WAALWIJK, The Netherlands, July 29 /PRNewswire/ --
- Revenue Increases 8% to EUR 35.7 Million
- Combined Revenue of Commerce, Payments and Fulfilment Activities Internet Service Company docdata Increases With More Than 50%
- All Divisions Contribute to Operating Profit (EBIT)
- Strong Order Portfolio IAI Will for the Largest Part be Delivered in the Second Half-Year 2008
Results and Financial position half-year 2008 (unaudited)
Half-year ended at (in millions, except 30 June 2008 30 June 2007 percentage figures and per share data) EUR % EUR % Revenue Internet service company 33.1 92.8 28.2 85.3 docdata Technology company IAI 2.6 7.2 4.8 14.7 Total 35.7 100.0 33.0 100.0 Gross profit 9.4 26.4 8.0 24.3 Operating profit (EBIT) Internet service company 1.3 4.1 0.3 0.8 docdata Technology company IAI 0.1 2.3 1.3 27.3 Total 1.4 4.0 1.6 4.7 Result after tax from - - 0.2 0.6 discontinued operation Profit for the half-year 1.0 2.9 1.6 4.9 Basic earnings per share 0.15 0.23 Diluted earnings per share 0.15 0.22 Balance sheet total 40.7 39.6 Equity 19.3 22.3 Solvency ratio (Equity / 47.4% 56.3% Balance sheet total)
Major features of the first half-year 2008
The Internet service company docdata continues to show strong growth. This growth has been realised by new customers, as well as through growth of existing customers. The total online shopping market has grown for years and will continue to grow. A large group of product categories sold online is consumer electronics, clothing and shoes, hardware, books, music, DVD's and tickets. The number of consumers that buy online increases, but also the total order value keeps rising. It is also expected that more and more brands and retailers will open online shops.
All four divisions of the Internet service company docdata have contributed in the first half-year 2008 to the operating profit. The integration of the various companies that have been acquired in the previous year is well on course. The different organisations are ready for a further growth, mainly autonomous, that will be realised in the coming six months. Also, costs will be incurred in the coming months to realise geographical growth in 2009, possibly through acquisitions.
Michiel Alting von Geusau: "Presently, we process over one million transactions per month for our customers. These transactions consist of realised orders through our web solutions, successfully processed payments by end consumers and shipped orders for our customers. We expect the number of transactions that we process to grow further in the coming years."
As most deliveries by Technology company IAI are scheduled for the second half-year 2008, this has resulted in a lower revenue and operating profit for the first half-year. During the first half of 2008, IAI has worked hard to ensure that the ordered systems can be successfully delivered in the second half of 2008. The final delivery for the Ukraine has successfully taken place in July.
IAI has developed new applications in the first half of 2008, for example the ability to use inkjet printing for a colour photograph in the personalisation process of passports. Also, IAI started the development and delivery of systems that can be used in the production process of solar cells, and contacts have been established with several big players in the solar market. IAI will continue this in the second half of 2008 to acquire a position in this market. Furthermore, IAI continues to search for companies that can support or accelerate the entrance in the solar market.
The cash flow statement in the Appendix to the attached enclosure 'Financial Information for the half-year ended 30 June 2008' shows that DOCDATA N.V. has realised net cash from operating activities of EUR 1.0 million in the first half-year 2008. The cash surplus position of EUR 3.5 million at 31 December 2007 has decreased in the first half-year 2008 to a net debt position of EUR 2.1 million at 30 June 2008. An amount of EUR 6.6 million has been spent during the first half-year 2008 to finance:
- acquisition of subsidiaries: in total EUR 1.3 million for the acquisition of (additional) share interests of 20% in docdata commerce B.V. in Waalwijk, 40% in Pegasus e-Business GmbH (concerning docdata fulfilment) in Münster, Germany, and 61.2% in Hitura Limited (post-acquisition named 'docdata commerce Limited') in London, United Kingdom;
- investments in property, plant & equipment and intangibles (EUR 1.5 million);
- distribution to the shareholders of dividend from the 2007 profit (EUR 1.9 million);
- own shares bought (EUR 1.9 million).
DOCDATA N.V. has maintained its strong financial position with a solvency ratio of 47.4% at 30 June 2008 (31 December 2007: 52.3%).
Michiel Alting von Geusau: "Through the combination of markets on which we operate, revenue and result of DOCDATA are less sensitive to the current negative climate with respect to the general economic situation and the declining consumer trust. We remain positive about the developments within our company and are convinced that we offer unique and reliable solutions to our customers."
Results by segment
Internet service company docdata
In the first half of 2008, docdata commerce, docdata payments and docdata fulfilment have shown strong growth. The fact that docdata can offer an integrated solution to companies that want to sell through the Internet has absolutely contributed to this growth. At this moment, docdata is more and more "recognised" in the market as the Internet service company; also thanks to the new Corporate Identity.
Docdata further invested in the first half-year of 2008 in the development of web based IT systems, through which optimal services can be offered to customers. Additional investments were done in a substantial increase of our fulfilment capacity, in the Netherlands, Germany, as well as in the United Kingdom.
Important new contracts with customers have been signed in the first half-year of 2008 which will contribute to revenue and results in the second half-year of 2008. Two examples of such contracts are V&D and TNT. V&D has chosen docdata fulfilment for the distribution of online sales. Docdata fulfilment is pleased with this development. Next to the existing products, docdata fulfilment will now also start processing fashion and related products. With this, docdata fulfilment has realised two of its goals for 2008: expansion of the service portfolio to (r)etailers and becoming a well known player in the fashion sector. Both V&D and TNT have chosen the online payment solutions of docdata payments.
Technology company IAI
The peak in the installation and delivery of systems in the order portfolio is in the second half-year of 2008. Installation and delivery dates are mainly determined at request of the client and IAI only has limited possibilities to spread the deliveries over the year. Revenue and results of IAI in the first half-year of 2008 are therefore lower than those for the comparable period in 2007, but the second half of 2008 will show a different picture.
In the course of 2008, system orders in the Security Printing market have been received for Algeria, South Africa and Sweden. In all cases, these orders relate to recently developed systems or systems in development: BookMaster One systems for the personalisation of passports with a polycarbonate holder page, BookMaster One systems for the personalisation of passports with a paper holder page, and the new SheetMaster Flex and WebMaster Flex systems, which are capable of processing documents printed in sheets or on roll. The sales focus lies with new systems, which confirms the acceptance of IAI's product diversification for the Security Printing market. The deliveries related to these orders have been partly scheduled for the second half of 2008.
In relation to 'Vision 2010: Gear to growth' it was announced that IAI would become active in the production equipment market for solar energy. IAI has established many contacts in this new market in the first half-year of 2008. Through these contacts, IAI wants to deliver systems in this market in order to realise autonomous growth. Furthermore, IAI aims to identify parties in this market that can be considered for intensive cooperation and/or acquisition to realise an additional growth impulse.
As of 1 January 2005 DOCDATA N.V. has adopted the International Financial Reporting Standards as adopted by the European Union (hereafter IFRS) in preparing the consolidated financial statements. For an overview of the significant accounting policies under IFRS, please refer to the 2007 Annual Report that is available at the Company and can also be downloaded from the Company's website, http://www.docdata.com, under Corporate.
The half-year financial report has been prepared in accordance with IAS 34 (Interim Financial Reporting).
The financial statements and reconciliations included in this half-year report and its enclosures have not been audited by the external auditors. Enclosure with financial information
For a detailed review of the 2008 half-year results please refer to the attached enclosure 'Financial Information for the half-year ended 30 June 2008' with Appendix.
Meeting for financial press and analysts
Today, 29 July 2008, management of DOCDATA N.V. will discuss the 2008 half-year results in a meeting for which both financial press and analysts have been invited, to be held at 10.30AM Amsterdam time in the Mercurius room of the Financieel Nieuwscentrum Beursplein 5 of NYSE Euronext Amsterdam (Beursplein 5, 1012 JW Amsterdam, +31-20-5505505).
DOCDATA N.V. is listed at the NYSE Euronext since 1997 and exists of two different organisations, docdata and Industrial Automation Integrators.
Internet service company docdata (http://www.docdata.com) is an European market leader with a strong basis in The Netherlands, Germany and the United Kingdom, and exists of four divisions:
- docdata commerce
- docdata payments
- docdata fulfilment
- docdata media
Technology company Industrial Automation Integrators (http://www.iai.nl) is a high tech engineering company specialised in developing and building machines 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 packaging materials
- processing of solar cells
- processing of other materials (such as motion picture subtitling)
The financial information is prepared in accordance with International Financial Reporting Standards as adopted by the European Union (hereafter IFRS).
(in thousands, except percentage figures) Half-year 2008 Half-year 2007 Revenue by company EUR % EUR % Internet service company docdata 33,118 92.8 28,161 85.3 Technology company IAI 2,575 7.2 4,835 14.7 Total 35,693 100.0 32,996 100.0
- Revenue of Internet service company docdata increased EUR 5.0 million (18%) in the half-year ended 30 June 2008 compared to the half-year ended 30 June 2007. Excluding revenue of the docdata media division of EUR 15.6 million in the half-year ended 30 June 2008 (HY2007: EUR 16.6 million), the total revenue of the three other divisions docdata commerce, docdata payments and docdata fulfilment increased EUR 6.0 million (52%) in the half-year ended 30 June 2008 compared to the half-year ended 30 June 2007. The acquisitions docdata commerce Ltd. (formerly named 'Hitura Ltd.') and Pegasus e-Business GmbH, which were not yet consolidated in the financial statements for the half-year ended 30 June 2007, and docdata payments B.V. (formerly named 'Triple Deal B.V.') that was only included in the consolidation for the half-year ended 30 June 2007 for one month after acquiring the controlling share interest per 25 May 2007, have together contributed for EUR 2.6 million to this revenue increase, while revenue increased for EUR 3.4 million (30%) due to autonomous growth.
- Technology company IAI's lower revenue is caused by lower revenue from (completed contract) deliveries of security systems in the half-year ended 30 June 2008 compared to the half-year ended 30 June 2007, first-time revenue from business in the solar market in the half-year ended 30 June 2008, in combination with a changed mix of revenues from deliveries of subassemblies, service, packaging contract research and development, and production royalties in the passport market segment. Most deliveries of security systems in 2008 are planned for the second half-year of 2008.
(in thousands, except percentage figures) Half-year 2008 Half-year 2007 Gross profit (margin) by company (margin as % of revenue by company) EUR % EUR % Internet service company docdata 8,583 25.9 6,134 21.8 Technology company IAI 848 32.9 1,897 39.2 Total 9,431 26.4 8,031 24.3
- Internet service company docdata realised an increase in gross profit of EUR 2.4 million (40%) in the half-year ended 30 June 2008 compared to the half-year ended 30 June 2007. The effect of changes in the consolidation for the two comparable half-years (Note: changes described under revenue) on gross profit was EUR 1.4 million, leaving EUR 1.0 million (16%) due to autonomous growth. Gross profit and gross profit margin for the three divisions docdata commerce, docdata payments and docdata fulfilment have improved predominantly by a higher activity and revenue level, enabling efficiency improvements through economies-of-scale. Also the docdata media division contributed to the increase in gross profit for a small part, through realising growth in gross profit margin from 14.6% in the half-year ended 30 June 2007 to 16.0% in the half-year ended 30 June 2008. This proves that docdata media is still successful in controlling production costs (including material expenses for polycarbonate and DVD-production royalties, personnel expenses, depreciation expenses and overheads) in relation to developments in the average sales prices for CD and DVD.
- Gross profit of Technology company IAI decreased EUR 1.0 million in the half-year ended 30 June 2008 compared to the half-year 30 June 2007. The gross profit margin decreased, predominantly caused by the difference in the sales mix of security systems delivered in both half-years, as well as in the mix of the other revenue categories for the previous year.
Operating profit before financing result (EBIT) and Selling & Administrative expenses
(in thousands, except percentage figures) Half-year 2008 Half-year 2007 Operating profit (margin) by company (margin as % of revenue by company) EUR % EUR % Internet service company docdata 1,354 4.1 234 0.8 Technology company IAI 58 2.3 1,319 27.3 Total 1,412 4.0 1,553 4.7 Selling & Administrative expenses (as % of revenue) Selling expenses 2,336 6.5 1,791 5.4 Administrative expenses 5,670 15.9 4,772 14.5 Total 8,006 22.4 6,563 19.9 Selling & Administrative expenses by company (as % of revenue by company) Internet service company docdata 7,216 21.8 5,985 21.3 Technology company IAI 790 30.7 578 12.0 Total 8,006 22.4 6,563 19.9
- Operating profit of Internet service company docdata increased EUR 1.1 million in the half-year ended 30 June 2008 compared to the half-year ended 30 June 2007. This increase is the combined effect of an increase in gross profit of EUR 2.4 million and an increase in selling and administrative expenses of EUR 1.3 million. The effect of changes in the consolidation for the two comparable half-years (Note: changes described under revenue) on selling and administrative expenses was EUR 1.5 million, resulting in a combined decrease in selling and administrative expenses of the other subsidiaries in this company of EUR 0.2 million. The increased selling expenses and administrative expenses reflect the execution of the new strategy 'Vision 2010: Gear to Growth', where higher personnel expenses and organisational costs have been incurred to enable growth of the activity and business levels for the divisions docdata commerce, docdata payments and docdata fulfilment. In general, the increase in expenses can be explained by required investments in personnel, organisational improvements, development of IT solutions, and design and implementation of e-Solutions for new customers.
- Operating profit of Technology company IAI decreased EUR 1.2 million (96%) in the half-year ended 30 June 2008 compared to the half-year ended 30 June 2007. This decrease is the combined effect of a decrease of EUR 1.0 million in gross profit and an increase in selling and administrative expenses of EUR 0.2 million. The lower EBIT margin is due to the different sales mix for both comparable half-years, with a lower gross profit margin of the revenue in the half-year ended 30 June 2008, in combination with higher selling and administrative expenses in the half-year ended 30 June 2008. This increase in expenses is fully in line with our plans for 2008, in which we communicated higher personnel expenses and higher consultancy costs, related to the strategic entrance into the solar market.
Net financing income / (expenses)
Net financing expenses in the half-year ended 30 June 2008 amounted to EUR 0.1 million compared to a small net financing income in the half-year ended 30 June 2007. This decrease of EUR 0.1 million is predominantly caused by higher bank interest expenses in relation to the usage of the credit facilities to finance the Braywood acquisition and to finance working capital for docdata fulfilment and the Pegasus acquisition. Furthermore, the financial expenses in the half-year ended 30 June 2008 include a EUR 0.1 million higher foreign currency exchange loss due to the euro becoming stronger against the British pound in the second half-year 2007 and the first half-year 2008.
Income tax expense
DOCDATA's effective tax rate for the half-year ended 30 June 2008 was 20% with an income tax expense of EUR 0.3 million on a profit before income tax of EUR 1.3 million. For the half-year ended 30 June 2007 the profit from continuing operations before income tax amounted to EUR 1.7 million and the income tax expense amounted to EUR 0.3 million (effective tax rate: 17%).
The income tax expense of EUR 0.3 million in the half-year ended 30 June 2008 is the combined result of the following tax treatments of the results per country:
- In the Netherlands, a tax charge has been recorded at a corporate income tax rate of 25.5% on the taxable income for the Dutch fiscal entity as well as for the Dutch subsidiaries that are not part of this fiscal entity.
- In the United Kingdom, income taxes are recorded against a corporate income tax rate of 28.0% (2007: 30.0%).
- In Germany, a tax charge has been recorded at a corporate income tax rate of in general 30.0% on taxable income for the German entities, taking into account lower income tax rates for some regions in Germany when and where applicable.
Profit from discontinued operation (net of income tax)
The profit from discontinued operation (net of income tax) of EUR 0.2 million for the half-year ended 30 June 2007 resulted from the reassessment of all existing risks at that time in relation to the termination of the former French activities of the Media Group, which were accounted for at net realisable value in the consolidated balance sheet at 31 December 2006 and were reported under assets and liabilities classified as held for sale. Reference is made to section 5.6 Discontinued operation of the Notes to the Consolidated Financial Statements for further information.
Liquidity and capital resources
The General Annual Meeting of Shareholders held on 15 May 2008 approved the proposal to distribute a dividend of EUR 0.25 per ordinary share outstanding (excluding own shares held by the Company), which had a decreasing impact of EUR 1.9 million on retained earnings within the equity of the Company in the half-year ended 30 June 2008. Furthermore, the shareholders approved in that same meeting the proposal to withdraw 308,850 shares to bring the issued share capital down to 7,000,000 shares. Completion of the procedure to formally realise this withdrawal is expected in September 2008.
In the half-year ended 30 June 2008 16,030 personnel options were exercised; 13,850 options from the 2003 series at a price of EUR 2.68 per share, and 2,180 options from the 2004 series at a price of EUR 4.48 per share. The underlying shares have been delivered by the Company from the number of own shares in possession of the Company. The proceeds of EUR 47 thousand have been credited to equity under reserves, as the purchase of own shares has been charged to reserves in the past. In addition, 20,741 shares were granted to the CEO in May 2008, following the approval by the General Meeting of Shareholders on 15 May 2008 of the Remuneration Report 2007. Furthermore, the Company purchased 291,584 own shares in the half-year ended 30 June 2008, for a total purchase price of EUR 1.9 million, to bring the number of own shares owned up to 694,502 (9.50%) shares as per 30 June 2008; the Company owns this same number of shares today.
In addition to the EUR 1.9 million dividend payment and the EUR 1.9 million share buy-back, the Group has invested a total amount of EUR 2.8 million in the half-year ended 30 June 2008: EUR 1.0 million in property, plant and equipment (mainly warehousing equipment and investment in IT infrastructure); EUR 0.6 million for the acquisition of an additional share interest of 20% (bringing the share interest to 80%) in docdata commerce B.V. (formerly named 'DOCdata e-Commerce Solutions B.V.'), EUR 0.4 million for the acquisition of an additional share interest of 40% (bringing the share interest to 70%) in Pegasus e-Business GmbH, EUR 0.3 million for the acquisition of a controlling share interest of 61.2% in Hitura Limited (post-acquisition name 'docdata commerce Ltd.'), and EUR 0.5 million in intangibles (predominantly IT development costs). These payments and investments for a total of EUR 6.6 million were for EUR 1.0 million financed from the Group's net cash flow from operating activities in the half-year ended 30 June 2008 (HY2007: EUR 2.5 million), including total depreciation and amortisation expenses of EUR 1.8 million (HY2007: EUR 1.9 million), for EUR 0.5 million from bank overdrafts and other borrowings and for EUR 5.1 million from the Group's net cash position. As a result of this, the Group's net cash position of EUR 3.5 million at 31 December 2007 has turned in the half-year ended 30 June 2008 into a net debt position of EUR 2.1 million.
Consolidated Financial Statements
1. Consolidated Balance Sheets
Balance sheets before appropriation of profit.
30 31 June December 2008 2007 (in thousands) EUR EUR Assets Property, plant and equipment 7,168 7,508 Intangible assets 11,030 9,856 Investments in associates 154 459 Other investments 100 100 Trade and other receivables 169 230 Deferred tax assets 959 1,046 Total non-current assets 19,580 19,199 Inventories 5,202 3,884 Income tax receivables 996 407 Trade and other receivables 14,612 13,379 Cash and cash equivalents 300 5,586 Total current assets 21,110 23,256 Total assets 40,690 42,455 Equity Share capital 731 731 Share premium 16,854 16,854 Translation reserves (541) (49) Reserve for own shares (3,288) (1,625) Retained earnings 5,318 5,932 Total equity attributable to equity 19,074 21,843 holders of the parent Minority interest 226 344 Total equity 19,300 22,187 Liabilities Interest-bearing loans and other 1,008 1,057 borrowings Employee benefits 186 343 Deferred tax liabilities 571 653 Total non-current liabilities 1,765 2,053 Bank overdrafts 2,352 2,110 Interest-bearing loans and other 135 76 borrowings Income tax payable 256 54 Trade and other payables 16,841 15,853 Provisions 41 122 Total current liabilities 19,625 18,215 Total liabilities 21,390 20,268 Total equity and liabilities 40,690 42,455
2. Consolidated Income Statements
Half-year 2008 Half-year 2007 (in thousands, except earnings EUR % EUR % per share and average shares outstanding) Continuing operations Revenue 35,693 100.0 32,996 100.0 Cost of sales (26,262) (73.6) (24,965) (75.7) Gross profit 9,431 26.4 8,031 24.3 Other operating income 21 0.1 164 0.5 Selling expenses (2,336) (6.5) (1,791) (5.4) Administrative expenses (5,670) (15.9) (4,772) (14.5) Other operating expenses (34) (0.1) (79) (0.2) Operating profit before financing 1,412 4.0 1,553 4.7 result Financial income 203 0.6 171 0.5 Financial expenses (327) (0.9) (167) (0.5) Net financing income / (expenses) (124) (0.3) 4 - Share of profits of associates 21 0.1 173 0.5 Profit before income tax 1,309 3.7 1,730 5.2 Income tax expense (267) (0.8) (292) (0.9) Profit from continuing operations 1,042 2.9 1,438 4.3 Discontinued operation Profit from discontinued - - 177 0.6 operation (net of income tax) Profit for the period 1,042 2.9 1,615 4.9 Attributable to: Equity holders of the parent 1,044 2.9 1,626 4.9 Minority interest (2) - (11) - Profit for the period 1,042 2.9 1,615 4.9 Weighted average number of shares 6,725,000 7,120,000 outstanding Weighted average number of shares 6,985,000 7,301,000 (diluted) Earnings per share Basic earnings per share 0.15 0.23 Diluted earnings per share 0.15 0.22 Continuing operations Basic earnings per share 0.15 0.20 Diluted earnings per share 0.15 0.20
3. Consolidated Statements of Cash Flows
Half-year Half-year 2008 2007 (in thousands) EUR EUR Cash flows from operating activities Profit for the year 1,042 1,615 Adjustments for: Depreciation and amortisation 1,847 1,918 Costs share options and delivered shares 184 131 Financial expenses 327 167 Financial income (203) (171) Share of profits of associates (21) (173) Income tax expense 267 292 Cash flows from operating activities before changes in working capital and provisions 3,443 3,779 Increase / decrease in trade and other receivables and assets held for sale (1,073) 4,860 Increase / decrease in inventories (1,318) 1,343 Increase / decrease in trade and other payables and liabilities held for sale 978 (7,094) Decrease / increase in provisions and employee (238) 295 benefits Cash generated from the operations 1,792 3,183 Interest paid (210) (167) Interest received 195 171 Income taxes paid (800) (673) Net cash from operating activities 977 2,514 Cash flows from investing activities Acquisition of subsidiaries (1,318) (1,846) Acquisition of property, plant and equipment (990) (1,079) Acquisition of intangible assets (479) (144) Acquisition of associates and other (66) - investments Proceeds from sale of property, plant and 11 14 equipment Net cash from investing activities (2,842) (3,055) Cash flows from financing activities Own shares bought (1,894) (642) Dividends paid (1,892) (1,418) Proceeds from bank overdrafts 377 131 Proceeds from / repayment of other borrowings 110 (72) Proceeds from exercise of share options 47 110 Loans provided to associates - - Net cash from financing activities (3,252) (1,891) Net (decrease) increase in cash and cash (5,117) (2,432) equivalents Cash and cash equivalents at the beginning of 5,586 5,831 the period Effect of exchange rate fluctuations on cash (169) (31) held Cash and cash equivalents at the end of the 300 3,368 period
4. Consolidated Statements of Shareholders' Equity
Total equity attributable to equity holders of Share Share Retained the parent Minority Total capital premium earnings interest equity Reserves (in EUR EUR EUR EUR EUR EUR EUR thousands) Equity Statement 2007 Balance at 1 731 16,854 625 3,978 22,188 226 22,414 January 2007 Dividend - - - (1,435) (1,435) (9) (1,444) distribution Shares bought - - (1,994) - (1,994) - (1,994) Exercised - - 129 - 129 - 129 share options Delivered - - 92 - 92 - 92 shares for remuneration Costs share - - 87 - 87 - 87 options Translation - - (613) - (613) - (613) difference Consolidation - - - - - 128 128 former associate Profit for - - - 3,389 3,389 (1) 3,388 the period Balance at 731 16,854 (1,674) 5,932 21,843 344 22,187 31 December 2007 Equity Statement 2008 Balance at 1 731 16,854 (1,674) 5,932 21,843 344 22,187 January 2008 Dividend - - - (1,658) (1,658) (234) (1,892) distribution Shares bought - - (1,894) - (1,894) - (1,894) Exercised - - 47 - 47 - 47 share options Delivered - - 135 - 135 - 135 shares for remuneration Costs share - - 49 - 49 - 49 options Translation - - (492) - (492) - (492) difference Consolidation - - - - - 118 118 former associate Profit for - - - 1,044 1,044 (2) 1,042 the period Balance at 731 16,854 (3,829) 5,318 19,074 226 19,300 30 June 2008
5. Notes to the Consolidated Financial Statements
5.1 Accounting principles
As of 1 January 2005 DOCdata N.V. (referred to as "DOCDATA" or the "Company") has adopted the International Financial Reporting Standards as adopted by the European Union ("IFRS") in preparing the consolidated financial statements.
For a summary of the significant accounting policies under IFRS, please refer to the Company's Annual Report for the financial year ended 31 December 2007.
This interim financial report has been prepared in accordance with IAS 34 (Interim Financial Reporting).
The financial statements and reconciliations included in this report and its enclosures have not been audited by the external auditors.
5.3 Management representations
In the opinion of the management, these financial statements include all adjustments necessary for a fair presentation of the financial position, operating results and cash flows of all reporting periods herein. All such adjustments are of a normal recurring nature.
The results of the operations for the half-year ended 30 June 2008 are not necessarily indicative of the results for the entire financial year ending 31 December 2008.
5.4 Organisation structure and segmentation
From 1 January 2008 onwards, DOCDATA has changed the organisation structure from a country organisation to a divisional structure. Starting the financial year 2008, DOCDATA identifies for the purpose of preparing financial statements the following two segments: Internet service company docdata (consisting of the following four divisions: docdata commerce, docdata payments, docdata fulfilment and docdata media) and Technology company IAI. The segmentation for the comparable financial statements for the half-year ended 30 June 2007 has been adjusted accordingly.
In the consolidated financial statements for the half-year ended 30 June 2008, the following acquisitions have been consolidated as of the acquisition dates mentioned:
- Pegasus e-Business GmbH: DOCDATA has increased its share interest in Pegasus e-Business GmbH in Münster (Germany; formerly named 'Pegasus Dienstleistungen GmbH') from 30% to 70%, through the exercise of the call option on 40% of the issued share capital which was part of the original sale and purchase agreement from September 2006. The balance sheet and income statement of Pegasus e-Business GmbH has been included in the DOCDATA consolidation starting 1 January 2008;
- docdata commerce Limited (formerly named 'Hitura Limited'): DOCDATA has acquired an interest of 61.2% in the issued share capital of Hitura Ltd. in London (England), with an agreement on the purchase of the remaining minority shares between 2008 and 2013. The balance sheet and income statement of Hitura Ltd. have been included in the DOCDATA consolidation starting 1 February 2008.
In the consolidated financial statements for the half-year ended 30 June 2007, the following acquisition has been consolidated as of the acquisition date mentioned:
- docdata payments B.V. (formerly named 'Triple Deal B.V.') as of 25 May 2007 (70% share interest). The consolidated income statement for the half-year ended 30 June 2007 includes revenue and results of this subsidiary as of acquisition date. The minority interest of 30% in the equity of this subsidiary, which minority interest is owned by Conclusion Consultants B.V. for 20% and by Syllion B.V. for 10%, has been accounted for in the consolidated balance sheet under minority interest within total equity.
5.6 Discontinued operation
In the consolidated financial statements for the half-year ended 30 June 2007 and for the year ended 31 December 2007, the assets, liabilities and activities of Optical Disc de France S.A.S., (DOCdata France) formerly part of the Media Group, have been accounted for as discontinued operation. In the consolidated balance sheet at 31 December 2006, all assets and liabilities of DOCdata France have been accounted for at net realisable value and have been reported under assets classified as held for sale and liabilities classified as held for sale. In the consolidated income statements for the half-year ended 30 June 2007 and the year ended 31 December 2007, the results after income tax of DOCdata France for those periods have been reported under profit/(loss) from discontinued operation (net of income tax).
In the consolidated balance sheet at 31 December 2007, a provision for remaining risks related to the termination of the French activities was accounted for under current liabilities (EUR 87 thousand). In the half-year ended 30 June 2008, this provision has been fully used for required and expected final payment of remaining liabilities. No further expenses have been accounted for in the income statement for the half-year ended 30 June 2008, and neither have any new accruals or provisions been accounted for in the balance sheet at 30 June 2008.
5.7 Property, plant and equipment
30 June 31 December 2008 2007 (in thousands) EUR EUR Land and buildings 1,554 1,552 Machinery and equipment 3,581 3,725 Other 2,019 1,896 7,154 7,173 Under construction 14 335 Total 7,168 7,508
The book value for property, plant and equipment has decreased with EUR 0.3 million in the half-year ended 30 June 2008, resulting from depreciation charges for EUR 1.5 million exceeding capital expenditure of EUR 1.2 million (inclusive of EUR 0.2 million for property, plant and equipment acquired through new participations).
5.8 Intangible assets
30 June 31 December 2007 2008 (in thousands) EUR EUR Goodwill 7,424 6,212 Customer contracts 806 899 IT platforms 2,436 2,605 10,666 9,716 Under construction 364 140 Total 11,030 9,856
The book value for intangible assets has increased with EUR 1.2 million in the half-year ended 30 June 2008, due to the following:
- goodwill paid (EUR 1.5 million) for the acquisitions of the majority share in Pegasus e-Business GmbH and Hitura Limited, as well as for the acquisition of an additional 20% share interest in docdata commerce B.V.;
- additions for the development of IT platforms (EUR 0.5 million, including under construction);
- amortisation charges for customer contracts and IT platforms (EUR 0.4 million in total);
- foreign currency loss (EUR 0.4 million) on the valuation of the intangible assets with an original value in British pounds (i.e. related to the Braywood and Hitura acquisitions).
5.9 Investments in associates
The book value for investments in associates has decreased with EUR 0.3 million in the half-year ended 30 June 2008, predominantly as a result from the consolidation of Pegasus e-Business GmbH starting 1 January 2008. In the consolidated balance sheet at 31 December 2007 the DOCDATA share interest of 30% at that time in Pegasus was valued at cost of EUR 0.3 million under investments in associates.
Further information: DOCDATA N.V., M.F.P.M. Alting von Geusau, CEO, Tel. +31-416-631-100