FINANCIAL STATEMENTS OF TELESTE CORPORATION 1 JANUARY TO 31 DECEMBER 2015
RECORD LEVEL NET SALES AND OPERATING PROFIT IN 2015
Turku, Finland, 2016-02-04 07:30 CET (GLOBE NEWSWIRE) —
TELESTE CORPORATION FINANCIAL STATEMENTS 4.2.2016 AT 08:30
FINANCIAL STATEMENTS OF TELESTE CORPORATION 1 JANUARY TO 31 DECEMBER 2015
RECORD LEVEL NET SALES AND OPERATING PROFIT IN 2015
Fourth quarter of 2015
– Net sales amounted to EUR 68.4 (53.9) million, an increase of 27.0%
– Operating profit stood at EUR 3.3 (3.5) million, a decrease of 7.1%
– Undiluted result per share equalled EUR 0.16 (0.17), a decrease of 8.0%
– Orders received totalled EUR 68.2 (53.0) million, an increase of 28.7%
– Cash flow from operations was EUR 3.5 (7.5) million, a decrease of 53.7%
January-December 2015
– Net sales amounted to EUR 247.8 (197.2) million, an increase of 25.7%
– Operating profit stood at EUR 14.3 (11.1) million, an increase of 28.4%
– Undiluted earnings per share stood at EUR 0.61 (0.48), an increase of 27.6%
– Orders received totalled EUR 251.3 (199.3) million, an increase of 26.1%
– Cash flow from operations was EUR 4.9 (9.2) million, a decrease of 46.7%
The Board of Directors proposes that a dividend of EUR 0.23 (0.20) per outstanding share will be paid.
Outlook for 2016
We estimate that net sales and operating profit for 2016 will exceed the 2015 level.
Comments on the last quarter of 2015 by CEO Jukka Rinnevaara:
“Orders received and net sales from the fourth quarter were the best in Teleste’s history. Also, the order backlog surpassed the previous year, particularly in access network products, whereas the operating profit fell from the comparative period. Operating profit was impacted negatively by the weaker-than-expected profitability of the services business and the fact that the main part of deliveries in access network products fell on lower-margin products subject to competition. Moreover, fixed costs were exceptionally at a higher level than those of the previous quarters. Management of working capital called for special attention as the business continued to grow rapidly.
Orders received by Video and Broadband Solutions grew, especially in the access network products and in the information solutions by Mitron. Net sales, too, increased in the said product groups. For the access network products, the most significant increase in the orders received and the deliveries took place in the UK, Belgium and Holland. We estimate that Teleste’s position remained strong in the new products complying with the Docsis 3.1 standard. In the fourth quarter, deliveries and profitability in the Video Security and Information solutions remained at a good level.
Net sales of Network Services reached the level of the comparative period, whereas the operating profit remained below that of the comparative period. Operating profit decreased in the UK, where the launch of new customer projects and the expansion of business continued to cause losses. In Germany, operating profit fell slightly short of the comparative period.”
Group Operations in October-December 2015
| Key figures (M€) | |||
| 10-12/2015 | 10-12/2014 | Change | |
| Orders received | 68.2 | 53.0 | +28.7% |
| Net sales | 68.4 | 53.9 | +27.0% |
| EBIT | 3.3 | 3.5 | -7.1% |
| EBIT % | 4.8% | 6.5% | |
| Profit for the period | 2.9 | 3.1 | -6.3% |
| Other important key figures | |||
| Earnings per share, EUR | 0.16 | 0.17 | -8.0% |
| Cash flow from operations, M€ | 3.5 | 7.5 | -53.7% |
The fourth-quarter orders received by Teleste Group increased by 28.7% and stood at EUR 68.2 (53.0) million. Order backlog totalled EUR 42.2 (15.2) million.
Net sales grew by 27.0% to EUR 68.4 (53.9) million, which is the highest quarterly net sales in Teleste’s history. Net sales increased influenced by the Mitron acquisition and organically in the Video and Broadband Solutions business area.
Expenses for material and production services increased and amounted to 54.5% (50.0%) of the net sales. Personnel expenses totalled EUR 18.1 (16.4) million, an increase of 10.2%. These expenses were pushed up by the number of personnel, which increase by 12.1%. Depreciation, amortisation, and other fixed operating expenses increased by 23.2% to EUR 10.8 (8.8) million. This increase in expenses was particularly affected by the Mitron acquisition. Operating profit decreased by 7.1% to EUR 3.3 (3.5) million, representing 4.8% (6.5%) of the net sales. Other income includes reversed provision of EUR 0.7 million, which relates to the supplementary contract price of the Mitron acquisition. Taxes stood at EUR 0.2 (0.3) million. Undiluted result per share was EUR 0.16 (0.17). Cash flow from operations equalled EUR 3.5 (7.5) million, a decrease of 53.7% due to an increase in net working capital. The single most significant reason behind this growth in net working capital was the expansion of business of Video and Broadband Solutions.
Group Operations in January-December 2015
| Key figures (M€) | |||
| 1-12/2015 | 1-12/2014 | Change | |
| Orders received | 251.3 | 199.3 | +26.1% |
| Net sales | 247.8 | 197.2 | +25.7% |
| EBIT | 14.3 | 11.1 | +28.4% |
| EBIT % | 5.8% | 5.6% | |
| Profit for the financial period | 11.0 | 8.5 | +29.8% |
| Other important key figures | |||
| Earnings per share, EUR | 0.61 | 0.48 | +27.6% |
| Cash flow from operations, M€ | 4.9 | 9.2 | -46.7% |
| Net gearing, % | 26.3% | 9.5% | |
| Equity ratio, % | 48.3% | 53.4% | |
| Personnel at period-end | 1,506 | 1,343 | +12.1% |
Orders received by the Group improved by 26.1 % standing at EUR 251.3 (199.3) million. Net sales increased 25.7 % equalling EUR 247.8 (197.2) million.
Expenses for material and production services increased and amounted to 51.8% (49.5%) of the net sales. Personnel expenses totalled EUR 70.5 (59.5) million, an increase of 18.5%. Personnel expenses were increased by the number of personnel and exchange rate changes. Depreciation, amortisation, and other fixed operating expenses increased by 18.9% to EUR 37.5 (31.5) million. This increase in the fixed expenses was particularly affected by the Mitron acquisition. Operating profit grew by 28.4 % standing at EUR 14.3 (11.1) million. Taxes for the Group amounted to EUR 2.9 (2.4) million while the tax rate equalled 21.0% (21.7%). Undiluted earnings per share increased by 27.6% to EUR 0.61 (0.48). Cash flow from operations decreased by 46.7% to EUR 4.9 (9.2) million. The cash flow was negatively affected, in particular, by the working capital tied to the growth of Video and Broadband Solutions.
Video and Broadband Solutions October-December 2015
| 1,000 euros | 10-12/2015 | 10-12/2014 | Change |
| Orders received | 43,419 | 28,642 | +51.6% |
| Net sales | 43,584 | 29,500 | +47.7% |
| EBIT | 2,666 | 2,616 | +1.9% |
| EBIT, % | 6.1% | 8.9% |
Year-on-year orders received improved by 51.6% standing at EUR 43.4 (28.6) million. Order backlog totalled EUR 42.2 (15.2) million. Net sales grew by 47.7% amounting to EUR 43.6 (29.5) million. Net sales were increased by the Mitron information solutions and increased deliveries of access network products. Operating profit increased by 1.9% standing at EUR 2.7 (2.6) million and making 6.1% (8.9%) of the net sales. Operating profit from Video Security and Information solutions increased while the profitability of the access network products was weaker than in the comparative period.
R&D expenses amounted to EUR 3.2 (2.6) million, i.e. 7.4% (8.8%) of the business area’s net sales. Product development projects focused on network products complying with the Docsis 3.1 standard, video security and information solutions, as well as customer-specific projects. Capitalized R&D expenses amounted to EUR 0.8 (0.4) million. Depreciation on activated R&D expenses amounted to EUR 0.4 (0.3) million.
Video and Broadband Solutions in January-December 2015
| 1,000 euros | 1-12/2015 | 1-12/2014 | Change |
| Orders received | 157,951 | 109,007 | +44.9% |
| Net sales | 154,396 | 106,901 | +44.4% |
| EBIT | 12,781 | 9,673 | +32.1% |
| EBIT % | 8.3% | 9.0% |
Year-on-year orders received improved by 44.9% standing at EUR 158.0 (109.0) million. Net sales grew by 44.4% amounting to EUR 154.4 (106.9) million. Orders and net sales were increased by the Mitron information solutions and access network products. Operating profit increased by 32.1% standing at EUR 12.8 (9.7) million and making 8.3% (9.0%) of the net sales. The operating profit was improved by the information solutions and an improvement in profitability of the IP headend business.
Product development expenses equalled EUR 11.0 (10.3), i.e. 7.1% (9.6%) of the net sales. Product development projects focused on network products complying with the Docsis 3.1 standard, a network management system, distributed access architecture, video security and information solutions, as well as customer-specific projects. Capitalized R&D expenses amounted to EUR 1.7 (1.1) million. Depreciation on activated R&D expenses amounted to EUR 1.1 (1.2) million.
Network Services in October-December 2015
| 1,000 euros | 10-12/2015 | 10-12/2014 | Change |
| Orders received | 24,809 | 24,367 | +1.8% |
| Net sales | 24,809 | 24,367 | +1.8% |
| EBIT | 607 | 909 | -33.2% |
| EBIT % | 2.4% | 3.7% |
Year-on-year orders received and net sales increased by 1.8% amounting to EUR 24.8 (24.4) million. Operating profit decreased by 33.2% standing at EUR 0.6 (0.9) million, which is 2.4% (3.7%) of the net sales. Operating profit decreased in the UK, where the launch of new customer projects and the expansion of business caused losses. Operating profit was below the comparative period also in Germany but improved in other markets.
Network Services in January-December 2015
| 1,000 euros | 1-12/2015 | 1-12/2014 | Change |
| Orders received | 93,362 | 90,275 | +3.4% |
| Net sales | 93,362 | 90,275 | +3.4% |
| EBIT | 1,520 | 1,463 | +3.9% |
| EBIT % | 1.6% | 1.6% |
Year-on-year orders received and net sales increased by 3.4% amounting to EUR 93.4 (90.3) million. Net sales increased in Switzerland and the UK. Operating profit increased by 3.9% standing at EUR 1.5 (1.5) million and making 1.6% (1.6%) of the net sales. Operating profit weakened in the UK and was a loss. Operating profit was below the comparative period also in Germany but improved in other markets.
Personnel and Organisation in January-December 2015
In the period under review, the average number of people employed by the Group was 1,485 (1,302/2014, 1,306/2013); of these 697 (560) were employed by Video and Broadband Solutions, and 788 (741) by Network Services. At the end of the review period, the Group employed 1,506 people (1,343/2014, 1,261/2013) of whom 68% (72%/2014, 71%/2013) were stationed abroad. About 3% of the Group’s employees were working outside Europe.
Personnel expenses increased from the previous year by 18.5% to EUR 70.5 (59.5/2014 and 56.9/2013) million. This growth in personnel expenses was due to the Mitron acquisition, increased number of personnel abroad and exchange rate changes. From the beginning of the reporting period, the number of employees increased by more than 160 people. The average number of employees increased by 14.2%. Most of this growth resulted from the Mitron acquisition, but also the number of personnel employed by Network Services increased.
Investments in January-December 2015
Investments by the Group in the period under review totalled EUR 16.9 (3.7) million accounting for 6.8% (1.9%) of the net sales. EUR 11.5 million of these investments involved the acquisition of Mitron. Investments in product development equalled EUR 1.7 (1.1) million. Other investments involved information systems and machines as well as equipment. Investments of EUR 1.7 (0.3) million were carried out under financial lease arrangements.
Product development projects focused on network products complying with the Docsis 3.1 standard, a network management system, distributed access architecture, video security and information solutions, as well as customer-specific projects.
Financing and Capital Structure in January to December 2015
Cash flow from operations stood at EUR 4.9 (9.2) million. This year-on-year decline in the operating cash flow was due to a growth in net working capital. The single most significant reason behind this growth in net working capital was the expansion of business of Video and Broadband Solutions.
In January, Teleste Corporation signed new overdraft and revolving credit facilities with a total value of EUR 45.0 million. These new agreements replaced the corresponding previous funding agreements. These credit limits are valid until the end of March 2018. At the end of the period under review, the amount of unused binding stand-by credits amounted to EUR 17.7 (17.0) million.
The Group’s equity ratio equalled 48.3% (53.4%) while net gearing was 26.3% (9.5%). On 31 December 2015, the Group’s interest-bearing debt stood at EUR 33.0 (24.4) 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 organisations in the public sector.
As to Video and Broadband Solutions, client-specific and integrated deliveries of solutions create favourable conditions for growth, even if the concerned resource allocation and technical implementation pose a challenge involving, therefore, also reasonable risks. In particular, deliveries of integrated safety and information systems for the passenger transport may be large in size, setting high demands for the project quotation calculation and management and, consequently, there are risks involved. Our customers’ network investments vary based on the relevant need for upgrading and their financial structure.
A 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 US dollar and the Chinese renminbi to the euro affects our product costs. The company hedges against short-term currency exposure by means of forward exchange contracts. The modest development in economic growth and the financial challenges faced by the European public sector may slow down the implementation of our customers’ investment plans. Furthermore, a weakening in the consumer purchasing power in Europe could slow down the network investments by the cable operators. Competition increased by the new service providers (OTT) may undermine the cable operators’ ability to invest. Availability of components is subject to natural phenomena, such as floods and earthquakes. Correct technological choices and their timing are vital to our success. Regardless of careful planning and quality assurance, complex products may fail in the customer’s network and lead to expensive repair obligations.
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 our services by any one of them is reflected in the actual deliveries and profitability. Improvements in customer satisfaction and productivity require efficient control of service process management as well as innovative solutions in processes, products and logistics to ensure the quality of services and cost effectiveness. Smooth operation of cable networks necessitates efficient technical management of the networks and functional solutions for devices in accordance with contractual obligations. This, in turn, demands continuous and determined development of skills and competencies in Teleste’s own personnel as well as those of our subcontractors. In addition, adequacy and utilization rates of our own personnel and subcontractor network capacity affect the Company’s delivery capacity and profitability. Tender calculation and management of larger projects with overall responsibility are complex and risky. Severe weather conditions may affect the supply conditions of our products and services.
Teleste’s strategy involves risks and uncertainties: new business opportunities may fail to be identified or they cannot be acted upon successfully. The business areas will have to keep an eye on market movements, such as consolidations among the customers and competitors. Intensifying competition may decrease the prices of products and solutions faster than we manage to reduce our products’ manufacturing and delivery costs. Various information systems are critical to the development, manufacturing and supply of products to our customers. Maintenance of information systems and deployment of new systems involve risks that may affect our ability to deliver products and services. Information systems may also be subject to external threats, from which we aim to protect ourselves. Acquisition of skilled personnel and maintenance of their competence require encouragement, development and recruitment, which can fail.
The Board of Directors annually reviews any essential risks related to the company operation and the management thereof. Risk management constitutes an integral part of the strategic and operative practices of our business areas. Risks are reported to the Board on a regular basis.
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 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 14 countries outside Finland. On 7 January 2015, the parent company acquired the entire share capital of Mitron Group Oy Ltd. On 15 May 2015, the parent company bought the entire share capital of Teleste Management II Oy to acquire its holding of Teleste Corporation’s shares.
Shares and Changes in Share Capital
On 31 December 2015, EM Group Oy was the largest single shareholder with a holding of 23.2%.
In the period under review, the lowest company share price was EUR 5.32 (4.25) while the highest was EUR 9.88 (5.29). Closing price on 31 December 2015 stood at EUR 9.80 (5.27). According to Euroclear Finland Ltd, the number of shareholders at the end of the period under review was 5,355 (4,962). Foreign ownership accounted for 5.0% (5.0%). The value of shares traded on the Nasdaq Helsinki on 1 January to 31 December 2015 was EUR 24.6 (10.9) million. In the period under review, 3.3 (2.3) million Teleste shares were traded on the stock exchange.
On 31 December 2015, the Group held 863,953 of its own shares, of which the parent company Teleste Corporation had 321,953 shares and the Group companies had 542,000 shares, respectively. At the end of the period, the Group’s holding of the total amount of shares amounted to 4.6% (6.3%).
In January, the Company transferred 56,924 shares as part of the purchase price in the context of the acquisition of the entire share capital of Mitron Group Oy Ltd by Teleste Corporation. In February, the Company transferred 73,644 shares in a directed free share issue constituting part of Teleste Corporation’s 2012 long-term incentive plan. In May, the Company transferred 195,133 shares when purchasing the entire share capital of Teleste Management II Oy.
On 31 December 2015, the registered share capital of Teleste stood at EUR 6,966,932.80 divided into 18,985,588 shares.
Valid authorizations at the end of the review period:
– Purchases of own shares: maximum 1,200,000 of the Company’s own shares, valid until 8 October 2016.
– Issue of new shares: maximum 4,000,000 shares, valid until 31 March 2017.
– Disposal of own shares in possession: maximum 1,800,000 shares, valid until 31 March 2017.
– Based on the special rights granted by the Company, the number of shares to subscribe may not exceed 2,500,000 shares; these special rights are included in the maximum warrants concerning new shares and the Group’s own shares mentioned above. This authorisation is valid until 31 March 2017.
Decisions by the Annual General Meeting
The Annual General Meeting (AGM) of Teleste Corporation on 09 April 2015 confirmed the financial statements for 2014 and discharged the Board of Directors and the CEO from liability for the financial period. The AGM confirmed the dividend of EUR 0.20 per share as proposed by the Board. The dividend was paid out on 20 April 2015.
The AGM decided that the Board of Directors consists of six members. Mr. Pertti Ervi, Ms. Jannica Fagerholm, Mr. Esa Harju, Ms. Marjo Miettinen, Mr. Kai Telanne and Mr. Petteri Walldén were re-elected as members of Teleste Corporation’s Board of Directors. Ms. Marjo Miettinen was elected Chair of the Board in the organising 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 Annual General Meeting decided to authorize the Board of Directors to decide on repurchasing the Company’s own shares as proposed by the Board. Based on this authorization, the Board of Directors may repurchase a maximum of 1,200,000 own shares of the Company otherwise than in proportion to the holdings of the shareholders by using the non-restricted equity through the regulated market on NASDAQ OMX Helsinki Ltd at the market price prevailing at the time of acquisition. This authorization of purchasing is valid for 18 months from the date of the decision.
Outlook for 2016
The business objective of Video and Broadband Solutions is to maintain its strong market position in Europe and to strengthen this market position in selected new markets outside Europe. Network capacity will continue to increase driven by the new broadband and video services provided by the operators. Our new products in line with the Docsis 3.1 communication standard allow the cable operators to increase their network capacity competitively. Price erosion in the market continues. Changes in the value of the euro, particularly against the US dollar and the Chinese renminbi, affect Teleste’s competitiveness, on the one hand, and product manufacturing costs, on the other. The positive trend in the markets for video security and passenger information solutions will continue whereas the public sector decisions concerning initiation of projects may be delayed by the current economic situation. The security solution for public areas introduced in Paris provides new opportunities for other major cities of the world. Train manufacturers and public transport operators benefit from Teleste’s video security and passenger information solutions.
As to Network Services, our business objective is to further develop the operational efficiency and increase the share of those services that provide our customers with higher value. In the UK, our aim is to improve the profitability of the provided services. We estimate the demand for all-inclusive network services in our key target markets to continue at least at the previous year level.
We estimate that net sales and operating profit for 2016 will exceed the 2015 level.
3 February 2016
Teleste Corporation Jukka Rinnevaara
Board of Directors President and CEO
Teleste’s Annual Report for 2015, which includes the audited financial statements, will be published no later than 18th of March 2016. 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 changes in IAS1, IFRS13 and IAS19 have been applied in this interim report and they do not have any material impact on the financial reporting. The data stated in this report is audited.
| STATEMENT OF COMPREHENSIVE INCOME, 1000 euros | 10-12/ 2015 |
10-12/ 2014 |
Change % |
| Net sales | 68,393 | 53,867 | 27.0 % |
| Other operating income | 1,001 | 1,752 | -42.9 % |
| Raw material and consumables used | -37,248 | -26,930 | 38.3 % |
| Employee benefits expense | -18,083 | -16,407 | 10.2 % |
| Depreciations | -1,313 | -1,097 | 19.7 % |
| Other operating expenses | -9,478 | -7,661 | 23.7 % |
| Operating profit | 3,273 | 3,525 | -7.1 % |
| Financial income | 5 | 5 | 2.7 % |
| Financial expenses | -169 | -178 | -4.9 % |
| Profit before taxes | 3,109 | 3,352 | -7.3 % |
| Taxes | -211 | -258 | -18.4 % |
| Profit for the period | 2,898 | 3,093 | -6.3 % |
| Attributable to: | |||
| Equity holders of the parent | 2,898 | 3,093 | -6.3 % |
| Earnings per share for profit of the year attributable to the equity holders of the parent | |||
| Basic (expressed in euro per share) | 0.16 | 0.17 | -8.0 % |
| Diluted (expressed in euro per share) | 0.16 | 0.17 | -8.0 % |
| Total comprehensive income for the period, 1000 euros |
|||
| Net profit | 2,898 | 3,093 | -6.3 % |
| Items that may be reclassified to profit or loss: | |||
| Translation differences | 273 | -290 | n/a |
| Fair value reserve | 11 | 8 | 37.5 % |
| Total comprehensive income for the period | 3,181 | 2,811 | 13.1 % |
| Attributable to: | |||
| Equity holders of the parent | 3,181 | 2,811 | 13.1 % |
| STATEMENT OF COMPREHENSIVE INCOME, 1000 euros | 1-12/ 2015 |
1-12/ 2014 |
Change % |
| Net sales | 247,758 | 197,176 | 25.7 % |
| Other operating income | 2,854 | 2,536 | 12.5 % |
| Raw material and consumables used | -128,300 | -97,561 | 31.5 % |
| Employee benefits expense | -70,532 | -59,497 | 18.5 % |
| Depreciation | -4,874 | -4,211 | 15.8 % |
| Other operating expenses | -32,604 | -27,309 | 19.4 % |
| Operating profit | 14,302 | 11,135 | 28.4 % |
| Financial income | 582 | 225 | 158.1 % |
| Financial expenses | -945 | -526 | 79.6 % |
| Profit before taxes | 13,939 | 10,835 | 28.7 % |
| Taxes | -2,928 | -2,353 | 24.4 % |
| Profit for the period | 11,011 | 8,482 | 29.8 % |
| Attributable to: | |||
| Equity holders of the parent | 11,011 | 8,482 | 29.8 % |
| Earnings per share for profit of the year attributable to the equity holders of the parent | |||
| Basic (expressed in euro per share) | 0.61 | 0.48 | 27.6 % |
| Diluted (expressed in euro per share) | 0.61 | 0.48 | 28.3 % |
| Total comprehensive income for the period (tEUR) | |||
| Net profit | 11,011 | 8,482 | 29.8 % |
| Items that may be reclassified to profit or loss: | |||
| Translation differences | 240 | -465 | n/a |
| Fair value reserve | 31 | -25 | n/a |
| Total comprehensive income for the period | 11,282 | 7,992 | 41.2 % |
| Attributable to: | |||
| Equity holders of the parent | 11,282 | 7,992 | 41.2 % |
| STATEMENT OF FINANCIAL POSITION, 1000 euros | |||
| Assets 1000 euros | |||
| 31.12.2015 | 31.12.2014 | Change % | |
| Non-current assets | |||
| Property, plant and equipment | 11,648 | 9,627 | 21.0 % |
| Goodwill | 37,849 | 33,121 | 14.3 % |
| Other intangible assets | 6,653 | 3,891 | 71.0 % |
| Available-for-sale investments | 704 | 701 | 0.5 % |
| Deferred tax assets | 1,843 | 1,698 | 8.5 % |
| Total | 58,698 | 49,037 | 19.7 % |
| Current assets | |||
| Inventories | 32,661 | 20,483 | 59.5 % |
| Trade and other receivables | 60,159 | 44,694 | 34.6 % |
| Income tax receivables | 263 | 582 | -54.9 % |
| Cash | 12,677 | 17,672 | -28.3 % |
| Total | 105,759 | 83,430 | 26.8 % |
| Total assets | 164,458 | 132,467 | 24.1 % |
| 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 | -99 | -339 | -70.7 % |
| Invested non restricted equity | 3,140 | 3,923 | -19.9 % |
| Retained profits | 66,033 | 58,139 | 13.6 % |
| Non-controlling interest | 0 | 487 | n/a |
| Total | 77,545 | 70,682 | 9.7 % |
| Non-current liabilities | |||
| Interest-bearing liabilities | 30,723 | 595 | 5060.9 % |
| Other liabilities | 2,730 | 31 | 8681.3 % |
| Deferred tax liabilities | 1,662 | 1,327 | 25.2 % |
| Provisions | 1,026 | 1,238 | -17.1 % |
| Total | 36,141 | 3,192 | 1032.3 % |
| Current liabilities | |||
| Trade and other liabilities | 46,505 | 33,536 | 38.7 % |
| Current tax payable | 1,062 | 793 | 33.9 % |
| Provisions | 889 | 480 | 85.2 % |
| Interest-bearing liabilities | 2,315 | 23,784 | -90.3 % |
| Total | 50,771 | 58,593 | -13.3 % |
| Total liabilities | 86,912 | 61,785 | 40.7 % |
| Equity and liabilities total | 164,458 | 132,467 | 24.1 % |
| CONSOLIDATED CASH FLOW STATEMENT, 1000 euros | 1.1.-31.12. | 1.1.-31.12. | Change % |
| 2015 | 2014 | ||
| Cash flows from operating activities | |||
| Profit for the period | 11,011 | 8,482 | 29.8 % |
| Adjustments for: | |||
| Non-cash transactions | 3,856 | 4,211 | -8.4 % |
| Interest and other financial expenses | 961 | 542 | 77.3 % |
| Interest income and other financial income | -582 | -225 | 158.1 % |
| Dividends | -3 | -2 | 50.0 % |
| Taxes | 2,928 | 2,353 | 24.4 % |
| Change in working capital | |||
| Increase/decrease in trade and other receivables | -5,096 | -6,157 | -17.2 % |
| Increase/decrease in inventories | -6,950 | -721 | 863.9 % |
| Increase/decrease in trade and other payables | 1,361 | 3,510 | -61.2 % |
| Increase/decrease in provisions | 197 | 252 | -21.8 % |
| Paid interests and other financial expenses | -945 | -526 | 79.6 % |
| Received interests and dividends | 582 | 225 | 158.1 % |
| Paid taxes | -2,400 | -2,717 | -11.7 % |
| Cash flow from operating activities | 4,920 | 9,227 | -46.7 % |
| Cash flow from investing activities | |||
| A conditional supplementary contract price for prior subsidiary acquisition | -1,147 | 0 | n/a |
| Purchases of property, plant and equipment (PPE) | -1,258 | -1,782 | -29.4 % |
| Proceeds from sales of PPE | 17 | 64 | -73.4 % |
| Purchases of intangible assets | -1,644 | -1,077 | 52.6 % |
| Proceeds from available-for-sale investments | 0 | -407 | n/a |
| Acquisition of subsidiary, net of cash acquired | -6,826 | 0 | n/a |
| Net cash used in investing activities | -10,858 | -3,202 | 239.1 % |
| Cash flow from financing activities | |||
| Proceeds from borrowings | 44,300 | 1,000 | 4330.0 % |
| Payments of borrowings | -38,130 | -888 | 4193.9 % |
| Payment of finance lease liabilities | -391 | -367 | 6.5 % |
| Dividends paid | -3,694 | -3,360 | 9.9 % |
| Proceeds from issuance of ordinary shares | -1,382 | 497 | n/a |
| Net cash used in financing activities | 703 | -3,118 | n/a |
| Change in cash | |||
| Cash and cash equivalents 1.1. | 17,672 | 15,229 | 16.0 % |
| Effect of currency changes | 240 | -465 | n/a |
| Cash and cash equivalents 31.12. | 12,677 | 17,672 | -28.3 % |
| Consolidated statement of changes in equity,1000 euros | |||||||||||
| Attributable to equity holders of the parent (tEUR) | |||||||||||
| 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 31.12.2014 | 6,967 | 1,504 | -339 | 58,139 | 3,954 | -31 | 70,194 | 487 | 70,682 | ||
| Total comprehensive income for the period | 0 | 0 | 240 | 11,011 | 0 | 31 | 11,282 | 0 | 11,282 | ||
| Share issue | -814 | -814 | 0 | -814 | |||||||
| Dividends | 0 | 0 | 0 | -3,802 | 0 | 0 | -3,802 | 108 | -3,694 | ||
| Changes in subsidiary interest | 10 | 10 | -10 | 0 | |||||||
| Equity-settled share-based payments | 0 | 0 | 0 | 676 | 0 | 0 | 676 | -585 | 91 | ||
| Equity 31.12.2015 | 6,967 | 1,504 | -99 | 66,034 | 3,140 | 0 | 77,545 | 0 | 77,545 | ||
| BUSINESS SEGMENTS 2015, 1000 EUROS |
Video and Broadband Solutios |
Network Services |
Group |
| External sales | |||
| Services | 7,860 | 93,362 | 101,222 |
| Goods | 146,536 | 0 | 146,536 |
| External sales total | 154,396 | 93,362 | 247,758 |
| Operating profit of segments | 12,781 | 1,520 | 14,302 |
| Financial items | -363 | ||
| Profit before taxes | 13,939 | ||
| Business segments 2014, 1000 euros | Video and Broadband Solutions |
Network Services |
Group |
| External sales | |||
| Services | 6,512 | 90,275 | 96,787 |
| Goods | 100,389 | 0 | 100,389 |
| External sales total | 106,901 | 90,275 | 197,176 |
| Operating profits of the segments | 9,673 | 1,463 | 11,136 |
| Financial items | -301 | ||
| Profit before taxes | 10,835 |
| GEOGRAPHICAL SEGMENTS 2015, 1000 EUROS |
Nordic countries | Other Europe | Finland | Others | Group |
| Sales by origin | 20,290 | 209,172 | 12,223 | 6,073 | 247,758 |
| Assets | 82 | 13,750 | 42,763 | 260 | 56,855 |
| Capital expenditure for the period | 0 | 1,843 | 14,982 | 123 | 16,948 |
| Geographical segments 2014, 1000 euros |
Nordic countries | Other Europe | Finland | Others | Group |
| Sales by origin | 15,792 | 159,572 | 14,858 | 6,954 | 197,176 |
| Assets | 89 | 12,730 | 33,937 | 583 | 47,339 |
| Capital expenditure for the period | 5 | 1,755 | 1,446 | 470 | 3,676 |
| Information per quarter, 1000 euros | 10-12/15 | 7-9/15 | 4-6/15 | 1-3/15 | 10-12/14 | 1-12/ 2015 |
1-12/ 2014 |
| Video and Broadband Solutions |
|||||||
| Order intake | 43,419 | 39,616 | 40,926 | 33,990 | 28,642 | 157,951 | 109,007 |
| Net sales | 43,584 | 43,760 | 36,519 | 30,532 | 29,500 | 154,396 | 106,901 |
| EBIT | 2,666 | 5,113 | 2,999 | 2,003 | 2,616 | 12,781 | 9,673 |
| EBIT % | 6.1 % | 11.7 % | 8.2 % | 6.6 % | 8.9 % | 8.3 % | 9.0 % |
| Network Services |
|||||||
| Order intake | 24,809 | 22,432 | 23,211 | 22,911 | 24,367 | 93,362 | 90,275 |
| Net sales | 24,809 | 22,432 | 23,211 | 22,911 | 24,367 | 93,362 | 90,275 |
| EBIT | 607 | 811 | -492 | 595 | 909 | 1,520 | 1,463 |
| EBIT % | 2.4 % | 3.6 % | -2.1 % | 2.6 % | 3.7 % | 1.6 % | 1.6 % |
| Total |
|||||||
| Order intake | 68,228 | 62,048 | 64,137 | 56,901 | 53,009 | 251,313 | 199,282 |
| Net sales | 68,393 | 66,192 | 59,730 | 53,443 | 53,867 | 247,758 | 197,176 |
| EBIT | 3,273 | 5,924 | 2,507 | 2,598 | 3,525 | 14,302 | 11,135 |
| EBIT % | 4.8 % | 8.9 % | 4.2 % | 4.9 % | 6.5 % | 5.8 % | 5.6 % |
| Commitments and contingencies, 1000 euros | 2015 | 2014 | Change % |
| Rental liabilities | 2,980 | 2,567 | 16.1 % |
| Lease liabilities | 4,878 | 2,992 | 63.0 % |
| Value of underlying forward contracts | 24,599 | 13,141 | 87.2 % |
| Market value of forward contracts | -27 | 65 | n/a |
| Interest rate swap | 10,000 | 11,000 | -9.1 % |
| Market value of interest swap | 0 | -31 | n/a |
| Guarantees | 3,124 | 0 | n/a |
| The number of employees broken down by following categories 31.12. | 2015 | 2014 | Change % |
| Research and development | 149 | 113 | 31.9 % |
| Production and material management | 1,089 | 1,003 | 8.5 % |
| Sales and marketing | 197 | 170 | 15.9 % |
| Administration | 71 | 57 | 24.6 % |
| Total | 1,506 | 1,343 | 12.1 % |
| IFRS | IFRS | IFRS | IFRS | IFRS | |
| Key figures | 2015 | 2014 | 2013 | 2012 | 2011 |
| Profit and loss account, balance sheet | |||||
| Net sales, Meur | 247.8 | 197.2 | 192.8 | 193.9 | 183.6 |
| Change % | 25.7 % | 2.3 % | -0.6 % | 5.6 % | 8.6 % |
| Sales outside Finland, % | 95.1 % | 92.5 % | 93.2 % | 93.4 % | 94.1 % |
| Operating profit, Meur | 14.3 | 11.1 | 11.0 | 10.9 | 9.4 |
| % of net sales | 5.8 % | 5.6 % | 5.7 % | 5.6 % | 5.1 % |
| Profit after financial items, Meur | 13.9 | 10.8 | 10.7 | 10.1 | 8.8 |
| % of net sales | 5.6 % | 5.5 % | 5.5 % | 5.2 % | 4.8 % |
| Profit before taxes, Meur | 13.9 | 10.8 | 10.7 | 10.1 | 8.8 |
| % of net sales | 5.6 % | 5.5 % | 5.5 % | 5.2 % | 4.8 % |
| Profit for the financial period, Meur | 11.0 | 8.5 | 8.1 | 6.7 | 6.3 |
| % of net sales | 4.4 % | 4.3 % | 4.2 % | 3.5 % | 3.4 % |
| R&D expenditure, Meur | 11.0 | 10.3 | 10.0 | 11.2 | 11.6 |
| % of net sales | 4.4 % | 5.2 % | 5.2 % | 5.8 % | 6.3 % |
| Gross investments, Meur | 16.9 | 3.7 | 6.3 | 3.3 | 5.2 |
| % of net sales | 6.8 % | 1.9 % | 3.3 % | 1.7 % | 2.9 % |
| Interest bearing liabilities, Meur | 33.0 | 24.4 | 24.3 | 22.1 | 33.2 |
| Shareholder’s equity, Meur | 77.5 | 70.7 | 65.6 | 60.6 | 55.3 |
| Total assets, Meur | 164.5 | 132.5 | 124.3 | 120.2 | 133.2 |
| Personnel and orders | |||||
| Average personnel | 1,485 | 1,302 | 1,306 | 1,326 | 1,297 |
| Order backlog at year end, Meur | 42.2 | 15.2 | 13.1 | 17.0 | 21.2 |
| Orders received, Meur | 251.3 | 199.3 | 188.9 | 189.7 | 188.1 |
| Key metrics | |||||
| Return on equity, % | 14.9 % | 12.5 % | 12.9 % | 11.6 % | 11.9 % |
| Return on capital employed, % | 14.2 % | 12.2 % | 13.0 % | 13.0 % | 11.5 % |
| Equity ratio, % | 48.3 % | 53.4 % | 52.7 % | 50.5 % | 41.6 % |
| Net gearing, % | 26.3 % | 9.5 % | 13.8 % | 13.7 % | 32.2 % |
| Earnings per share, euro | 0.61 | 0.48 | 0.47 | 0.38 | 0.36 |
| Earnings per share fully diluted, euro | 0.61 | 0.48 | 0.46 | 0.38 | 0.36 |
| Shareholders equity per share, euro | 4.28 | 3.94 | 3.73 | 3.48 | 3.17 |
| Teleste share | |||||
| Highest price, euro | 9.88 | 5.29 | 4.47 | 4.44 | 4.82 |
| Lowest price, euro | 5.32 | 4.25 | 3.78 | 3.04 | 2.50 |
| Closing price, euro | 9.80 | 5.27 | 4.25 | 4.17 | 3.00 |
| Average price, euro | 7.42 | 4.67 | 4.17 | 3.98 | 3.64 |
| Price per earnings | 16.1 | 11.0 | 9.1 | 10.8 | 8.3 |
| Market capitalization, Meur | 177.6 | 98.7 | 79.6 | 78.1 | 56.2 |
| Stock turnover, Meur | 24.6 | 10.9 | 9.2 | 10.8 | 6.2 |
| Turnover, number in millions | 3.3 | 2.3 | 2.2 | 2.7 | 1.7 |
| Turnover, % of share capital | 17.5 % | 12.5 % | 11.7 % | 14.4 % | 9.1 % |
| Average number of shares | 18985588 | 18918869 | 18743507 | 18728590 | 18189560 |
| Number of shares at the year-end | 18985588 | 18985588 | 18816691 | 18728590 | 18728590 |
| Average number of shares, diluted w/o own shares | 18036667 | 17729215 | 17513799 | 17688527 | 17425605 |
| Number of shares at the year-end, diluted w/o own shares | 18121635 | 17795934 | 17838599 | 17709672 | 17425605 |
| Paid dividend, Meur | 4.2 | 3.6 | 3.3 | 3.0 | 2.4 |
| Dividend per share, euro | 0,23* | 0.20 | 0.19 | 0.17 | 0.14 |
| Dividend per net result, % | 37.7 % | 41.7 % | 40.8 % | 44.5 % | 38.9 % |
| Effective dividend yield, % | 2.3 % | 3.8 % | 4.5 % | 4.1 % | 4.7 % |
| * The Board’s proposal to the AGM | |||||
| Treasury shares | Number of shares |
% of shares | % of votes | ||
| Teleste companies own shares 31.12.2015 | 863,953 | 4.55% | 4.55% |
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 |
| Major shareholders 31.12.2015 | Number of shares | % of share capital |
| EM Group Oy | 4,409,712 | 23.23 |
| Mandatum Life Insurance Company Limited | 1,679,200 | 8.84 |
| Ilmarinen Mutual Pension Insurance Company | 963,860 | 5.08 |
| Kaleva Mutual Insurance Company | 824,641 | 4.34 |
| Teleste Management II Oy | 542,000 | 2.85 |
| Varma Mutual Pension Insurance Company | 521,150 | 2.74 |
| The State Pension Fund | 500,000 | 2.63 |
| Teleste Oyj | 321,953 | 1.7 |
| Danske Invest Finnish Small Cap Fund | 290,000 | 1.53 |
| FIM Fenno Equity fund | 277,520 | 1.46 |
| Shareholders by sector | Number of shareholders | % of Owners | Number of shares | % of shares |
| Households | 5,015 | 93,65 | 4,785,023 | 25,2 |
| Public sector institutions | 3 | 0,06 | 1,985,010 | 10,5 |
| Financial and insurance institutions | 20 | 0,37 | 3,457,533 | 18,2 |
| Corporations | 251 | 4,69 | 7,105,394 | 37,4 |
| Non-profit institutions | 29 | 0,54 | 360,531 | 1,9 |
| Foreign and nominee registered owners | 37 | 0,69 | 1,292,097 | 6,8 |
| Total | 5,355 | 100,00 | 18,985,588 | 100,0 |
| Number of shares | Number of shareholders | % of shareholders | Number of shares | % of shares |
| 1 – 100 | 1,300 | 24,3 | 84,146 | 0,4 |
| 101 – 500 | 2,343 | 43,8 | 634,303 | 3,3 |
| 501 – 1000 | 767 | 14,3 | 627,507 | 3,3 |
| 1001 – 5000 | 768 | 14,3 | 1,686,218 | 8,9 |
| 5001 – 10000 | 78 | 1,5 | 550,011 | 2,9 |
| 10001 – 50000 | 67 | 1,3 | 1,447,835 | 7,6 |
| 50001 – 100000 | 10 | 0,2 | 759,875 | 4,0 |
| 100001 – 500000 | 15 | 0,3 | 3,638,547 | 19,2 |
| 500001 – | 7 | 0,1 | 9,557,146 | 50,3 |
| Total | 5,355 | 100,0 | 18,985,588 | 100,0 |
| of which nominee registered | 1,078,100 | 5,7 |
| The following assets are liabilities were recognised in the acquisition Mitron: | |
| 1 000 € | Recognised fair values on acquisition |
| Fair values used in consolidation | |
| Trade marks (inc. in intangible assets) | 746 |
| Customer relationship (inc. in intangible assets) | 585 |
| Technology (inc. in intangible assets) | 1,362 |
| Inventories | 4,983 |
| Trade receivables | 8,514 |
| Book values used in consolidation | |
| Tangible assets | 944 |
| Intangible assets | 537 |
| Shares and immaterial rights | 29 |
| Accrued income | 1,315 |
| Deferred tax asset | 314 |
| Other receivables | 425 |
| Cash and cash equivalents | 874 |
| Total assets | 20,628 |
| Book values used in consolidation | |
| Interest-bearing liabilities | 1,174 |
| Trade payables | 5,672 |
| Deferred tax liabilites | 539 |
| Advance payments | 2,984 |
| Other liabilities | 3,159 |
| Total liabilities | 13,528 |
| Net identifiable assets and liabilities | 7,100 |
| Total consideration | 11,500 |
| Goodwill on acquisition | 4,400 |
| Consideration paid in cash | -7,700 |
| Cash and cash equivalents in acquired subsidiary | 874 |
| Total net cash outflow on the acquisition | -6,826 |
ADDITIONAL INFORMATION:
CEO Jukka Rinnevaara, phone +358 2 2605 611 or +358 400 747 488
DISTRIBUTION:
Nasdaq Helsinki
Main Media
www.teleste.com