Bisnode Year-end report 2010

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Bisnode Year-end report 2010

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<ul><li><p>2010 2009 2010 2009llion Oct-Dec Oct-Dec Jan-Dec Jan-Dece 1,164 1,244 4,451 4,741</p><p>e growth, % -6.4 5.6 -6.1 9.6</p><p>ng profit (EBITA) 160 185 536 593</p><p>ng margin (EBITA), % 13.8 14.9 12.0 12.5</p><p>ng profit (EBITA) excl. cap. gains 165 155 545 563</p><p>ng margin (EBITA) excl. cap. gains, % 14.1 12.5 12.2 11.9</p><p>w from operating activities 230 244 464 471</p><p>SEK miRevenu</p><p>Revenu</p><p>Operati</p><p>Operati</p><p>Operati</p><p>Operati</p><p>Cash flo</p><p> Revenue of SEK 1,164 million (1,244) Operating profit (EBITA) of SEK 160 million (185) Operating margin (EBITA) of 13.8 per cent (14.9) Cash flow from operating activities of SEK 230 million (244) </p><p> Revenue of SEK 4,451 million (4,741) Operating profit (EBITA) of SEK 536 (593) Operating margin (EBITA) of 12.0 per cent (12.5) Cash flow from operating activities of SEK 464 million (471) </p><p> Improving market development and positive sales development </p><p>in the second half of the year Market positions in France and Finland strengthened through </p><p>the acquisitions of Directinet and Yritystele Launch of new credit information company in Germany Continued streamlining of the Group through the divestiture </p><p>of three companies and one operating unit Acquisition of Croatian Poslovna Domena and majority holding </p><p>in Swedish Vendemore completed after the balance sheet date </p><p>Q4 </p><p>Year-end report 2010</p><p>October-December </p><p>Bisnode ended the year on a positive note with organic growth of over 1 per cent in the second half of the year, partly as a result of gradually improving market development in Europe. For the year as a whole, revenue decreased organically by 1 per cent. Operating margin adjusted for capital gains rose slightly and a continued strong cash flow from operating activities enabled us to reduce our net debt by close to SEK 400 million during the year. </p><p>January-December </p><p>Key events </p><p> It is satisfying to see that our German operations are performing well. Germanys size makes the country strategically important and in recent years we have invested extensively in the German credit information market to increase the Groups market share. In Sweden, as communicated earlier, the Swedish Tax Agency will take over responsibility for SPAR (Coordinated Population and Address Register) in 2011 and the group company Infodata will thereby lose its exclusive right to distribution of SPAR information. The services previously handled by Infodata will remain on the market during 2011 but will be terminated thereafter. The Swedish Tax Agencys takeover of SPAR will have a significant impact on Bisnodes SPAR-related operations through lower revenue and weaker profitability. Our assessment is, however, that the Groups other operations will compensate for the decline in SPAR-related revenue. In light of the new market situation in Sweden, our ventures in Germany and other European markets are an important part of our efforts to build a platform for long-term profitability and growth. Johan Wall, President and CEO </p><p>Key figures </p><p>January-December 2010, Bisnode Business Information Group AB. CIN 556681-5725 1 (12)</p><p>Revenue</p><p>9Q1-10</p><p>Q2-10</p><p>Q3-10</p><p>Q4-10</p><p>0</p><p>800</p><p>1,600</p><p>2,400</p><p>3,200</p><p>4,000</p><p>4,800</p><p>5,600</p><p>SEK m</p><p>0</p><p>200</p><p>400</p><p>600</p><p>800</p><p>1,000</p><p>1,200</p><p>1,400</p><p>Q4-0</p><p>Quarter LTM</p><p>Operating profit (EBITA)</p><p>0</p><p>30</p><p>60</p><p>90</p><p>120</p><p>150</p><p>180</p><p>210</p><p>Q4-09</p><p>Q1-10</p><p>Q2-10</p><p>Q3-10</p><p>Q4-10</p><p>0</p><p>100</p><p>200</p><p>300</p><p>400</p><p>500</p><p>600</p><p>700</p><p>SEK m</p><p>Quarter LTM</p></li><li><p>2010 2009 2010 2009 2010 2009SEK million Oct-Dec Oct-Dec Oct-Dec Oct-Dec Oct-Dec Oct-DecRegion Nordic 522 544 99 127 19.0 23.3Region DACH 244 249 68 38 27.7 15.2Region BeNeFra 188 196 9 30 4.6 15.4Region Central Europe 44 45 -2 0 -3.8 0.5Business Area Product Information 108 127 18 -2 16.3 -1.9Business Area Software &amp; Applications 93 118 10 22 10.8 18.4Central functions -41 -29 n/a n/aInternal eliminations -35 -35 n/a n/aTotal 1,164 1,244 160 185 13.8 14.9</p><p>2010 2009 2010 2009 2010 2009SEK million Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-Dec Jan-DecRegion Nordic 1,988 2,086 371 385 18.7 18.5Region DACH 860 913 104 81 12.1 8.9Region BeNeFra 741 735 30 73 4.1 9.9Region Central Europe 182 183 23 26 12.7 14.4Business Area Product Information 437 530 71 52 16.2 9.7Business Area Software &amp; Applications 360 424 46 60 12.8 14.1Central functions -109 -84 n/a n/aInternal eliminations -117 -129 n/a n/aTotal 4,451 4,741 536 593 12.0 12.5</p><p>Revenue Operating profit (EBITA) Operating margin (EBITA), %</p><p>Operating margin (EBITA), %Revenue Operating profit (EBITA)</p><p>Business overview </p><p>Adjusted for foreign exchange effects, organic growth reached 1.3 per cent for the quarter and -1.4 per cent for the full year. Operating margin for the full year was 12.0 per cent. Adjusted for capital gains on the sale of operations, operating margin was 12.2 per cent, compared to 11.9 per cent in last year. </p><p>Adjusted for foreign exchange effects, Region Nordic reported organic growth of -2 per cent for the year and 1 per cent for the fourth quarter. The rise in growth at the end of the year is mainly due to continued strong growth for credit information in Finland and Sweden. Through greater cost awareness and the now completed cost-cutting programmes the region achieved a somewhat higher operating margin for the year as a whole. The drop in operating margin in the fourth quarter compared to the same period of last year is explained by the fact that the comparison period includes total capital gains of SEK 26 million on the sale of operations. </p><p>Development in Bisnodes Norwegian businesses remains weak, with negative organic growth of 9 per cent. The downward trend is visible in all market segments and steps are being taken to adapt these operations to the market situation. Growth in Denmark has slowed following the previous years sharp increase in demand for credit information, while Finland continued to perform well with organic growth of 10 per cent. In 2010 operations in Finland were further strengthened through the acquisition of Yritystele, which will complement the existing units. The integration of Yritystele and 121 Media, which was acquired in 2009, has proceeded according to plan and </p><p>substantial synergies with the existing operations have been realised, which has resulted in better operating margins. </p><p>Region DACH reported positive development with organic growth of 3 per cent, adjusted for foreign exchange effects. The region showed higher profitability in spite of the ongoing initiatives to increase the Groups share of the German credit information market. These activities started in 2008 by a database expansion that in turn has made the launch of two new credit solutions companies possible, Hoppenstedt Creditcheck and Hoppenstedt360, which targets different market segments. The strong development in the fourth quarter compared to 2009 is explained by generally good development in the region and the closing of several important deals on the right side of the end of the year. Austria and Switzerland delivered continued positive performance with growth of 1-2 per cent and improved operating margins. </p><p>Region BeNeFra, which consists solely of Marketing Solutions companies, reported negative organic growth of 6 per cent, adjusted for foreign exchange effects. In the Netherlands, a law change with the introduction of a do not call register has significantly changed the market conditions for all market players and led to negative growth of 18 per cent. To adapt these operations to the new market situation, a new managing director was appointed in the Netherlands during the year and an action programme with substantial cost-cutting measures has been launched, resulting in higher costs of SEK 14 million in the fourth quarter. In Belgium, an integration project has been carried out to </p><p>January-December 2010, Bisnode Business Information Group AB. CIN 556681-5725 2 (12) </p></li><li><p>Nordic43%</p><p>DACH19%</p><p>BeNeFra17%</p><p>Central Europe4%</p><p>Product Information10%</p><p>Softw are and Applications</p><p>7%</p><p>Marketing Solutions33%</p><p>Credit Solutions32%</p><p>Business Information Solutions</p><p>18%</p><p>Product Information10%</p><p>Softw are and Applications</p><p>7%</p><p>unite the customer offerings in business-to-business and business-to-consumer information. Profit in Belgium was burdened with an impairment loss of SEK 5 million pertaining to a previous IT investment and profit in France included one-time costs of SEK 7 million connected to the integration of Directinet, which was acquired at the beginning of the year. </p><p>Region Central Europe posted organic growth of 7 per cent, adjusted for foreign exchange effects. Development was strongest in Poland and Slovenia, but growth-enhancing investments were made in product development, database expansion and hiring of new staff throughout the region in 2010. Fourth quarter earnings were charged with a provision of SEK 2 million related to an ongoing dispute in Poland. After the end of the period, operations in Croatia were strengthened through the acquisition of Poslovna Domena, the countrys market-leading supplier of digital business information. </p><p>Revenue in the Product Information business area declined organically by 6 per cent for the year and 2 per cent for the fourth quarter. The business area improved its operating margin compared to the previous year as a result of well considered cost adaptations to the lower level of demand. In addition, profit for the fourth quarter of 2009 included one-time costs for restructuring measures. </p><p>The divestiture of the unprofitable ABC companies in Belgium, France, Luxembourg and the Netherlands during the period resulted in a capital loss of SEK 10 million. Profit for the period also includes a capital gain of SEK 7 million on the sale of a property. </p><p>In the Software and Applications business area, Bisnode sold Office Team in Norway and its shareholding of slightly over 50 per cent in Emric during the year, which explains the drop in revenue and lower operating profit. The remaining companies have recovered after the previous years sharp decrease and reported organic growth of over 4 per cent for the year and 11 per cent for the fourth quarter. The offering of CRM systems in the Swedish market remains successful and the expansion to Norway and Finland is proceeding as planned, although it has initially weakened the business areas operating margin. </p><p>Central functions include costs for the Groups joint units, such as the accounting and finance, corporate communications and CIO functions. Added to this are costs for acquisitions and divestitures and the Groups three competence centres. Profit for the year was charged with one-time costs of SEK 24 million pertaining to an ongoing tax dispute and a strategy process that was completed during the year. </p><p> Revenue by region January-December 2010 </p><p>Revenue by market segment January-December 2010</p><p>January-December 2010, Bisnode Business Information Group AB. CIN 556681-5725 3 (12) </p></li><li><p>Market overviewThe market for digital business information is rapidly developing and evolving with a steadily growing volume of information, new technologies and new laws and rules for the use of information. According to industry analysts, the market is expected to show long-term growth of 3-5 per cent per year. Bisnodes experience is that demand varies between different market segments and geographical areas and that the information market recovers later than general economy. </p><p>Millions of business decisions are made daily by decision-makers who are increasingly demanding fast and reliable information. Bisnode delivers solutions that help decision-makers to maximise sales, minimise risks and make better business decisions. Bisnode divides its market into three main segments: Marketing Solutions, Credit Solutions and Business Information Solutions. </p><p>Marketing Solutions offers marketing- and sales-related products and solutions that help companies to identify new customers and to retain and develop their existing customer relationships in both the business-to-business and business-to-consumer markets. One increasingly important area of this segment is management of customer databases and registers, in line with an anticipated trend in which resale prices for pure information will fall and value added services and long-term customer relationships will become more critical to maintain profitability. Another important part of the offering is designed to meet the rising need for web-based solutions that are integrated with more traditional DM services. A dramatic decrease in the customers campaign-driven marketing projects was noted during the past financial crisis and resulted in a sharp drop in demand for Marketing Solutions. In pace with recovery in the economy, demand for marketing-related services is rising. </p><p>Credit Solutions offers a wide range of solutions for credit and risk management, including financial information and credit assessments of both businesses and consumers. Demand for credit information tends to increase in periods of heightened financial uncertainty when companies want to ensure the payment and delivery capacity of their customers and suppliers. In the first half of 2009 Credit Solutions experienced powerful sales growth that later slowed somewhat in connection with stabilisation in the market. However, overall demand remains strong. Due to continued price pressure for pure information and a rising number of players in the low-price segment, Bisnode is working actively to enhance its competitiveness by developing a more segmented product offering. </p><p>Business Information Solutions provides decision-makers and specialists with customised business information. The offering ranges from general financial and legal information about companies, properties and individuals to media monitoring services. The growing volume of people information, driven by social media and user-generated content, is creating new business opportunities for Bisnode. Business Information Solutions has shown stable growth with high profitability, since the same information is reused in multiple products and market segments. Because many of the services are based on publicly sourced information, the scope for growth depends on access to public sector information. In addition, there is major potential to combine different types of information from both public and private sources to give customers the right information through the right channel and at the right time. </p><p>The Swedish market for people information is in transition. In 2009 the Swedish Tax Agency took over responsibility for SPAR (Coordinated Population and Address Register), which was previously handled by Bisnode through its subsidiary Infodata, and the Swedish Tax Agency introduced its first own SPAR services on the market in January 2011. The services handled by Infodata will remain on the market during 2011 but will cease entirely thereafter. Infodata will thus lose its exclusive right to distribution of SPAR information. For more than 20 years, Infodata has distributed this information on a wholesale basis to both Group companies and ext...</p></li></ul>