FINANCIAL STATEMENTS OF TELESTE CORPORATION 1 JANUARY TO 31 DECEMBER 2012
TELESTE CORPORATION FINANCIAL STATEMENTS 1.2.2013 AT 08:30
FINANCIAL STATEMENTS OF TELESTE CORPORATION 1 JANUARY TO 31 DECEMBER 2012
PROFITABLE GROWTH CONTINUED IN 2012, LAST QUARTER FELL SHORT OF THE COMPARATIVE PERIOD
Q4/2012
– Net sales amounted to EUR 47.5 (53.4) million, a decrease of 11.2%
– Operating profit stood at EUR 2.7 (4.1) million, a decrease of 34.5%
– Undiluted result per share were EUR 0.09 (0.17) per share, a decrease of 44.5%
– Orders received totaled EUR 50.8 (53.5) million, a decrease of 4.9%
– Cash flow from operations was EUR 5.1 (4.5) million, an increase of 14.0%.
January-December 2012
– Net sales amounted to EUR 193.9 (183.6) million, an increase of 5.6%
– Operating profit amounted to EUR 10.9 (9.4) million, an increase of 16.6%
– Undiluted result per share were EUR 0.38 per share, an increase of 5.6%
– Orders received totaled EUR 189.7 (188.1) million, an increase of 0.8%
– Cash flow from operations was EUR 15.3 (2.1) million, an increase of 641.6%
– The Board of Directors proposes that a dividend of EUR 0.17 (0.14) per outstanding share will be paid.
Outlook for 2013
We expect net sales and operating profit for 2013 to reach the 2012 level. In our assessment, net sales and operating profit for the first half of 2013 will remain below the comparative period.
Comments on the last quarter of 2012 by CEO Jukka Rinnevaara:
“Orders received stood at a satisfactory level due to the good order intake for video surveillance solutions, but the cable operators’ demand fell below the comparable period. Teleste’s net sales fell below the reference period, as deliveries of equipment for cable operators decreased and the year-on-year deliveries in German fiber projects declined. In spite of the implemented cost management, the drop in net sales resulted in a reduced operating profit. Temporary personnel layoffs were launched in the Finnish operations of Video and Broadband Solutions designed to prepare for a quieter market early in the year.
Video and Broadband Solutions’ net sales fell below the comparative period, mainly due to a lower demand for the Luminato headend. Deliveries related to video surveillance were at par with the comparative period. In the fourth quarter, an onboard video management and recording solution order of four million euro was received from Chicago Transit Authority (CTA). The delivery is scheduled for 2013. A two-year frame agreement worth about two million euro for intelligent network products was signed with the Danish Stofa A/S.
The year-on-year net sales and operating profit of Network Services fell. This decline in net sales and operating profit was mainly due to a reduction in deliveries of fiber-optic projects. The start of new frame agreements also called for an increase in resources. At the end of the period under review, a three-year frame agreement was signed with a German telecom operator for upgrading of networks and technical maintenance.”
Group Operations in October-December 2012
| Key figures (EUR million) | |||
| 10-12/2012 | 10-12/2011 | Change, % | |
| Orders received | 50,8 | 53,5 | -4,9% |
| Net sales | 47,5 | 53,4 | -11,2% |
| Operating profit | 2,7 | 4,1 | -34,5% |
| Operating profit, % | 5,7% | 7,7% | |
| Net profit | 1,6 | 2,9 | -43,6% |
| Other important key figures | |||
| Earnings per share, EUR | 0,09 | 0,17 | -44,5% |
| Cash flow from operations, EUR million | 5,1 | 4,5 | 14,0% |
In the fourth quarter, orders received by the Group totaled EUR 50.8 (53.5) million, which is 4.9% below the reference period. Order backlog totaled EUR 17.0 (21.2) million.
Net sales decreased by 11.2% to EUR 47.5 (53.4) million. Year-on-year operating profit fell by 34.5% standing at EUR 2.7 (4.1) million, which is 5.7% (7.7%) of the net sales. Operating profit includes a sale of a real estate and a reserve reversal of an additional purchase price related to a business acquisition totaling EUR 1.2 million. Personnel costs amounted to EUR 14.8 (15.5) million. Taxes stood at EUR 1.0 (1.1) million. Tax rate rose to 37.8% (27.9%), because a greater part of the profit was made in higher-tax countries. Moreover, specification of the tax deferral for the financial period affected the tax cost. Undiluted result per share was EUR 0.09 (0.17). Operating cash flow amounting to EUR 5.1 (4.5) million was good.
Group Operations in January-December 2012
| Key figures (EUR million) | |||
| 1-12/2012 | 1-12/2011 | Change, % | |
| Orders received | 189,7 | 188,1 | 0,8% |
| Net sales | 193,9 | 183,6 | 5,6% |
| Operating profit | 10,9 | 9,4 | 16,6% |
| Operating profit, % | 5,6% | 5,1% | |
| Net profit | 6,7 | 6,3 | 6,4% |
| Other important key figures | |||
| Earnings per share, EUR | 0,38 | 0,36 | 5,6% |
| Cash flow from operations, EUR million | 15,3 | 2,1 | 641,6% |
| Net gearing, % | 13,7% | 32,2% | -57,6% |
| Equity ratio, % | 50,5% | 41,6% | 21,3% |
| Personnel at period-end | 1 325 | 1 319 | 0,5% |
Orders received totaled EUR 189.7 (188.1) million. Net sales increased by 5.6% to EUR 193.9 (183.6) million, mainly due to an increase in deliveries involving smart network equipment. Operating profit grew by 16.6% equaling EUR 10.9 (9.4) million. Taxes amounted to EUR 3.4 (2.5) million with the tax rate of 33.7% (28.7%). Undiluted result per share was EUR 0.38 (0.36). Operating cash flow was good, i.e. EUR 15.3 (2.1) million, due to release of working capital and growth in profitability.
Video and Broadband Solutions October-December 2012
Economic Development of Video and Broadband Solutions
| 10-12/2012 | 10-12/2011 | Change, % | |
| Orders received | 27 830 | 28 674 | -2,9% |
| Net sales | 24 659 | 27 698 | -11,0% |
| Operating profit | 2 002 | 3 062 | -34,6% |
| Operating profit, % | 8,1% | 11,1% |
Year-on-year orders received decreased by 2.9% standing at EUR 27.8 (28.7) million. Order backlog totaled EUR 17.0 (20.3) million. In the fourth quarter, an onboard video recording and management software solution order of four million euro was received from the USA. Net sales decreased by 11.0% to EUR 24.7 (27.7) million. The decline in net sales was due to a decrease in deliveries of headends and certain network projects. Operating profit stood at EUR 2.0 (3.1) million making 8.1% (11.1%) of the net sales. This weakening in the operating profit was mainly caused by diminished net sales.
Research and development expenses stood at 3.0 (3.0) million, or 12.3% (10.8%) of the business area’s net sales. Activated R&D expenses amounted to EUR 0.3 (0.7) million. The projects involved future product platforms mainly at a research stage and some short-term customer-specific development projects. Depreciation on R&D expenses amounted to EUR 0.5 (0.5) million.
Video and Broadband Solutions for January-December 2012
| 1-12/2012 | 1-12/2011 | Change, % | |
| Orders received | 97 730 | 93 274 | 4,8% |
| Net sales | 101 230 | 89 716 | 12,8% |
| Operating profit | 8 497 | 8 220 | 3,4% |
| Operating profit, % | 8,4% | 9,2% |
Orders received improved by 4.8% standing at EUR 97.7 (93.3) million. Net sales grew by 12.8% amounting to EUR 101.2 (89.7) million. Operating profit increased by 3.4% standing at EUR 8.5 (8.2) million making 8.4% (9.2%) of the net sales. Product development expenses equaled EUR 11.2 (11.6), in other words 11.2% (12.9%) of the net sales. Activated R&D expenses stood at EUR 0.8 (2.5) million while depreciation on product development expenses equaled EUR 2.0 (2.1) million.
Network Services October-December 2012
Economic Development of Network Services
| 10-12/2012 | 10-12/2011 | Change, % | |
| Orders received | 22 995 | 24 797 | -7,3% |
| Net sales | 22 809 | 25 735 | -11,4% |
| Operating profit | 706 | 1 070 | -34,0% |
| Operating profit, % | 3,1% | 4,2% |
In Q4, the year-on-year orders received decreased by 7.3% standing at EUR 23.0 (24.8) million. Net sales decreased by 11.4% to EUR 22.8 (25.7) million. This decrease in net sales mainly involved German fiber projects. Operating profit stood at EUR 0.7 (1.1) million making 3.1% (4.2%) of the net sales. This decline in the operating profit over the comparative period was caused by decreased net sales and additional investments required for the new German frame agreements.
Network Services in January-December 2012
| 1-12/2012 | 1-12/2011 | Change, % | |
| Orders received | 91 931 | 94 800 | -3,0% |
| Net sales | 92 645 | 93 900 | -1,3% |
| Operating profit | 2 439 | 1 160 | 110,3% |
| Operating profit, % | 2,6% | 1,2% |
Orders received decreased by 3.0% and stood at EUR 91.9 (94.8) million. Net sales amounted to EUR 92.6 (93.9) million. Operating profit stood at EUR 2.4 (1.2) million making 2.6% (1.2%) of the net sales. Operating profit increased in step with improved productivity.
Personnel and Organization in January-December 2012
In the period under review, the Group had an annual average of 1,326 people (1,297/2011 1,215/2010), of whom 567 (564) were employed by Video and Broadband Solutions, and 759 (733) by Network Services. At the end of the review period, the figure totaled 1,325 (1,319/2011, 1,231/2010) of whom 73% (72%/2011, 70%/2010) were stationed overseas. Employees stationed outside Europe accounted for less than 5% of the Group’s personnel.
In the fourth quarter of 2012, the parent company Teleste Corporation launched cooperation procedures together with the personnel. Adjustments in the number of employees in Finland were initiated in December 2012 by introducing a flexible and rotating temporary layoff. In addition, three persons were made redundant. The rotating temporary layoff agreed in the cooperation procedures can be extended until March 2014.
Wages and salaries increased by 7.2% over the previous year and amounted to EUR 58.5 (54.6/ 2011, 50.8 /2010) million. This increase was mainly due to a rise in the number of personnel of Network Services, decrease in the activation of wage costs involving R&D, as well as union-specific contract increases.
The number of temporary labor in the Finnish production averaged 22 (10) people. At the end of the review period, there were no temporary employees in Finland. Costs involving temporary labor have been entered under the material costs.
Investments in January-December 2012
Investments by the Group for the period under review totaled EUR 3.3 (5.2) million accounting for 1.7% (2.9%) of the net sales. Investments in product development equaled EUR 0.8 (2.5) million. The projects involved future product platforms at the research stage, further development of the existing product families, as well as short-term customer projects. Other investments involved information systems, as well as machinery and equipment for production and services. Investments of EUR 0.8 (0.3) million were made under financial lease arrangements. In Finland, a piece of real property was sold with the capital gain amounting to EUR 0.6 million.
Financing and Capital Structure in January to December 2012
Operating cash flow stood at EUR 15.3 (2.1) million. This improved cash flow from operations was due to a growth in profitability, a reduction in inventories, as well as a decrease in accounts receivable. At the end of the period under review, the amount of unused binding stand-by credits amounted to EUR 19.0 (7.5) million. Credit limits are valid until August 2015.
The Group’s equity ratio equaled 50.5% (41.6%) and net gearing 13.7% (32.2%). On 31 December 2012, the Group’s interest bearing debt stood at EUR 22.1 (33.2) million.
Key Risks Faced by the Business Areas
Founded in 1954, Teleste is a technology and services company consisting of two business areas: Video and Broadband Solutions and Network Services. With Europe as the main market area, our clients include European cable operators and specified organizations in the public sector.
As to Video and Broadband Solutions, client-specific and integrated deliveries of solutions create favorable conditions for growth, even if the involved resource allocation and technical implementation pose a challenge involving, therefore, also reasonable risks. Our customers’ network investments vary based on the relevant need for upgrading and their financial structure. Significant part of Teleste’s competition comes from the USA so the exchange rate of euro up against the US dollar affects our competitiveness. The exchange rate development of the Chinese renminbi to euro affects our material costs. The company hedges against short-term currency exposure by means of forward contracts. The tight financial market in Europe may slow down our customers’ investment plans. Furthermore, a weakening in the consumer purchasing power in Europe could slow down the network investments by the cable operators. Availability of components is subject to natural phenomena, such as floods and earthquakes. Severe weather conditions have an impact on the business areas’ ability to deliver products and services. Correct technological choices and their timing are vital for our success.
Net sales of Network Services comes, for the most part, from a small number of large European customers, so a significant change in the demand for services by any one of them is reflected in the actual deliveries. To ensure quality of services and cost-efficiency along with efficient service process management, customer satisfaction and improvements in productivity require innovative solutions in terms of processes, products and logistics. Smooth operation of cable networks requires effective technical management and functional hardware solutions in accordance with contractual obligations. This, in turn, demands continuous and determined development of skill levels in Teleste’s own personnel as well as those of our subcontractors. In addition, our ability to deliver and compete may be constrained by the adequacy of our sub-contractor network capacity. Tender calculation and management of larger projects with overall responsibility are complex and risky.
It is important for our business areas to take into account any market developments such as consolidations taking place among the clientele and competition. The threats to information systems must be minimized to ensure business continuity. The Board of Directors annually reviews any essential risks related to the company operation and the management thereof. Risk management is an integral part of the strategic and operational activities of the business areas. Risks and their probability are reported to the Board in conjunction with regular monthly reports.
The company has covered any major risks of loss related to the business areas through insurance policies. Insurance will also cover credit loss risks related to sales receivables. In the period under review, no such risks materialized, and no such legal proceedings or judicial procedures were pending that would have had any essential significance for the Group operation.
Group Structure
Parent company Teleste has branch offices in Australia, the Netherlands, and Denmark with subsidiaries in 12 countries outside Finland. On account of financial arrangements, Teleste Management Oy, established in March 2010, and Teleste Management II Oy, established in December 2011, have been consolidated into Teleste Corporation’s figures. Teleste Incentive Oy has been merged with Teleste Corporation. In Belgium, the company structure was streamlined.
Decisions by the Annual General Meeting
The Annual General Meeting (AGM) of Teleste Corporation held on 3 April 2012 confirmed the financial statements for 2011 and discharged the Board of Directors and the CEO from liability for the financial period. The AGM confirmed the dividend of EUR 0.14 per share proposed by the Board. The dividend was paid out on 17 April 2012.
Ms. Marjo Miettinen, Mr. Pertti Ervi, Mr. Pertti Raatikainen, Mr. Kai Telanne and Mr. Petteri Walldén continue in Teleste’s Board of Directors. Mr. Esa Harju was elected a new member while the membership of Mr. Tero Laaksonen ended. Ms. Marjo Miettinen was elected Chair of the Board in the organizational meeting held immediately after the AGM.
Authorized Public Accountants KPMG Oy Ab continue as the auditor until the next AGM. Mr. Esa Kailiala, accountant authorized by the Central Chamber of Commerce of Finland, was chosen auditor-in-charge.
The AGM authorized the Board to acquire the maximum of 1,400,000 of the company’s own shares and to convey the maximum of 1,779,985 company’s own shares. On 8 April 2011, the AGM authorized the Board of Directors to issue five million new shares; this authorization will be valid until the Annual General Meeting of 2014. Pursuant to the special rights provided by the Company, the maximum number of significant shares is 2,500,000; these special rights are included in the authorization to issue 5,000,000 new shares.
Shares and Changes in Share Capital
On 31 December 2012, EM Group Oy was the largest single shareholder with a holding of 23.44%.
In the period under review, the lowest company share price was EUR 3.04 (2.50) and the highest was EUR 4.44 (4.82). Closing price on 31 December 2012 stood at EUR 4.17 (3.00). According to Euroclear Finland Ltd the number of shareholders at the end of the period under review was 5,182 (5,054). Foreign ownership accounted for 5.8% (7.76%). From 1 January to 31 December 2012, trading with Teleste share at NASDAQ OMX Helsinki amounted to EUR 10.8 (6.2) million. In the period under review, 2.7 (1.7) million Teleste shares were traded on the stock exchange.
At the end of December 2012, the Group held 1,302,985 of its own shares, of which the parent company Teleste Corporation had 379,985 shares and the controlled companies had 923,000 shares, respectively. At the end of the period, the Group’s holding of the total amount of shares amounted to 6.96% (6.96%).
On 31 December 2012, the registered share capital of Teleste stood at EUR 6,966,932.80 divided in 18,728,590 shares.
Trading with stock options 2007B and 2007C began on the NASDAQ OMX Helsinki Ltd on 2 April 2012. These options allow subscription for a maximum of 560,000 shares in the company.
Outlook for 2013
Given the new video services offered by the operators, there is a continuous need for increased cable network capacity, so we estimate the deliveries by Video and Broadband Solutions in our target markets to reach at least the 2012 level. In our view, investments by cable operators will fall on the second half of the year.
We estimate that Network Services’ net sales in our target markets will reach at least the 2012 level and that the profitability will improve from the 2012 level with the developments in productivity.
We expect net sales and operating profit for 2013 to reach the 2012 level. In our assessment, net sales and operating profit for the first half of 2013 will remain below the comparative period.
31 January 2013
Teleste Corporation Jukka Rinnevaara
Board of Directors President and CEO
Teleste’s Annual Report for 2012, which includes the audited financial statements, will be published no later than 15 March 2013. The Company will issue a statement of its corporate governance as a separate report, which will be published together with the Annual Report, and will be simultaneously available on the Company’s web site.
This interim report has been compiled in compliance with IAS 34, as it is accepted within EU, using the recognition and valuation principles with those used in the Annual Report. The Group has adopted revised IFRS 3 Business Combinations from 1.1.2010. The data stated in this report is audited.
| STATEMENT OF COMPREHENSIVE INCOME, 1000 euros |
|||
| 10-12/2012 | 10-12/2011 | Change % | |
| Net sales | 47,468 | 53,433 | -11.2 % |
| Other operating income | 362 | 729 | -50.3 % |
| Raw material and consumables used | -22,482 | -25,806 | -12.9 % |
| Employee benefits expense | -14,752 | -15,480 | -4.7 % |
| Depreciations | -1,209 | -1,426 | -15.2 % |
| Other operating expenses | -6,679 | -7,318 | -8.7 % |
| Operating profit | 2,708 | 4,132 | -34.5 % |
| Financial income | 155 | 60 | 159.0 % |
| Financial expenses | -259 | -202 | 28.0 % |
| Profit before taxes | 2,605 | 3,990 | -34.7 % |
| Taxes | -984 | -1,114 | -11.7 % |
| Profit for the period | 1,621 | 2,876 | -43.6 % |
| Attributable to: | |||
| Equity holders of the parent | 1,621 | 2,876 | -43.6 % |
| Earnings per share for profit of the year attributable to the equity holders of the parent | |||
| Basic (expressed in euro per share) | 0.09 | 0.17 | -44.5 % |
| Diluted (expressed in euro per share) | 0.09 | 0.17 | -45.3 % |
| Total comprehensive income for the period, 1000 euros | |||
| Net profit | 1,621 | 2,876 | -43.6 % |
| Translation differences | -48 | 435 | n/a |
| Fair value reserve | 24 | -76 | n/a |
| Total comprehensive income for the period | 1,597 | 3,235 | -50.6 % |
| Attributable to: | |||
| Equity holders of the parent | 1,597 | 3,235 | -50.6 % |
| STATEMENT OF COMPREHENSIVE INCOME, 1000 euros |
1-12/2012 | 1-12/2011 | Change % |
| Net sales | 193,875 | 183,616 | 5.6 % |
| Other operating income | 1,150 | 2,112 | -45.6 % |
| Raw material and consumables used | -94,747 | -90,990 | 4.1 % |
| Employee benefits expense | -58,511 | -54,560 | 7.2 % |
| Depreciation | -5,078 | -5,372 | -5.5 % |
| Other operating expenses | -25,753 | -25,426 | 1.3 % |
| Operating profit | 10,936 | 9,380 | 16.6 % |
| Financial income | 328 | 189 | 73.5 % |
| Financial expenses | -1,150 | -730 | 57.5 % |
| Profit before taxes | 10,115 | 8,839 | 14.4 % |
| Taxes | -3,412 | -2,540 | 34.3 % |
| Profit for the period | 6,703 | 6,299 | 6.4 % |
| Attributable to: | |||
| Equity holders of the parent | 6,703 | 6,299 | 6.4 % |
| Earnings per share for profit of the year attributable to the equity holders of the parent | |||
| Basic ( expressed in euro per share) | 0.38 | 0.36 | 5.6 % |
| Diluted (expressed in euro per share) | 0.38 | 0.36 | 4.0 % |
| Total comprehensive income for the period 1000 euros | |||
| Net profit | 6,703 | 6,299 | 6.4 % |
| Translation differences | 631 | 149 | 323.5 % |
| Fair value reserve | 144 | 20 | 620.0 % |
| Total comprehensive income for the period | 7,478 | 6,468 | 15.6 % |
| Attributable to: | |||
| Equity holders of the parent | 7,478 | 6,468 | 15.6 % |
| STATEMENT OF FINANCIAL POSITION, 1000 euros | |||
| Assets 1000 euros | |||
| 31.12.2012 | 31.12.2011 | Change % | |
| Non-current assets | |||
| Property, plant and equipment | 10,127 | 9,364 | 8.1 % |
| Goodwill | 31,350 | 31,277 | 0.2 % |
| Other intangible assets | 4,174 | 6,338 | -34.1 % |
| Available-for-sale investments | 294 | 713 | -58.8 % |
| Deferred tax assets | 2,086 | 1,714 | 21.7 % |
| Total | 48,031 | 49,406 | -2.8 % |
| Current assets | |||
| Inventories | 19,495 | 24,075 | -19.0 % |
| Trade receivables and other receivables | 38,524 | 44,326 | -13.1 % |
| Tax receivables | 287 | 0 | n/a |
| Cash | 13,880 | 15,404 | -9.9 % |
| Total | 72,186 | 83,805 | -13.9 % |
| Total assets | 120,217 | 133,211 | -9.8 % |
| Equity and liabilities | |||
| Equity attributable to equity holders of the parent | |||
| Share capital | 6,967 | 6,967 | 0.0 % |
| Share premium | 1,504 | 1,504 | 0.0 % |
| Translation differences | 685 | 54 | 1168.5 % |
| Invested non restricted equity | 2,715 | 2,571 | 5.6 % |
| Retained profits | 48,008 | 43,559 | 10.2 % |
| Non-controlling interest | 678 | 623 | 8.8 % |
| Total | 60,557 | 55,278 | 9.5 % |
| Non-current liabilities | |||
| Interest-bearing liabilities | 788 | 11,940 | -93.4 % |
| Other liabilities | 22 | 4,140 | -99.5 % |
| Deferred tax liabilities | 1,297 | 1,946 | -33.4 % |
| Provisions | 503 | 605 | -16.8 % |
| Total | 2,610 | 18,631 | -86.0 % |
| Current liabilities | |||
| Trade and other liabilities | 32,612 | 35,223 | -7.4 % |
| Current tax payable | 2,075 | 1,595 | 30.1 % |
| Provisions | 1,004 | 1,211 | -17.1 % |
| Interest-bearing liabilities | 21,360 | 21,273 | 0.4 % |
| Total | 57,050 | 59,302 | -3.8 % |
| Total liabilities | 59,660 | 77,933 | -23.4 % |
| Equity and liabilities total | 120,217 | 133,211 | -9.8 % |
| CONSOLIDATED CASH FLOW STATEMENT,1000 EUROS | |||
| 1.1.-31.12. 2012 |
1.1.-31.12. 2011 |
Change % | |
| Cash flows from operating activities | |||
| Profit for the period | 6,703 | 6,299 | 6.4 % |
| Adjustments for: | |||
| Non-cash transactions | 4,877 | 5,552 | -12.2 % |
| Interest and other financial expenses | 1,150 | 730 | 57.5 % |
| Interest income and other financial income | -326 | -138 | 136.5 % |
| Dividends | -2 | -51 | -96.1 % |
| Taxes | 3,412 | 2,540 | 34.3 % |
| Change in working capital | |||
| Increase in trade and other receivables | 5,802 | -11,407 | n/a |
| Increase in inventories | 4,580 | -3,075 | n/a |
| Increase in trade and other payables | -5,901 | 4,809 | n/a |
| Decrease in provisions | -309 | -154 | 100.9 % |
| Paid interests and other financial expenses | -726 | -760 | -4.5 % |
| Received interests and dividends | 328 | 189 | 73.8 % |
| Paid taxes | -4,290 | -2,471 | 73.6 % |
| Cash flow from operating activities | 15,297 | 2,063 | 641.6 % |
| Cash flow from investing activities | |||
| Acquisition of subsidiary, net of cash acquired | -828 | 0 | n/a |
| Purchases of property, plant and equipment (PPE) | -1,609 | -3,346 | -51.9 % |
| Proceeds from sales of PPE | 499 | 714 | -30.1 % |
| Purchases of intangible assets | -844 | -2,822 | -70.1 % |
| Proceeds from sales of shares | 0 | 93 | n/a |
| Net cash used in investing activities | -2,782 | -5,361 | -48.1 % |
| Cash flow from financing activities | |||
| Proceeds from borrowings | 0 | 6,000 | n/a |
| Payments of borrowings | -11,500 | -222 | 5080.2 % |
| Payment of finance lease liabilities | -321 | -655 | -51.0 % |
| Dividends paid | -2,440 | -2,091 | 16.7 % |
| Proceeds from issuance of ordinary shares | 0 | 319 | n/a |
| Net cash used in financing activities | -14,261 | 3,351 | n/a |
| Change in cash | |||
| Cash and cash equivalents 1.1. | 15,404 | 15,203 | 1.3 % |
| Effect of currency changes | 221 | 149 | 48.3 % |
| Cash and cash equivalents 31.12. | 13,880 | 15,404 | -9.9 % |
| Consolidated statement of changes in equity,1000 euros | ||||||||||
| Attributable to equity holders of the parent | ||||||||||
| A | Share capital | |||||||||
| B | Share premium | |||||||||
| C | Translation differences | |||||||||
| D | Retained earnings | |||||||||
| E | Invested free capital | |||||||||
| F | Other funds | |||||||||
| G | Total | |||||||||
| H | Share of non-controlling interest | |||||||||
| I | Total equity | |||||||||
| A | B | C | D | E | F | G | H | I | ||
| Equity 31.12.2011 | 6,967 | 1,504 | 54 | 43,559 | 2,737 | -166 | 54,655 | 623 | 55,278 | |
| Total comprehensive income for the period | 0 | 0 | 631 | 6,703 | 0 | 144 | 7,478 | 0 | 7,478 | |
| Dividends | 0 | 0 | 0 | -2,569 | 0 | 0 | -2,569 | 129 | -2,440 | |
| Changes in subsidiary interest | 74 | 74 | -74 | 0 | ||||||
| Equity-settled share-based payments | 0 | 0 | 0 | 240 | 0 | 0 | 240 | 0 | 240 | |
| Equity 31.12.2012 | 6,967 | 1,504 | 685 | 48,007 | 2,737 | -22 | 59,878 | 678 | 60,557 | |
| Business segments 2012, 1000 euros |
Video and Broadband Solutios |
Network Services |
Group |
| External sales | |||
| Services | 5,862 | 92,645 | 98,507 |
| Goods | 95,368 | 0 | 95,368 |
| External sales total | 101,230 | 92,645 | 193,875 |
| Operating profit of segments | 8,497 | 2,439 | 10,936 |
| Financial items | -821 | ||
| Profit before taxes | 10,115 | ||
| Business segments 2011, 1000 euros | Video and Broadband Solutions |
Network Services |
Group |
| External sales | |||
| Services | 4,305 | 93,900 | 98,205 |
| Goods | 85,411 | 0 | 85,411 |
| External sales total | 89,716 | 93,900 | 183,616 |
| Operating profits of the segments | 8,220 | 1,160 | 9,380 |
| Financial items | -541 | ||
| Profit before taxes | 8,839 |
| Geographical segments 2012, 1000 euros |
Nordic countries | Other Europe | Finland | Others | Group |
| Sales by origin | 17,358 | 150,936 | 12,776 | 12,805 | 193,875 |
| Assets | 8,800 | 83,634 | 26,162 | 1,621 | 120,217 |
| Capital expenditure for the period | 15 | 1,350 | 1,940 | 20 | 3,325 |
| Geographical segments 2011, 1000 euros |
Nordic countries | Other Europe | Finland | Others | Group |
| Sales by origin | 11,059 | 154,979 | 10,830 | 6,748 | 183,616 |
| Assets | 9,280 | 83,634 | 38,576 | 1,721 | 133,211 |
| Capital expenditure for the period | 15 | 1,576 | 3,631 | 18 | 5,240 |
| Information per quarter, 1000 euros | 10-12/ 12 |
7-9/ 12 |
4-6/ 12 |
1-3/ 12 |
10-12/ 11 |
1-12/ 2012 |
| Video and Broadband Solutions |
||||||
| Order intake | 27,830 | 19,720 | 23,790 | 26,390 | 28,674 | 97,730 |
| Net sales | 24,659 | 24,794 | 24,278 | 27,499 | 27,698 | 101,230 |
| EBIT | 2,002 | 2,423 | 1,548 | 2,524 | 3,062 | 8,497 |
| EBIT % | 8.1 % | 9.8 % | 6.4 % | 9.2 % | 11.1 % | 8.4 % |
| Network Services |
||||||
| Order intake | 22,995 | 20,796 | 25,409 | 22,731 | 24,797 | 91,931 |
| Net sales | 22,809 | 20,796 | 25,409 | 23,631 | 25,735 | 92,645 |
| EBIT | 706 | 448 | 872 | 413 | 1,070 | 2,439 |
| EBIT % | 3.1 % | 2.2 % | 3.4 % | 1.7 % | 4.2 % | 2.6 % |
| Total | ||||||
| Order intake | 50,825 | 40,516 | 49,199 | 49,121 | 53,471 | 189,661 |
| Net sales | 47,468 | 45,590 | 49,687 | 51,130 | 53,433 | 193,875 |
| EBIT | 2,708 | 2,871 | 2,420 | 2,937 | 4,132 | 10,936 |
| EBIT % | 5.7 % | 6.3 % | 4.9 % | 5.7 % | 7.7 % | 5.6 % |
| Commitments and contingencies, 1000 euros | 2012 | 2011 | Change % |
| Rental liabilities | 2,656 | 3,026 | -12.2 % |
| Lease liabilities | 5,872 | 5,098 | 15.2 % |
| Value of underlying forward contracts | 5,936 | 7,434 | -20.1 % |
| Market value of forward contracts | -109 | -99 | 10.0 % |
| Interest rate swap | 9,000 | 11,500 | -21.7 % |
| Market value of interest swap | -22 | -167 | -86.8 % |
| The number of employees broken down by following categories 31.12. | 2012 | 2011 | Change % |
| Research and development | 117 | 122 | -4.1 % |
| Production and material management | 1,031 | 1,020 | 1.1 % |
| Sales and marketing | 122 | 125 | -2.4 % |
| Finance,quality and IT | 55 | 52 | 5.8 % |
| Total | 1,325 | 1,319 | 0.5 % |
| IFRS | IFRS | IFRS | IFRS | IFRS | |
| Key figures | 2012 | 2011 | 2010 | 2009 | 2008 |
| Profit and loss account, balance sheet | |||||
| Net sales, Meur | 193.9 | 183.6 | 167.8 | 141.7 | 108.7 |
| Change % | 5.6 % | 8.6 % | 18.5 % | 30.3 % | -13.1 % |
| Sales outside Finland, % | 93.4 % | 94.1 % | 93.3 % | 91.8 % | 90.2 % |
| Operating profit, Meur | 10.9 | 9.4 | 7.4 | 2.5 | 5.6 |
| % of net sales | 5.6 % | 5.1 % | 4.4 % | 1.8 % | 5.2 % |
| Profit after financial items, Meur | 10.1 | 8.8 | 6.7 | 1.4 | 5.1 |
| % of net sales | 5.2 % | 4.8 % | 4.0 % | 1.0 % | 4.7 % |
| Profit before taxes, Meur | 10.1 | 8.8 | 6.7 | 1.4 | 5.1 |
| % of net sales | 5.2 % | 4.8 % | 4.0 % | 1.0 % | 4.7 % |
| Profit for the financial period, Meur | 6.7 | 6.3 | 4.8 | 0.4 | 5.5 |
| % of net sales | 3.5 % | 3.4 % | 2.9 % | 0.3 % | 5.1 % |
| R&D expenditure, Meur | 11.2 | 11.6 | 10.3 | 10.8 | 13.5 |
| % of net sales | 5.8 % | 6.3 % | 6.1 % | 7.6 % | 12.4 % |
| Gross investments, Meur | 3.3 | 5.2 | 3.8 | 25.2 | 3.9 |
| % of net sales | 1.7 % | 2.9 % | 2.2 % | 17.8 % | 3.6 % |
| Interest bearing liabilities, Meur | 22.1 | 33.2 | 28.1 | 22.8 | 11.0 |
| Shareholder’s equity, Meur | 60.6 | 55.3 | 50.4 | 46.7 | 46.6 |
| Total assets, Meur | 120.2 | 133.2 | 116.2 | 110.1 | 75.5 |
| Personnel and orders | |||||
| Average personnel | 1,326 | 1,297 | 1,215 | 1,103 | 702 |
| Order backlog at year end, Meur | 17.0 | 21.2 | 17.0 | 33.1 | 24.0 |
| Orders received, Meur | 189.7 | 188.1 | 167.2 | 151.0 | 118.6 |
| Key metrics | |||||
| Return on equity, % | 11.6 % | 11.9 % | 9.9 % | 0.9 % | 11.8 % |
| Return on capital employed, % | 13.0 % | 11.5 % | 10.2 % | 3.3 % | 10.4 % |
| Equity ratio, % | 50.5 % | 41.6 % | 43.6 % | 43.6 % | 61.7 % |
| Net gearing, % | 13.7 % | 32.2 % | 25.5 % | 22.0 % | 3.6 % |
| Earnings per share, euro | 0.38 | 0.36 | 0.27 | 0.02 | 0.32 |
| Earnings per share fully diluted, euro | 0.38 | 0.36 | 0.27 | 0.02 | 0.32 |
| Shareholders’ equity per share, euro | 3.48 | 3.17 | 2.90 | 2.68 | 2.74 |
| Teleste share | |||||
| Highest price, euro | 4.44 | 4.82 | 5.33 | 4.30 | 7.49 |
| Lowest price, euro | 3.04 | 2.50 | 3.64 | 2.25 | 1.90 |
| Closing price, euro | 4.17 | 3.00 | 4.41 | 3.72 | 2.24 |
| Average price, euro | 3.98 | 3.64 | 4.49 | 3.62 | 4.52 |
| Price per earnings | 10.8 | 8.3 | 16.3 | 154.1 | 7.0 |
| Market capitalization, Meur | 78.1 | 56.2 | 80.2 | 66.2 | 39.9 |
| Stock turnover, Meur | 10.8 | 6.2 | 14.2 | 28.5 | 51.1 |
| Turnover, number in millions | 2.7 | 1.7 | 3.2 | 7.8 | 11.5 |
| Turnover, % of share capital | 14.4 % | 9.1 % | 17.4 % | 44.0 % | 64.6 % |
| Average number of shares | 18728590 | 18189560 | 18093689 | 17805590 | 17708782 |
| Number of shares at the year-end | 18728590 | 18728590 | 18186590 | 17805590 | 17805590 |
| Average number of shares, diluted w/o own shares | 17688527 | 17425605 | 17693605 | 17229154 | 17372555 |
| Number of shares at the year-end, diluted w/o own shares | 17709672 | 17425605 | 17693605 | 17425605 | 17039399 |
| Paid dividend, Meur | * 3,0 | 2.4 | 2.1 | 1.4 | 2.0 |
| Dividend per share, euro | * 0,17 | 0.14 | 0.12 | 0,08 | 0,12 |
| Dividend per net result, % | 44.5 % | 38.9 % | 43.7 % | 331.3 % | 37.4 % |
| Effective dividend yield, % | 4.1 % | 4.7 % | 2.7 % | 2.2 % | 5.4 % |
| * The Board’s proposal to the AGM | |||||
| Treasury shares | Number of shares |
% of shares | % of votes | ||
| Teleste companies own shares 31.12.2012 | 1,302,985 | 6.96 % | 6.96 % |
CALCULATION OF KEY FIGURES
| Return on equity: | Profit/loss for the financial period —————————— * 100 Shareholders’ equity (average) |
| Return on capital employed: | Profit/loss for the period after financial items + financing charges —————————— * 100 Total assets – non-interest-bearing liabilities (average) |
| Equity ratio: | Shareholders’ equity —————————– * 100 Total assets – advances received |
| Gearing: | Interest bearing liabilities – cash in hand and in bank – interest bearing assets —————————– * 100 Shareholders’ equity |
| Earnings per share: | Profit for the period attributable to equity holder of the parent ———————————————- Weighted average number of ordinary shares outstanding during the period |
| Earnings per share, diluted: | Profit for the period attributable to equity holder of the parent (diluted) ———————————————– Average number of shares – own shares + number of options at the period-end |
| SHAREHOLDERS AT 31.12.2012 | Shares | % |
| EM Group Oy | 4,389,712 | 23.44 |
| Mandatum Life | 1,679,200 | 8.97 |
| Ilmarinen Mutual Pension Insurance Company | 953,854 | 5.09 |
| Kaleva Mutual Pension Insurance Company | 824,641 | 4.40 |
| Teleste Management II Oy | 542,000 | 2.89 |
| Varma Mutual Pension Insurance Company | 521,150 | 2.78 |
| State Pension Fund | 500,000 | 2.67 |
| Aktia Capital Mutual Fund | 450,000 | 2.40 |
| Teleste Management Oy | 381,000 | 2.03 |
| Teleste Corporation | 379,985 | 2.03 |
| Op-Suomi Small Cap | 350,000 | 1.87 |
| Fim Fenno Mutual Fund | 270,342 | 1.44 |
| SECTOR DISPERSION AT 31.12.2012 | Shareholders | % | Shares | % |
| Corporations | 286 | 5.51 | 7,254,749 | 38.73 |
| Financial and insurance corporations | 11 | 0.21 | 3,385,419 | 18.07 |
| Public institutions | 6 | 0.11 | 2,015,104 | 10.75 |
| Non-profit institutions | 37 | 0.71 | 384,929 | 2.05 |
| Households | 4,795 | 92.53 | 4,585,420 | 24.48 |
| Foreign countries and nominee registered | 47 | 0.90 | 1,102,969 | 5.88 |
| Total | 5,182 | 100.00 | 18,728,590 | 100.00 |
| AMOUNT AT 31.12.2012 | Shareholders | % | Shares | % |
| 0 – 100 | 1,157 | 22.32 | 79,419 | 0.42 |
| 101 – 1,000 | 3,016 | 58.20 | 1,268,596 | 6.77 |
| 1,001 – 10,000 | 914 | 17.63 | 2,501,777 | 13.35 |
| 10,001 – 100,000 | 74 | 1.42 | 1,796,217 | 9.59 |
| 100,001 – 1,000,000 | 19 | 0.36 | 7,013,669 | 37.44 |
| 1,000,001 – | 2 | 0.03 | 6,068,912 | 32.40 |
| Total | 5,182 | 100.00 | 18,728,590 | 100.00 |