 86,6 113,6-23,7% 21, 261, -23,% Denmark 124,5 129,7-4,% 282,1 285, -1,% Finland 17,8 19,3-8,% 23,6 47,9-5,7% The Baltics 15,4 9,5 61,9% 37,8 2, 89,5% Group Shared Services 7,3 7,4 -,3% 34,4 31, 1,9% Group cost -9,1-9,1,3% -32,3-31,7-2,% EBITDA 348,2 374,9-7,1% 822,1 871,1-5,6% EBITDA margin (%) 5,5% 5,8% 3,9% 4,3% EBIT Q4 Q4 Full Year Full Year (amounts in ) % change % change Norway 87, 86,9,% 215,7 25,2 5,1% Sweden 78,6 17,4-26,8% 168,5 237, -28,9% Denmark 82,4 11,6-18,8% 155,9 183,5-15,1% Finland 14,3 12,9 1,7% 6, 28,5-78,8% The Baltics 1,3 5,7 8,% 21,4 5,8 267,2% Group Shared Services 5,7 5,9-2,8% 27,4 27, 1,7% Group cost -9,7-9, -7,2% -37,3-35,5-4,9% Operating profit/loss (EBIT) 268,7 311,4-13,7% 557,6 651,3-14,4% Financial income 2,3 6,4 216,1% 76,1 73, 4,3% Financial expenses 3, 18,9 58,3% 114,4 111,7 2,4% Profit/(loss) before tax, continued operations 259, 298,9-13,4% 519,3 612,6-15,2% Revenue and contribution/margin Q4 Q4 Full Year Full Year (amounts in ) % change % change Product revenue 5 67, ,3-4,9% 16 51, ,4 2,5% Consulting revenue 1 253, 1 189,9 5,3% 4 428, ,7 7,3% Total revenue 6 32, ,2-3,% 2 93, ,8 3,5% Gross contribution 1 46, ,9 2,7% 5 98, 4 854,9 5,% Product margin 12,5% 12,5% 12,9% 13,3% Consulting and services margin 65,9% 63,6% 67,% 65,6% Gross margin 23,1% 21,8% 24,4% 24,% Quarterly revenue and contribution/margin Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (amounts in ) Product revenue 3 653, ,9 3 25, , , , ,8 5 67,8 Consulting and services revenue 994,3 1 34,6 96, ,9 1 46, ,2 1 15, , Total revenue 4 647, , , , , ,7 4 45,5 6 32,9 Gross contribution 1 18, 1 231,7 1 21, , , , ,2 1 46,7 Product margin 14,% 13,7% 13,6% 12,5% 13,9% 12,5% 13,% 12,5% Consulting and services margin 67,3% 67,2% 64,5% 63,6% 68,7% 66,4% 67,3% 65,9% Gross margin 25,4% 24,9% 24,8% 21,8% 25,8% 23,7% 25,4% 23,1% Note: All EBITDA figures are before share-based compensation and expenses/income related to acquisitions. *Most of Atea s internal sales are related to Group Shared Services, which consists of Atea Logistics and Atea Global Services. 15

16 NOTE 3 Business combinations The Group has acquired seven companies during 212. The new units have been integrated into various units in the Atea Group until 31 December 212. This means that it is not appropriate or practical to show revenue and earnings for the total of the acquired units for the period from the date of acquisitions until 31 December 212. BMK UAB and Kauno BMK UAB The acquisition will strengthen Atea within product and service portfolio in the Baltics and Lithuania in particular, as Atea is not currently present within the business areas of AV and print/copy in the Baltics. Nworks A/S The acquisition will strengthen Atea's IT network business in Denmark as Nworks complements Atea's current products within this business area. IT Partner Finnmark AS and IT Partner Hammerfest AS The acquisition will strengthen Atea's presence in Finnmark, where Atea has not previously had any offices, and is a part of Atea's increased focus on the region. The acquisition will strengthen the commitment to existing customers and towards the large investments in IT infrastructure related to the future oil development projects in the Barents Sea that are expected in the coming years. NG Infra OU (IT infrastructure activities of Net Group) The acquisition will quadruple Ateas current business activities in Estonia, and will add a service organization with important competences and certifications to the Estonian operation. The acquisition is important for Atea in the Baltics, as Atea post the acquisition will be able to offer its customers the full range of IT infrastructure products and services in all Baltic countries. Total Storage Solutions Norge AS The acquisition will strengthen Atea's focus on data storage and backup solutions in general, and in IBM technology particularly. TSS is a niche supplier to the banking and oil industries, industries with high requirements for quality and expertise. KSC UAB The acquisition will strengthen the activities in Lithuania (in Kaunas Region) within IT infrastructure. Goodwill from acquisitions The goodwill arises from a number of factors, such as expected synergies through combining a highly skilled workforce with obtaining market power, buying power, cost savings etc. The fair values have been determined on provisional basis because new information may occur. 16

17 Breakdown of the acquired net assets and goodwill in 212 is as follows: (amounts in ) BMK UAB Nworks A/S IT Partner Finnmark AS NG Infra OU Kauno BMK UAB Total Storage Solutions AS KSC UAB Total Acquisition date 14 Mar Mar Jun Jun Jul Sep Dec 212 Country Lithuania Denmark Norway Estonia Lithuania Norway Lithuania Voting rights/ownership interest 1,% 1,% 1,% 1,% 1,% 1,% 1,% Acquisition cost: Consideration 1) 24, 38,6 12,5 4,4 2,8 4,,9 123,2 Adjustment of cost price Liabilities assumed - 3, ,2 4,1 Direct costs associated with acquisitions Fair value of shares issued Total acquisition cost 24, 42,5 12,5 4,4 2,8 4, 1,1 127,3 Net assets acquired at carrying value of equity (see table below) 12, 6,6 1,8,4 2,1 13,2,3 36,5 Identification of excess value: - Contracts and customer relationships 1,7 9, 1,1 1,4,8 7,9,3 31,2 Computer software and rights Fair value of tangible fixed assets Deferred tax -1,6-2,3 -,3 -,2 -,1-2,2 -, -6,7 Net excess value 9,1 6,8,8 1,2,7 5,7,2 24,4 Fair value of net assets acquired, excluding goodwill 21,1 13,3 2,1 1,6 2,8 18,9,1 6, Controlling ownership interests 21,1 13,3 2,1 1,6 2,8 18,9,1 6, Non-controlling ownership interest Goodwill 2,9 29,1 9,9 2,8-21,1,5 66,3 1) Consideration that is dependent on future results is recognised as an obligation based on the fair value at the time of acqusition. Assets and liabilities related to the acquisitions in 212 are as follows: (amounts in ) IT Partner Finnmark BMK UAB Nworks A/S AS OU BMK UAB AS KSC UAB Total Deferred tax assets -,2 - -, - -,2 Goodwill - -, ,5 Computer software and rights,3,9,, ,2 Other intangible assets - - -,, - -, Property, plant and equipment 12,3 24,3 1,5,1,6 1,9,1 4,8 Inventories 6,7 5,5 1,6,1 1,1 2,6,9 18,5 Advances to suppliers 1,6 -,,, - - 1,6 Trade receivables 2,3 7,3 3,5 1,1 2,6 4,7 1,5 4,9 Provisions for losses on receivables - -, -, ,3 Other current receivables and investments,1 3,,7,1,1,3-4,3 Cash and cash equvalents 1,4 3,,5,4,4 1,,2 16, Deferred tax liabilities -, , ,2 Other long-term liabilities and provisions -, ,1 Interest-bearing long-term liabilities -3,1 - -1, ,8 Trade payables -21,3-3,2-1,9 - -2,5-2,6-2,4-33,8 Current interest-bearing liabilities - -12,2 - -, ,2 Short terms Interest-bearing leasing/borrowing liabilities -1,9-14, ,5 Other current liabilities and provisions -4, -7,7-2,7 -,4 -,1-3, ,6 Net assets acquired 12, 6,6 1,8,4 2,1 13,2,3 36,5 NG Infra Kauno Total Storage Solutions Net cash payments in connection with the acquisitions are as follows: (amounts in ) IT Partner Finnmark BMK UAB Nworks A/S AS OU BMK UAB AS KSC UAB Total Considerations and costs in cash and cash equivalents 24, 38,6 12,5 4,4 2,8 4,,9 123,2 Cash and cash equivalents in acquired companies -1,4-3, -,5 -,4 -,4-1, -,2-16, Net cash payments for the acquisitions 22,6 35,6 12, 4, 2,5 3,,6 17,2 NG Infra Kauno Total Storage Solutions If all acquired entities had been consolidated from 1 January 211, the consolidated proforma income statements for 212 would show revenue and profit as follows: Full year Full year (amounts in ) Operating revenue 21 45, ,4 Operating profit/loss (EBIT) 557,4 662,7 17

18 NOTE 4 Related parties Note 25 in the Annual Report for 211 provides details of related party transactions. From January 212 Atea has entered into an agreement to lease premises from Thrust IT A/S in Denmark. Thrust IT A/S is controlled by Ib Kunøe who is the Board Chairman and the largest shareholder of Atea ASA through the company Systemintegration ApS. The rent for 212 is.8 and will be adjusted according to the consumer price index the following years. The agreement can be cancelled by both parties from 1 January 217. NOTE 5 Paid-in equity Number of shares Issued Treasury shares Share capital Issued Treasury shares Share premium Total paid-in equity (Whole figures) (Whole figures) () () () () As of 1 January ,5 -,7 73, ,6 Issue of Share capital *) , - 35,5 49,5 As of 31 December ,5 -,7 766, ,1 *) Issue of Share capital is related to Share options for the Management and selected employees. NOTE 6 Change in equity in the opening balance as at 1 January 211 The equity in the opening balance as of 1 January 211 has been changed due to accounting errors in previous years. The errors are due to setup and tailoring of the local ERP-system in Atea Finland, resulting in overstated inventory. Actions have been taken to improve the systems and routines, and both automatic and manual controls have been strengthened. Due to the fact that the errors have accumulated over multiple years, it has been impracticable to allocate the period-specific effects of the errors to specific years. As a consequence, the opening balance sheet of the comparison financial period to 31 December 211 has been restated to reflect adjustments relating to all prior years. The net of tax effect and change in equity in the opening balance as of 1 January 211 is 16.. The error has been considered as material due to the effects in the Operating profit/loss accounts in the Operating segment information for Finland (note 2). 18

19 Holding Atea ASA Brynsalleen 2 Box 6472 Etterstad NO-65 Oslo Tel: Org.no investor@atea.com Norway Atea AS Brynsalleen 2 Box 6472 Etterstad NO-65 Oslo Tel: Org.no info@atea.no Sweden Atea AB Kronborgsgränd 1 Box 18 SE Kista Tel: +46 () Org.no info@atea.se Denmark Atea A/S Lautrupvang 6 DK-275 Ballerup Tel: Org.no info@atea.dk Finland Atea Oy Jaakonkatu 2 PL 39 FI-1621 Vantaa Tel: () Org.no customercare@atea.fi Lithuania Atea UAB Laisves pr. 3 LT-4215 Vilnius Tel: Org.no info@atea.lt Latvia Atea SIA Unijas iela 11a LV-139 Riga Tel: Org.no info@atea.lv Estonia Atea OÜ Tondi 17 EE Tallinn Tel: Org.no info@atea.ee Atea Logistics AB Smedjegatan 12 Box 159 SE Växjö Tel: +46 () Org.no customer.care@atea.se Atea Global Services SIA Skanstes Street 5 LV-113 Riga Tel: Org.no rigainfo@atea.dk