TELESTE CORPORATION INTERIM REPORT – 1 JAN TO 30 SEPTEMBER 2009
TELESTE CORPORATION INTERIM REPORT 27.10.2009 AT 09:00 HOURS
TELESTE CORPORATION INTERIM REPORT - 1 JAN TO 30 SEPTEMBER 2009
Highlights in Q3
- Net sales grew by 72.9% over the year of comparison amounting to EUR 41.7
(24.1) million.
- Operating profit grew by 10.2% over the year of comparison amounting to EUR
1.6 (1.5) million.
- Undiluted result per share equalled EUR 0.03 (EUR 0.11).
- Year-on-year orders received improved by 82.9% standing at EUR 48.6 (26.6)
million.
- The Company continued to strengthen its position as the leading service
provider for German cable operators in line with the established European
services strategy
Net sales in Q3 amounted to EUR 41.7 (24.1) million. Deliveries of products and
systems by the business areas fell from the year of comparison approximately
21%, i.e. by EUR 5.1 million, yet in total terms there was a clear increase in
net sales due to the offering of new services by Broadband Cable Networks. The
impact of acquisitions made in Germany (AVC and Cableway) on the increased net
sales compared with the Q2 level was 36% or EUR 11 million.
Operating profit stood at EUR 1.6 (1.5) million making 3.9% (6.1%) of the net
sales. The improvement in operating profit by EUR 1.2 million from Q2 was mainly
attributable to measures involving cost structure adjustments and efficient
management of material expenses. The business operations of AVC and Cableway
were included, for the first time, in the offering of services by Broadband
Cable Networks. Out of these, the effect of Cableway on result was slightly
negative.
Undiluted result per share for Q3 was EUR 0.03 (0.11). Result per share of the
period of comparison includes one-off tax rebate from 2002 to 2004 the impact of
which was approximately EUR 0.06 per share.
Year-on-year orders received in Q3 increased by 82.9% standing at EUR 48.6
(26.6) million. Orders received increased from Q2 by 64.5% or EUR 19.1 million,
out of which approximately EUR 11 million involved impact contributable to
acquisitions. Order backlog totalled EUR 30.3 (27.8) million. Order backlog
includes the order of EUR 12.0 million received from India in June 2008 for the
Luminato headend solution. In our estimation, actual deliveries will start after
the year-end in 2010.
Group operations January to September
Net sales amounted to EUR 97.9 (80.6) million, an increase of 21.5% over the
period of comparison. This increase in net sales was due to newly acquired
services business companies, whereas the product and systems business operations
were clearly on a lower level compared with the last year. Owing to the general
tight situation in the financial market, our main customers, i.e. the European
cable operators, have postponed their network investments. Moreover, chances for
investment of our East European customers have become more difficult with the
local currencies weakening and the financial market getting tighter. However,
there has been some improvement in the market situation since the beginning of
the year.
Operating profit stood at EUR 0.8 (4.1) million making 0.8% (5.0%) of the net
sales. The year-on-year weakening in the operating profit is attributable to the
significant contraction (EUR -23.3 million, i.e. -33.9%) in product and system
deliveries by the Broadband Cable Networks business area. Adaptation of the cost
structure in product and systems solutions continues with the accrued savings
for the period under review being approximately 16% i.e. EUR 6.6 million. Other
income increased by EUR 1.0 million consisting mainly of profit on one-off sale
of fixed asset items. Undiluted result per share equalled EUR
-0.03 (0.21).
Year-on-year orders received improved by 11.6% standing at EUR 104.2 (93.4)
million.
Changes in Group Structure
In line with its strategy, Teleste strengthened the offering of services of the
Broadband Cable Networks business area. On 1 January 2009 the Company acquired
three German companies (Antel GmbH, MKS and YoungNet GmbH) and on 1 July
strengthened its position further by acquiring AVC Systemhaus GmbH. In our
estimate, the effect of these acquisitions on Teleste net sales for 2009 will be
more than EUR 50 million and the operating profit will be positive. The
acquisitions were paid for in cash and financed through a bank loan. On 1
January Teleste Services GmbH with 100% holding of the acquired companies was
set up in Germany.
With these acquisitions Teleste's holding in the German Cableway AG increased up
to 75%. Result equal to Teleste's holding in Cableway AG is presented under the
Financial Items for the period 1 January to 30 June; Cableway is consolidated as
a Group company as of 1 July 2009.
Business Areas
Broadband Cable Networks in Q3
Net sales in Q3 amounted to EUR 38.7 (20.9) million. Delivery volumes of
products fell from the period of comparison by 23% in other words EUR 4.9
million. The share of German services in the net sales stood at EUR 22.7
million.
Operating profit for Q3 stood at EUR 1.6 (1.7) million making 4.3% (7.9%) of the
net sales. Operating profit improved over Q2 in terms of products, whereas
profitability of German services fell from the early year's level mainly due to
the low level of activity in the summer holiday season.
Orders received amounted to EUR 42.8 (22.8) million. Order backlog totalled EUR
24.4 (26.1) million. Share of the new German Group companies stood at EUR 27.7
million of all orders received. Order backlog includes the order of EUR 12.0
million received from India in June 2008 for the Luminato headend solution.
Share of the new Group companies of the order backlog, which involved technical
implementation of two fibre projects, amounted to EUR 5.0 million. Deliveries
related to the services business are primarily based on framework agreements.
Business Activities - January to September
Net sales of Broadband Cable Networks grew by 25.3% and stood at EUR 86.2 (68.8)
million. Delivery volumes on products fell by EUR 23.3 million or 34% from the
period of comparison, whereas new net sales worth EUR 40.6 million was created
in Germany through the acquisitions. In our estimation European cable operators
continue to proceed cautiously with regard to their network investments in the
current difficult market situation.
Operating profit stood at EUR 0.5 (4.4) million making 0.5% (6.4%) of the net
sales. This weakening in the operating profit was caused by a significant
decline in the deliveries of products and systems.
Orders received totalled EUR 91.0 (81.8) million, out of which the German
services business accounted for EUR 45.6 million.
Video Networks in Q3
In Q3, net sales for Video Networks totalled EUR 3.1 (3.2) million. Net sales
fell by EUR 1.2 million from the Q2 of the year owing to delays in material
deliveries and scheduling of project deliveries.
Operating profit amounted to EUR -0.04 (-0.2) million. Improvement over the
period of comparison was caused by cost adaptation. Orders received in Q3 stood
at EUR 5.8 (3.8) million. Increase in orders received was due to the project
delivery of approximately EUR 3 million ordered by Chicago Transit Authority.
Order backlog totalled EUR 5.9 (1.7) million.
Business Activities - January to September
Net sales of Video Networks totalled EUR 11.6 (11.7) million. Operating profit
amounted to EUR 0.3 (-0.3) million. Improvement over the period of comparison
was mainly caused by cost adaptation.
Orders received by Video Networks amounted to EUR 13.2 (11.6) million.
Personnel - January to September
At the end of September the Group employed 1260 people (2008: 694, 2007: 677)
out of which 418 (2008: 471, 2007: 446) were stationed in Finland. Owing to
acquisitions the number of personnel has increased by 630. No hired personnel
was used in the period under review (2008: 20, 2007: 69). Layoffs involving
personnel stationed in Finland have been on-going since the end of 2008. In the
uncertain market situation preparations for additional layoffs have been taken
designed to adapt the company operations to the market situation without
compromising the company's potential for growth.
R&D and Investments - January to September
Average number of persons working in R&D related assignments was 137 (2008: 161,
2007: 140) and at the end of September this number was 123 (160). In April 2009,
23 persons moved from R&D to be employed by Cybercom Plenware. This solution
supports implementation of our strategy related to business growth, enables
focusing on core business and provides flexibility to the R&D personnel
resources.
Product development expenses equalled EUR 8.3 (10.1) in other words 8.5% (12.5%)
of net sales. Teleste's product development expenses were mainly focused on
products and systems for which the product development expenses amounted to
15.0% (12.5%). Development efforts continued by further development of the IP
based Luminato video processing system and the development of the next
generation video surveillance transfer system. Activated R&D expenses stood at
EUR 1.2 (1.8) million and depreciation on previous activation items equalled EUR
1.7 (1.3) million. Some 70% of product development expenses involved further
development of product platforms currently in production and their maintenance
as well as customer-specific product modifications.
Investments for the Group totalled EUR 17.5 (2.8) million. As for investments,
EUR 11.3 million involved acquisitions related to Broadband Cable Networks'
services business. Investments include additional purchase price of EUR 3.4
million related to the acquisition of DINH Telecom carried out in April 2007.
Product development investments totalled EUR 1.2 (1.8) million. In Finland
expenses for the production and storage building expansion investment amounted
to EUR 1.7 million, which is included in the investments. In terms of total
costs, this enlargement of premises designed to boost productivity amounts to
approximately EUR three million.
Financing - January to September
Operating cash flow stood at EUR 2.6 (7.1) million. With the significant growth
in delivery volumes, working capital has been tied to the Broadband Cable
Networks business area's services business. Since beginning of the year,
interest-bearing debt at the end of September increased by EUR 16.7 million
standing at EUR 27.7 (11.3) million. This growth in debt mainly involved
increase in the Broadband Cable Networks' services business in Germany. At the
end of the review period, liquid funds stood at EUR 12.8 (8.9) million. The
amount of unused stand-by credits amounted to EUR 14.5 (21.0) million. The
current stand-by credits of EUR 40.0 million run till November 2013. The Group's
gearing was 32.6% (5.2%) and the equity ratio was 43.4% (59.6%).
Teleste hedges main exchange rate risks of forecasted currency flows for six
months ahead.
Shares and Shareholders
With stock purchases performed on 14 January 2009, holding by EM Group Oy of the
total number of shares and votes of Teleste Corporation stands at 5.04%.
With stock purchases performed on 29 January 2009, holding by EM Group Oy of the
total number of shares and votes of Teleste Corporation stands at 10.57%.
With stock purchases performed on 10 February 2009, holding by Reima Kuisla of
the total number of shares and votes of Teleste Corporation stands at 5.59%.
With stock purchases performed on 25 February 2009, holding by Reima Kuisla of
the total number of shares and votes of Teleste Corporation stands at 0.00%.
With stock purchases performed on 25 February 2009, holding by EM Group Oy of
the total number of shares and votes of Teleste Corporation stands at 20.32%.
In the period under review, the trading price of shares fluctuated between EUR
2.25 (3.71) and EUR 4.30 (7.49). The closing price at the end of September was
EUR 4.10 (3.92). According to the Finnish Central Security Depository the number
of shareholders at the end of the period was 5,470 (5,326). Foreign ownership
accounted for 10.3% (15.3%). The trading in NASDAQ OMX Helsinki Oy with the
shares of Teleste amounted to EUR 25.8 (38.5) with the number of shares
totalling 7.1 (6.6) million.
On 10 June 2009, the number of company's own shares conveyed by authorisation
granted by the Annual General Meeting of 2009 for the additional purchase price
of DINH Telecom acquired on 2 April 2007 was 464,736, making 2.61% of the share
capital.
At the end of September, Teleste and its subsidiaries were in possession of
379,985 own shares. In the period under review, the number of own shares
purchased by authorisation granted by the Annual General Meeting of 2008 was
78,530.
Decisions by the Annual General Meeting
On 7 April 2009, the Annual General Meeting (AGM) confirmed the financial
statements for 2008 and discharged the Board and the CEO from liability for the
financial period. The AGM confirmed the Board's proposed dividend of EUR 0.12
per share. The dividend was paid out on 21 April 2009.
The AGM decided that the Board of Directors shall consist of six members. Marjo
Miettinen was elected as the Chairman of the Board with Pertti Ervi and Petteri
Walldén as new Board members. Tero Laaksonen, Pertti Raatikainen and Kai Telanne
were re-elected members of the Board.
Authorised Public Accountants KPMG Oy Ab continue as the auditor until the next
AGM. Accountant authorised by the Central Chamber of Commerce of Finland Esa
Kailiala was chosen auditor-in-charge.
The AGM authorised the Board to acquire the maximum of 900,000 of the company's
own shares and to convey the maximum of 1,744,721 company's own shares. The AGM
also authorised the company Board to issue 10,000,000 new shares. Pursuant to
the special rights provided by the company, the maximum number of significant
shares is 5,000,000; these special rights are included in the authorisation to
issue 10,000,000 new shares.
These authorisations will be valid until the AGM due to be held in 2010.
Significant Short-Term Risks and Uncertainty Factors for the Business Areas
Potential ownership and debt rearrangements among Teleste's clientele may slow
down the folding out of some investments in the business of Broadband Cable
Networks.
Strengthening of order backlog for Video Networks is dependent on timing of the
public sector decisions.
Inactive situation in the financial markets may lead to delays in the customers'
investment plans and weakening solvency. The strength of the euro in relation to
the US dollar may further erode Teleste's competitive edge. Introduction to the
market of new competing technologies is a characteristic risk factor for both of
our business areas.
Outlook
The offering of services to private households by the operator clientele of
Broadband Cable Networks will remain relatively stable even in an uncertain
market situation. Demand for network services provided by the business area is
increasing in Germany. Due to the difficult situation in the financial markets,
the cable operators continue to proceed cautiously with regard to their network
investments.
In our view, in the current year, deliveries of product solutions provided by
Broadband Cable Networks will remain clearly under the 2008 level with the price
competition continuing further. Net sales of the business area is growing owing
to the increased offering of services.
Increased needs for security and more effective traffic infrastructure maintain
demand for the Video Networks' solutions on the same level with the previous
year.
Teleste is confident about keeping its strong market position in the core
markets and continues to implement its strategy in a goal-directed manner while
adapting its cost structure as required by the economic situation. The recent
strategic investments in network services business performed by Teleste will
cushion the cyclic pattern in the company net sales under the uncertain market
conditions.
As a result of decreased demand for network investments, the Group's action plan
prepares for sales in products and systems falling below the level of the
previous year. Given the increased offering of network services we estimate net
sales to exceed the last year's level, whereas operating profit will fall
clearly from the last year's level.
Teleste's final accounts for the financial year 2009 will be released on 3
February 2010.
26.10.2009
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. The data stated in this report is unaudited.
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| STATEMENT OF COMPREHENSIVE | 7-9/2009 | 7-9/2008 | Change % | |
| INCOME (tEUR) | | | | |
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| Turnover | 41 711 | 24 118 | 72.9 % | |
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| | Other operating income | 478 | 466 | 2.5 % | |
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| | Materials and services | -23 416 | -9 893 | 136.7 % | |
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| | Personnel expenses | -10 912 | -7 904 | 38.1 % | |
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| | Other operating expenses | -4 841 | -4 214 | 14.9 % | |
--------------------------------------------------------------------------------
| | Depreciation | -1 412 | -1 114 | 26.8 % | |
--------------------------------------------------------------------------------
| Operating profit | 1 608 | 1 460 | 10.2 % | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Financial income and | -154 | -284 | -45.8 % | |
| | expenses | | | | |
--------------------------------------------------------------------------------
| | Share of profit of | -354 | 0 | n/a | |
| | associates | | | | |
--------------------------------------------------------------------------------
| Profit after financial items | 1 100 | 1 176 | -6.4 % | |
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--------------------------------------------------------------------------------
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| Profit before taxes | 1 100 | 1 176 | -6.4 % | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Taxes | -560 | 698 | n/a | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit | 540 | 1 874 | -71.2 % | |
--------------------------------------------------------------------------------
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| Attributable to: | | | | |
--------------------------------------------------------------------------------
| | Equity holders of the | 540 | 1 874 | -71.2 % | |
| | parent | | | | |
--------------------------------------------------------------------------------
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| Earnings per share for result of the year attributable to the equity holders |
| of the parent (expressed in euro per share) |
--------------------------------------------------------------------------------
| | Basic | 0.03 | 0.11 | -71.8 % | |
--------------------------------------------------------------------------------
| | Diluted | 0.03 | 0.11 | -71.8 % | |
--------------------------------------------------------------------------------
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| Total comprehensive income | | | | |
| for the period (tEUR) | | | | |
--------------------------------------------------------------------------------
| Net profit | 540 | 1 874 | -71.2 % | |
--------------------------------------------------------------------------------
| Translation differences | -73 | -44 | 65.9 % | |
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| Total comprehensive income | 467 | 1 830 | -74.5 % | |
| for the period | | | | |
--------------------------------------------------------------------------------
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| Attributable to: | | | | |
--------------------------------------------------------------------------------
| | Equity holders of the | 467 | 1 830 | -74.5 % | |
| | parent | | | | |
--------------------------------------------------------------------------------
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| STATEMENT OF COMPREHENSIVE | 1-9/2009 | 1-9/2008 | Change % | 1-12/2008 |
| INCOME (tEUR) | | | | |
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| | | | | | |
--------------------------------------------------------------------------------
| Turnover | 97 867 | 80 570 | 21.5 % | 108 695 |
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| | | | | | |
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| | Other operating income | 2 591 | 1 351 | 91.8 % | 1 820 |
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| | Materials and services | -48 924 | -36 755 | 33.1 % | -49 145 |
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| | Personnel expenses | -31 177 | -24 471 | 27.4 % | -33 226 |
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| | Other operating expenses | -15 461 | -13 125 | 17.8 % | -17 811 |
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| | Depreciation | -4 090 | -3 514 | 16.4 % | -4 705 |
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| Operating profit | 806 | 4 057 | -80.1 % | 5 628 |
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| | | | | | |
--------------------------------------------------------------------------------
| | Financial income and | -539 | -432 | 24.8 % | -533 |
| | expenses | | | | |
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| | Share of profit of | -544 | 0 | n/a | 0 |
| | associates | | | | |
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| Profit after financial items | -277 | 3 625 | n/a | 5 095 |
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| | | | | | |
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| Profit before taxes | -277 | 3 625 | n/a | 5 095 |
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| | | | | | |
--------------------------------------------------------------------------------
| | Taxes | -302 | 40 | n/a | 433 |
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| Net profit | -579 | 3 665 | n/a | 5 528 |
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| | | | | | |
--------------------------------------------------------------------------------
| Attributable to: | | | | |
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| | Equity holders of the | -579 | 3 665 | n/a | 5 528 |
| | parent | | | | |
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| | | | | | |
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| Earnings per share for result of the | | | |
| year attributable to the equity holders | | | |
| of the parent | | | |
--------------------------------------------------------------------------------
| (expressed in euro per share) | | | | |
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| | Basic | -0.03 | 0.21 | n/a | 0.32 |
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| | Diluted | -0.03 | 0.21 | n/a | 0.32 |
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| | | | | | |
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| Total comprehensive income | | | | |
| for the period (tEUR) | | | | |
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| Net profit | -579 | 3 665 | n/a | 5 528 |
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| Translation differences | 19 | -23 | n/a | -508 |
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| Total comprehensive income | -560 | 3 642 | n/a | 5 020 |
| for the period | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Attributable to: | | | | |
--------------------------------------------------------------------------------
| Total comprehensive income | -560 | 3 642 | n/a | 5 020 |
| for the period | | | | |
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| | | | | | |
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| STATEMENT OF FINANCIAL | 30.9.200 | 30.9.2008 | Change % | 31.12.200 |
| POSITION (tEUR) | 9 | | | 8 |
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| Non-current assets | | | | |
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| | Property,plant,equipment | 8 520 | 6 815 | 25.0 % | 6 373 |
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| | Goodwill | 25 999 | 13 584 | 91.4 % | 13 865 |
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| | Intangible assets | 8 216 | 6 408 | 28.2 % | 6 466 |
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| | Investments | 703 | 783 | -10.2 % | 790 |
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| | | 43 438 | 27 590 | 57.4 % | 27 494 |
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| Current assets | | | | |
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| | Inventories | 19 876 | 16 131 | 23.2 % | 14 049 |
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| | Other current assets | 32 121 | 23 962 | 34.0 % | 24 728 |
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| | Short-term investments | 0 | 3 500 | n/a | 0 |
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| | Liquid funds | 12 836 | 5 434 | 136.2 % | 9 268 |
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| | | 64 833 | 49 027 | 32.2 % | 48 045 |
--------------------------------------------------------------------------------
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| Total assets | 108 271 | 76 617 | 41.3 % | 75 539 |
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| Shareholder's equity and | | | | |
| liabilities | | | | |
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| | Share capital | 6 967 | 6 967 | 0.0 % | 6 967 |
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| | Other equity | 38 544 | 38 698 | -0.4 % | 39 678 |
--------------------------------------------------------------------------------
| | | 45 511 | 45 665 | -0.3 % | 46 645 |
--------------------------------------------------------------------------------
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| Non-current liabilities | | | | |
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| | Provisions | 314 | 425 | -26.1 % | 314 |
--------------------------------------------------------------------------------
| | Non interest bearing | 2 250 | 1 288 | 74.7 % | 1 025 |
| | liabilities | | | | |
--------------------------------------------------------------------------------
| | Interest bearing | 12 412 | 1 311 | 846.8 % | 1 175 |
| | liabilities | | | | |
--------------------------------------------------------------------------------
| | | 14 976 | 3 024 | 395.3 % | 2 514 |
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| Short-term liabilities | | | | |
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| | Trade payables and other | 31 043 | 17 468 | 77.7 % | 15 964 |
| | s-t liabilities | | | | |
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| | Provisions | 1 469 | 440 | 233.9 % | 629 |
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| | S-t interest bearing | 15 271 | 10 019 | 52.4 % | 9 787 |
| | liabilities | | | | |
--------------------------------------------------------------------------------
| | | 47 783 | 27 927 | 71.1 % | 26 380 |
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| Total shareholder's equity | 108 271 | 76 617 | 41.3 % | 75 539 |
| and liabilities | | | | |
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| Statement of cash flows | 1-9/2009 | 1-9/2008 | Change % | 1-12/2008 |
| (tEUR) | | | | |
--------------------------------------------------------------------------------
| | | | | | |
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| Cash-flow from operation | 2 551 | 7 132 | -64.2 % | 9 673 |
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| | Cash in | 106 614 | 84 456 | 26.2 % | 112 238 |
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| | Cash out | -104 063 | -77 324 | 34.6 % | -102 565 |
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| Cash-flow from investments | -12 463 | -1 829 | 581.4 % | -3 222 |
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| | Cash in | 1 085 | 220 | 393.2 % | 221 |
--------------------------------------------------------------------------------
| | Cash out | -13 548 | -2 049 | 561.2 % | -3 443 |
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| Cash-flow from finance | 13 461 | -4 048 | -432.5 % | -4 376 |
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| | Cash in | 20 500 | 6 249 | 228.1 % | 6 342 |
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| | Cash out | -5 004 | -6 139 | -18.5 % | -6 560 |
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| | Paid dividend | -2 035 | -4 158 | -51.1 % | -4 158 |
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| Other items | 19 | -23 | -182.6 % | -508 |
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| | Effect of currency rates | 19 | -23 | -182.6 % | -508 |
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| Change in liquid funds | 3 568 | 1 232 | 189.6 % | 1 566 |
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| KEY FIGURES | 1-9/2009 | 1-9/2008 | Change % | 1-12/2008 |
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| | Earnings per share, EUR | -0.03 | 0.21 | n/a | 0.32 |
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| | Earnings per share fully | -0.03 | 0.21 | n/a | 0.32 |
| | diluted, EUR | | | | |
--------------------------------------------------------------------------------
| | Shareholders' equity per | 2.61 | 2.66 | -1.7 % | 2.74 |
| | share, EUR | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Return on equity | -1.7 % | 10.6 % | n/a | 11.8 % |
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| | Return on capital | 0.4 % | 9.9 % | -96.0 % | 10.4 % |
| | employed | | | | |
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| | Equity ratio | 43.4 % | 59.6 % | -27.2 % | 61.7 % |
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| | Gearing | 32.6 % | 5.2 % | 521.8 % | 3.6 % |
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| | Investments, tEUR | 17 519 | 2 755 | 535.9 % | 3 920 |
--------------------------------------------------------------------------------
| | Investments % of net | 17.9 % | 3.4 % | 423.5 % | 3.6 % |
| | sales | | | | |
--------------------------------------------------------------------------------
| | Order backlog, tEUR | 30 329 | 27 800 | 9.1 % | 24 000 |
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| | Personnel, average | 1 090 | 708 | 54.0 % | 702 |
--------------------------------------------------------------------------------
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| | Number of shares | 17 806 | 17 682 | 0.7 % | 17 708 |
| | (thousands) | | | | |
--------------------------------------------------------------------------------
| | including own shares | | | | |
--------------------------------------------------------------------------------
| | Highest share price, EUR | 4.30 | 7.49 | -42.6 % | 7.49 |
--------------------------------------------------------------------------------
| | Lowest share price, EUR | 2.25 | 3.71 | -39.4 % | 1.90 |
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| | Average share price, EUR | 3.61 | 5.86 | -38.4 % | 4.52 |
--------------------------------------------------------------------------------
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| | Turnover, in million | 7.1 | 6.6 | 8.6 % | 11.5 |
| | shares | | | | |
--------------------------------------------------------------------------------
| | Turnover, in MEUR | 25.8 | 38.5 | -33.1 % | 51.1 |
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| Treasury shares | | | | |
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| | | Number | | % of | % of |
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| | | of | | shares | votes |
| | | shares | | | |
--------------------------------------------------------------------------------
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| | Teleste companies own | 379 985 | | 2.13 % | 2.13 % |
| | shares 30.9.2009 | | | | |
--------------------------------------------------------------------------------
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| Contingent liabilities and pledged assets (tEUR) |
--------------------------------------------------------------------------------
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| For own debt | | | | |
--------------------------------------------------------------------------------
| | Guarantees | 0 | 306 | -100.0 % | 0 |
--------------------------------------------------------------------------------
| | Other securities | 120 | 240 | -50.0 % | 259 |
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| Leasing and rent liabilities | 5 990 | 2 440 | 121.4 % | 3 699 |
--------------------------------------------------------------------------------
| | | 6 110 | 2 986 | 84.9 % | 3 958 |
--------------------------------------------------------------------------------
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| Derivative instruments (tEUR) | | | | |
--------------------------------------------------------------------------------
| | Value of underlying | 6 962 | 10 320 | -32.5 % | 9 094 |
| | forward contracts | | | | |
--------------------------------------------------------------------------------
| | Market value of forward | -236 | -148 | 59.5 % | 419 |
| | contracts | | | | |
--------------------------------------------------------------------------------
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| Taxes are computed on the basis of the tax on the profit for the period. |
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| There are no changes in segment reporting compared to earlier adopted IAS14. |
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| Operating segments (tEUR) | 1-9/2009 | 1-9/2008 | Change % | 1-12/2008 |
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| Broadband Cable Networks |
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| | Order intake | 90 994 | 81 750 | 11.3 % | 101 430 |
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| | Net sales | 86 227 | 68 840 | 25.3 % | 92 605 |
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| | EBIT | 467 | 4 387 | -89.4 % | 6 098 |
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| | EBIT% | 0.5 % | 6.4 % | -91.5 % | 6.6 % |
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| Video Networks |
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| | Order intake | 13 202 | 11 620 | 13.6 % | 17 203 |
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| | Net sales | 11 640 | 11 730 | -0.8 % | 16 090 |
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| | EBIT | 339 | -330 | n/a | -470 |
--------------------------------------------------------------------------------
| | EBIT% | 2.9 % | -2.8 % | n/a | -2.9 % |
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| Total |
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| | Order intake | 104 196 | 93 370 | 11.6 % | 118 633 |
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| | Net sales | 97 867 | 80 570 | 21.5 % | 108 695 |
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| | EBIT | 806 | 4 057 | -80.1 % | 5 628 |
--------------------------------------------------------------------------------
| | EBIT% | 0.8 % | 5.0 % | -83.6 % | 5.2 % |
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| | Financial items | -539 | -432 | 24.8 % | -533 |
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| | Shares of associates | -544 | 0 | n/a | 0 |
--------------------------------------------------------------------------------
| | Operating segments net | -277 | 3 625 | n/a | 5 095 |
| | profit before taxes | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment assets | | | | |
--------------------------------------------------------------------------------
| | Segment assets include items directly attributable as well as those |
| | that can be allocated on a reasonable basis |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| | | 30.9.2009 | 30.9.2008 | Change % | 31.12.200 |
| | | | | | 8 |
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| | Broadband Cable Networks | 80 323 | 52 212 | 53.8 % | 50 930 |
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| | Video Networks | 15 112 | 15 471 | -2.3 % | 15 341 |
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| | Segment assets total | 95 435 | 67 683 | 41.0 % | 66 271 |
--------------------------------------------------------------------------------
| | Unallocated assets | 12 836 | 8 934 | 43.7 % | 9 268 |
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| | Total assets | 108 271 | 76 617 | 41.3 % | 75 539 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Information per | 7-9/09 | 4-6/09 | 1-3/09 | 10-12/08 | 7-9/08 | 10/2008- |
| guarter (tEUR) | | | | | | 9/2009 |
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| Broadband Cable Networks |
--------------------------------------------------------------------------------
| | Order | 42 844 | 25 570 | 22 580 | 19 680 | 22 838 | 110 674 |
| | intake | | | | | | |
--------------------------------------------------------------------------------
| | Net sales | 38 661 | 26 266 | 21 300 | 23 765 | 20 873 | 109 992 |
--------------------------------------------------------------------------------
| | EBIT | 1 649 | 191 | -1 373 | 1 711 | 1 657 | 2 178 |
--------------------------------------------------------------------------------
| | EBIT % | 4.3 % | 0.7 % | -6.4 % | 7.2 % | 7.9 % | 2.0 % |
--------------------------------------------------------------------------------
| Video Networks |
--------------------------------------------------------------------------------
| | Order | 5 800 | 3 996 | 3 406 | 5 583 | 3 753 | 18 785 |
| | intake | | | | | | |
--------------------------------------------------------------------------------
| | Net sales | 3 050 | 4 286 | 4 304 | 4 360 | 3 245 | 16 000 |
--------------------------------------------------------------------------------
| | EBIT | -41 | 212 | 168 | -140 | -197 | 199 |
--------------------------------------------------------------------------------
| | EBIT % | -1.3 % | 4.9 % | 3.9 % | -3.2 % | -6.1 % | 1.2 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total |
--------------------------------------------------------------------------------
| | Order | 48 644 | 29 566 | 25 986 | 25 263 | 26 591 | 129 459 |
| | intake | | | | | | |
--------------------------------------------------------------------------------
| | Net sales | 41 711 | 30 552 | 25 604 | 28 125 | 24 118 | 125 992 |
--------------------------------------------------------------------------------
| | EBIT | 1 608 | 403 | -1 205 | 1 571 | 1 460 | 2 377 |
--------------------------------------------------------------------------------
| | EBIT % | 3.9 % | 1.3 % | -4.7 % | 5.6 % | 6.1 % | 1.9 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to | Share | Share | Translati | Retaine | Investe | Total |
| equity holders | capita | premium | on | d | d | |
| of the parent | l | | differenc | earning | free | |
| (tEUR) | | | es | s | capital | |
--------------------------------------------------------------------------------
| Shareholder's | 6 967 | 1 504 | -561 | 37 284 | 1 451 | 46 645 |
| equity 1.1.2009 | | | | | | |
--------------------------------------------------------------------------------
| | Total | | | 19 | -579 | | -560 |
| | comprehens | | | | | | |
| | ive income | | | | | | |
| | for the | | | | | | |
| | period | | | | | | |
--------------------------------------------------------------------------------
| | Equity-set | | | | 175 | 1 286 | 1 461 |
| | tled | | | | | | |
| | share-base | | | | | | |
| | d payments | | | | | | |
--------------------------------------------------------------------------------
| | Paid | | | | -2 035 | 0 | -2 035 |
| | dividend | | | | | | |
--------------------------------------------------------------------------------
| Shareholder's | 6 967 | 1 504 | -542 | 34 845 | 2 737 | 45 511 |
| equity | | | | | | |
| 30.9.2009 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholder's | 6 967 | 1 504 | -53 | 35 720 | 2 531 | 46 669 |
| equity 1.1.2008 | | | | | | |
--------------------------------------------------------------------------------
| | Profit of | | | -23 | 3 665 | | 3 642 |
| | the period | | | | | | |
--------------------------------------------------------------------------------
| | Equity-set | | | | 205 | -692 | -487 |
| | tled | | | | | | |
| | share-base | | | | | | |
| | d payments | | | | | | |
--------------------------------------------------------------------------------
| | Paid | | | | -4 159 | | -4 159 |
| | dividend | | | | | | |
--------------------------------------------------------------------------------
| Shareholder's | 6 967 | 1 504 | -76 | 35 431 | 1 839 | 45 665 |
| equity | | | | | | |
| 30.9.2008 | | | | | | |
--------------------------------------------------------------------------------
CALCULATION OF KEY FIGURES
--------------------------------------------------------------------------------
| Return on equity: | Profit/loss for the period |
| | ------------------------------ * 100 |
| | Shareholders' equity (average) |
--------------------------------------------------------------------------------
| Return on capital | Profit/loss for the period after financial |
| employed: | 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, | Profit for the period attributable to equity |
| diluted: | holder of the parent (diluted) |
| | ----------------------------------------------- |
| | Average number of shares - own shares + number |
| | of options at the period-end |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MAJOR SHAREHOLDERS 30.9.2009 | Shares | % |
--------------------------------------------------------------------------------
| 1. | EM Group Oy | 3 617 552 | 20.32 % |
--------------------------------------------------------------------------------
| 2. | Mandatum Pension Insurance Company | 1 679 200 | 9.43 % |
--------------------------------------------------------------------------------
| 3. | Ilmarinen Mutual Pension Insurance | 894 776 | 5.03 % |
| | Company | | |
--------------------------------------------------------------------------------
| 4. | Kaleva Mutual Insurance Company | 798 541 | 4.48 % |
--------------------------------------------------------------------------------
| 5. | Aktia Capital Mutual Fund | 524 200 | 2.94 % |
--------------------------------------------------------------------------------
| 6. | Varma Mutual Pension Insurance Company | 521 150 | 2.93 % |
--------------------------------------------------------------------------------
| 7. | State Pension Fund | 500 000 | 2.81 % |
--------------------------------------------------------------------------------
| 8. | Skagen Vekst Verdipapierfond | 437 000 | 2.45 % |
--------------------------------------------------------------------------------
| 9. | FIM Fenno Mutual Fund | 401 342 | 2.25 % |
--------------------------------------------------------------------------------
| 10. | Teleste Incentive Oy | 379 985 | 2.13 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SEKTOR DISPERSION 30.9.2009 | Shares | % |
--------------------------------------------------------------------------------
| Corporations | 5 472 340 | 30.73 % |
--------------------------------------------------------------------------------
| Financial and insurance corporations | 3 276 168 | 18.40 % |
--------------------------------------------------------------------------------
| Public institutions | 2 172 976 | 12.20 % |
--------------------------------------------------------------------------------
| Non-profit organizations | 578 963 | 3.25 % |
--------------------------------------------------------------------------------
| Households | 4 468 515 | 25.10 % |
--------------------------------------------------------------------------------
| Foreign and nominee -registered | 1 836 628 | 10.31 % |
--------------------------------------------------------------------------------
| Total | 17 805 590 | 100.00 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| HOLDING DISPERSION | Owners | % | Shares | % |
| 30.9.2009 | | | | |
--------------------------------------------------------------------------------
| 1 - 100 | 1 212 | 22.15 % | 85 774 | 0.48 % |
--------------------------------------------------------------------------------
| 101 - 1 000 | 3 221 | 58.88 % | 1 330 101 | 7.47 % |
--------------------------------------------------------------------------------
| 1 001 - 10 000 | 944 | 17.25 % | 2 729 745 | 15.33 % |
--------------------------------------------------------------------------------
| 10 001 - 100 000 | 76 | 1.38 % | 1 845 537 | 10.36 % |
--------------------------------------------------------------------------------
| 100 001 - 1 000 000 | 15 | 0.27 % | 6 517 681 | 36.60 % |
--------------------------------------------------------------------------------
| 1 000 001 - | 2 | 0.03 % | 5 296 752 | 29.74 % |
--------------------------------------------------------------------------------
| Total | 5 470 | 100 % | 17 805 590 | 100.00 % |
--------------------------------------------------------------------------------
ACQUISITIONS 1 Jan - 30 September 2009
At 1 January 100% of shares of German companies, Antel GmbH, MKS and Young-Net
GmbH was purchased. At 1 July 100% of shares in AVC Systemhaus GmbH. With these
purchases Teleste ownership in Cabelway AG increased to 75%. The purchase prices
amounted totally 10 954 thousand and was paid in cash.
The acquisition resulted in 3 150 thousand of intangible assets, which was
allocated to trade marks, customer relationships and personell. Teleste
personnel increased with 630 persons. The goodwill, amounted 8 754 thousand EUR,
is mainly due to future revenue expectation and to personnel synergy effects in
the future. The impact of the acquisition on Teleste's net sales during the
period 1.1.2009 - 30.9.2009 was 40 593 thousand EUR and on the EBIT 1 818
thousand EUR.
--------------------------------------------------------------------------------
| Preliminary calculation of recognised fair values on acquisition |
| 1 000 EUR |
--------------------------------------------------------------------------------
| Fair values used in consolidation | |
--------------------------------------------------------------------------------
| Trade marks (inc. in intangible assets) | 767 |
--------------------------------------------------------------------------------
| Customer relationship (inc. in intangible assets) | 2 383 |
--------------------------------------------------------------------------------
| Book values used in consolidation |
--------------------------------------------------------------------------------
| Tangible assets | 1 583 |
--------------------------------------------------------------------------------
| Inventories | 7 304 |
--------------------------------------------------------------------------------
| Deferred tax receivables | 1 172 |
--------------------------------------------------------------------------------
| Trade receivables | 10 331 |
--------------------------------------------------------------------------------
| Other receivables | 4 108 |
--------------------------------------------------------------------------------
| Liquid funds | 2 553 |
--------------------------------------------------------------------------------
| Total assets | 30 201 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Book values used in consolidation |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 1 767 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 819 |
--------------------------------------------------------------------------------
| Other liabilities | 25 229 |
--------------------------------------------------------------------------------
| Total liabilities | 27 815 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net identifiable assets and liabilities | 2 386 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total consideration | 10 954 |
--------------------------------------------------------------------------------
| Acquisition costs | 186 |
--------------------------------------------------------------------------------
| Goodwill on acquisition | 8 754 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Consideration paid in cash | -11 284 |
--------------------------------------------------------------------------------
| Cash and cash equivalents in acquired subsidiary | 2 553 |
--------------------------------------------------------------------------------
| Total net cash outflow on the acquisition | -8 731 |
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DISTRIBUTION:
NASDAQ OMX Helsinki
Media
www.teleste.com
