Income statement (IFRS)

INCOME STATEMENT (IFRS)
 
EUR million Note 1 Jan–31 Dec 2017 1 Jan–31 Dec 2016
Net sales   1 1 543.2 1 492.6
         
Other operating income   3 17.4 19.8
         
Cost of sales     -235.0 -232.8
Employee benefit expenses 8, 9 -873.1 -827.1
Depreciation and amortization 14, 15 -54.7 -53.9
Impairment loss     - -
Other operating expenses   4 -261.8 -261.0
Share of profit from investments accounted for using the equity method   29 3.2 3.2
Operating profit     139.2 140.8
         
Interest and other financial income   6 1.5 2.1
Interest and other financial expenses   6 -4.7 -5.0
Net exchange losses and gains   6 -0.2 -1.1
Profit before taxes     135.8 136.8
         
Income taxes   12 -28.0 -29.6
Net profit for the financial year     107.8 107.2
         
Net profit for the period attributable to        
Shareholders of the Parent company     107.8 107.2
Non-controlling interest     0.0 0.0
      107.8 107.2
Earnings per share attributable to the shareholders of the Parent company, EUR 7    
Basic     1.46 1.46
Diluted     1.46 1.46
         
Statement of comprehensive income, EUR million        
         
Net profit for the period     107.8 107.2
Items that may be reclassified subsequently to profit or loss        
Translation difference     -19.0 -2.1
Cash flow hedges (net of tax)     - -0.2
Items that will not be reclassified subsequently to profit or loss        
Actuarial gain/loss on post employment benefit obligations (net of tax)     -2.4 -2.1
Total comprehensive income     86.4 102.8
       
Total comprehensive income attributable to        
Shareholders of the Parent company     86.4 102.8
Non-controlling interest     0.0 0.0
      86.4 102.8
 
Notes are an integral part of these consolidated financial statements.

Comments to the income statement

Net sales increased by 3.4% to EUR 1 543.2 (1 492.6) million, growth of 4.1% in local currencies. In IT services, net sales were up by 3.0%, in local currencies up by 3.6%. In Product Development Services, sales increased by 7.9%, in local currencies up by 9.6%. Acquisitions added EUR 17 million in sales, affecting Industry Solutions and Business Consulting and Implementation. Currency fluctuations had a negative impact of EUR 10 million on sales, mainly due to the weaker Swedish Krona.

Operating profit (EBIT) amounted to EUR 139.2 (140.8) million, representing a margin of 9.0% (9.4). Operating profit was strained by restructuring costs related to the automation and efficiency improvement programme initiated in January 2017. 

The efficiency improvement programme had an impact of around EUR 20 million on the cost base in the full year, whereas improvement was curbed by salary inflation of around EUR 18 million. Offering development costs remained at the previous year’s level at close to EUR 75 million. 

Employee benefit expenses were up by 6% and represented 56.6% (55.4) of net sales. Employee benefit expenses include costs from personnel restructuring of EUR 21.9 (10.6) million. The performance-based incentive accruals, including both short-term and long-term incentives, were EUR 37.6 (25.6) million. The average number of full-time employees was 13 889 (13 472).

Net financial expenses stood at EUR 3.4 (4.0) million. Net interest expenses were EUR 2.1 (2.1) million and net losses from foreign exchange transactions EUR 0.2 (1.1) million. Other financial income and expenses amounted to EUR -1.1 (-0.8) million.

Tax expenses reported for the year include EUR 22.4 million payable on the profit for the year and EUR 6.5 million negative from the change in deferred taxes. Tax rate was 20.0% in Finland and 22.0% in Sweden.

Cost structure, % 2017 2016
Cost of sales 16.5 16.9
Employee benefit expenses 61.3 60.2
Other operating expenses 18.4 19.0
Depreciation and amortization 3.8 3.9
Total 100.0 100.0