TELESTE CORPORATION INTERIM REPORT 1 JAN TO 30 SEP 2013
TELESTE CORPORATION INTERIM REPORT 31 OCTOBER 2013 AT 08:30
TELESTE CORPORATION INTERIM REPORT 1 JAN TO 30 SEP 2013
IMPROVED THIRD QUARTER IN YEAR-ON-YEAR COMPARISON, FULL-YEAR OUTLOOK UNCHANGED
Third quarter of 2013
– Orders received totaled EUR 51.1 (40.5) million, an increase of 26.2%
– Net sales amounted to EUR 46.5 (45.6) million, an increase of 1.9%
– Operating profit amounted to EUR 3.2 (2.9) million, an increase of 10.9%
– Undiluted result per share stood at EUR 0.12 (EUR 0.11)
– Operating cash flow was EUR 3.0 (-0.2) million
Outlook for 2013
We expect net sales and operating profit for 2013 to reach the 2012 level.
Comments on Q3/2013 by CEO Jukka Rinnevaara:
“The positive market development of the third quarter was brought about by growth in the demand for both broadband access capacity and video surveillance, especially in the European market. We also managed to win significant orders on account of which our order backlog increased clearly over the comparative period.
Moreover, significant consolidations took place in our main clientele like those between Vodafone and Kabel Deutschland in Germany, and Liberty Global and Virgin Media in the U.K. The impact of such consolidations on network investments is difficult to assess.
Orders received by Video and Broadband Solutions were significantly higher than in the comparative period. Particularly strong markets included the Nordic countries, the Netherlands, Poland and France. Preparations continued for the future network technology solutions with our customers. Net sales and operating profit were at par with the comparative period.
The successful adjustment of the cost structure of Network Services business in Germany and the growth in demand for broadband connections allowed for a clear improvement in the year-on-year profitability.”
Group Operations July to September 2013
| Key figures (EUR million) | |||
| 7-9/2013 | 7-9/2012 | Change % | |
| Orders received | 51.1 | 40.5 | 26.2% |
| Net sales | 46.5 | 45.6 | 1.9% |
| EBIT | 3.2 | 2.9 | 10.9% |
| EBIT % | 6.9% | 6.3% | |
| Profit for the period | 2.0 | 1.9 | 9.4% |
| Other important key figures | |||
| Earnings per share, € | 0.12 | 0.11 | 8.6% |
| Cash flow from operations, M€ | 3.0 | -0.2 | n/a |
The third-quarter orders received by Teleste Group increased by 26.2% and stood at EUR 51.1 (40.5) million. Order backlog increased totaling EUR 17.4 (13.6) million. Net sales amounted to EUR 46.5 (45.6) million. Operating profit improved and stood at EUR 3.2 (2.9) million making 6.9% (6.3%) of the net sales. Proportional material margin was slightly lower than in the period of comparison because the deliveries by the product business involved more lower-margin products.
Wages and salaries decreased and stood at EUR 12.8 (EUR 13.3) million. This decrease in payroll expenses was contributed by reduction in the number of personnel in the services business. Undiluted result per share was EUR 0.12 (0.11). Operating cash flow stood at EUR 3.0 (-0.2) million.
Group Operations January to September 2013
| Key figures (EUR million) | ||||
| 1-9/2013 | 1-9/2012 | Change % | 1-12/2012 | |
| Orders received | 138.7 | 138.8 | -0.1% | 189.7 |
| Net sales | 138.7 | 146.4 | -5.2% | 193.9 |
| EBIT | 7.5 | 8.2 | -8.5% | 10.9 |
| EBIT % | 5.4% | 5.6% | 5.6% | |
| Profit for the period | 5.1 | 5.1 | 0.2% | 6.7 |
| Other important key figures | ||||
| Earnings per share, € | 0.29 | 0.29 | -0.2% | 0.38 |
| Cash flow from operations, EUR million | 7.3 | 10.2 | -28.6% | 15.3 |
| Net gearing, % | 17.4% | 21.7% | -19.7% | 13.7% |
| Equity ratio, % | 50.4% | 47.5% | 6.2% | 50.5% |
| Personnel at period-end | 1,283 | 1,308 | -1.9% | 1,325 |
On account of the good order intake in Q3 and changes in Group structure (acquisition of Asheridge in April 2013), orders received were at par with the comparative period. Net sales amounted to EUR 138.7 (146.4) million. Operating profit stood at EUR 7.5 (8.2) million making 5.4% (5.6%) of the net sales.
Financial items totaled EUR 0.4 (0.7) million. Taxes paid amounted to EUR 2.0 (2.4) million and the Group’s tax rate was 28.3% (32.3%). Undiluted result per share was EUR 0.29 (0.29). Operating cash flow stood at EUR 7.3 (10.2) million.
Video and Broadband Solutions July to September 2013
Economic Development of Video and Broadband Solutions:
| 7-9/2013 | 7-9/2012 | Change % | |
| Orders received | 28,919 | 19,720 | 46.6% |
| Net sales | 24,258 | 24,794 | -2.2% |
| EBIT | 2,362 | 2,423 | -2.5% |
| EBIT % | 9.7% | 9.8% |
Year-on-year orders received improved significantly by 46.6% standing at EUR 28.9 (19.7) million. Order backlog strengthened totaling EUR 17.4 (13.6) million. Net sales standing at EUR 24.3 (24.8) million was at par with the comparative period. Operating profit stood at EUR 2.4 (2.4) million making 9.7% (9.8%) of the net sales.
R&D expenses were 2.0 (2.4) million, i.e. 8.4% (9.8%) of the business area’s net sales. Activated R&D expenses amounted to EUR 0.3 (0.2) million. The R&D efforts focused on the next generation innovative broadband solution (Data Access HUB), the future access network solutions (Docsis 3.1), video headend systems (Luminato), as well as video surveillance software development. Depreciation on R&D expenses amounted to EUR 0.3 (0.5) million.
Video and Broadband Solutions January to September 2013
| 1-9/2013 | 1-9/2012 | Change % | 1-12/2012 | |
| Orders received | 73,688 | 69,900 | 5.4% | 97,730 |
| Net sales | 73,696 | 76,571 | -3.8% | 101,230 |
| EBIT | 7,106 | 6,495 | 9.4% | 8,497 |
| EBIT % | 9.6% | 8.5% | 8.4% |
Orders received improved by 5.4% standing at EUR 73.7 (69.9) million. Net sales decreased by 3.8% to EUR 73.7 (76.6) million. Operating profit increased by 9.4% standing at EUR 7.1 (6.5) million making 9.6% (8.5%) of the net sales. This improvement in the operating profit was mainly due to the good level of video surveillance deliveries, especially in the first half of the year.
Product development expenses equaled EUR 7.1 (8.3) million, in other words 9.6% (10.9%) of the net sales. Activated R&D expenses stood at EUR 0.9 (0.6) million while depreciation on product development expenses equaled EUR 1.5 (1.5) million.
Network Services July to September 2013
Economic Development of Network Services:
| 7-9/2013 | 7-9/2012 | Change % | |
| Orders received | 22,220 | 20,796 | 6.8% |
| Net sales | 22,220 | 20,796 | 6.8% |
| EBIT | 823 | 448 | 83.8% |
| EBIT % | 3.7% | 2.2% |
In the third quarter, both orders received and net sales increased by 6.8% and stood at EUR 22.2 (20.8) million. Compared to the same period in the previous year, operating profit improved clearly totaling EUR 0.8 (0.4) million, which is 3.7% (2.2%) of the net sales. This improvement in the operating profit was brought about by the successful adjustment of cost structure in Germany and the increase in demand for broadband connections.
Network Services January to September 2013
| 1-9/2013 | 1-9/2012 | Change % | 1-12/2012 | |
| Orders received | 65,036 | 68,936 | -5.7% | 91,931 |
| Net sales | 65,036 | 69,836 | -6.9% | 92,645 |
| EBIT | 419 | 1,733 | -75.8% | 2,439 |
| EBIT % | 0.6% | 2.5% | 2.6% |
Orders received totaled EUR 65.0 (68.9) million. Net sales decreased by 6.9% to EUR 65.0 (69.8) million. Operating profit equaled EUR 0.4 (1.7) million. This decline in operating profit over the comparative period was due to the low net sales and the relatively high cost structure in the first half of the year.
Personnel and Organization January to September 2013
In the period under review, the Group had an annual average of 1,324 people (1,326/2012, 1,290/2011), of whom 562 (568) were employed by Video and Broadband Solutions, and 762 (758) by Network Services. At the end of the reporting period, the Group employed 1,283 (1,308/2012, 1,311/2011) people, of whom Video and Broadband Solutions accounted for 564 and Network Services for 719. At the end of the reporting period, 72% (73%/2012, 72%/2011) worked abroad. Employees stationed outside Europe accounted for less than 5% of the Group’s personnel.
Year-on-year wages and salaries decreased by 4.7% and amounted to EUR 41.7 (43.8/Jan to Sep/2012, 39.1/Jan to Sep/2011) million. This reduction in wages and salaries was contributed by performance-based bonuses, growth in the activation of R&D wages and salaries and payroll adjustments in the first quarter. In Finland, adjustments agreed in the cooperation procedures can be extended until March 2014, if required.
M.Sc. (Econ) Juha Hyytiäinen (46) has been appointed new Chief Financial Officer and member of the Management Team of Teleste Corporation. Mr. Hyytiäinen’s employment will begin on 18 November 2013. Teleste’s current CFO, Erja Saarikoski, will leave the company in early 2014.
Investments in January to September 2013
Investments by the Group for the period under review totaled EUR 5.3 (2.5) million accounting for 3.8% (1.7%) of the net sales. EUR 3.5 million of these investments involved the acquisition of Asheridge. Investments in product development equaled EUR 0.9 (0.6) million. R&D investments involved the distributed access network solution and video surveillance software. Other investments were made in machinery and equipment for production and services as well as for modifications made in the production facilities in Finland. Investments of EUR 0.1 (0.8) million were made under financial lease arrangements.
Financing and Capital Structure in January to September 2013
Operating cash flow stood at EUR 7.3 (10.2) million. This decrease in cash flow from operations was primarily due to diminished EBITDA and taxes paid. At the end of the period under review, the amount of unused binding stand-by credits amounted to EUR 15.0 (16.0) million. The current binding stand-by credits of EUR 40.0 million run till August 2015.
The Group’s equity ratio equaled 50.4% (47.5%) and net gearing was 17.4% (21.7%). Interest bearing debt on 30 September 2013 stood at EUR 26.3 (25.1) million.
Essential Operational Risks of 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 their 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 our 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 their management. 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 involving 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 13 countries outside Finland. In April 2013 Teleste Management Oy became a Group company through exchange of shares. Teleste Management II Oy, founded in December 2011, has been consolidated in the Teleste Group figures on account of financial arrangements. Suomen Turvakamera Oy has been merged with Teleste Corporation on 30 April 2013. In Germany, the Group Structure has been streamlined. Asheridge Group has been consolidated with the Group figures as of 7 April 2013.
Shares and Changes in Share Capital
On 30 September 2013, EM Group Oy was the largest single shareholder with a holding of 23.50%.
In the period under review, the lowest company share price was EUR 3.81 (3.04) and the highest was EUR 4.42 (4.44). Closing price on 30 September 2013 stood at EUR 4.12 (4.38). According to Euroclear Finland Ltd the number of shareholders at the end of the period under review was 5106 (5187). Foreign ownership accounted for 5.62% (5.96%). From 1 January to 30 September 2013, trading with Teleste share at NASDAQ OMX Helsinki amounted to EUR 7.0 (8.2) million. In the period under review, 1.7 (2.1) million Teleste shares were traded on the stock exchange.
At the end of September 2013, the Group held 1,189,654 (1,302,985) of its own shares, of which the parent company Teleste Corporation had 266,654 shares while the Group and 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 6.34% (6.96%).
On 30 September 2013, Teleste’s registered share capital stood at EUR 6,966,932.80 divided in 18,762,320 shares.
The period for subscription of Teleste 2007B options expired on 30 April 2013. No Teleste Corporation shares were subscribed by the specified options in the subscription period. On 21 August 2013, 33,730 shares were subscribed by means of 2007C options. Up until 30 April 2014, 2007C options allow for subscription of maximum 280,000 Teleste Corporation shares. Teleste 2007C options have been listed on NASDAQ OMX Helsinki Oy since 2 April 2012.
Decisions by the Annual General Meeting
The Annual General Meeting (AGM) of Teleste Corporation on 12 April 2013 confirmed the financial statements for 2012 and discharged the Board of Directors and the CEO from liability for the financial period. The AGM confirmed the dividend of EUR 0.17 per share proposed by the Board. The dividend was paid out on 24 April 2013.
Ms. Marjo Miettinen, Mr. Pertti Ervi, Mr. Esa Harju, Mr. Kai Telanne and Mr. Petteri Walldén continue in Teleste’s Board of Directors. Ms. Jannica Fagerholm was elected new member of the Board of Directors. Mr. Pertti Raatikainen’s membership of the Board of Directors 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.
Valid authorizations granted by the AGM:
– Authorization to purchase own shares: 1,400,000
– Disposal of own shares: 1,779,985, valid until the 2014 Annual General Meeting
– Issue of new shares: 5,000,000, valid until the 2014 Annual General Meeting
– Pursuant to the special rights granted by the company, the maximum number of shares is 2,500,000; these special rights are included in the authorization to issue 5,000,000 new shares.
In the period under review, 113,331 treasury shares were conveyed. This conveyance was related to the acquisition of the share capital of the management holding company Teleste Management Oy, which was carried out through a share exchange.
Outlook for 2013
Network capacity will continue to increase driven by the new video services provided by the operators. However, comparisons made by the operators concerning the future access network technologies could delay the launch of investments. We estimate profitability of Video and Broadband Solutions to improve over the comparative period.
We estimate profitability of Network Services to remain below the comparative period.
We expect net sales and operating profit for 2013 to reach the 2012 level.
30 October 2013
Teleste Corporation Jukka Rinnevaara
Board of Directors President and CEO
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. Teleste has prepared this interim report applying the same accounting principles as those described in detail in its 2012 consolidated financial statements. The data stated in this report is unaudited. 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.
| STATEMENT OF COMPREHENSIVE INCOME (tEUR) | 7-9/2013 | 7-9/2012 | Change % | 1-12/2012 | |
| Net Sales | 46,478 | 45,590 | 1.9 % | 193,875 | |
| Other operating income | 347 | 0 | n/a | 1,150 | |
| Materials and services | -23,350 | -21,867 | 6.8 % | -94,747 | |
| Personnel expenses | -12,815 | -13,258 | -3.3 % | -58,511 | |
| Other operating expenses | -6,390 | -6,256 | 2.1 % | -25,753 | |
| Depreciation | -1,085 | -1,338 | -18.9 % | -5,078 | |
| Operating profit | 3,185 | 2,871 | 10.9 % | 10,936 | |
| Financial income and expenses | -239 | 43 | n/a | -822 | |
| Profit after financial items | 2,946 | 2,914 | 1.1 % | 10,115 | |
| Profit before taxes | 2,946 | 2,914 | 1.1 % | 10,115 | |
| Taxes | -911 | -1,054 | -13.6 % | -3,412 | |
| Net profit | 2,035 | 1,860 | 9.4 % | 6,703 | |
| Attributable to: | |||||
| Equity holders of the parent | 2,035 | 1,860 | 9.4 % | 6,703 | |
| Earnings per share for result of the year attributable to the equity holders of the parent | |||||
| (expressed in € per share) | |||||
| Basic | 0.12 | 0.11 | 8.6 % | 0.38 | |
| Diluted | 0.11 | 0.11 | 8.5 % | 0.38 | |
| Total comprehensive income for the period (tEUR) | |||||
| Net profit | 2,035 | 1,860 | 9.4 % | 6,703 | |
| Possible items with future net profit effect | |||||
| Translation differences | 44 | 322 | -86.3 % | 631 | |
| Fair value reserve | -19 | 36 | n/a | 144 | |
| Total comprehensive income for the period | 2,060 | 2,218 | -7.1 % | 7,478 | |
| Attributable to: | |||||
| Equity holders of the parent | 2,060 | 2,218 | -7.1 % | 7,478 | |
| STATEMENT OF COMPREHENSIVE INCOME (tEUR) | 1-9/2013 | 1-9/2012 | Change % | 1-12/2012 | |
| Net Sales | 138,732 | 146,407 | -5.2 % | 193,875 | |
| Other operating income | 805 | 788 | 2.2 % | 1,150 | |
| Materials and services | -66,951 | -72,265 | -7.4 % | -94,747 | |
| Personnel expenses | -41,705 | -43,759 | -4.7 % | -58,511 | |
| Other operating expenses | -19,759 | -19,074 | 3.6 % | -25,753 | |
| Depreciation | -3,597 | -3,869 | -7.0 % | -5,078 | |
| Operating profit | 7,525 | 8,228 | -8.5 % | 10,936 | |
| Financial income and expenses | -424 | -718 | -40.9 % | -822 | |
| Profit after financial items | 7,101 | 7,510 | -5.4 % | 10,115 | |
| Profit before taxes | 7,101 | 7,510 | -5.4 % | 10,115 | |
| Taxes | -2,008 | -2,428 | -17.3 % | -3,412 | |
| Net profit | 5,093 | 5,082 | 0.2 % | 6,703 | |
| Attributable to: | |||||
| Equity holders of the parent | 5,093 | 5,082 | 0.2 % | 6,703 | |
| Earnings per share for result of the year attributable to the equity holders of the parent (expressed in € per share) | |||||
| Basic | 0.29 | 0.29 | -0.2 % | 0.38 | |
| Diluted | 0.29 | 0.29 | -0.3 % | 0.38 | |
| Total comprehensive income for the period (tEUR) | |||||
| Net profit | 5,093 | 5,082 | 0.2 % | 6,703 | |
| Possible items with future net profit effect | |||||
| Translation differences | -427 | 679 | n/a | 631 | |
| Fair value reserve | 32 | 120 | -73.3 % | 144 | |
| Total comprehensive income for the period | 4,698 | 5,881 | -20.1 % | 7,478 | |
| Attributable to: | |||||
| Equity holders of the parent | 4,698 | 5,881 | -20.1 % | 7,478 | |
| STATEMENT OF FINANCIAL POSITION (tEUR) | 30.9.2013 | 30.9.2012 | Change % | 31.12.2012 | |
| Non-current assets | |||||
| Property,plant,equipment | 10,578 | 10,032 | 5.4 % | 10,127 | |
| Goodwill | 33,376 | 31,400 | 6.3 % | 31,350 | |
| Other intangible assets | 4,352 | 4,644 | -6.3 % | 4,174 | |
| Deferred tax assets | 2,206 | 1,833 | 20.3 % | 2,086 | |
| Available-for-sale investments | 286 | 287 | -0.3 % | 294 | |
| 50,798 | 48,196 | 5.4 % | 48,031 | ||
| Current assets | |||||
| Inventories | 21,307 | 21,131 | 0.8 % | 19,495 | |
| Trade and other receivables | 36,237 | 42,315 | -14.4 % | 38,811 | |
| Cash and cash equivalents | 15,450 | 12,311 | 25.5 % | 13,880 | |
| 72,994 | 75,757 | -3.6 % | 72,186 | ||
| Total assets | 123,791 | 123,952 | -0.1 % | 120,217 | |
| Shareholder’s equity and liabilities | |||||
| Share capital | 6,967 | 6,967 | 0.0 % | 6,967 | |
| Other equity | 55,003 | 51,111 | 7.6 % | 52,912 | |
| Non-controlling interest | 425 | 695 | -38.9 % | 678 | |
| 62,396 | 58,773 | 6.2 % | 60,557 | ||
| Non-current liabilities | |||||
| Provisions | 783 | 605 | 29.4 % | 503 | |
| Deferred tax liabilities | 1,902 | 2,182 | -12.8 % | 1,297 | |
| Non interest bearing liabilities | 2,400 | 3,394 | -29.3 % | 22 | |
| Interest-bearing liabilities | 814 | 665 | 22.4 % | 788 | |
| 5,899 | 6,846 | -13.8 % | 2,610 | ||
| Current liabilities | |||||
| Trade payables and other liabilities | 28,858 | 31,660 | -8.9 % | 32,612 | |
| Current tax payable | 267 | 1,040 | -74.3 % | 2,075 | |
| Provisions | 850 | 1,211 | -29.8 % | 1,004 | |
| Interest-bearing liabilities | 25,521 | 24,422 | 4.5 % | 21,360 | |
| 55,496 | 58,333 | -4.9 % | 57,050 | ||
| Total shareholder’s equity and liabilities | 123,791 | 123,952 | -0.1 % | 120,217 | |
| CONSOLIDATED CASH FLOW STATEMENT (tEUR) | 1-9/ 2013 |
1-9/ 2012 |
Change % | 1-12/ 2012 |
|
| Cash flows from operating activities | |||||
| Profit for the period | 5,093 | 5,082 | 0.2 % | 6,703 | |
| Adjustments | 6,029 | 7,069 | -14.7 % | 9,110 | |
| Interest and other financial expenses and incomes | -424 | -295 | 43.7 % | -397 | |
| Paid Taxes | -3,816 | -2,087 | 82.8 % | -4,290 | |
| Change in working capital | 418 | 450 | -7.1 % | 4,171 | |
| Cash flow from operating activities | 7,300 | 10,219 | -28.6 % | 15,297 | |
| Cash flow from investing activities | |||||
| Acquisition of subsidiary, net of cash acquired | -3,541 | -580 | 510.6 % | -828 | |
| Purchases of property, plant and equipment (PPE) | -977 | -1,242 | -21.3 % | -1,110 | |
| Purchases of intangible assets | -897 | -480 | 86.9 % | -844 | |
| Net cash used in investing activities | -5,415 | -2,302 | 135.3 % | -2,782 | |
| Cash flow from financing activities | |||||
| Proceeds from borrowings | 5,000 | 0 | n/a | 0 | |
| Payments of borrowings | -2,029 | -9,249 | -78.1 % | -11,821 | |
| Dividends paid | -2,962 | -2,440 | 21.4 % | -2,440 | |
| Proceeds from issuance of ordinary shares | 103 | 0 | n/a | 0 | |
| Net cash used in financing activities | 112 | -11,689 | n/a | -14,261 | |
| Change in cash | |||||
| Cash in the beginning | 13,880 | 15,404 | -9.9 % | 15,404 | |
| Change in cash during period | 1,997 | -3,772 | n/a | -1,746 | |
| Effect of currency changes | -427 | 679 | n/a | 221 | |
| Cash at the end | 15,450 | 12,311 | 25.5 % | 13,880 | |
| KEY FIGURES | 1-9/ 2013 |
1-9/ 2012 |
Change % | 1-12/ 2012 |
|
| Earnings per share, EUR | 0.29 | 0.29 | -0.2 % | 0.38 | |
| Earnings per share fully diluted, EUR | 0.29 | 0.29 | -0.3 % | 0.38 | |
| Shareholders’ equity per share, EUR | 3.55 | 3.37 | 5.3 % | 3.48 | |
| Return on equity | 11.0 % | 11.9 % | -7.0 % | 11.6 % | |
| Return on capital employed | 11.5 % | 13.0 % | -11.9 % | 13.0 % | |
| Equity ratio | 50.4 % | 47.5 % | 6.2 % | 50.5 % | |
| Gearing | 17.4 % | 21.7 % | -19.7 % | 13.7 % | |
| Investments, tEUR | 5,273 | 2,522 | 109.1 % | 3,325 | |
| Investments % of net sales | 3.8 % | 1.7 % | 120.6 % | 1.7 % | |
| Order backlog, tEUR | 17,392 | 13,629 | 27.6 % | 17,000 | |
| Personnel, average | 1,324 | 1,326 | -0.2 % | 1,326 | |
| Number of shares, average (thousands) | 18,734 | 18,729 | 0.0 % | 18,729 | |
| including own shares | |||||
| Highest share price, EUR | 4.42 | 4.44 | -0.5 % | 4.44 | |
| Lowest share price, EUR | 3.81 | 3.04 | 25.3 % | 3.04 | |
| Average share price, EUR | 4.12 | 3.97 | 3.8 % | 3.98 | |
| Turnover, in million shares | 1.7 | 2.1 | -17.8 % | 2.7 | |
| Turnover, in MEUR | 7.0 | 8.2 | -14.4 % | 10.8 | |
| Treasury shares | |||||
| Number of shares |
% of shares |
% of votes |
|||
| Teleste companies possession of own shares 30.9.2013 | 1,189,654 | 6.34 % | 6.34 % | ||
| Contingent liabilities and pledged assets (tEUR) | |||||
| Leasing and rent liabilities | 6,907 | 9,026 | -23.5 % | 8,528 | |
| Derivative instruments (tEUR) | |||||
| Value of underlying forward contracts | 7,830 | 1,913 | 309.3 % | 5,936 | |
| Market value of forward contracts | -257 | -50 | 414.0 % | -109 | |
| Value of underlying interest swap contracts | 11,000 | 2,500 | 340.0 % | 9,000 | |
| Market value of interest swap contracts | 10 | -46 | n/a | -22 | |
| According to IFRS 7 the currency exchange contracts and interest swap contracts are in level 2. According to IFRS 7 the available for sales assets are in level 3. Taxes are computed on the basis of the tax on the profit for the period. |
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| OPERATING SEGMENTS (tEUR) | 1-9/2013 | 1-9/2012 | Change % | 1-12/2012 | |
| Video and Broadband Solutions | |||||
| Orders received | 73,688 | 69,900 | 5.4 % | 97,730 | |
| Net sales | 73,696 | 76,571 | -3.8 % | 101,230 | |
| EBIT | 7,106 | 6,495 | 9.4 % | 8,497 | |
| EBIT% | 9.6 % | 8.5 % | 8.4 % | ||
| Network Services |
|||||
| Orders received | 65,036 | 68,936 | -5.7 % | 91,931 | |
| Net sales | 65,036 | 69,836 | -6.9 % | 92,645 | |
| EBIT | 419 | 1,733 | -75.8 % | 2,439 | |
| EBIT% | 0.6 % | 2.5 % | 2.6 % | ||
| Total |
|||||
| Orders received | 138,724 | 138,836 | -0.1 % | 189,661 | |
| Net sales | 138,732 | 146,407 | -5.2 % | 193,875 | |
| EBIT | 7,525 | 8,228 | -8.5 % | 10,936 | |
| EBIT% | 5.4 % | 5.6 % | 5.6 % | ||
| Financial items | -424 | -718 | -40.9 % | -821 | |
| Operating segments net profit before taxes | 7,101 | 7,510 | -5.4 % | 10,115 | |
| Information per quarter (tEUR) | 7-9/13 | 4-6/13 | 1-3/13 | 10-12/12 | 7-9/12 | 10/2012- 9/2013 |
|
| Video and Broadband Solutions | |||||||
| Orders received | 28,919 | 23,350 | 21,419 | 27,830 | 19,720 | 101,518 | |
| Net sales | 24,258 | 25,625 | 23,813 | 24,659 | 24,794 | 98,355 | |
| EBIT | 2,362 | 2,308 | 2,436 | 2,002 | 2,423 | 9,108 | |
| EBIT % | 9.7 % | 9.0 % | 10.2 % | 8.1 % | 9.8 % | 9.3 % | |
| Network Services | |||||||
| Orders received | 22,220 | 20,870 | 21,946 | 22,995 | 20,796 | 88,031 | |
| Net sales | 22,220 | 20,870 | 21,946 | 22,809 | 20,796 | 87,845 | |
| EBIT | 823 | -570 | 166 | 706 | 448 | 1,125 | |
| EBIT % | 3.7 % | -2.7 % | 0.8 % | 3.1 % | 2.2 % | 1.3 % | |
| Total | |||||||
| Orders received | 51,139 | 44,220 | 43,365 | 50,825 | 40,516 | 189,549 | |
| Net sales | 46,478 | 46,495 | 45,759 | 47,468 | 45,590 | 186,200 | |
| EBIT | 3,185 | 1,738 | 2,602 | 2,708 | 2,871 | 10,233 | |
| EBIT % | 6.9 % | 3.7 % | 5.7 % | 5.7 % | 6.3 % | 5.5 % | |
| 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 | ||
| Shareholder’s equity 1.1.2013 | 6,967 | 1,504 | 685 | 48,007 | 2,737 | -22 | 59,878 | 678 | 60,557 | |
| Total comprehensive income for the period | -427 | 5,093 | 0 | 32 | 4,698 | 0 | 4,698 | |||
| Paid dividend | -3,119 | 0 | 0 | -3,119 | 157 | -2,962 | ||||
| Interest, non controll party | 43 | 0 | 0 | 43 | -43 | 0 | ||||
| Used share options | 103 | 0 | 103 | 0 | 103 | |||||
| Equity-settled share-based payments | 0 | 367 | 0 | 367 | -367 | 0 | ||||
| Shareholder’s equity 30.9.2013 | 6,967 | 1,504 | 258 | 50,024 | 3,207 | 10 | 61,970 | 425 | 62,396 | |
| Shareholder’s equity 1.1.2012 | 6,967 | 1,504 | 54 | 43,559 | 2,737 | -166 | 54,655 | 623 | 55,278 | |
| Total comprehensive income for the period | 0 | 0 | 679 | 5,082 | 0 | 120 | 5,881 | 0 | 5,881 | |
| Paid dividend | 0 | 0 | 0 | -2,569 | 0 | 0 | -2,569 | 129 | -2,440 | |
| Interest, non controll party | 0 | 0 | 0 | 57 | 0 | 0 | 57 | -57 | 0 | |
| Equity-settled share-based payments | 0 | 0 | 0 | 54 | 0 | 0 | 54 | 0 | 54 | |
| Shareholder’s equity 30.9.2012 | 6,967 | 1,504 | 733 | 46,183 | 2,737 | -46 | 58,078 | 695 | 58,773 | |
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 30.9.2013 | Shares | % |
| EM Group Oy | 4,409,712 | 23.50 |
| Mandatum Life Insurance Company Limited | 1,679,200 | 8.95 |
| Ilmarinen Mutual Pension Insurance Company | 953,854 | 5.08 |
| Kaleva Mutual Insurance Company | 824,641 | 4.40 |
| OP-Finland Small Firms Fund | 630,712 | 3.36 |
| Teleste Management II Oy | 542,000 | 2.89 |
| Varma Mutual Pension Insurance Company | 521,150 | 2.78 |
| The State Pension Fund | 500,000 | 2.66 |
| Teleste Management Oy | 381,000 | 2.03 |
| FIM Fenno Equity fund | 271,242 | 1.45 |
| Sector Dispersion 30.9.2013 | Shareholders | % | Shares | % |
| Households | 4,725 | 92.5 | 4,633,923 | 24.7 |
| Public sector institutions | 6 | 0.1 | 2,009,004 | 10.7 |
| Financial and insurance institutions | 14 | 0.3 | 3,419,917 | 18.2 |
| Corporations | 285 | 5.6 | 7,261,069 | 38.7 |
| Non-profit institutions | 35 | 0.7 | 384,067 | 2.0 |
| Foreign and nominee registered owners | 41 | 0.8 | 1,054,340 | 5.6 |
| Total | 5,106 | 100.0 | 18,762,320 | 100.0 |
| Amount of shares 30.9.2013 | Shareholders | % | Shares | % |
| 1 – 100 | 1,129 | 22.1 | 77,324 | 0.4 |
| 101 – 500 | 2,192 | 42.9 | 601,516 | 3.2 |
| 501 – 1,000 | 793 | 15.5 | 653,444 | 3.5 |
| 1001 – 5,000 | 804 | 15.7 | 1,768,092 | 9.4 |
| 5,001 – 10,000 | 93 | 1.8 | 670,603 | 3.6 |
| 10,001 – 50,000 | 68 | 1.3 | 1,299,461 | 6.9 |
| 50,001 – 100,000 | 4 | 0.1 | 341,055 | 1.8 |
| 100,001 – 500,000 | 16 | 0.3 | 3,789,556 | 20.2 |
| 500,001 – | 7 | 0.1 | 9,561,269 | 51.0 |
| Total | 5,106 | 100.0 | 18,762,320 | 100.0 |
| of which nominee registered | 837,775 | 4.5 |
| The following assets and liabilities were preliminary recognised in the acquisition of Asheridge: | |
| 1 000 € | Recognised fair values on acquisition |
| Fair values used in consolidation | |
| Trade marks (inc. in intangible assets) | 0 |
| Customer relationship (inc. in intangible assets) | 730 |
| Technology (inc. in intangible assets) | 533 |
| Inventories | 727 |
| Trade receivables | 1 126 |
| Book values used in consolidation | |
| Tangible asstes | 731 |
| Other receivables | 81 |
| Cash and cash equivalents | 219 |
| Total assets | 4 147 |
| Book values used in consolidation | |
| Interest-bearing liabilities | 1 209 |
| Trade payables | 1 084 |
| Deferred tax liabilites | 315 |
| Other liabilities | 242 |
| Total liabilities | 2 850 |
| Net identifiable assets and liabilities | 1 297 |
| Total consideration | 3 553 |
| Goodwill on acquisition | 2 257 |
| Consideration paid in cash | -1 184 |
| Cash and cash equivalents in acquired subsidiary | 219 |
| Total net cash outflow on the acquisition | -965 |
ADDITIONAL INFORMATION:
CEO Jukka Rinnevaara, phone +358 2 2605 866 or +358 400 747 488
DISTRIBUTION:
NASDAQ OMX Helsinki
Main Media
www.teleste.com