Q Interim Report January-September 2012

Transcription

1 Q Interim Report January-September

2 We have continued our aggressive approach to the market in Q3 and our revenue has grown at more than twice the market rate. This aggressive approach has affected our product margins, but we have been able to manage our cost base so that our EBITDA is improving year over year. Highlights Q Revenue of MNOK 4,450.5, up 8.2% y-o-y EBITDA of MNOK 157.5, up 5.0% y-o-y EBITDA margin of 3.5%, down from 3.6% y-o-y Cash flow of MNOK 39.5, up MNOK y-o-y Acquisition of Total Storage Solutions in Norway Claus Hougesen, CEO of Atea. Market update The financial turmoil in Europe continued to impact the Nordic IT infrastructure market in Q As a consequence of tougher market conditions prices are under pressure, particularly in the product segment. In order to continue growing market share in the product segment, Atea has responded to the price pressure by winning some contracts with lower gross margin. Increased product revenue will be important for increased services revenue going forward. IDC s latest forecast for Atea s addressable market (Atea s Blue Box) shows growth of 3.3% in the Nordics in The forecast shows hardware growth of 4.6%, software growth of 3.3% and consulting and services growth of 1.7%. In comparison with IDC s forecasted market growth in 2012 of 3.3%, Atea achieved actual growth in constant currency of 7.5% and organic growth of 5.1% in Q in the Nordics, which shows that Atea is continuing to gain market share. Financial review Q Group Group revenue was up 8.2% from MNOK 4,112.8 in Q to MNOK 4,450.5 in Q Hardware revenue was up 5.5%, consulting and services revenue was up 12.0% and software revenue was up 15.4%. Organic growth amounted to 5.6% in constant currency, Atea is therefore continuing to gain market share. EBITDA in Q ended at MNOK 157.5, up 5.0% y-o-y despite lower earnings in the Swedish and Finnish markets, mainly as a consequence of lower hardware margins due to price pressure. Given tougher market conditions, Atea has chosen to win hardware deals and with the opportunity to offer services as well. The total gross margin for the Group was 25.4%, up from 24.8% in Q This increase combined with the revenue growth explains the EBITDA improvement. Total revenue year to date 2012 was MNOK 14,609.4, which is up 6.6% compared with the same period last year. Organic growth amounted to 5.5% in constant currency. EBITDA ended at MNOK 473.9, down from MNOK last year, representing an EBITDA margin of 3.2% versus 3.6% last year. Norway Revenue in Q was MNOK 1,505.4 which was up by 21.7% compared with Q Product revenue was up 25.1%, while consulting and services revenue was up 11.4%. Organic revenue growth in Q3 was 15.2%. Revenue from the public sector was particularly strong in Q3 2012, mainly due to deliveries of school PCs. IDC predicts growth of 3.1% in Norway in 2012, split between 3.8% for hardware, 3.7% for software and 2.1% for services, Atea is therefore continuing to gain market share in Norway. EBITDA in Q ended at MNOK 60.7, up 10.4% compared with Q and mainly reflects the increased revenue. Product margin ended at 12.6%, which was down 2.0% compared with Q due to a higher software volume with lower margins and low margin school PC sales (hardware). Organically, total operational costs increased by 5.0%. The average organic increase in workforce in Q compared with Q was 6.5%. The EBITDA margin in Q ended at 4.0% versus 4.4% last year. On 24 August, Atea signed an agreement to acquire Total Storage Solutions Norge AS who specializes in data storage and backup solutions. Total Storage Solutions Norge (TSS) has offices in Oslo, Bergen, Stavanger and Kongsberg, and has 19 employees. The company is expected to generate total revenue of MNOK 70 and EBITDA of MNOK 8 in The agreed transaction value (enterprise value) was MNOK Atea has signed a frame agreement with NAV IKT to deliver hardware and services. The agreement is valid for two years, with an option for additional two years. Atea estimates the value of the agreement to be approximately MNOK 50 per year. 2

3 Sweden Revenue reached MNOK 1,419.7 in Q3 2012, which was up 13.8% (9.5% in constant currency) compared with last year. Product revenue was up 9.8% in constant currency, mainly driven by a 40.7% increase in software revenue, while consulting and services revenue was up 8.4% in constant currency. Organically, revenue was up 9.2% in constant currency. The macro-economic climate continues to have a negative effect on hardware volumes, mainly in the private enterprise segment. In addition, the tougher market conditions are causing increased price pressure, particularly in the hardware segment. However, hardware revenue showed a 4.0% (organic 3.7%) growth compared with Q3 2011, to be explained by a high order backlog from Q2, especially within school PCs. IDC predicts growth of 3.3% in Sweden in 2012, split between 4.4% for hardware, 3.3% for software and 2.1% for services. Atea Sweden continues to gain market share. EBITDA in Q ended at MNOK 25.9 compared with MNOK 31.0 in Q The product margin ended at 13.5%, which is 0.6% below the level of last year, caused by price pressure and a less favourable product mix. The total gross margin ended at 23.6% for Q3 2012, down from 25.5% in Q Cost reduction measures initiated during Q2 with an annual effect of MNOK 60 (MNOK 15 in 2H) are proceeding according to plan. The combination of a strong order backlog and cost reductions are expected to generate Q EBITDA in line with Q4 last year, indicating an estimated full year EBITDA of MNOK 230, down from MNOK 261 in Atea was, together with five other suppliers, selected by Kammarkollegiet in their procurement process for network solutions, products and services for a large part of the public sector in Sweden. The agreement has an estimated total annual value of MNOK 347 and is valid for one year, with an option for additional three years. Atea was also, together with four other suppliers, selected by Kammarkollegiet in their procurement process for audio visual products and related services for a large part of the public sector in Sweden. The agreement has an estimated total annual value of MNOK 97.5 and is valid for one year, with an option for additional three years. Denmark Revenue in Q ended at MNOK 1,157.1, down 7.5% (2.6% in constant currency) compared with Q Product revenue was down 6.0%, while consulting and services revenue was up 8.5% in constant currency. The decline in product revenue reflects a reduction in hardware revenue. The reduction in hardware revenue is primarily a consequence of reduced PC sales related to the launch of Windows 8 in Q Organically, revenue was down 4.2% in constant currency. IDC predicts growth of 3.0% in Denmark in 2012, split between 4.3% for hardware, 3.3% for software and 1.3% for services. Atea still expects full year hardware growth in line with IDC market predictions and growth well above market expectations for services. Atea is therefore expecting to gain market share in Denmark for the full year EBITDA in Q ended at MNOK 56.6, up from MNOK 52.1 in Q The product margin ended at 10.3% in line with Q Total gross margin ended at 23.6% compared with 20.8% for Q3 2011, reflecting an increased margin within services. Organically, operational costs show an increase of 3.4% in constant currency compared to Q Workforce increased organically by 5.2% in the same period, implying that cost focus is bridging the temporary shortfalls of hardware sales. The EBITDA margin ended at 4.9% compared with 4.2% in Q Finland Revenue in Finland in Q ended at MNOK 256.4, down 16.9% (11.9% in constant currency) compared with Q Product revenue was down 14.9%, while consulting and services revenue was up 12.0% in constant currency. The reduction in hardware business reflects a weaker market in the private enterprise sector. IDC predicts growth of 3.6% in Finland in 2012, split between 6.1% for hardware, 2.8% for software and 1.2% for services. EBITDA in Q ended at MNOK 0.4, compared with MNOK 7.0 in Q The Q decline in results versus last year mainly reflects the reduction in product gross margin. The Baltics Revenue in Q was MNOK 144.9, which was up 87.5% (96.8% in constant currency) from Q Organic growth in constant currency was 27.7%, mainly due to deliveries of EU funded projects. 3

4 EBITDA in Q ended at MNOK 7.2, compared with MNOK 3.1 in Q Total gross margin was 21.4% compared with 20.9% in Q EBITDA margin ended at 5.0%, up from 4.0% in Q Outlook IDC s forecast for 2012 for Atea s addressable market in the Nordics estimates growth of 3.3%. IDC believes that growth in the hardware market in 2012 will primarily be driven by smart phones, tablets, and the delivery of school PCs in Sweden and Norway. Growth in the software market will primarily be driven by the deployment of large Windows 7 projects. There is a strong trend in the services market towards outsourcing internal IT functions to external partners, and outsourcing 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. The risks and uncertainty in the outlook primarily relate to macroeconomic developments. A macroeconomic downturn or increased macroeconomic uncertainty will result in hesitancy to commit to larger investment programmes. However, because of the relatively short lifespan of the IT infrastructure environment, postponements cannot be sustained for a longer time period. 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 in general. In the last few years, Atea has invested in high growth areas such as Collaboration, Mobility, Virtualization, Software Asset Management, Windows 7, Consumerization and Green IT. Leveraging these investments in high growth areas provides reassurance that Atea can continue to grow at a faster pace than the market in general. On 23 November 2011, Atea launched its Together Towards the Top strategy, which sets the stage for Atea s development towards The goal of the new strategy is to increase revenue to NOK 30 billion and EBITDA to NOK 1.8 billion by Implementation of key initiatives has started according to plan. Key initiatives include marketoriented 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 its profitability in the coming years. Equity and cash flow Shareholders equity as of 30 September 2012 was MNOK 3,561.2 corresponding to an equity ratio of 42.1%, down from 44.5% compared to 30 September The Group generated an operational cash flow of MNOK 39.5 in Q3 2012, which was MNOK above the corresponding quarter last year. The improvement is mainly explained by a decrease in inventory and some postponements in customer payments at the end of the second quarter which were paid in the beginning of July instead of June. A strong cash flow for the full year 2012 is still expected, driven by increased earnings and a decline in working capital in the last quarter of The working capital ratio as of 30 September 2012 was 4.1%, which is up from 3.9% as of 30 September Capital expenditure in Q amounted to MNOK These were maintenance investments related to hosting centres, Atea s internal One Infrastructure project, ERP development, equipment for employees and other office related investments. Payments relating to acquisitions amounted to MNOK The acquisition payments were related to the purchase of NG Infra in Estonia, Total Storage Solutions in Norway and earn-out payment in Sweden related to the previous acquisition of Portal AB. At the end of Q3 2012, the Group s net financial position was MNOK , down from MNOK at the end of Q Cash reserves, including unutilized credit facilities, as of 30 September 2012, were MNOK 1,

5 Shares Atea ASA had 8,653 shareholders as of 30 September 2012 compared to 8,604 as of 30 June The 10 largest shareholders as of 30 September 2012 were: Main Shareholders * Shares % Systemintegration APS ** ,46 % State Street Bank & Trust Co. Ref: OM80 *** ,82 % JPMorgan Chase Bank *** ,63 % Bank of New York Mellon *** ,73 % JPMorgan Chase Bank *** ,24 % State Street Bank & Trust Co. Ref: OM04 *** ,69 % Goldman Sachs Int. - Equity - *** ,67 % Folketrygdfondet ,67 % State Street Bank & Trust Co. Ref: OM06 *** ,65 % VPF Nordea Kapital ,56 % Other ,89 % Total number of shares ,00 % * Source: Verdipapirsentralen ** Includes shares held by Ib Kunøe *** Includes client nominee accounts As of 30 September 2012, Chairman Ib Kunøe and close associates control a total of 28.8% of the shares, including the shares held in Systemintegration ApS. Key figures Q3 Q3 YTD YTD Full year Earnings per share (NOK) * 0,78 0,75 2,24 2,75 5,96 Diluted earnings per share, adj. for effect of option progr. (NOK) * 0,77 0,74 2,22 2,71 5,90 Weighted average number of shares * Weighted average number of diluted shares * Sep Sep Dec 2011 Number of shares end of period * Net interest-bearing position (MNOK) 299,7 503,4 884,1 599,5-283,2 Cash reserve (MNOK) 1 191, , , , ,0 Working capital (MNOK) 550,0 407,8 729,1 643,7-27,9 Working capital ratio 2,9 % 2,2 % 4,1 % 3,9 % -0,1 % Equity ratio 46,1 % 43,1 % 42,1 % 44,5 % 38,0 % Number of employees * Excluding Atea ASA's number of own shares (73,601 end of Q3 2012). 5

6 Consolidated statement of comprehensive income Q3 Q3 YTD YTD Full Year (amounts in MNOK) Note Operating revenue , , , , ,8 Goods consumed 3 321, , , , ,9 Employee benefits expense excl. share based comp 778,9 695, , , ,2 Other operating expenses 192,8 175,5 578,3 569,6 762,6 EBITDA before share based compensation 2 157,5 150,0 473,9 496,2 871,1 Share based compensation 3,4 3,5 10,3 12,6 13,3 Expenses/income related to acquisition -1,6 0,8 0,3-3,0 0,0 EBITDA 155,7 145,7 463,3 486,6 857,7 Depreciation 59,2 48,1 173,3 146,7 206,4 Operating profit/(loss) (EBIT) 2 96,5 97,6 290,1 339,9 651,3 Financial income 24,4 23,8 55,8 66,5 73,0 Financial expenses 33,2 34,5 84,5 92,8 111,7 Net financial items -8,9-10,6-28,6-26,2-38,8 Profit/(loss) before tax, continued operations 87,6 86,9 261,5 313,7 612,6 Tax on continued operations 9,5 12,2 36,9 39,5 11,7 Profit/(loss) for the period from cont. operations 78,1 74,7 224,5 274,1 600,8 Other comprehensive income Currency translation differences -18,4 27,3-78,4-7,8-7,6 Forward contracts - cash flow hedging -5,0 7,6-5,3 0,7 5,2 Income tax relating to components of other comprehensive income 2,9-6,0 16,9 7,0 5,7 Other comprehensive income -20,4 28,9-66,8-0,1 3,3 Total comprehensive income for the period 57,6 103,6 157,7 274,0 604,1 Of which non-controlling interests 0,1 0,1 1,5 1,3 7,8 6

7 Consolidated statement of financial position (amounts in MNOK) Note 30 Sep Sep Dec 2011 ASSETS Property, plant and equipment 251,6 181,9 195,9 Deferred tax assets 503,2 469,8 503,2 Goodwill 2 849, , ,8 Other intangible assets 319,9 314,8 334,8 Retirement benefit plans 0,0 4,1 0,0 Other long-term receivables 3 2,2 37,0 33,4 Non-current assets 3 926, , ,0 Inventories 608,4 608,0 570,0 Trade receivables 3 077, , ,4 Other receivables 685,3 616,9 633,9 Other financial assets 0,4 13,2 12,9 Cash and cash equivalents 162,0 92,8 485,4 Current assets 4 533, , ,6 Total assets 8 460, , ,7 EQUITY AND LIABILITIES Share capital and premium , , ,6 Other unrecognised reserves -66,8-94,0-0,1 Retained earnings 1 878, , ,4 Equity attributable to shareholder of Atea ASA 3 561, , ,9 Non-controlling interests 0,0 1,8 3,5 Equity 3 561, , ,4 Interest-bearing long-term liabilities 26,9 2,1 14,5 Other long-term liabilities 33,2 78,0 66,0 Retirement benefit obligations 5,1 20,4 7,3 Deferred tax liabilities 171,9 174,6 173,0 Non-current liabilities 237,0 275,1 260,7 Trade payables 2 028, , ,3 Interest-bearing current liabilities 1 019,2 724,1 218,2 VAT, taxes and government fees 388,8 349,8 594,8 Provisions 60,8 112,2 132,3 Other current liabilities 1 161, , ,8 Other financial liabilities 3,1 0,0 0,0 Current liabilities 4 662, , ,5 Total liabilities 4 899, , ,3 Total equity and liabilities 8 460, , ,7 7

8 Consolidated statement of changes in equity (amounts in MNOK) 30 Sep Sep 2011 Equity at start of period 3 885, ,2 Currency translation differences -63,0-0,8 Forward contracts - cash flow hedging -3,8 0,7 Other comprehensive income -66,8-0,1 Profit/loss for the year 224,5 274,0 Total recognised income/expense for the year 157,7 274,0 Changes related to own shares - -3,8 Employee share-option schemes 6,8 14,9 Dividends paid -500,4-198,6 Issue of share capital 21,1 144,6 Non-controlling interests from acquistions -9,4-23,1 Equity at end of period 3 561, ,1 Consolidated statement of cash flow Q3 Q3 YTD YTD (amounts in MNOK) Cash earnings 84,8 140,5 414,8 465,7 Changes in work. cap./accr. items -45,3-298,5-732,6-462,4 Cash flow from operations 39,5-158,0-317,8 3,3 Capital expenditures -48,6-53,2-156,2-124,3 Purch./sale of subs./assoc./investm. -47,9-6,0-154,9-69,4 Cash flow from investments -96,5-59,2-311,1-193,7 Change in debt 196,2 257,2 791,7-57,3 Equity transactions 0,4 0,0-479,4-57,8 Cash flow from financing 196,6 257,2 312,3-115,1 Change in cash 139,6 40,0-316,6-305,5 Cash, start of period 20,9 50,8 485,4 404,0 Cash, end of period 162,0 92,8 162,0 92,8 Currency effects on cash and cash equivalents 1,4 2,1-6,9-5,7 8

9 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 for nine months ended 30 September 2012 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 2011, 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 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 1000 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 these geographical areas are evaluated on a regular basis by Atea s senior management. In addition the Group operates Shared Services: Atea Logistics and Atea Services & Software. 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. 9

10 Revenue Q3 Q3 YTD YTD Full Year (amounts in MNOK) % change % change 2011 Norway 1 505, ,1 21,7% 4 431, ,3 17,7% 5 809,3 Sweden 1 419, ,2 13,8% 4 603, ,8 2,9% 6 515,9 Denmark 1 157, ,3-7,5% 3 987, ,9-0,2% 5 766,2 Finland 256,4 308,8-16,9% 1 182, ,6-2,8% 1 717,6 The Baltics 144,9 77,3 87,5% 450,4 270,8 66,3% 436,1 Group Shared Services 962,2 952,1 1,1% 2 589, ,1-0,6% 3 635,6 Eliminations * -995,2-961, , , ,0 Atea Group 4 450, ,8 8,2% , ,5 6,6% ,8 EBITDA Q3 Q3 YTD YTD Full Year (amounts in MNOK) % change % change 2011 Norway 60,7 55,0 10,4% 169,8 153,3 10,8% 257,8 Sweden 25,9 31,0-16,3% 114,3 147,4-22,4% 261,0 Denmark 56,6 52,1 8,7% 157,5 155,3 1,5% 285,0 Finland 0,4 7,0-94,7% 5,9 28,6-79,4% 47,9 The Baltics 7,2 3,1 132,0% 22,5 10,5 114,5% 20,0 Group Shared Services 13,7 8,7 58,1% 27,1 23,7 14,4% 31,0 Group cost -7,1-6,9-3,0% -23,3-22,6-2,9% -31,7 EBITDA 157,5 150,0 5,0% 473,9 496,2-4,5% 871,1 EBITDA margin (%) 3,5% 3,6% 3,2% 3,6% 4,3% EBIT Q3 Q3 YTD YTD Full Year (amounts in MNOK) % change % change 2011 Norway 47,8 42,1 13,5% 128,8 118,2 8,9% 205,2 Sweden 18,3 25,7-28,8% 89,9 129,6-30,7% 237,0 Denmark 29,4 27,1 8,4% 73,4 81,9-10,3% 183,5 Finland -4,2 2,1-8,3 15,6 28,5 The Baltics 2,4 0,6 287,6% 11,1 0,1 5,8 Group Shared Services 12,2 7,8 56,5% 22,8 21,0 8,5% 27,0 Group cost -9,5-8,0-19,7% -27,6-26,5-4,1% -35,5 Operating profit/loss (EBIT) 96,5 97,6-1,1% 290,1 339,9-14,7% 651,3 Financial income 24,4 23,8 2,2% 55,8 66,5-16,1% 73,0 Financial expenses 33,2 34,5-3,6% 84,5 92,8-9,0% 111,7 Profit/(loss) before tax, continued operations 87,6 86,9 0,7% 261,5 313,7-16,6% 612,6 Revenue and contribution/margin Q3 Q3 YTD YTD Full Year (amounts in MNOK) % change % change 2011 Product revenue 3 434, ,8 7,1% , ,1 6,1% ,4 Consulting revenue 1 015,7 906,9 12,0% 3 175, ,8 8,2% 4 125,7 Total revenue 4 450, ,8 8,2% , ,5 6,6% ,8 Gross contribution 1 129, ,2 10,6% 3 637, ,9 6,0% 4 854,9 Product margin 13,0% 13,6% 13,1% 13,8% 13,3% Consulting and services margin 67,3% 64,5% 67,4% 66,4% 65,6% Gross margin 25,4% 24,8% 24,9% 25,0% 24,0% Quarterly revenue and contribution/margin Q1 Q2 Q3 Q4 Q1 Q2 Q3 (amounts in MNOK) Product revenue 3 653, , , , , , ,8 Consulting and services revenue 994, ,6 906, , , , ,7 Total revenue 4 647, , , , , , ,5 Gross contribution 1 180, , , , , , ,2 Product margin 14,0% 13,7% 13,6% 12,5% 13,9% 12,5% 13,0% Consulting and services margin 67,3% 67,2% 64,5% 63,6% 68,7% 66,4% 67,3% Gross margin 25,4% 24,9% 24,8% 21,8% 25,8% 23,7% 25,4% Note: All EBITDA figures are before share-based compensation and expenses/income related to acquisition. *Most of Atea s internal sales are related to Group Shared Services, which consists of Atea Logistics and Atea Services & Software. 10

11 NOTE 3 Business combinations The Group has acquired five companies during the first nine months of The new units have been integrated into various units in the Atea Group until YTD This means that it is not appropriate or practical to show revenues and earnings for the sum total of the acquired units for the period from the date of acquisitions until YTD UAB BMK 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. 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. 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. 11

12 Breakdown of the acquired net assets and goodwill in 2012 is as follows: (amounts in MNOK) BMK UAB Kauno BMK UAB NG Infra OU Nworks A/S IT Partner Finnmark AS Total Storage Solutions AS Total Acquisition date 14 Mar Jul Jun Mar Jun Sep 2012 Country Lithuania Lithuania Estonia Denmark Norway Norway Voting rights/ownership interest 100,00% 100,00% 100,00% 100,00% 100,00% 100,00% Acquisition cost: Consideration 1) 24,0 2,8 4,4 38,6 12,5 40,0 122,4 Adjustment of cost price Liabilities assumed , ,8 Direct costs associated with acquisitions Fair value of shares issued Total acquisition cost 24,0 2,8 4,4 42,5 12,5 40,0 126,2 Net assets acquired at carrying value of equity (see table below) 12,0 2,1 0,4 6,6 1,8 13,2 36,2 Identification of excess value: - Contracts and customer relationships 10,7 0,8 1,4 9,0 1,1 7,9 30,9 Computer software and rights Fair value of tangible fixed assets Deferred tax -1,6-0,1-0,2-2,3-0,3-2,2-6,7 Net excess value 9,1 0,7 1,2 6,8 0,8 5,7 24,2 Fair value of net assets acquired, excluding goodwill 21,1 2,8 1,6 13,3 2,1 18,9 59,9 Controlling ownership interests 21,1 2,8 1,6 13,3 2,1 18,9 59,9 Non-controlling ownership interest Goodwill 2,9-2,8 29,1 9,9 21,1 65,8 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 2012 are as follows: (amounts in MNOK) BMK UAB BMK UAB OU A/S AS AS Total Deferred tax assets - 0,0-0, ,2 Goodwill ,5-0,5 Computer software and rights 0,3-0,0 0,9 0,0-1,2 Other intangible assets - 0,0 0, ,0 Property, plant and equipment 12,3 0,6 0,1 25,1 1,5 1,9 41,4 Inventories 6,7 1,1 0,1 5,5 1,6 2,6 17,5 Advances to suppliers 1,6 0,0 0,0-0,0-1,6 Trade receivables 20,3 2,6 1,1 7,3 3,5 4,7 39,4 Provisions for losses on receivables ,0-0,3 - -0,3 Other current receivables and investments 0,1 0,1 0,1 2,3 0,7 0,3 3,6 Cash and cash equvalents 1,4 0,4 0,4 3,0 0,5 10,0 15,8 Deferred tax liabilities -0,1-0, ,2 Other long-term liabilities and provisions -0, ,1 Interest-bearing long-term liabilities -3, ,7 - -4,8 Trade payables -21,3-2,5 - -3,2-1,9-2,6-31,4 Current interest-bearing liabilities ,9-12, ,2 Short terms Interest-bearing leasing/borrowing liabilities -1, , ,5 Other current liabilities and provisions -4,0-0,1-0,4-7,7-2,7-3,8-18,6 Net assets acquired 12,0 2,1 0,4 6,6 1,8 13,2 36,2 Kauno NG Infra NWorks IT Partner Finnmark Total Storage Solutions Net cash payments in connection with the acquisitions are as follows: (amounts in MNOK) BMK UAB BMK UAB OU A/S AS AS Total Considerations and costs in cash and cash equivalents 24,0 2,8 4,4 38,6 12,5 40,0 122,4 Cash and cash equivalents in acquired companies -1,4-0,4-0,4-3,0-0,5-10,0-15,8 Net cash payments for the acquisitions 22,6 2,5 4,0 35,6 12,0 30,0 106,6 Kauno NG Infra NWorks IT Partner Finnmark Total Storage Solutions If all acquired entities had been consolidated from 1 January 2011, the consolidated income statement for the 9 months ended 30 September 2012 would show revenue and profit as follows: YTD YTD (amounts in MNOK) Operating revenue , ,7 Operating profit/loss (EBIT) 289,9 334,1 12

13 NOTE 4 Related parties Note 25 in the Annual Report for 2011 provides details of related party transactions. From January 2012 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 2012 is MNOK 0.8 and will be adjusted according to consumer price index the following years. The agreement can be cancelled by both parties from 1 January NOTE 5 Paid-in equity Number of shares Share capital Issued Treasury shares Issued Treasury shares Share premium Total paid-in equity (Whole figures) (Whole figures) (MNOK) (MNOK) (MNOK) (MNOK) As of 1 January ,5-0,7 730, ,6 Issue of Share capital *) ,8-14,3 21,1 As of 30 September ,3-0,7 745, ,7 *) Issue of Share capital is related to Share options for the Management and selected employees. 13

14 Holding Atea ASA Brynsalleen 2 Box 6472 Etterstad NO-0605 Oslo Tel: Org.no investor@atea.com Norway Atea AS Brynsalleen 2 Box 6472 Etterstad NO-0605 Oslo Tel: Org.no info@atea.no Sweden Atea AB Kronborgsgränd 1 Box 18 SE Kista Tel: +46 (0) Org.no info@atea.se Denmark Atea A/S Lautrupvang 6 DK-2750 Ballerup Tel: Org.no info@atea.dk Finland Atea Oy PL 39 FI Vantaa Tel: (0) Org.no customercare@atea.fi Lithuania Atea UAB Laisves pr. 3 LT Vilnius Tel: Org.no info@atea.lt Latvia Atea SIA Unijas iela 11a LV-1039 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 (0) Org.no customer.care@atea.se Atea Services & Software SIA Skanstes Street 50-K5 LV-1013 Riga Tel: Org.no inforiga@atea.com