TELESTE CORPORATION INTERIM REPORT 1 JAN TO 31 MARCH 2010
TELESTE CORPORATION INTERIM REPORT 28.4.2010 AT 09:00
TELESTE CORPORATION INTERIM REPORT 1 JAN TO 31 MARCH 2010
First quarter of 2010
- Net sales amounted to EUR 39.1 (25.6) million, an increase of 52.7% over the
year of comparison
- Operating profit stood at EUR 0.8 (-1.2) million
- Undiluted result per share equalled EUR 0.03 (EUR -0.07)
- Orders received amounted to EUR 37.5 (26.0) million, an increase of 44.3% over
the year of comparison
- Orders received by Video and Broadband Solutions amounted to EUR 18.6 (17.3)
million
- Orders received by Network Services stood at EUR 18.9 (8.7) million
- Operating cash flow equalled EUR 2.4 (1.0) million.
Outlook for 2010
Due to increased net sales and adaptation of costs we estimate the operating
profit to improve clearly over 2009.
Comments on Q1 by CEO Jukka Rinnevaara
Although the market situation was still relatively difficult, the first quarter
of 2010 was significantly better than that of the previous year. The cold winter
in Europe slowed down deliveries to clients in both of our business areas more
than the usual seasonal variation. Furthermore, in the first quarter,
reorganisation of the German services business caused one-off expenses. As to
our Video and Broadband Solutions business, the market situation showed some
tentative signs of a slight pick-up. Nevertheless, ordering decisions involving
some important video surveillance projects have been delayed. The operating
profit in Q1 was, on the whole, in the black due to increased net sales in Video
and Broadband Solutions business and the adaption of costs.
We will press on determinedly with the implementation of our growth strategy,
which consists of R&D solutions ensuring profitable growth in the future,
strengthening of our distribution channels and expansion of our services
offering. In the prevailing market situation careful cost management and
adaptation measures must be continued. The on-going re-organisation of our
services operations in Germany and, consequently, the enhanced utilization of
synergies will improve the unit's profitability in the second half of the year
while paving the way for expanding our business to near-by areas of Germany.
Moreover, our Luminato headend solution has been well received by our clients
and we expect its sales to develop favourably also later on in this year. The
actual performance in Q1 confirms our estimation concerning the profitable
growth in 2010.
We expect the ownership arrangements among the cable operators to continue the
whole of the current year, and these may have an impact on the timing of network
investments.
Market Situation and Net Sales
In Q1, the year-on-year orders received increased by 44.3% standing at EUR 37.5
(26.0) million. The increase of orders received by EUR 11.5 million over the
period of comparison was mainly caused by acquisitions in our Network Services
business area in the second half of 2009.
Net sales for Q1/2010 amounted to EUR 39.1 (25.6) million. The growth in net
sales over the period of comparison was mainly caused by acquisitions in our
Network Services business area carried out in the second half of 2009.
The Group's order backlog totalled EUR 31.2 (24.1) million. The order backlog
includes the order for video headend (Luminato) of EUR 12.0 million received
from India. So far deliveries related to this order have been delayed by more
than a year from the original schedule. Nevertheless, we continue to estimate
that the deliveries will begin in 2010 although the delivery involves
significant uncertainties.
Financial Position and Result
Operating profit improved over the period of comparison standing at EUR 0.8
(-1.2) million, which is 2.1% (-4.7%) of net sales. This positive development
was caused by growth in the net sales of Video and Broadband Solutions, on one
hand, and by decrease in the material expenses and cost adaptation, on the
other. Operating profit for the period of comparison included EUR 1.1 million of
other operating income, whereas in the period under review these amounted to EUR
0.4 million. Undiluted result per share for Q1 was EUR 0.03 (-0.07).
Operating cash flow stood at EUR 2.4 (1.0) million. At the end of the period
under review, the amount of unused binding stand-by credits amounted to EUR 19.5
(26.0) million. The current binding stand-by credits of EUR 40.0 million run
till November 2013. The Group's equity ratio equalled 44.5% (51.8%) and net
gearing 18.6% (18.6%). Interest bearing debt on 31 March 2010 was EUR 23.2
(15.7) million.
Video and Broadband Solutions
This business area focuses on product and management solutions of broadband
subscriber networks, video services platforms and CCTV applications. Major
clientele of the business area consists of cable operators but includes also
resellers and public sector organizations. The main market of the business area
is Europe.
Video and Broadband Solutions in Q1
Net sales in Q1 equalled EUR 19.1 (16.9) million. The year-on-year operating
profit grew by EUR 2.0 million standing at EUR 0.6 (-1.5) million, which
accounts for 2.9% (-8.7%) of net sales. This improvement in operating profit was
due to increased net sales, better material margin and cost adaptation.
Orders received totalled EUR 18.6 (17.3) million. Order backlog totalled EUR
28.3 (24.1) million. The order backlog includes the order of EUR 12.0 million
received in June 2008 from India.
R&D expenses for the business area amounted to EUR 2.6 (3.2) million making
13.6% (18.9%) of the area's net sales. Some 60% (70%) of the R&D expenses
involved continued development of product platforms currently in production and
their maintenance as well as customer-specific product applications. Out of the
R&D expenses, EUR 0.3 (0.5) million were activated for the Luminato video
processing system. Depreciation on activated R&D expenses amounted to EUR 0.6
(0.6) million. The relevant R&D efforts involved, in particular, the IP-based
Luminato headend system and the video surveillance transfer system based on
video encoding protocol H.264. Our R&D efforts continued involving the new
generation amplifier technology (the Access product range), the optical transfer
system for HFC networks (the HDO product range) and the video surveillance
management system (VMX).
Network Services
Clientele of our Network Services business consists mainly of large European
cable operators. The services provided by this business area include planning,
new construction, upgrading and maintenance of cable networks. Implementation
and scope of the relevant services vary by client ranging from stand-alone
applications to integrated turnkey deliveries. Some of our projects also include
Teleste's own product solutions. Our know-how on services covers all the sectors
related to the cable network technology from installation and maintenance of
headends to upgrading of house networks. Parts of the projects are carried out
by our subcontractor network.
Network Services in Q1
Net sales of the business area amounted to EUR 20.0 (8.7) million. The
year-on-year increase of EUR 11.3 million in net sales was due to acquisitions
carried out in the second half of 2009.
Operating profit stood at EUR 0.3 (0.3) million making 1.3% (3.0%) of net sales.
Relative profitability was weakened by an increased number of unfinished
projects, delays in deliveries caused by the weather conditions and the
deliveries consisting of certain low-margin services. Operations in Germany are
being reorganised, which has caused a number of one-off expenses in the period
under review. The German companies will be formed into three regional units
operating under the business name of Cableway. At the same time, the number of
own personnel will be reduced to some degree.
Orders received in Q1 stood at EUR 18.9 (8.7) million. Network Services received
from Germany two frame agreements, which are contract extensions from current
clients (NetCologne, delivery span 12 months and TeleColumbus, delivery span 6
years). The value of these contracts equals approximately EUR 8 million. Order
backlog totalled EUR 2.9 (0.0) million.
Investments
Investments by the Group for the period under review totalled EUR 0.8 (10.8)
million accounting for 1.9% (42.3%) of net sales; EUR 0.3 million involved an
extension investment for the business premises in Finland and EUR 0.3 (0.5)
million was allocated to product development. As to investments for the period,
EUR 0.1 (0.1) million was carried out by means of financial leasing.
Personnel and Organisation
In the period under review, the Group employed on average 1,221 persons
(1,001/2009, 681/2008), out of which 563 worked for Video and Broadband
Solutions and 658 for Network Services. At the end of the period, the figure
totalled 1,223 (1,001/2009, 686/2008) of which 68% (55%/2009, 33%/2008) were
stationed overseas. Employees stationed outside Europe accounted for less than
5% of the Group's personnel. Expenditure on employee benefits amounted to EUR
12.3 (10.0/January-March 2009, 8.0/January-March 2008) million.
As part of the cost-structure adaptation measures required by the general market
situation, the Finnish personnel have continued on a rotating layoff. Measures
agreed on in the co-determination procedures will be sustained until the end of
2010 as required by the market situation. The co-determination procedure was
concluded on 22 January 2010. Streamlining of German operations of Network
Services is in progress.
Essential Operational Risks of Business Areas
Founded in 1954, Teleste is a technology and service provider consisting of two
business areas: Video and Broadband Solutions and Network Services. With Europe
as the main market area our most significant clients include European cable
operators.
Concerning Video and Broadband Solutions, integrated deliveries of solutions
create favourable conditions for growth, even if the involved resource
allocation and technical implementation pose a challenge involving, therefore,
also reasonable risks. The present difficult market situation may delay
implementation of investment plans among our clientele. Network investments
carried out by the clients vary based on their need for upgrading and their
capital structure. Much of Teleste's competition comes from the USA so the
exchange rate of euro up against the US dollar affects our competitiveness.
Teleste hedges against short-term currency exposure by means of forward
contracts. Correct technological choices and their timing are vital for our
success.
Net sales for Network Services comes, for the most part, from a small number of
large European customers, so a significant change in the demand for services by
any one of them is reflected in the actual deliveries. To ensure quality of
services and cost-efficiency, along with an efficient service process
management, customer satisfaction requires innovative solutions in terms of
processes, products and logistics. Being committed to the technical management
of the cable operators' networks and the development of well-designed product
solutions, Teleste ensures efficient operation of the networks by providing its
own and suppliers' personnel with continuous further training.
It is equally important for our business areas to take into account any
developments in the market such as consolidations taking place among the
clientele and competition.
The Board of Directors annually reviews any essential risks related to the
company operation and the management thereof. Risk management has been
integrated into the strategic and operative practices of our business areas.
Risks and their probability are reported to the Board with regular monthly
reports.
The company has covered risks involving damage to operative functions of the
business areas mainly by means of insurance policies. These insurances do not
include credit loss risks. In the period under review, no such risks
materialized, and no 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, Spain, the Netherlands,
China and Denmark with subsidiaries in 12 countries outside Finland. Teleste
Management Oy, which was founded in March 2010, is included in the Teleste Group
figures because, owing to financial arrangements, Teleste Corporation has
control over the company.
Decisions by the Annual General Meeting
The Annual General Meeting (AGM) held on 9 April 2010 confirmed the financial
statements for 2009 and discharged the Board and the CEO from liability for the
financial period. The AGM confirmed the Board's proposed dividend of EUR 0.08
per share. The dividend was paid out on 21 April 2010.
The AGM decided that the Board of Directors shall consist of six members. Marjo
Miettinen was reappointed Chairman of the Board of Directors while the
reappointed Board Members include Pertti Ervi, Tero Laaksonen, Pertti
Raatikainen, Kai Telanne and Petteri Walldén.
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 1,400,000 of the
company's own shares and to convey the maximum of 1,779,985 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.
The authorizations are valid until the Annual General Meeting of Shareholders
for year 2011.
Shares and Changes in Share Capital
On 31 March 2010, EM Group Oy was the largest single shareholder with a holding
of 20.05%.
In the period under review, the lowest company share price was EUR 3.63 (2.25)
and the highest was EUR 4.90 (4.18). On 31 March 2010, the closing price stood
at EUR 4.75 (3.18). According to Euroclear Finland Ltd the number of
shareholders at the end of the period under review was 5,441 (5,415). Foreign
ownership accounted for 9.3% (7.9%). From 1 January to 31 March 2010, trading
with Teleste share at NASDAQ OMX Helsinki amounted to EUR 4.7 (21.1) million. In
the period under review, 1.2 (5.9) million Teleste shares were traded on the
stock exchange.
In March 2010, Teleste Board of Directors decided on a directed share issue of
381,000 shares to Teleste Management Oy established by the management of Teleste
Corporation. This directed share issue was authorized by the AGM on 7 April
2009.
At the end of March 2010, the number of own shares in the Group possession stood
at 760,985 (844,721) out of which parent company Teleste Corporation had none
(0) while other Group or controlled companies had 760,985 shares, respectively.
At the end of the period, the Group's holding of the total amount of shares
amounted to 4.18% (4.74%).
On 31 March 2010, the registered share capital of Teleste stood at EUR
6,966,932.80 divided in 18,186,590 shares.
Events after the End of the Period
On 14 April 2010, Teleste acquired the Swiss Freycom S.A. specialising in
maintenance and upgrading of networks with its primary business area in upgrade
and maintenance services of house networks. For Teleste, this acquisition marks
an entry into services business in a market where the company has long been an
established and significant supplier of products. In 2009, the net sales of the
acquired company stood at approximately EUR 2.7 million. The impact of this
acquisition to Teleste's net sales for 2010 is estimated to be approximately EUR
2 million. The transaction has no essential effect on Teleste's operating
profit. The acquisition increases Teleste's number of personnel by approximately
20.
Outlook
Cautious approach to network investments is likely to continue among the
operator clientele of Video and Broadband Solutions. Nevertheless, we believe
the deliveries will continue at least on the level of 2009.
We estimate the demand from the current clientele of Network Services to
continue steady. The realized acquisitions ensure that the net sales will
improve considerably from last year.
Due to increased net sales and adaptation of costs we estimate the operating
profit to improve clearly over 2009.
27 April 2010
Teleste Corporation Jukka Rinnevaara
The 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 | 1-3/2010 | 1-3/2009 | Change % | 1-12/2009 |
| COMPREHENSIVE INCOME | | | | |
| (TEUR) | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net Sales | 39 094 | 25 604 | 52.7 % | 141 651 |
--------------------------------------------------------------------------------
| | Other operating | 357 | 1 113 | -67.9 % | 3 124 |
| | income | | | | |
--------------------------------------------------------------------------------
| | Materials and | -19 412 | -11 903 | 63.1 % | -69 962 |
| | services | | | | |
--------------------------------------------------------------------------------
| | Personnel expenses | -12 279 | -10 018 | 22.6 % | -44 584 |
--------------------------------------------------------------------------------
| | Other operating | -5 419 | -4 662 | 16.2 % | -21 323 |
| | expenses | | | | |
--------------------------------------------------------------------------------
| | Depreciation | -1 515 | -1 339 | 13.1 % | -5 582 |
--------------------------------------------------------------------------------
| | Impairment loss | 0 | 0 | n/a | -800 |
--------------------------------------------------------------------------------
| Operating profit | 826 | -1 205 | n/a | 2 524 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Financial income and | -148 | -239 | -38.1 % | -605 |
| | expenses | | | | |
--------------------------------------------------------------------------------
| | Share of profit of | 0 | -100 | n/a | -544 |
| | associates | | | | |
--------------------------------------------------------------------------------
| Profit after financial | 678 | -1 544 | n/a | 1 375 |
| items | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit before taxes | 678 | -1 544 | n/a | 1 375 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Taxes | -183 | 336 | n/a | -959 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit | 495 | -1 208 | n/a | 416 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to: | | | | |
--------------------------------------------------------------------------------
| | Equity holders of | 495 | -1 208 | n/a | 416 |
| | the 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 | -0.07 | n/a | 0.02 |
--------------------------------------------------------------------------------
| | Diluted | 0.03 | -0.07 | n/a | 0.02 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL COMPREHENSIVE | | | | |
| INCOME FOR THE PERIOD | | | | |
| (TEUR) | | | | |
--------------------------------------------------------------------------------
| Net profit | 495 | -1 208 | n/a | 416 |
--------------------------------------------------------------------------------
| Translation differences | 180 | 43 | 318.6 % | 189 |
--------------------------------------------------------------------------------
| Fair value reserve | -92 | 0 | n/a | -116 |
--------------------------------------------------------------------------------
| Total comprehensive | 583 | -1 165 | n/a | 489 |
| income for the period | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to: | | | | |
--------------------------------------------------------------------------------
| | Equity holders of | 583 | -1 165 | n/a | 489 |
| | the parent | | | | |
--------------------------------------------------------------------------------
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| STATEMENT OF FINANCIAL | 31.3.2010 | 31.3.2009 | Change % | 31.12.2009 |
| POSITION (tEUR) | | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| | Property,plant,equip | 9 770 | 6 725 | 45.3 % | 9 960 |
| | ment | | | | |
--------------------------------------------------------------------------------
| | Goodwill | 31 657 | 20 092 | 57.6 % | 31 657 |
--------------------------------------------------------------------------------
| | Intangible assets | 6 898 | 9 113 | -24.3 % | 7 664 |
--------------------------------------------------------------------------------
| | Available-for-sale | 894 | 1 128 | -20.7 % | 713 |
| | investments | | | | |
--------------------------------------------------------------------------------
| | | 49 219 | 37 058 | 32.8 % | 49 994 |
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| | Inventories | 21 420 | 18 670 | 14.7 % | 20 682 |
--------------------------------------------------------------------------------
| | Other current assets | 24 853 | 27 639 | -10.1 % | 26 884 |
--------------------------------------------------------------------------------
| | Liquid funds | 14 376 | 7 311 | 96.6 % | 12 518 |
--------------------------------------------------------------------------------
| | | 60 649 | 53 620 | 13.1 % | 60 084 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | 109 868 | 90 678 | 21.2 % | 110 078 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholder's equity and | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| | Share capital | 6 967 | 6 967 | 0.0 % | 6 967 |
--------------------------------------------------------------------------------
| | Other equity | 40 398 | 38 297 | 5.5 % | 39 702 |
--------------------------------------------------------------------------------
| | Non-controlling | 289 | 0 | n/a | 0 |
| | interest | | | | |
--------------------------------------------------------------------------------
| | | 47 654 | 45 264 | 5.3 % | 46 669 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| | Provisions | 513 | 314 | 63.4 % | 513 |
--------------------------------------------------------------------------------
| | Non interest bearing | 7 073 | 1 523 | 364.4 % | 6 726 |
| | liabilities | | | | |
--------------------------------------------------------------------------------
| | Interest bearing | 12 237 | 10 175 | 20.3 % | 12 237 |
| | liabilities | | | | |
--------------------------------------------------------------------------------
| | | 19 823 | 12 012 | 65.0 % | 19 476 |
--------------------------------------------------------------------------------
| Short-term liabilities | | | | |
--------------------------------------------------------------------------------
| | Trade payables and | 30 359 | 26 160 | 16.1 % | 32 372 |
| | other s-t | | | | |
| | liabilities | | | | |
--------------------------------------------------------------------------------
| | Provisions | 1 042 | 1 673 | -37.7 % | 1 026 |
--------------------------------------------------------------------------------
| | S-t interest bearing | 10 990 | 5 569 | 97.3 % | 10 535 |
| | liabilities | | | | |
--------------------------------------------------------------------------------
| | | 42 391 | 33 402 | 26.9 % | 43 933 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total shareholder's | 109 868 | 90 678 | 21.2 % | 110 078 |
| equity and liabilities | | | | |
--------------------------------------------------------------------------------
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| CONSOLIDATED CASH FLOW | 1-3/2010 | 1-3/2009 | Change % | 1-12/2009 |
| STATEMENT,1000 EURO | | | | |
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| Cash flows from operating | | | | |
| activities | | | | |
--------------------------------------------------------------------------------
| | Profit for the | 495 | -1 208 | n/a | 416 |
| | period | | | | |
--------------------------------------------------------------------------------
| | Adjustments | 1 959 | 1 290 | 51.9 % | 8 230 |
--------------------------------------------------------------------------------
| | Interest and other | -148 | -239 | -38.1 % | -937 |
| | financial expenses | | | | |
| | and incomes | | | | |
--------------------------------------------------------------------------------
| | Paid Taxes | 0 | 0 | n/a | -1 708 |
--------------------------------------------------------------------------------
| | Change in working | 140 | 1 192 | -88.3 % | 3 830 |
| | capital | | | | |
--------------------------------------------------------------------------------
| Cash flow from operating | 2 446 | 1 035 | 136.3 % | 9 831 |
| activities | | | | |
--------------------------------------------------------------------------------
| Cash flow from investing | | | | |
| activities | | | | |
--------------------------------------------------------------------------------
| | Acquisition of | 0 | -6 793 | n/a | -10 281 |
| | subsidiary, net of | | | | |
| | cash acquired | | | | |
--------------------------------------------------------------------------------
| | Purchases of | -673 | -123 | 447.2 % | -2 772 |
| | property, plant and | | | | |
| | equipment (PPE) | | | | |
--------------------------------------------------------------------------------
| | Purchases of | -145 | -555 | -73.9 % | -1 327 |
| | intangible assets | | | | |
--------------------------------------------------------------------------------
| | Investments in | 0 | 0 | n/a | -10 |
| | shares | | | | |
--------------------------------------------------------------------------------
| Net cash used in | -818 | -7 471 | -89.1 % | -14 390 |
| investing activities | | | | |
--------------------------------------------------------------------------------
| Cash flow from financing | | | | |
| activities | | | | |
--------------------------------------------------------------------------------
| | Proceeds from | 0 | 9 000 | n/a | 20 542 |
| | borrowings | | | | |
--------------------------------------------------------------------------------
| | Payments of | -239 | -4 300 | -94.4 % | -10 623 |
| | borrowings | | | | |
--------------------------------------------------------------------------------
| | Dividends paid | 0 | 0 | n/a | -2 035 |
--------------------------------------------------------------------------------
| | Own shares | 0 | -264 | n/a | -264 |
--------------------------------------------------------------------------------
| | Proceeds from | 289 | 0 | n/a | 0 |
| | issuance of ordinary | | | | |
| | shares | | | | |
--------------------------------------------------------------------------------
| Net cash used in | 50 | 4 436 | -98.9 % | 7 620 |
| financing activities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash | | | | |
--------------------------------------------------------------------------------
| | Cash in the | 12 518 | 9 268 | 35.1 % | 9 268 |
| | beginning | | | | |
--------------------------------------------------------------------------------
| | Effect of currency | 180 | 43 | 318.6 % | 189 |
| | changes | | | | |
--------------------------------------------------------------------------------
| | Cash at the end | 14 376 | 7 311 | 96.6 % | 12 518 |
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| KEY FIGURES | 1-3/2010 | 1-3/2009 | Change % | 1-12/2009 |
--------------------------------------------------------------------------------
| | Earnings per share, | 0.03 | -0.07 | n/a | 0.02 |
| | EUR | | | | |
--------------------------------------------------------------------------------
| | Earnings per share | 0.03 | -0.07 | n/a | 0.02 |
| | fully diluted, EUR | | | | |
--------------------------------------------------------------------------------
| | Shareholders' equity | 2.73 | 2.67 | 2.3 % | 2.68 |
| | per share, EUR | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Return on equity | 4.2 % | -10.5 % | n/a | 0.9 % |
--------------------------------------------------------------------------------
| | Return on capital | 4.9 % | -9.4 % | n/a | 3.3 % |
| | employed | | | | |
--------------------------------------------------------------------------------
| | Equity ratio | 44.5 % | 51.8 % | -14.1 % | 43.6 % |
--------------------------------------------------------------------------------
| | Gearing | 18.6 % | 18.6 % | -0.2 % | 22.0 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Investments, tEUR | 756 | 10 825 | -93.0 % | 25 241 |
--------------------------------------------------------------------------------
| | Investments % of net | 1.9 % | 42.3 % | -95.4 % | 17.8 % |
| | sales | | | | |
--------------------------------------------------------------------------------
| | Order backlog, tEUR | 31 210 | 24 096 | 29.5 % | 33 100 |
--------------------------------------------------------------------------------
| | Personnel, average | 1 221 | 1 011 | 20.8 % | 1 103 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Number of shares | 17 810 | 17 806 | 0.0 % | 17 806 |
| | (thousands) | | | | |
--------------------------------------------------------------------------------
| | including own shares | | | | |
--------------------------------------------------------------------------------
| | Highest share price, | 4.90 | 4.18 | 17.2 % | 4.30 |
| | EUR | | | | |
--------------------------------------------------------------------------------
| | Lowest share price, | 3.63 | 2.25 | 61.3 % | 2.25 |
| | EUR | | | | |
--------------------------------------------------------------------------------
| | Average share price, | 4.02 | 3.50 | 14.9 % | 3.62 |
| | EUR | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Turnover, in million | 1.2 | 5.9 | -80.2 % | 7.8 |
| | shares | | | | |
--------------------------------------------------------------------------------
| | Turnover, in MEUR | 4.7 | 21.1 | -78.0 % | 28.5 |
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| Treasury shares | | | | |
--------------------------------------------------------------------------------
| | | Number | | % of | % of |
--------------------------------------------------------------------------------
| | | of shares | | shares | votes |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Teleste companies | 760 985 | | 4.18 % | 4.18 % |
| | own shares 31.3.2010 | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Contingent liabilities | | | | |
| and pledged assets (tEUR) | | | | |
--------------------------------------------------------------------------------
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| For own debt | | | | |
--------------------------------------------------------------------------------
| | Other securities | 120 | 259 | -53.7 % | 120 |
--------------------------------------------------------------------------------
| Leasing and rent | 5 839 | 5 899 | -1.0 % | 6 016 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| | | 5 959 | 6 158 | -3.2 % | 6 136 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Derivative instruments | | | | |
| (tEUR) | | | | |
--------------------------------------------------------------------------------
| | Value of underlying | 7 152 | 7 387 | -3.2 % | 8 043 |
| | forward contracts | | | | |
--------------------------------------------------------------------------------
| | Market value of | -356 | -81 | 339.5 % | -228 |
| | forward contracts | | | | |
--------------------------------------------------------------------------------
| | Interest rate swap | 11 500 | 0 | n/a | 11 500 |
--------------------------------------------------------------------------------
| | Market value of | -282 | 0 | n/a | -157 |
| | interest swap | | | | |
--------------------------------------------------------------------------------
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| Taxes are computed on the basis of the tax on the profit for the period. |
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| RECLASSIFICATION OF SEGMENTS 1.1.2010 |
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| OPERATING SEGMENTS | 1-3/2010 | 1-3/2009 | Change % | 1-12/2009 |
| (TEUR) | | | | |
--------------------------------------------------------------------------------
| Video and Broadband Solutions |
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| | Order intake | 18 578 | 17 290 | 7.4 % | 81 612 |
--------------------------------------------------------------------------------
| | Net sales | 19 062 | 16 908 | 12.7 % | 76 280 |
--------------------------------------------------------------------------------
| | EBIT | 562 | -1 464 | n/a | -692 |
--------------------------------------------------------------------------------
| | EBIT% | 2.9 % | -8.7 % | n/a | -0.9 % |
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| Network Services |
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| | Order intake | 18 926 | 8 696 | 117.6 % | 69 408 |
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| | Net sales | 20 032 | 8 696 | 130.4 % | 65 371 |
--------------------------------------------------------------------------------
| | EBIT | 264 | 259 | 1.9 % | 3 216 |
--------------------------------------------------------------------------------
| | EBIT% | 1.3 % | 3.0 % | -55.9 % | 4.9 % |
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| Total |
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| | Order intake | 37 504 | 25 986 | 44.3 % | 151 020 |
--------------------------------------------------------------------------------
| | Net sales | 39 094 | 25 604 | 52.7 % | 141 651 |
--------------------------------------------------------------------------------
| | EBIT | 826 | -1 205 | n/a | 2 524 |
--------------------------------------------------------------------------------
| | EBIT% | 2.1 % | -4.7 % | n/a | 1.8 % |
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| | Financial items | -148 | -239 | -38.1 % | -605 |
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| | Share of profit of | 0 | -100 | n/a | -544 |
| | associates | | | | |
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| | Operating segments | 678 | -1 544 | n/a | 1 375 |
| | net profit before | | | | |
| | taxes | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment assets | | | | |
--------------------------------------------------------------------------------
| | Segment assets include items directly attributable as well as those |
| | that can be allocated on a reasonable basis. |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | 31.3.201 | 31.3.2009 | Change % | 31.12.2009 |
| | | 0 | | | |
--------------------------------------------------------------------------------
| | Video and Broadband | 55 000 | 62 540 | -12.1 % | 56 120 |
| | Solutions | | | | |
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| | Network Services | 41 520 | 20 827 | 99.4 % | 41 440 |
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| | Segment assets | 96 520 | 83 367 | 15.8 % | 97 560 |
| | total | | | | |
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| | Unallocated assets | 14 376 | 7 311 | 96.6 % | 12 518 |
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| | Assets total | 110 896 | 90 678 | 22.3 % | 110 078 |
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--------------------------------------------------------------------------------
| Information | 1-3/10 | 10-12/0 | 7-9/09 | 4-6/09 | 1-3/09 | 4/2009- |
| per quarter | | 9 | | | | 3/2010 |
| (tEUR) | | | | | | |
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| Video and Broadband Solutions |
--------------------------------------------------------------------------------
| | Order | 18 578 | 22 705 | 22 508 | 19 109 | 17 290 | 82 900 |
| | intake | | | | | | |
--------------------------------------------------------------------------------
| | Net sales | 19 062 | 21 015 | 18 262 | 20 095 | 16 908 | 78 434 |
--------------------------------------------------------------------------------
| | EBIT | 562 | -457 | 1 524 | -295 | -1 464 | 1 334 |
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| | EBIT % | 2.9 % | -2.2 % | 8.3 % | -1.5 % | -8.7 % | 1.7 % |
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| Network Services |
--------------------------------------------------------------------------------
| | Order | 18 926 | 24 119 | 26 136 | 10 457 | 8 696 | 79 638 |
| | intake | | | | | | |
--------------------------------------------------------------------------------
| | Net sales | 20 032 | 22 769 | 23 449 | 10 457 | 8 696 | 76 707 |
--------------------------------------------------------------------------------
| | EBIT | 264 | 2 175 | 84 | 698 | 259 | 3 221 |
--------------------------------------------------------------------------------
| | EBIT % | 1.3 % | 9.6 % | 0.4 % | 6.7 % | 3.0 % | 4.2 % |
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| Total |
--------------------------------------------------------------------------------
| | Order | 37 504 | 46 824 | 48 644 | 29 566 | 25 986 | 162 538 |
| | intake | | | | | | |
--------------------------------------------------------------------------------
| | Net sales | 39 094 | 43 784 | 41 711 | 30 552 | 25 604 | 155 141 |
--------------------------------------------------------------------------------
| | EBIT | 826 | 1 718 | 1 608 | 403 | -1 205 | 4 555 |
--------------------------------------------------------------------------------
| | EBIT % | 2.1 % | 3.9 % | 3.9 % | 1.3 % | -4.7 % | 2.9 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attri- | Share | Share | Trans | Reta | Inve- | Other | Total | Shar | Total |
| butabl | capit | premi | -lati | i-ne | sted | funds | | e of | equit |
| e to | al | um | on | d | free | | | non- | y |
| equity | | | Diffe | Earn | capit | | | cont | |
| holder | | | r-ren | -ing | al | | | -rol | |
| s of | | | ces | s | | | | -lin | |
| the | | | | | | | | g | |
| parent | | | | | | | | Inte | |
| (tEUR) | | | | | | | | -res | |
| | | | | | | | | t | |
--------------------------------------------------------------------------------
| Share- | 6 967 | 1 504 | -372 | 35 | 2 737 | -116 | 46 | 0 | 46 |
| holder | | | | 949 | | | 669 | | 669 |
| 's | | | | | | | | | |
| equity | | | | | | | | | |
| 1.1.20 | | | | | | | | | |
| 10 | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | 180 | 495 | | -92 | 583 | 0 | 583 |
| compre | | | | | | | | | |
| -hensi | | | | | | | | | |
| ve | | | | | | | | | |
| income | | | | | | | | | |
| for | | | | | | | | | |
| the | | | | | | | | | |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Share | | | | | 0 | | 0 | 289 | 289 |
| issue | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | | | | 113 | 0 | 0 | 113 | 0 | 113 |
| -settl | | | | | | | | | |
| ed | | | | | | | | | |
| share- | | | | | | | | | |
| based | | | | | | | | | |
| paymen | | | | | | | | | |
| ts | | | | | | | | | |
--------------------------------------------------------------------------------
| Share- | 6 967 | 1 504 | -192 | 36 | 2 737 | -208 | 47 | 289 | 47 |
| holder | | | | 557 | | | 365 | | 654 |
| 's | | | | | | | | | |
| equity | | | | | | | | | |
| 31.3.2 | | | | | | | | | |
| 010 | | | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share- | 6 967 | 1 504 | -561 | 37 | 1 451 | 0 | 46 | 0 | 46 |
| holder | | | | 284 | | | 645 | | 645 |
| 's | | | | | | | | | |
| equity | | | | | | | | | |
| 1.1.20 | | | | | | | | | |
| 09 | | | | | | | | | |
--------------------------------------------------------------------------------
| Profit | | | 43 | -1 | | 0 | -1 | 0 | -1 |
| of the | | | | 208 | | | 165 | | 165 |
| period | | | | | | | | | |
--------------------------------------------------------------------------------
| Equity | | | | 48 | -264 | 0 | -216 | 0 | -216 |
| -settl | | | | | | | | | |
| ed | | | | | | | | | |
| share- | | | | | | | | | |
| based | | | | | | | | | |
| paymen | | | | | | | | | |
| ts | | | | | | | | | |
--------------------------------------------------------------------------------
| Share- | 6 967 | 1 504 | -518 | 36 | 1 187 | 0 | 45 | 0 | 45 |
| holder | | | | 124 | | | 264 | | 264 |
| 's | | | | | | | | | |
| equity | | | | | | | | | |
| 31.3.2 | | | | | | | | | |
| 009 | | | | | | | | | |
--------------------------------------------------------------------------------
CALCULATION OF KEY FIGURES
--------------------------------------------------------------------------------
| Return on equity: | Profit/loss for the financial 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 |
--------------------------------------------------------------------------------
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| MAJOR SHAREHOLDERS 31.3.2010 | Shares | % |
--------------------------------------------------------------------------------
| EM Group Oy | 3 647 248 | 20.05 |
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| Mandatum Life | 1 679 200 | 9.23 |
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| Ilmarinen Mutual Pension Insurance | 894 776 | 4.92 |
| Company | | |
--------------------------------------------------------------------------------
| Kaleva Mutual Pension Insurance | 824 641 | 4.53 |
| Company | | |
--------------------------------------------------------------------------------
| Varma Mutual Pension Insurance Company | 521 150 | 2.87 |
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| The State Pension Fund | 500 000 | 2.75 |
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| Aktia Capital Mutual Fund | 450 000 | 2.47 |
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| Skagen Vekst Verdipapierfond | 437 000 | 2.40 |
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| Fim Fenno Mutual Fund | 401 342 | 2.21 |
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| Teleste Management Oy | 381 000 | 2.09 |
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| SECTOR DISPERSION 31.3.2010 | Shareholde | % | Shares | % |
| | rs | | | |
--------------------------------------------------------------------------------
| Corporations | 323 | 5.93 | 5 813 632 | 31.96 |
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| Financial and insurance | 17 | 0.31 | 3 441 784 | 18.92 |
| corporations | | | | |
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| Public institutions | 7 | 0.12 | 2 172 976 | 11.94 |
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| Non-profit institutions | 40 | 0.73 | 563 716 | 3.09 |
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| Households | 5 011 | 92.09 | 4 506 191 | 24.77 |
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| Foreign countries and nominee | 43 | 0.79 | 1 688 291 | 9.28 |
| registered | | | | |
--------------------------------------------------------------------------------
| Total | 5 441 | 100.00 | 18 186 590 | 100.00 |
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ADDITIONAL INFORMATION:
Mr Jukka Rinnevaara, CEO, Tel. +358 2 2605 866 or +358 400 747 488
DISTRIBUTION:
NASDAQ OMX Helsinki Ltd
Media
www.teleste.com
