Income statement (IFRS)
|INCOME STATEMENT (IFRS)|
|EUR million||Note||1 Jan–31 Dec 2016||1 Jan–31 Dec 2015|
|Net sales||1||1 492.6||1 460.1|
|Other operating income||3||19.8||30.5|
|Cost of sales||-232.8||-230.2|
|Employee benefit expenses||8,||9||-827.1||-828.3|
|Depreciation and amortization||14,||15||-53.9||-56.6|
|Other operating expenses||4||-261.0||-254.5|
|Share of profit from investments accounted for using the equity method||28||3.2||4.2|
|Interest and other financial income||6||2.1||1.9|
|Interest and other financial expenses||6||-5.0||-5.4|
|Net exchange losses and gains||6||-1.1||-2.4|
|Profit before taxes||136.8||119.3|
|Net profit for the financial year||107.2||90.5|
|Net profit for the period attributable to|
|Shareholders of the Parent company||107.2||90.5|
|Earnings per share attributable to the shareholders of the Parent company, EUR||7|
|Statement of comprehensive income, EUR million|
|Net profit for the period||107.2||90.5|
|Items that may be reclassified subsequently to profit or loss|
|Cash flow hedges (net of tax)||-0.2||0.5|
|Items that will not be reclassified subsequently to profit or loss|
|Actuarial gain/loss on post employment benefit obligations (net of tax)||-2.1||9.5|
|Total comprehensive income||102.8||102.8|
|Total comprehensive income attributable to|
|Shareholders of the Parent company||102.8||102.8|
|Notes are an integral part of these consolidated financial statements.|
Comments to the income statement
Net sales increased by 2.2% to EUR 1 492.6 (1 460.1) million, growth of 3.2% in local currencies. In IT services, net sales were up by 4.3%, in local currencies up by 5.3%. In Product Development Services, sales were down by 17.3% partly due to an insourcing by one key customer whose projects ended after the first quarter of 2015. The acquisitions added EUR 50 million in sales, affecting Industry Solutions (EUR 34 million) and Business Consulting and Implementation (EUR 16 million). Divestments implemented in 2015 had a negative impact of EUR 5 million, affecting Industry Solutions. Currency fluctuations had a negative impact of EUR 15 million on sales, mainly due to the weaker Swedish and Norwegian Krona.
Operating profit (EBIT) amounted to EUR 140.8 (125.2) million, representing a margin of 9.4% (8.6). Operating profit included allocated acquisition-based amortization of EUR 3.3 million. Additionally, customer debt restructurings had a negative impact of EUR 1.7 million.
Cost savings, mainly related to the automation programme and industrialization of application management services, had a positive effect of around EUR 29 million on IT services’ operating profit while the positive impact of gross savings was curbed by around EUR 18 million in salary inflation, around EUR 20 million in costs for recruitments in new service areas and the increase of EUR 15 million in offering development costs.Currency changes had a negative impact of over EUR 3 million on operating profit. The negative effect was mainly attributable to Swedish and Norwegian Krona.
Employee benefit expenses remained at the previous year’s level and represented 55.4% (56.7) of net sales. Employee benefit expenses include costs from personnel restructuring of EUR 10.6 (30.9) million. The performance-based incentive accruals, including both short-term and long-term incentives, were EUR 25.6 (32.4) million. The average number of full-time employees was 13 472 (13 184).
Net financial expenses stood at EUR 4.0 (5.9) million. Net interest expenses were EUR 2.1 (2.2) million and net losses from foreign exchange transactions EUR 1.1 (2.4) million. Other financial income and expenses amounted to EUR -0.8 (-1.3) million.
Tax expenses reported for the year include EUR 23.6 million payable on the profit for the year and EUR 6.9 million negative from the change in deferred taxes. Tax rate was 20.0% in Finland and 22.0% in Sweden.
|Cost structure, %||2016||2015|
|Cost of sales||16.9||16.8|
|Employee benefit expenses||60.2||60.5|
|Other operating expenses||19.0||18.6|
|Depreciation and amortization||3.9||4.1|