|By PR Newswire||
|February 20, 2014 01:31 AM EST||
WAALWIJK, The Netherlands, February 20, 2014 /PRNewswire/ --
- Both Docdata and IAI realise revenue growth in 2013
- Operating profit before financing result, depreciation and amortisation (EBITDA) increases to € 20.3 million in 2013 (2012: 17.4 million)
- IAI order book grows to € 10.5 million per end 2013 (2012: € 7.0 million)
- Impairment UK fulfilment activities recorded of € 3 million
- Proposal to distribute dividend of € 0.70 per share out of profit per share of € 1.24 (2012: € 0.55 dividend per share from € 1.09 eps)
- New strategy determined: 'Vision 2020: "Smart Growth"'
Michiel Alting von Geusau, CEO of DOCDATA N.V.: "IAI and Docdata have had a very good year with excellent results. Both companies have contributed to the growth of the revenue and the profit. In 2013, we have started activities in Poland and Italy with own companies. IAI has delivered multiple orders and managed to win several very promising orders. The pressure on the gross profit margins of both companies remains, which forces us to focus on costs permanently. This also encourages us to find smart and efficient solutions. Our service and quality remain high; something we, but also our clients, are proud of. The markets of Docdata and IAI offer enough chances and opportunities for further growth. We have determined our strategy for 2020 with the motto'Smart Growth'; a description thereof is attached to this press release."
The following table provides a summary of the major features of the financial results and the financial position as described:
2013 2012 (in millions, except percentage figures and EUR % EUR % earnings per share) Revenue 166.9 100.0 152.8 100.0 Gross profit 37.0 22.2 33.6 22.0 EBITDA 20.3 12.2 17.4 11.4 EBITA 15.6 9.3 12.9 8.4 Operating income (EBIT) 11.1 6.7 11.0 7.2 Profit for the year 8.7 5.2 7.6 5.0 Basic earnings per share 1.24 1.09 Balance sheet total 88.6 83.1 Equity 42.8 37.5 Solvency ratio (Equity / Balance sheet total) 48.3% 45.2%
Exhibit 1: Table Major features of financial results and financial position 2013 and 2012
The revenue development of DOCDATA N.V. for the years 2002 to 2013 can be presented as follows, showing the transformation of the nature of the Company activities and revenue growth over the years.
Revenue of DOCDATA N.V. has increased in 2013 with 9% to € 166.9 million. This revenue increase has been fully realised autonomously by the increased transaction volume of Docdata and the higher number of orders delivered by IAI. In 2013, the share of our largest client in Germany in the total revenue of the Group decreased as expected to 31%. The share of our largest client in the Netherlands in the total revenue of the Group in 2013 again exceeded 10%.
Revenue 2013 2012 Growth (in thousands, except for percentage figures) EUR EUR % Docdata 149,141 142,835 + 4% IAI 17,780 10,001 + 78% Total 166,921 152,836 + 9%
Exhibit 2: Table revenue 2013 and 2012
In 2013, a higher gross profit of € 37.0 million was realised compared to € 33.6 million in 2012, mainly due to the sales growth. The gross profit margin of 22.2% is in line with last year.
The operating profit before financing result (EBIT) in 2013 amounts to € 11.1 million compared to € 11.0 million for the prior year. In 2013, net other operating expenses for € 2.6 million has been recorded as incidental (non-recurring) costs. In 2012, an amount of € 0.9 million was recorded for net other operating expenses. Excluding these non-recurring costs in both years, the EBIT would have increased from € 11.9 million in 2012 to € 13.7 million in 2013. As announced in our interim notice for the third quarter of 2013, the developments in the United Kingdom fell short of expectations. For that reason an impairment has been recorded for a total of € 3.0 million and a restructuring provision has been recognised for € 0.2 million.
The profit for 2013 amounts to € 8.7 million and is 14% higher compared to the profit for 2012 (€ 7.6 million). The net financing result in 2013 was € 0.1 million negative as a result of foreign currency exchange effects (2012: nil). The lower income tax expense is mainly the result of a combination of non-recurring costs for the goodwill impairment that are not tax deductible, the valuation of deferred tax assets for net operating losses in Germany and a one-off income tax gain of € 1.3 million due to realising the liquidation loss (€ 5.2 million) on the former French Docdata replication activities. This liquidation process was completed in September 2013.
The financial position of DOCDATA N.V. remained strong with a solvency ratio of 48.3% per 31 December 2013 (31 December 2012: 45.2%). The improved solvency is the combined effect of the main movements in equity: the profit for the year (€ 8.7 million) and the dividend paid in May 2013 out of the 2012 profit (€ 3.9 million). The balance sheet total per 31 December 2013, excluding the effect of the non-restricted cash of the Stichting foundation docdata payments), increased to € 75.1 million (31 December 2012: € 71.3 million).
In 2013 more than € 7 million was invested in tangible fixed assets for the further expansion of the capacity in Waalwijk, Groβbeeren and Schwiebodzin (Poland). This is mainly storage facilities, smart fulfilment and returns solutions and IT hardware for Docdata. Furthermore, € 1.4 million was invested in intangible assets. This mainly concerns the completion of the development for the new generation of the BookMaster One® system by IAI as well as IT development costs for Docdata's payment platform. These investments contribute to the growth of both companies to offer existing and new clients the highest quality of services.
Personnel and organisation
The permanent staff employed by the Group increased in 2013 with 12% to 1,266 employees (1,211 FTE) as a result of autonomous growth, mainly of the activities in the Netherlands and Germany (2012: 1,129 employees; 1,062 FTE). Finding the right people that fit within the specific culture of our Company remains an important priority for us. Our success continues to depend on our permanent and hired employees. The employees who work with us and for us, consider us a good employer. Our policy is focused to maintain this and to receive and implement improvement observations that come from within the organisation in a timely manner.
2014 will be a year in which we are fully focused on bringing in new clients and orders to show growth again in 2015.
For 2014, we expect a lower revenue for Docdata due to a strong decline of the revenue for our largest client. Early 2014, we however signed agreements for strategic partnerships with several new clients with potential. Furthermore, IAI has an excellent order book and a healthy pipeline, which are a good basis for 2014 and beyond.
Today, we are launching our new strategy 'Vision 2020: "Smart Growth"' that will be implemented in 2014.
Strategy: 'Vision 2020: "Smart Growth"'
Our strategy "Growth through Quality" has been achieved and we have set out the strategic directions for the comings years in our new strategy 'Vision 2020: "Smart Growth"'. With this vision we will bring innovative solutions as custom-made service for specific business models of our clients and the markets in which they operate. We explain our Vision 2020: "Smart Growth" in the enclosure to this press release. This enclosure can also be downloaded from the corporate website of the Company, http://www.docdatanv.com.
Management of DOCDATA N.V. will propose to the shareholders at this year's annual General Meeting of Shareholders, in accordance with Article 28 of the Articles of Association of DOCDATA N.V., to decide to distribute to all shareholders of ordinary shares a dividend amount of € 0.70 per ordinary share out of the profit for the year 2013. The distribution will be subject to dividend withholding taxes, unless the shareholder can prove that substantial holding exemption can be claimed.
The dividend policy of DOCDATA N.V., adopted by the General Meeting of Shareholders, is aimed at realising a high dividend return, for which a payout ratio of at least 50% is the target. The liquidity and solvency required for the execution of the strategy, will also be taken into consideration. Management of DOCDATA N.V. holds the opinion that the very strong liquidity and solvency of the Company enable the proposed dividend distribution of € 0.70 per share.
At 31 December 2013, the issued share capital of DOCDATA N.V. consisted of 7,000,000 ordinary shares with a nominal value of € 0.10 each. DOCDATA N.V. currently holds no ordinary shares to fund the Performance Share Plan. Ordinary shares owned by the Company are not entitled to any distribution of profit. When the General Meeting of Shareholders decides to accept this proposal, an amount of € 4.9 million will be distributed in May 2014 as dividend out of the profit for the year 2013 on the ordinary shares, which are held by other shareholders than the Company. The General Meeting of Shareholders shall be held on Tuesday 13 May 2014 in Waalwijk. The dividend distribution will lead to a decrease of the solvency ratio with some percent-points.
Exhibit 3: Graph development dividend (per share) 2000-2013
Performance Share Plan and purchase of own shares
On 17 June 2014 (the vesting date), the Performance Shares awarded in 2011 under the Performance Share Plan to the members of the Management Board and the international management team of DOCDATA, will be unconditionally granted in DOCDATA N.V. shares. The performance period for these Performance Shares comprise the financial years 2011, 2012 and 2013. This period has already ended and the independent external remuneration advisor of the Supervisory Board, determined on behalf of the Company that DOCDATA N.V. actually realised an annual average TSR (Total Shareholder Return) of 26.64% for this performance period. According to the Performance Share Plan, this TSR results in an unconditional grant (vesting) of 127.11% of the number of Performance Shares conditionally awarded in 2011. The number of own shares DOCDATA N.V. required for this unconditional grant (49,269 shares) will be purchased by the Company in the period from today until 17 June 2014, since the Company currently does not own any shares DOCDATA N.V. anymore.
The consolidated financial statements of DOCDATA N.V. are prepared in accordance with the International Financial Reporting Standards as adopted by the European Union (hereafter IFRS). For an overview of the significant accounting policies under IFRS, please refer to the 2012 Annual Report that is available at the Company and can also be downloaded from the Company's corporate website, http://www.docdatanv.com. The 2013 Annual Report can be downloaded there from 1 April 2014 onwards.
Enclosure with financial information
For a detailed review of the 2013 year-end results, please refer to the attached enclosure 'Financial Information for the year ended 31 December 2013' with Appendix.
Meeting for financial press and analysts
This morning, 20 February 2014, management of DOCDATA N.V. will discuss the 2013 year-end results in a meeting for which both financial press and analysts have been invited, to be held at 10.30AM Continental Time in the Mercurius room of the Financieel Nieuwscentrum Beursplein 5 of NYSE Euronext Amsterdam (Beursplein 5, 1012 JW Amsterdam, telephone +31-20-5505505). After this meeting, the presentation shown to the financial press and analysts will be made available for downloading from the Company's corporate website, http://www.docdatanv.com.
1 April 2014 Publication of 2013 Annual Report (online)
15 April 2014 Record date (voting rights)
23 April 2014 Interim notice first quarter 2014
13 May 2014 Annual General Meeting of Shareholders in Waalwijk
14 May 2014 Cum-date
15 May 2014 Ex date
19 May 2014 Record date (dividend rights)
23 May 2014 Dividend payment date
17 July 2014 Publication of 2014 half-year results
15 October 2014 Interim notice third quarter 2014
The listed DOCDATA N.V. exists of two lines of business:
Docdata (http://www.docdata.com) is a European market leader with a strong basis in The Netherlands, Germany and the United Kingdom. Docdata offers a complete e-commerce service portfolio to clients, enabling them to be successful on the internet.
IAI (http://www.iai-industrial-systems.com) is a high tech engineering company specialised in developing and building systems for very accurate and high speed processing of all kinds of products and materials. IAI delivers clients globally in the following sectors: securing and personalising of security documents, processing of solar cells and modules and processing of other materials and products.
Waalwijk, The Netherlands, 20 February 2014
Corporate website: http://www.docdatanv.com
The financial information is prepared in accordance with International Financial Reporting Standards as adopted by the European Union (hereafter "IFRS") and its interpretations adopted by the International Accounting Standards Board (IASB).
Results for Docdata
2013 2012 (in thousands, except for percentage figures) EUR % EUR % Revenue 149,141 100.0 142,835 100.0 Gross profit (margin as a % of revenue) 31,570 21.2 30,637 21.4 Selling and administrative expenses (19,505) (13.1) (18,843) (13.2) Other operating income and expenses (2,413) (1.6) (975) (0.6) EBITDA 18,005 12.1 16,928 11.9 Operating profit before financing result (EBIT) 9,652 6.5 10,819 7.6
Revenue of Docdata increased with € 6.3 million (+4.4%) to € 149.1 million. The major part of this growth was realised in the Netherlands due to autonomous growth of existing clients. As expected, revenue in Germany decreased mainly due to less volumes processed for our biggest client. The number of transactions increased with 8.5% to almost 52 million in 2013 (2012: almost 48 million). Revenue in the fourth quarter decreased as expected due to lower volumes processed for our biggest client in Germany.
The gross profit increased with € 0.9 million (+3%), which is a mix of the revenue growth and efficiency results in 2013. The gross profit margin is in line with last year and is the result of a higher gross profit margin in Germany and a lower gross profit margin in the UK. In Germany the gross profit margin increased resulting from a negative impact due to lower prices and higher costs and a positive impact as there were no exceptional (non-recurring) costs as in 2012. In the UK the gross profit margin decreased significantly due to issues with a large client in the UK.
The operating profit decreased with € 1.2 million (-/-10.8%) mainly as the result of the increased gross profit and higher selling and administrative expenses, as well as higher other operating expenses. The selling and administrative expenses have followed the growth of the organisation. Other operating income and expenses increased mainly due to an impairment loss of € 3 million in 2013 for the goodwill and customer contracts which has been recognised for the UK activities acquired with Braywood Holdings Ltd in 2006. In 2013 restructuring costs have been recognised for an amount of € 0.2 million.
As international expansion is a key focus for Docdata, the Group has started on 5 June 2013 activities in Poland through Docdata Fulfilment sp. z o.o. This Group company is a private limited liability company incorporated to Polish law and is located in Swiebodzin in Poland, where a warehouse has been rented of approximately 2,500 square meters. A three-year contract has been signed with an existing client for return handling by this new subsidiary for returns coming from the German market and all returns from the Polish market. The business activities started in the fourth quarter of 2013. Now we have entered the Polish market, we expect to add more volume to this business in the coming years.
On 8 July 2013, the Group has incorporated a new company in Italy named Docdata Italy Srl. and continued the business of a former partner. The current volumes are relatively low, but we are fully focusing on the Italian market to win new business.
Results for IAI
2013 2012 (in thousands, except for percentage figures) EUR % EUR % Revenue 17,780 100.0 10,001 100.0 Gross profit (margin as a % of revenue) 5,443 30.6 2,916 29.2 Selling and administrative expenses (3,810) (21.4) (2,809) (28.1) Other operating income and expenses (138) (0.8) 46 0.4 EBITDA 2,255 12.7 513 5.1 Operating profit before financing result (EBIT) 1,495 8.4 153 1.5
Revenue of IAI increased with € 7.8 million (+78%) due to more system deliveries during 2013 compared to 2012, which year had a very low revenue level.
The gross profit increased with € 2.5 million (+87%) due to higher sales. The gross profit margin increased due to higher margins realised on delivered systems. The operating profit increased with € 1.3 million as a combined effect of higher gross profit and higher selling and administrative expenses, mainly resulting from the growing organisation of IAI to accommodate a higher capacity.
Consolidated Financial Statements
1. Consolidated statement of financial position
Financial position before appropriation of profit.
31 31 December December Reference 2013 2012 (in thousands) EUR EUR Assets Property, plant and equipment 6.6 22,016 19,599 Intangible assets 6.7 5,870 8,948 Investments in associates - - Other investments 11 21 Trade and other receivables 360 - Deferred tax assets 796 531 Total non-current assets 29,053 29,099 Inventories 6.8 7,135 6,240 Income tax receivables 2,038 729 Trade and other receivables 29,118 25,653 Cash and cash equivalents 6.9 (Note) 20,518 20,655 Assets classified as held for sale 738 738 Total current assets 59,547 54,015 Total assets 88,600 83,114 Equity Share capital 700 700 Share premium 16,854 16,854 Translation reserves (523) (514) Reserve for own shares 441 (477) Retained earnings (from prior years) 16,626 13,461 Unappropriated profits (Profit for the period) 8,665 7,507 Total equity attributable to equity holders of the parent 42,763 37,531 Non-controlling interest - - Total equity 6.11 42,763 37,531 Liabilities Interest-bearing loans and other borrowings - - Deferred tax liabilities 980 1,210 Other non-current liabilities 418 268 Total non-current liabilities 1,398 1,478 Bank overdrafts - - Interest-bearing loans and other borrowings - - Income tax payable 1,839 1,062 Trade and other payables 40,725 41,546 Provisions 1,875 1,497 Total current liabilities 44,439 44,105 Total liabilities 45,837 45,583 Total equity and liabilities 88,600 83,114
Note: Cash and cash equivalents per 31 December 2013 includes restricted cash of Stichting foundation docdata payments in the amount of € 13.8 million, see also the disclosure notes 6.5, 6.9 and 6.10 (31 December 2012: € 11.9 million).
2. Consolidated Income Statement
Reference 2013 2012 (in thousands, except for earnings per share) EUR % EUR % Revenue 166,921 100.0 152,836 100.0 Cost of sales (129,908) (77.8) (119,283) (78.0) Gross profit 37,013 22.2 33,553 22.0 Other operating income 6.12 994 0.6 1,025 0.7 Selling expenses (6,683) (4.0) (5,729) (3.8) Administrative expenses (16,632) (10.0) (15,923) (10.4) Other operating expenses 6.12 (3,545) (2.1) (1,954) (1.3) Operating profit before financing result 11,147 6.7 10,972 7.2 Financial income 114 0.1 234 0.1 Financial expenses (231) (0.2) (228) (0.1) Net financing income / (expenses) 6.13 (117) (0.1) 6 - Share of profits / (losses) of associates - - (9) - Profit before income tax 11,030 6.6 10,969 7.2 Income tax expense 6.14 (2,365) (1.4) (3,374) (2.2) Profit for the period 8,665 5.2 7,595 5.0 Attributable to: Equity holders of the parent 8,665 5.2 7,507 4.9 Non-controlling interest - - 88 0.1 Profit for the period 8,665 5.2 7,595 5.0 Earnings per share Basic earnings per share 1.24 1.09 Diluted earnings per share 1.23 1.08
3. Consolidated Statement of Cash Flows
Reference 2013 2012 (in thousands) EUR EUR Cash flows from operating activities Profit for the period 8,665 7,595 Adjustments for: Depreciation and amortisation (including goodwill impairments) 9,113 6,469 Costs share options, performance shares and delivered shares shares 246 270 Loss / (Gain) on sale of property, plant and equipment - (271) Financial income (114) (234) Financial expenses 231 228 Share of losses of associates - 9 Income tax expense 2,365 3,374 Cash flows from operating activities before changes in working capital and provisions 20,506 17,440 (Increase) / decrease in trade and other receivables (3,695) (4,522) (Increase) / decrease in inventories (895) (1,804) Increase / (decrease) in trade and other payables (3,062) 7,382 Increase / (decrease) in provisions and other 378 1,227 non-current liabilities Cash generated from the operations 13,232 19,723 Interest paid (132) (240) Interest received 114 204 Income taxes paid (4,233) (3,549) Income taxes received 879 76 Net cash from operating activities 6.11 9,860 16,214 Cash flows from investing activities Acquisition of property, plant and equipment 6.6 (6,895) (10,307) Acquisition of intangible assets 6.7 (1,357) (1,412) Loans provided to associates and other investments (110) - Proceeds from sale of property, plant and equipment 34 443 Proceeds from sale of associates and other investments 10 74 Acquisition of subsidiaries - 310 Proceeds from sale of replication activities - 375 Net cash from investing activities 6.11 (8,318) (10,517) Cash flows from financing activities Dividends paid (3,850) (3,457) Proceeds from exercise of share options 425 275 Own shares bought (245) (124) Acquisition of non-controlling interests - (1,250) Repayment of interest-bearing loans and other borrowings - (100) Net cash from financing activities 6.11 (3,670) (4,656) Net increase / (decrease) in non-restricted cash and cash equivalents (2,128) 1,041 Cash and cash equivalents at the beginning of the period 8,801 7,781 Restricted cash and cash equivalents (Note) 13,814 11,854 Effect of exchange rate fluctuations on cash held 31 (21) Cash and cash equivalents at the end of the period (Note) 20,518 20,655
Note: reference to disclosure notes 6.5, 6.9 and 6.10 for Stichting foundation docdata payments
4. Consolidated Statement of changes in Shareholders' Equity
Total equity attributable to equity Share Share Retained holders of Non-controlling Total capital premium Reserves earnings the parent interest equity (in thousands) EUR EUR EUR EUR EUR EUR EUR (Note 1) (Note 2) 2012 Balance at 1 January 2012 700 16,854 (1,476) 17,740 33,818 340 34,158 Dividend distribution - - - (3,457) (3,457) - (3,457) Exercised share options - - 275 - 275 - 275 Delivered shares for remuneration - - 97 - 97 - 97 Own shares bought - - (124) - (124) - (124) Costs share options and Performance shares - - 173 - 173 - 173 Unrealised exchange rate results - - 64 - 64 - 64 Acquisition of non-controlling interest without a change in control - - - (822) (822) (428) (1,250) Profit for the period - - - 7,507 7,507 88 7,595 Balance at 31 December 2012 700 16,854 (991) 20,968 37,531 - 37,531 2013 Balance at 1 January 2013 700 16,854 (991) 20,968 37,531 - 37,531 Dividend distribution - - - (3,850) (3,850) - (3,850) Exercised share options - - 425 - 425 - 425 Delivered shares for remuneration - - 32 - 32 - 32 Own shares bought - - (245) - (245) - (245) Costs share options and Performance shares - - 214 - 214 - 214 Realised reserve for own shares - - 492 (492) - - - Unrealised exchange rate results - - (9) - (9) - (9) Profit for the period - - - 8,665 8,665 - 8,665 Balance at 31 December 2013 700 16,854 (82) 25,291 42,763 - 42,763
Note 1: Reserves in the Consolidated Statement of Shareholders' Equity consists of the balances for Translation reserves and Reserve for own shares.
Note 2: Retained earnings in the Consolidated Statement of Shareholders' Equity consists of
the balances for Retained earnings (from prior years) and Unappropriated profits, equal to the Profit for the period for both years ended 31 December 2012 respectively 31 December 2013.
5. Consolidated Statement of recognised Income and Expense
2013 2012 (in thousands) EUR EUR Foreign exchange translation differences, net of tax (9) 64 Income / (Expense) recognised directly in equity (9) 64 Profit for the period 8,665 7,595 Total recognised income and expense for the period 8,656 7,659 Attributable to: Equity holders of the parent 8,656 7,571 Non-controlling interest - 88 Total recognised income and expense for the period 8,656 7,659
6. Notes to the Consolidated Financial Statements
6.1 Reporting entity
DOCDATA N.V. (referred to as "DOCDATA" or the "Company") is a company domiciled in Waalwijk, the Netherlands. The consolidated financial statements of DOCDATA N.V. as at and for the year ended 31 December 2013 comprise DOCDATA N.V. and its subsidiaries (together referred to as the "Group") and the Group's interest in associates and jointly controlled entities.
The consolidated financial statements of the Group as at and for the year ended 31 December 2013 will be published on 1 April 2014. The consolidated financial statements of the Group as at and for the year ended 31 December 2012 are available upon request from the Company's registered office at Energieweg 2, 5145 NW in Waalwijk, the Netherlands, or at the Company's corporate website, http://www.docdatanv.com.
6.2 Statement of compliance
These consolidated financial statements do not include all of the information required for full annual financial statements, and should therefore be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2012.
6.3 Significant accounting policies
The consolidated financial statements of the Group are prepared in accordance with the International Financial Reporting Standards as adopted by the European Union ("IFRS"). The accounting policies applied by the Group in these consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2012. For a summary of the significant accounting policies under IFRS, please refer to the Group's Annual Report for the year ended 31 December 2012.
6.4 Management representations
In the opinion of the management, these consolidated financial statements include all adjustments necessary for a fair presentation of the financial position, operating results and cash flows of all reporting periods herein.
In the consolidated financial statements for the year ended 31 December 2013, non-recurring adjustments have been recorded for the following topics:
- full impairment of the goodwill paid in 2006 for the acquisition of Braywood Holdings Ltd. in the UK (€ 2.9 million);
- accelerated amortisation (impairment) of the remaining book value of the customer contracts recognised as part of the purchase price allocation at the acquisition of Braywood Holdings Ltd. in the UK (€ 0.1 million);
- restructuring provisions (€ 0.2 million).
Non-recurring adjustments were recorded in the consolidated financial statements for the year ended 31 December 2012 for the following topics:
- full impairment of the remaining book value (€ 0.1 million) of the goodwill paid for the acquisition of Hitura Ltd. in the UK (docdata commerce Ltd.);
- full impairment of the goodwill paid (€ 1.0 million) for the acquisition of ICenT B.V. (docdata commerce B.V.);
- provisions and other liabilities for contract termination costs and dilapidations for rented warehouses in Germany (in total an effect of € 1.6 million);
- reporting as 'assets classified as held for sale' of the property (land, building and equipment) owned by Docdata e-Services B.V. in Tilburg (the Netherlands), following the sale of the last Docdata media replication business activities per 1 January 2012. These assets have not been sold yet during 2013 and remain on the balance sheet per 31 December 2013.
In the consolidated financial statements for the year ended 31 December 2013, the following treatment has been applied for the following incorporations and amendments in the consolidation structure of the Group:
- Docdata Italy Srl.: on 8 July 2013, the Group has incorporated through its intermediate holding company DOCdata International B.V. a limited liability company in Italy and named this new wholly-owned subsidiary Docdata Italy Srl. As of the incorporation date, the activities and results of this legal entity have been included in the DOCDATA consolidation;
- Docdata Fulfilment sp. z o.o.: on 5 June 2013, the Group has acquired through its intermediate holding company DOCdata International B.V. a limited liability (shelf) company in Poland and renamed this new wholly-owned subsidiary Docdata Fulfilment sp. z o.o. As of the acquisition date, the activities and results of this legal entity have been included in the DOCDATA consolidation;
- Docdata Technology B.V.: on 15 April 2013, the Group has incorporated through its group company Docdata Technology Beheer B.V. a limited liability company in the Netherlands and named this new wholly-owned subsidiary Docdata Technology B.V. As of the incorporation date, the activities and results of this legal entity have been included in the DOCDATA consolidation;
- Docdata Technology Beheer B.V.: on 15 April 2013, the articles of association of the wholly-owned Dutch subsidiary 4D upgrade B.V. were amended and the legal name of the company was changed into Docdata Technology Beheer B.V..
6.6 Property, plant and equipment
31 December 31 December 2013 2012 (in thousands) EUR EUR Land and buildings 3,080 2,401 Machinery and equipment 16,150 14,040 Office equipment and other 2,665 2,940 21,895 19,381 Under construction 121 218 Total 22,016 19,599
The book value of property, plant and equipment has increased with € 2.4 million in 2013, mainly as a combined result of capital expenditure for € 7.2 million and depreciation charges for € 4.7 million. Capital expenditure in 2013 relates for € 3.9 million to the investment by Docdata Fulfilment for the further expansion of the logistic centre in Waalwijk, the Netherlands (2012: € 6.0 million). Other capital expenditure of € 3.3 million mainly consists of investments for the expansion of fulfilment warehouses in Germany, predominantly in the Berlin region (€ 2.7 million) and investments in Poland (€ 0.2 million) and in the United Kingdom (€ 0.2 million), as well as the investments by IAI (€ 0.2 million). At 31 December 2013, € 0.1 million additional capital expenditure was committed in addition to the amount accounted for 'under construction'.
6.7 Intangible assets
31 December 31 December 2013 2012 (in thousands) EUR EUR Goodwill 2,444 5,381 Software (IT platforms) 2,010 1,912 Development costs 1,416 1,421 Customer contracts - 234 Total 5,870 8,948
The book value for intangible assets has decreased with € 3.1 million in 2013, due to the following:
- capital expenditure for investments by Docdata Payments in the further development of their payment platform (€ 0.5 million), investments by IAI in costs for the development of second generation systems (e.g. BookMaster One®) for the security market (€ 0.5 million) and an investment in a software planning tool by Docdata Fulfilment (€ 0.3 million) (€ 1.4 million in total; rounded);
- amortisation charges for software (IT platforms), customer contracts and development costs (€ 1.4 million in total);
- full impairment of the goodwill paid in 2006 for the acquisition of Braywood Holdings Ltd. in the UK (€ 2.9 million);
- accelerated amortisation (impairment) of the remaining book value of the customer contracts recognised as part of the purchase price allocation at the acquisition of Braywood Holdings Ltd. in the UK (€ 0.1 million).
31 December 31 December 2013 2012 (in thousands) EUR EUR Finished goods 1,903 2,194 Work in progress 4,063 2,857 Raw and auxiliary materials 1,169 1,189 Total 7,135 6,240
The book value of inventories increased € 0.9 million in 2013, which is the combined effect of increased work in progress at IAI (€ 1.2 million) and a lower finished goods inventory level (€ 0.3 million). The lower finished goods inventory level is predominantly caused by a lower stock of corporate clothing by Docdata Fashion Services GmbH. The Company only bears a limited inventory risk on this stock, as the clients have accepted their obligation to take over this inventory should they terminate their contract with Docdata Fashion Services GmbH.
IAI's order book developed in 2013 from € 6.7 million at 31 December 2012 to € 10.2 million at 31 December 2013 resulting from systems' deliveries in 2013 with revenue of € 17.8 million and new orders booked with a total sales value of € 21.3 million. The increased order book is also reflected in the book value per 31 December 2013 of work in progress, as the largest part of the orders included in the order book value is scheduled for delivery in 2014. Production has already started in 2013 for some of these orders.
6.9 Cash and cash equivalents
31 December 31 December 2013 2012 (in thousands) EUR EUR Non-restricted cash and cash equivalents 6,704 8,801 Restricted cash and cash equivalents 13,814 11,854 Total 20,518 20,655
Restricted cash and cash equivalents only consists of the restricted cash and cash equivalents recorded in the balance sheet of Stichting foundation docdata payments, representing cash received from customers on behalf of the Docdata Payments merchants in the bank accounts of Stichting foundation docdata payments which shall have to be paid (net of charged Docdata Payments fees) to the merchants without any disposition of this cash balance to the Group.
6.10 Stichting foundation docdata payments
The balance sheet of Stichting foundation docdata payments reads as follows:
31 December 31 December 2013 2012 (in thousands) EUR EUR Trade and other receivables 183 163 Restricted cash and cash equivalents 13,814 11,854 Total current assets 13,997 12,017 Total assets 13,997 12,017 Other non-current liabilities 418 268 Total non-current liabilities 418 268 Trade and other payables 13,579 11,749 Total current liabilities 13,579 11,749 Total liabilities 13,997 12,017
Of these items in the balance sheet of Stichting foundation docdata payments, the following items have certain restrictions which should be honoured by the Group:
- restricted cash and cash equivalents is fully restricted cash, as the balance concerns cash received from customers on behalf of the Docdata Payments merchants which shall have to be paid to the merchants, net of charged Docdata Payments fees;
- other non-current liabilities concerns advance payments received from merchants in depository accounts;
- trade and other payables reflect the payment obligations towards the merchants in view of the settlements for realised transactions for which money has already been collected from consumers that shall have to be paid to the merchants.
6.11 Liquidity and capital resources
The General Annual Meeting of Shareholders held on 14 May 2013 approved the proposal to distribute a dividend of € 0.55 per ordinary share outstanding, which had a decreasing impact of € 3.9 million on retained earnings within the equity of the Company in 2013. This dividend was paid by the Company on 24 May 2013 from the net cash available.
In February 2013, all remaining 66,000 share options outstanding per 31 December 2012 were exercised from the 2008 and 2009 series at an average exercise price of € 6.44 per share, after which the 2006 Personnel Options Plan came to an end. The underlying shares were delivered by the Company from the shares in stock. The proceeds of € 0.4 million have been credited to equity ('Reserve for own shares'). Per 31 December 2013, the Company has no own shares in stock, which is also the situation per today, 20 February 2014. The debit balance of the Reserve for own shares, created at the purchase of the own shares by the Company in previous years, was realised in the first half-year 2013 and the related debit reserve amount of € 492 thousand was released against retained earnings.
The Performance Shares granted conditionally in 2010 vested at 14 May 2013 with a vesting percentage of 91.62%, which was based on the average annual Total Shareholder Return growth realised over the three-year performance period covering the years 2010, 2011 and 2012. For a total number of 18,284 outstanding Performance Shares the Company has delivered 16,758 own shares, which were bought for an amount of € 213 thousand (average price: € 12.68 per share) through a broker on the Euronext Amsterdam stock market on the day following the publication of the 2012 results (i.e. purchase date 22 February 2013).
Furthermore, a total number of 143,157 Performance Shares are outstanding per 31 December 2013, which have been granted conditionally in 2011 (38,755 Performance Shares; vesting date: 17 June 2014), in 2012 (63,387 Performance Shares; vesting date: 1 June 2015) and in 2013 (41,015 Performance Shares; vesting date: 16 May 2016). The own shares required at vesting of each of these Performance Share Plans will be bought by the Company, if and when needed in the future, through an external broker at the Euronext Amsterdam stock market. The 'Reserve for own shares' balance in equity per 31 December 2013 amounts to € 441 thousand (credit), representing the total of all costs recorded against income for the Performance Shares granted in 2011, 2012 and 2013. Each year when Performance Shares will vest, the balance will be partially released to retained earnings for the corresponding amount related to those specific Performance Shares.
As the Company holds no own shares anymore per date of 14 May 2013, following the above mentioned exercise of options and vesting of Performance Shares, the Company has disclosed per that same date its holdings in DOCDATA N.V. at 0%, in accordance with Chapter 5.2 of the Financial Supervision Act ('Wet op het financieel toezicht').
In 2013, the Group realised net cash from operating activities of € 9.9 million (2012: € 16.2 million). Furthermore, € 0.4 million in cash was received from the exercise of all the remaining outstanding share options. In total, this resulted in Group funding (cash-in) of € 10.3 million, while the Group did spent (cash-out) a total of € 12.4 million, containing the payment of the 2012 dividend (€ 3.9 million), capital expenditure in property, plant and equipment (€ 7.2 million of which € 6.9 million was paid in 2013, mainly for warehousing equipment in Waalwijk and Groβbeeren) and intangibles (€ 1.4 million, mainly for IT development costs for the payments platform, development costs for second generation systems of IAI and a software planning tool of Docdata Fulfilment), the purchase of own shares necessary for the vesting of the Performance Share Plan 2010 (€ 0.2 million) and the distribution of a loan to associates and other investments (€ 0.1 million). As a result, the net cash position of the Group has decreased with € 2.1 million to a net cash surplus position of € 6.7 million per 31 December 2013 (31 December 2012: net cash surplus position of € 8.8 million), excluding the restricted cash position of € 13.8 million per 31 December 2013 of Stichting foundation docdata payments (31 December 2012: € 11.9 million).
6.12 Other operating income and expenses
2013 2012 (in thousands, except for percentage figures) EUR % EUR % Other operating income 994 0.6 1,025 0.7 Other operating expenses (3,545) (2.1) (1,954) (1.3) Net other operating expenses (2,551) (1.5) (929) (0.6)
Other operating income in 2013, as well as in 2012, predominantly consists of releases of accruals and provisions carried in the balance sheet at the end of the previous year.
Other operating expenses predominantly consist of impairment charges (2013: € 3.0 million, including € 2.9 million goodwill impairment and € 0.1 million accelerated amortisation of customer contracts, both for the UK activities acquired with Braywood Holdings Ltd.; 2012: € 1.4 million, including € 0.3 million additional depreciation German assets and € 1.1 million goodwill impairment of the Docdata Commerce activities acquired with ICenT B.V. in the Netherlands and Hitura Ltd. in the UK), restructuring expenses (2013: € 0.4 million; 2012: € 0.5 million) and expenses from prior years (2013: € 0.1 million; 2012: € 0.1 million).
6.13 Net financing income / (expenses)
Net financing expenses in 2013 amounted to € 117 thousand compared to net financing income of € 6 thousand in 2012. This decrease of € 0.1 million is predominantly caused by the foreign currency exchange result in 2013 (€ 98 thousand loss) compared to 2012 (€ 37 thousand profit) related to the British pound.
6.14 Income tax expense
DOCDATA's effective tax rate in 2013 was 21.4% with an income tax expense of € 2.4 million on a profit before income tax of € 11.0 million. In 2012, the profit before income tax (excluding share of losses of associates) amounted to € 11.0 million and the income tax expense amounted to € 3.4 million (effective tax rate: 30.7%). The decreased effective tax rate predominantly reflects the impact of an income tax gain realised in the Netherlands in 2013, as mentioned below.
The income tax expense of € 2.4 million in 2013 is the result of the following tax treatments of the results per country, combined with an effect of some entries for the valuation of deferred tax assets per 31 December 2013 in relation to the realisation of net operating losses in the Netherlands and Germany, and some differences between commercial and fiscal treatment of certain assets and profit and loss items:
- In the Netherlands, income taxes are recorded at a corporate income tax rate of 25.0% on the taxable income for the Dutch fiscal entity as well as for the Dutch subsidiary Docdata Payments that is not part of this fiscal entity (2012: 25.0%). In 2013, an income tax gain of € 1.3 million has been recorded due to the realisation of the liquidation loss (€ 5.2 million) from the former French Docdata replication activities that can be claimed as the liquidation process (started in 2007) was completed by the competent Court in France per 16 September 2013.
- In the United Kingdom, income taxes are recorded against a blended corporate income tax rate of 23.25% (2012: 24.5%). No corporate income taxes have been recorded on the UK operating loss in 2013 and the goodwill impairment charge (€ 2.9 million) is not tax deductible for the Group.
- In Germany, income taxes are recorded at a corporate income tax rate of in general between 26% and around 32% on taxable income for the German entities when and where applicable, depending on the actual region in Germany of their legal seat (e.g. Berlin, Munich or Münster region). In 2013, the valuation allowance for deferred tax assets on net operating losses from prior years has been released due to improved profitability of the Münster operations, which has resulted in a tax profit of € 0.4 million.
- In Poland, income taxes are recorded against a corporate income tax rate of 19.0%.
- In Italy, income taxes are recorded against a corporate income tax rate of 27.5%.
6.15 Segmented Consolidated Income Statements
2013 2012 (in thousands) EUR % EUR % Revenue 149,141 100.0 142,835 100.0 Cost of sales (117,571) (78.8) (112,198) (78.6) Gross profit 31,570 21.2 30,637 21.4 Other operating income 949 0.6 958 0.7 Selling expenses (5,566) (3.7) (4,821) (3.4) Administrative expenses (13,939) (9.3) (14,022) (9.8) Other operating expenses (3,362) (2.3) (1,933) (1.3) Operating profit before financing result 9,652 6.5 10,819 7.6 Financial income 83 0.1 198 0.1 Financial expenses (201) (0.2) (192) (0.1) Net financing expenses (118) (0.1) 6 - Share of profits of associates - - - - Profit before income tax 9,534 6.4 10,825 7.6 Income tax expense (2,121) (1.4) (3,345) (2.4) Profit for the period 7,413 5.0 7,480 5.2 Attributable to: Equity holders of the parent 7,413 5.0 7,392 5.2 Non-controlling interest - - 88 - Profit for the period 7,413 5.0 7,480 5.2
2013 2012 (in thousands) EUR % EUR % Revenue 17,780 100.0 10,001 100.0 Cost of sales (12,337) (69.4) (7,085) (70.8) Gross profit 5,443 30.6 2,916 29.2 Other operating income 45 0.2 67 0.6 Selling expenses (1,117) (6.3) (908) (9.1) Administrative expenses (2,693) (15.1) (1,901) (19.0) Other operating expenses (183) (1.0) (21) (0.2) Operating profit before financing result 1,495 8.4 153 1.5 Financial income 31 0.2 36 0.4 Financial expenses (30) (0.2) (36) (0.4) Net financing expenses 1 - - - Share of profits of associates - - (9) (0.1) Profit before income tax 1,496 8.4 144 1.4 Income tax expense (244) (1.4) (29) (0.3) Profit for the period 1,252 7.0 115 1.1 Attributable to: Equity holders of the parent 1,252 7.0 115 1.1 Non-controlling interest - - - - Profit for the period 1,252 7.0 115 1.1
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