Q Interim Report January-June 2013

Transcription

1 Q2 213 Interim Report January-June 213 I am pleased to see a continued strong performance and double digit growth rates in the software and services segments. Tough market conditions in the hardware market however had a negative effect on our EBITDA in Q Claus Hougesen CEO of Atea

2 Highlights Revenue of NOK 5,51.8 million, up 3.% y-o-y EBITDA of NOK 14.4 million, down 9.% y-o-y EBITDA margin of 2.6%, down from 2.9% y-o-y Operational cash flow of NOK million, up from NOK 64.2 million y-o-y Paid dividend of NOK 5.5 per share, up from NOK 5. y-o-y Raised 5-year bank loan of DKK 5 million and issued 5-year bonds of NOK 3 million Revenue EBITDA Cash flow (YTD) 8, 6, 5,34 4,451 6,321 5,85 5, , , , Key figures Q2 Q2 H1 H1 Full year Operating revenue () 5 51, , , ,9 2 93,3 Gross margin (%) 24,3 23,7 24,7 24,7 24,4 EBITDA () * 14,4 154,3 281,3 317,5 824,1 EBITDA margin (%) 2,6 2,9 2,7 3,1 3,9 EBIT () 53,2 91,8 121,8 193,5 559,7 Earnings per share (NOK) **,38,67,9 1,46 5,8 Diluted earnings per share (NOK) **,38,66,9 1,45 5,4 Operating cash flow () 158,2 64,2-65,9-357,3 812,4 Free cash flow () 11,2 7,3-2, -464,9 565,5 3 Jun Jun Jun Jun Dec 212 Net financial position () -772,8-844,3-772,8-844,3 49,3 Liquidity reserve () *** 1 189, 1 12, , 1 12, ,6 Working capital () 275,7 67, 275,7 67, -57, Working capital ratio (%) 1,3 2,9 1,3 2,8 -,2 Equity ratio (%) 36,8 38,2 36,8 38,2 38,9 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 Q2 213) *** Limited by 2.5 debt covenant ratio (net debt/last twelve months EBITDA) 2

3 Market update The financial turmoil in Europe continued to impact the Nordic IT infrastructure market in Q The market has remained weak, and margins have been under pressure. This is particularly the case in the hardware segment where demand for servers and PCs has declined. According to IDC, Atea s target market (the Blue Box) grew.4% in the Nordics in Q The hardware market declined by 4.1%, software grew 4.6% and services grew 3.2%. In comparison with IDC s estimated market growth of.4% in Q2 213, Atea achieved growth in constant currency of 1.7% and organic growth of.4% in the Nordics. In H1 213, Atea s target market (the Blue Box) declined by.2% in the Nordics. Atea achieved growth in constant currency of 3.6% and organic growth of 2.4% in the Nordics, indicating that Atea has gained market share. Financial review Q2 and first half 213 Group Group revenue was up 3.% (up 1.3% in constant currency) from NOK 5,339.7 million in Q2 212 to NOK 5,51.8 million in Q Hardware revenue was down 3.4%, software revenue was up 1.5% and services revenue was up 1.1%. Organic revenue was down.3% in constant currency. The drop in hardware revenue reflects tougher market conditions in particular in the PC and server segments. EBITDA in Q2 213 ended at NOK 14.4 million, down 9.% y-o-y. The reason for the decline in EBITDA is lower hardware sales and lower hardware margin as a consequence of the challenging market conditions. The decline in the hardware segment was somewhat compensated for by strong performances in the software and services segments. The total gross margin for the Group was 24.3%, up from 23.7% in Q2 212, mainly as a consequence of a higher share of services revenue. In light of the market development, Atea will continue to focus on costs and has initiated actions in order to decrease the cost base going forward. Group revenue in H1 213 was NOK 1,586.6 million, up 4.2% (up 3.4% in constant currency) compared with the same period last year. Hardware revenue was down 2.4%, software revenue was up 16.7% and services revenue was up 8.7%. Organic growth in constant currency was 1.7%. EBITDA in H1 213 ended at NOK million, down 11.4% y-o-y, reflecting lower hardware revenue and lower hardware margin in a tough market environment. 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 1,8 1,6 1,4 1,2 1, ,4 1,2 1, ,683 2, HW revenue and growth -9,5% +5,5% -1,4% 3,941 3,566 2,897 2,856 2,842 2,744 Q3 Q4 Q1 Q2 +15,4% 63 Comparable Quarter SW revenue and growth +8,1% 1,389 1, Latest Quarter 1,17-3,4% 1,53 1,385 Q3 Q4 Q1 Q2 +12,% 1,16 Comparable Quarter 1,19 1, ,5% Latest Quarter Services revenue and growth +5,3% +1,5% 1,226 1,46 1,121 1,113 Q3 Q4 Q1 Q2 Comparable Quarter +7,2% Latest Quarter +1,1% 3

4 Norway Revenue in Q2 213 was NOK 1,555.4 million, up 2.% compared with Q Hardware revenue was up.2%, software revenue was down 4.9%, while services revenue was up 11.3%. Organic revenue decreased by.7% in a market which, according to IDC, declined by 1.%. Organic hardware revenue decreased by 3.1% compared with a market which was down 7.4%. Organic software revenue declined by 5.3% in a market which grew 3.6%. The decrease in software revenue is seasonal. Organic services revenue growth was 8.4% compared with a market which increased by 3.7%. Services show a positive development as a result of increased focus. Atea in Norway continues to gain market share. 2,5 2, 1,5 1,524 1,55 Revenue 1,922 1,435 1, EBITDA Revenue in H1 213 was NOK 2,99.6 million, up 2.2% compared with the same period last year. Hardware revenue was down 4.6%, software revenue was up 14.7% and services revenue was up 11.2%. Organic revenue was down.1% in a market which, according to IDC, decreased by 1.2%. EBITDA in H1 213 ended at NOK 85.4 million, compared with NOK 19.1 million last year, reflecting lower hardware revenue and a lower hardware margin , 5 EBITDA in Q2 213 ended at NOK 52.1 million, compared with NOK 57.5 million in Q Product margin ended at 13.4%, down from 13.7% in Q2 212, influenced by increased public deliveries in Q The total gross margin ended at 28.5%, up from 27.3% in Q2 212, mainly due to an increased share of services revenue. Organic growth in operational costs of 5.% reflects organic growth in the average workforce of 88 employees, mainly in services. EBITDA margin in Q2 213 ended at 3.3% versus 3.8% last year. 4

5 Sweden Revenue in Q2 213 ended at NOK 2,13.3 million, up 23.7% (up 18.4% in constant currency) compared with last year. Hardware revenue was up 4.9%, software revenue was up 42.4%, while services revenue was up 12.2% in constant currency. Organic revenue in constant currency increased by 16.7% in a market which, according to IDC, was flat. Organic growth in hardware revenue of 4.1% compared with a market which was down 5.% was driven by particularly strong revenue growth in the public sector. Organic software revenue increased by 41.9% compared with market growth of 5.6%. Atea has a strong position within license sale and is winning many new cases. Organic services revenue growth was 7.3% compared with a market which increased by 3.3%. Atea in Sweden continues to gain market share in all market segments. 2,5 2, 1,5 1,722 1,42 Revenue 2,34 1,785 2, EBITDA Revenue in H1 213 was NOK 3,914.9 million, up 22.9% (up 18.9% in constant currency) compared with the same period last year. Hardware revenue was up 11.%, software revenue was up 43.% and services revenue was up 9.8% in constant currency. Organic revenue was up 17.4% in a market which, according to IDC, decreased by 1.4%. EBITDA in H1 213 ended at NOK 91.4 million, compared with NOK 88.4 million last year, reflecting increased revenue , 5 EBITDA in Q2 213 ended at NOK 44.8 million compared with NOK 39.5 million in Q Product margin ended at 11.4%, down from 12.6% in Q2 212 as Atea has successfully won a number of large public deals with lower than average margins. The services margin ended at 58.6% compared with 62.2% in Q The decrease in the services margin is a result of increased use of subcontractors on a number of projects. The total gross margin ended at 2.8% for Q2 213, down from 23.% in Q EBITDA margin ended at 2.1% versus 2.3% last year. 5

6 Denmark Revenue in Q2 213 ended at NOK 1,354.8 million, down 1.9% (down 11.3% in constant currency) compared with last year. Hardware revenue was down 14.3%, software revenue was down 14.2% due to seasonality, while services revenue was up.2% in constant currency. Organic revenue in constant currency decreased by 11.3%. The decline in hardware revenue mainly reflects reduced activities in the private sector EBITDA According to IDC, the market grew 1.7% in Denmark in Q2 213, split between -.4% for hardware, 4.3% for software and 3.% for services, indicating that Atea is losing market share. 2, 1,8 1,6 1,4 1,2 1, ,521 1,157 Revenue 1,742 1,332 1,355 2 Revenue in H1 213 was NOK 2,686.5 million, down 5.1% (down 4.2% in constant currency) compared with the same period last year. Hardware revenue was down 9.%, software revenue was up 5.1% and services revenue was up 1.3% in constant currency. Organic revenue was down 4.6% in a market which, according to IDC, increased by 1.4%. EBITDA in H1 213 ended at NOK 92.6 million, compared with NOK 11. million last year, reflecting lower hardware revenue and a lower hardware margin. EBITDA in Q2 213 ended at NOK 36.2 million, compared with NOK 44.5 million in Q The product margin ended at 9.8% compared with 1.2% in Q The tough market conditions are causing increased price pressure on hardware. The services margin increased to 64.9% from 6.4% in Q The increase in margin was due to less use of subcontractors. The total gross margin ended at 22.5% for Q2 213, up from 2.5% in Q Total EBITDA margin ended at 2.7% compared with 2.9% last year. The overall achievement was lower than expected, but due to a promising backlog the performance is expected to improve going forward. 6

7 Finland Revenue in Q2 213 ended at NOK 34.7 million, down 17.2% (down 18.1% in constant currency) compared with last year. Hardware revenue was down 16.4%, software revenue was down 22.1%, while services revenue was down 8.2% in constant currency. Organic revenue in constant currency declined by 18.1% in a market which, according to IDC, increased by.6%. The decline in revenue was caused by strong competition in both the private and the public sector. The Baltics Revenue in Q2 213 was NOK million, down 7.8% (down 8.4% in constant currency) compared with last year. Organic revenue in constant currency declined by 17.3%. The revenue in Q2 213 has been affected by delayed public spending due to a temporary macroeconomic uncertainty as a consequence of the potential adoption of the Euro in Lithuania in the near future Revenue EBITDA in Q2 213 ended at NOK 3.9 million, compared with NOK 4.7 million in Q The decline in revenue was somewhat compensated for by a higher hardware margin and lower operational costs. Gross margin ended at 17.1%, up from 15.7% in Q Revenue EBITDA in Q2 213 ended at NOK 8.3 million, compared with NOK 8.4 million in Q The decline in hardware revenue was compensated for by a higher hardware margin than last year and a higher share of services revenue. Total gross margin ended at 23.% compared with 18.% in Q EBITDA EBITDA Revenue in H1 213 was NOK million, down 17.4% (down 16.9% in constant currency) compared with the same period last year in a market which, according to IDC, increased by 1.5%. EBITDA in H1 213 ended at NOK 8.8 million, compared with NOK 5.5 million last year. Revenue in H1 213 was NOK million, down 2.4% (down 1.7% in constant currency) compared with the same period last year. EBITDA in H1 213 ended at NOK 12. million, compared with NOK 15.2 million last year, reflecting lower hardware revenue. 7

8 Equity and cash flow Shareholders equity as of 3 June 213 was NOK 3,524.3 million, corresponding to an equity ratio of 36.8%, down from 38.2% compared with 3 June 212. The Group generated an operational cash flow of NOK million in Q2 213, which was NOK 94. million above the corresponding quarter last year. This is primarily explained by working capital improvements in the relationship between trade receivables and trade payables. The working capital ratio as of 3 June 213 was 1.3%, down from 2.8% as of 3 June 212. Capital expenditures in Q2 213 amounted to NOK 57. million and relate to general maintenance investments, including further development of internal systems and investments in the Group s hosting centres. At the end of Q2 213, the Group s net financial position was NOK million, down from NOK million at the end of Q The change in net financial position includes the effect of the 212 dividend payout on 14 May 213 of NOK million, which corresponds to NOK 5.5 per share. Shares Atea ASA had 7,895 shareholders as of 3 June 213 compared with 8,181 as of 31 March 213. The 1 largest shareholders as of 3 June 213 were: Main Shareholders * Shares % Systemintegration ApS ** 28,612, % State Street Bank & Trust Co. Ref: OM8 *** 6,967, % JPMorgan Chase Bank A/C Columbia Wanger *** 3,617, % JPMorgan Chase Bank Nordea Treaty Acct *** 3,289, % State Street Bank & Trust Co. Ref: OM4 *** 2,787, % The Bank of New York Mellon *** 2,667, % Skandinaviske Enskilda Banken A/S *** 2,44, % JPMorgan Chase Bank Special Treaty Lending *** 2,253, % Odin Norge 1,964, % State Street Bank & Trust Co. Ref: OM6 *** 1,671, % Other 45,866, % Total number of shares 12,138,16 1. % * Source: Verdipapirsentralen ** Includes shares held by Ib Kunøe *** Includes client nominee accounts As of 3 June 213, Chairman Ib Kunøe and close associates controlled a total of 28.3% of the shares, including the shares held in Systemintegration ApS. Liquidity reserves, including unutilized credit facilities, as of 3 June 213, were NOK 1,189. million. On the basis of Atea s strong cash flow performance and deleveraged balance sheet, the company conducted a thorough review of its financing strategy over the last period in order to create maximum value for its shareholders while maintaining a robust capital structure. Atea has historically been financed through short-term bank facilities only. In order to decrease the dependency on such short-term financing and diversify the sources of financing, Atea concluded to raise longterm bank debt and bonds in addition to its existing facilities. Based on this conclusion, Atea raised a DKK 5 million, 5-year non-amortizing bank loan from Nordea. In addition, Atea has issued a total of NOK 3 million of senior unsecured bonds with 5-year maturity in the Norwegian bond market. The bank loan and the bonds have a covenant limiting the Leverage Ratio (net interest bearing debt/ebitda) to less that 2.5 at quarter-end. Please see note 8 for further information. 8

9 Outlook IDC's latest forecast for the second half of 213 for Atea's Blue Box in the Nordics shows growth of 3.7%. The services market is expected to grow by 4.2% and the software market by 5.7%. The hardware market is expected to improve substantially from a decline of 4.5% in H1 213 to growth of 2.7% in H2 213 IDC believes that the hardware market in the second half of 213 will be driven by continued decline in the PC and server markets, while networks, smartphones and tablets will grow. This is supported by the ongoing shift in the client market, where the use of desktop PCs is declining, the use of laptop PCs is stagnating, and the use of smartphones and tablets is increasing. Growth in the product market will be driven by a gradual increase in Windows 8 projects and the new touchscreen products related to this that are being launched in H Atea s current view on the development in the hardware market in H2 213 is more conservative than IDC s expectations, as Atea is still experiencing prolonged sales processes with the customers. The outsourcing of internal IT functions to external partners represents a strong trend in the services market, particularly the outsourcing of client management. This trend is being reinforced by increasing complexity in the client environment, with more and new types of equipment, more operating systems and programs, as well as increased demand for access and availability. Atea is well positioned for further growth in this area. 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 217. 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. Key initiatives in the strategy 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 expects to gain market shares and improve 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 monitor the development during 213 and will revisit the goal later this year. The uncertainty in the outlook primarily relates to macroeconomic developments. A macroeconomic downturn or increased uncertainty may result in hesitancy to commit to large investment programs. However, because of the relatively short lifespan of the IT infrastructure environment, investments cannot be postponed for longer periods of time. 9

10 Consolidated statement of comprehensive income Q2 Q2 H1 H1 Full year Note Operating revenue 2 5,51.8 5, , , ,93.3 Goods consumed 4, ,74.2 7, , ,832.2 Employee benefits expense excl. share based comp. 1, , ,85.3 3,58.6 Other operating expenses EBITDA before share based compensation Share based compensation Expenses/income related to acquisition EBITDA Depreciation and amortisation Operating profit/loss (EBIT) Financial income Financial expenses Net financial items Profit/loss before tax, continued operations Tax on continued operations Profit/loss for the period from continued operations Other comprehensive income Remeasurement of defined benefit obligation 1, Income tax OCI relating to items that will not be reclassified to profit or loss 1, Items that will not be reclassified subsequently to profit or loss Currency translation differences Forward contracts - cash flow hedging Income tax OCI relating to items that may be reclassified to profit or loss Items that may be reclassified subsequently to profit or loss Other comprehensive income Total comprehensive income for the period Of which non-controlling ownership interests

11 Consolidated statement of financial position Note 3 Jun Jun Dec 212 ASSETS Property, plant and equipment Deferred tax assets 1, Goodwill 3,1.7 2, ,832.5 Other intangible assets Other long-term receivables Non-current assets 4, , ,74.6 Inventories Trade receivables 7 3, , ,437.8 Other receivables Other financial assets Cash and cash equivalents Current assets 5, ,68.6 5,735.5 Total assets 9, ,35.5 9,81.1 EQUITY AND LIABILITIES Share capital and premium 5 1, , ,778.1 Other unrecognised reserves Retained earnings 1,6 1, , ,18.7 Equity attributable to shareholder of Atea ASA 3, ,456. 3,815.8 Non-controlling interests... Equity 3, ,456. 3,815.8 Interest-bearing long-term liabilities 7, Other long-term liabilities Retirement benefit obligations 1, Deferred tax liabilities Non-current liabilities 1, Trade payables 7 2, ,63. 3,616. Interest-bearing current liabilities VAT, taxes and government fees Provisions Other current liabilities 7 1, ,332. 1,358.4 Other financial liabilities Current liabilities 4, ,31.4 5,678.6 Total liabilities 6,58.1 5, ,994.3 Total equity and liabilities 9, ,35.5 9,

12 Consolidated statement of changes in equity 3 Jun Jun 212 Equity at start of period 3, ,829.4 Currency translation differences Forward contracts - cash flow hedging Remeasurement of defined benefit obligation. 1.1 Other comprehensive income Profit/loss for the period Total recognised income/expense for the year Employee share-option schemes Dividends paid Issue of share capital Non-controlling interests from acquistions Equity at end of period 3, ,456. Consolidated statement of cash flow Q2 Q2 H1 H Cash earnings Changes in work. cap./accr. items Cash flow from operations Capital expenditures Purch./sale of subs./assoc./investm Cash flow from investments Change in debt Equity transactions Cash flow from financing Change in cash Cash, start of period Cash, end of period Currency effects on cash and cash equivalents

13 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 3 June 213 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 212, 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 212 except the changes below. Changes in accounting policy and disclosures effective from 1 January 213: IAS 1 Presentations of items of other comprehensive income includes requirement to group other comprehensive income (OCI) into two categories; items that will be reclassified subsequently to profit or loss, and items that will not be reclassified to profit or loss. IAS 19 Employee benefits. The impact on the Group has been as follows: to eliminate the corridor approach and recognise all actuarial gains and losses in Other comprehensive income (OCI) as they occur; to immediately recognise all past service costs; and to replace interest cost and expected return on plan assets with a net interest amount that is calculated by applying the discount rate to the net defined benefit liability (asset). The effect of transition to IAS 19R is booked 1 January 213 and reflected in a new balance sheet at 31 December 212. The impacts of the amendments are enclosed in note 6. IFRS 13 Fair value measurement aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other IFRS standards. The amendments will not have any impacts for the Comprehensive Income or Statement of Financial Position for the Group. The Fair value measurements are enclosed in note 7. Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual profit or loss. Taxes include both tax on continued operations and taxes related to Other comprehensive income. 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. 13

14 NOTE 2 Operating segment information Atea is a complete provider of hardware and software products, as well as related consulting and services. 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 Group. 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 Q2 Q2 H1 H1 Full Year % change % change 212 Norway 1, , % 2,99.6 2, % 6,353.4 Sweden 2,13.3 1, % 3, , % 6,637.5 Denmark 1, , % 2, , % 5,729.6 Finland % % 1,67.5 The Baltics % % Group Shared Services % 1, , % 3,514.3 Eliminations * , ,64.7-3,56.5 Atea Group 5,51.8 5, % 1, , % 2,93.3 EBITDA Q2 Q2 H1 H1 Full Year % change % change 212 Norway % % Sweden % % 21. Denmark % % Finland % % 23.6 The Baltics % % 37.8 Group Shared Services % % 34.4 Group cost % % -3.2 EBITDA % % EBITDA margin (%) 2.6% 2.9% 2.7% 3.1% 3.9% EBIT Q2 Q2 H1 H1 Full Year % change % change 212 Norway % % Sweden % % Denmark % Finland % % 6. The Baltics % % 21.4 Group Shared Services % % 27.4 Group cost % % Operating profit/loss (EBIT) % % Financial income % % 76.1 Financial expenses % % Profit/(loss) before tax, continued operations % % Revenue and contribution/margin Q2 Q2 H1 H1 Full Year % change % change 212 Product revenue 4, , % 8,238. 7, % 16,51.8 Services revenue 1, , % 2, , % 4,428.1 Total revenue 5,51.8 5, % 1, , % 2,93.3 Gross contribution 1, , % 2,69.9 2, % 5,98. Product margin 12.1% 12.5% 12.4% 13.1% 12.9% Services margin 66.9% 66.4% 67.7% 67.5% 67.% Gross margin 24.3% 23.7% 24.7% 24.7% 24.4% Quarterly revenue and contribution/margin Q1 Q2 Q3 Q4 Q1 Q Product revenue 3, , , ,67.8 3, ,274.4 Services revenue 1,46.2 1, ,15.7 1,253. 1, ,225.6 Total revenue 4, , ,45.5 6,32.9 5,84.8 5,51.8 Gross contribution 1, , , ,46.7 1, ,338.6 Product margin 13.9% 12.5% 13.% 12.5% 12.7% 12.1% Services margin 68.7% 66.4% 67.3% 65.9% 68.6% 66.9% Gross margin 25.8% 23.7% 25.4% 23.1% 25.% 24.3% 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 four companies during the first half of 213. The turnover and results from acquisition date to the end of the quarter for the new units is considered to be inconsequential from a Group perspective. Exait AB The acquisition will strengthen Ateas market position in the Northern region of Sweden and scale up the service organization within this region considerably. Mobility Invest AS The acquisition of Itale AS through the acquisition of the holding company Mobility Invest AS is in line with Atea's strategy to gain a significant position in the mobile terminal market. The Group delivers both products and services in a rapidly growing market based on smartphones and tablets. Due to new information related to the cost price of the shares, the goodwill from the acquisition has been reduced by NOK 9.5 million compared to the provisional figures recognised in the financial statements for Q Prezentaciju spektras UAB The acquisition will strengthen Atea s position within audio/video in Lithuania. Onsite services business of Data Center Finland The acquisition will further strengthen the existing onsite services and will bring new customers in the SMB sector in Atea Finland. Goodwill from acquisitions The goodwill arises from a number of factors, such as expected synergies through combining a highly skilled workforce with obtaining market shares, 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 213 is as follows: Exait AB Mobility Invest AS Prezentaciju spektras UAB Data Center Finland Total Acquisition date 21 Feb Feb Mar May 213 Country Sweden Norway Lithuania Finland Voting rights/ownership interest 1.% 1.% 1.% 1.% Acquisition cost: Consideration 1) Adjustment of cost price Liabilities assumed Direct costs associated with acquisitions Fair value of shares issued Total acquisition cost Net assets acquired at carrying value of equity (see table below) Identification of excess value: - Contracts and customer relationships Computer software and rights Fair value of tangible fixed assets Deferred tax Net excess value Fair value of net assets acquired, excluding goodwill Controlling ownership interests Non-controlling ownership interest Goodwill ) 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 213 are as follows: Data Mobility Prezentaciju Center Exait AB Invest AS spektras UAB Finland Total Goodwill Computer software and rights Property, plant and equipment Inventories Advances to suppliers Trade receivables Revenues in excess of invoicing Provisions for losses on receivables Other current receivables and investments Cash and cash equvalents Non-controlling ownership interests Deferred tax liabilities Interest-bearing long-term liabilities Trade payables Current interest-bearing liabilities Short terms Interest-bearing leasing/borrowing liabilities Other current liabilities and provisions Net assets acquired Net cash payments in connection with the acquisitions are as follows: Data Mobility Prezentaciju Center Exait AB Invest AS spektras UAB Finland Total Considerations and costs in cash and cash equivalents Cash and cash equivalents in acquired companies Net cash payments for the acquisitions If all acquired entities had been consolidated from 1 January 212, the consolidated proforma income statements for YTD 213 would show revenue and profit as follows: H1 H Operating revenue 1, ,357.7 Operating profit/loss (EBIT)

18 NOTE 4 Related parties The Group has not entered into any significant agreements relating to transactions with related parties during the first half of 213. 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 At 1 January ,251,2-73,61 1, ,778.1 Issue of Share capital *) 886, At 3 June ,138,16-73,61 1, ,813.3 *) Issue of Share capital is related to Share options for the Management and selected employees. NOTE 6 Change in accounting policy due to applications of IAS 19R - Retirement benefit obligations In the consolidated interim financial statements for 213 the Group has applied IAS 19R retrospectively. Consequently, the Group has adjusted opening equity at 1 January 212 and the figures for 212 have been restated as if IAS19R had always been applied. Retirement benefit obligation Deferred tax assets Balance reported at 31 December ,834.8 Effect on application of IAS 19R Restated balance at 31 December ,815.8 Equity The effect on the Consolidated statement of Comprehensive income is as follows: There is no effect on the figures as at 3 June 213, because actuarial assumptions are collected at the year end. 212 Decrease of Employee benefits expense 2.1 Increase of tax on continuing operations -.6 Increase of profit/loss for the period from cont. operations 1.5 Other comprehensive income Remeasurement of defined benefit obligation 28. Income tax OCI relating to items that will not be reclassified to profit or loss -7.8 Increase of Other comprehensive income 2.2 Increase of Total comprehensive income for the period

19 NOTE 7 Classifications of financial instruments At 3 June 213 Loans and receivables Amortised cost Fair value 1) Financial assets Trade receivables 3, ,675.2 Other receivables 2) Derivative contracts.6.6 Cash and cash equivalents Financial liabilities Interest-bearing long-term liabilities Other long-term liabilities 3) Trade payables 2, ,779.5 Interest-bearing current liabilities Derivative contracts Other current liabilities 4) 1,445. 1,445. 1) Book value is a reasonable estimate of fair value in cases where these numbers are identical. 2) Less prepaid expenses 3) Interest not charged, discounted amortised cost at 3M NIBOR at 3 June 213 assuming an average repayment period of 1 year. 4) Less provisions for restructuring and other provisions. NOK 14.2 million is related to forward-contract regarding purchases of remaining shares from non-controlling ownership interests in Atea Baltic UAB. NOTE 8 Loans The Group has entered into new long term loan facilities in Q Unsecured bond loan, NOK 3 million The bond loan was entered into in June 213 and arranged by Norsk Tillitsmann. Maturity is in June 218. The coupon rate is 3M NIBOR plus 2.1 %.The loan is listed at the Oslo Stock Exchange and is expected to be traded from August 213. In connection with the issuance of bonds Atea has removed upstream and cross guarantees and limited pledges in favor of Nordea. Pledges on subsidiaries shares have been removed and the pledge on trade receivables has been limited to NOK 1,25 million. The pledge on trade receivables serves as security for the factoring facility of NOK 1, million. Long term bank loan, DKK 5 million The loan was entered into in June 213 and arranged by Nordea Bank, Denmark. Maturity is June 218. The loan is secured by downstream guarantee from Atea ASA. The interest rate is fixed at 2.59 %. Financial covenant The financial covenant which applies to these two loans is a Leverage Ratio for the Group less than 2.5. Leverage Ratio means the ratio of Net Interest Bearing Debt to EBITDA. EBITDA shall be reported on a pro forma basis and adjusted for any new member of the Group acquired during the Relevant Period (i.e. also prior to it became a member of the Group), and in respect of any disposal of any existing Group Company. The Compliance is measured at the end of each Quarter. The Group is compliant with the covenant at the balance date. 19

20 Responsibility statement We confirm to the best of our knowledge that the condensed set of financiall statements for the period 1 January to 3 June 213, has been prepared in accordance with IAS 34 Interim Financial F Reporting, and gives a true and fair view of the Group s assets, liabilities, financial position and result for the period viewed in their entirety, and that the interim management report, to the best of our knowledge, includes a fair review of any significant events that arose during the six-month period and their effect on the half-yearly financial report, any significant related parties transactions, and a description of the principal risks and uncertainties for the remaining six s months of the year. Oslo, 11 July 213 Sven Madsen Ib Kunøe Chairman of the Board Kristine M. Madsen Marthe Dyrud Jørn I. Goldstein Marianne Urdahl Morten Jurs Claus Hougesen CEO Lisbeth T. Kvan 2

21 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 AS 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