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Solteq Oyj

Interim / Quarterly Report Jul 17, 2012

3341_10-q_2012-07-17_56719417-c742-4db3-b53c-9a9a3ce533f1.pdf

Interim / Quarterly Report

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SOLTEQ PLC'S INTERIM REPORT 1.1.-30.6.2012

  • On 22 March 2012, software service company Solteq Plc purchased the entire stock capital of Aldata Solution Finland Ltd from Aldata Solution Plc at a purchasing price of EUR 8.3 million. After the acquisition took place, the company's name was changed to Solteq Retail Oy. The company was merged into the Solteq Group from 1.3.2012.

  • Solteq Plc's turnover increased 36,2 per cent and totalled 19,3 million euros (14,2 million euros). Solteq Retail Oy's turnover totalled 3,9 million euros is included in year 2012 figures beginning March 1.

  • Solteq Plc's operating profit increased 93,4% and totalled 1.342 thousand euros (692 thousand euros). Solteq Retail Oy's operating profit totalled 299 thousand euros is included in year 2012 figures.

  • The operating profit for the review period includes a total of 276 thousand EUR of one-time profit and expenses as gross. The instalments are sales profit from property, EUR 887 thousand, which is presented in other income for the financial period and 611 thousand EUR relating to the acquisition of Aldata Finland Solution Ltd, which is presented in other expenses for the financial period.

  • For 2012, we estimate our turnover to be approx. 35-37 million EUR and operating profit approx. 6-8 %.

  • Earnings per share were 0,06 euros (0,04 euros).

  • On 20 March 2012, Solteq Plc decided on a directed issue of shares to Mutual insurance company Eläke-Fennia and Mutual pension insurance company Varma based on authorisation given in a company meeting on 23 March 2007 and again on 14 March 2012. After the subscription and registration of the shares issued during the Issuing of shares, the Company has 14,998,061 shares.

KEY FIQURES

Turnover by operation:

% 1-6/12 1-6/11 1-12/11
Softwareservices 62 63 64
Licences 32 31 30
Hardware 6 6 6

CEO Repe Harmanen:

"In view of our operations and strategy, the first half of 2012 can be considered successful. The progress we have made in several areas compared with the previous year show that the measures we have taken so far have been correct and effective. Our activities have improved our predictable profitability and we are on the road towards our strategic goals.

The corporate acquisition we published on 20 March 2012 has added zest to the first six months of the year, first in the form of negotiations and arrangements of the deal and then as integration work in the second quarter. We have proceeded in accordance with our goals in the integration work, and it continues as planned, or even ahead of plans in certain areas. The result from the second quarter is burdened the one line expenses from the quick and powerful integration work. First we have concentrated on the integration of technical internal functions

for instance in the areas of client support and systems and have partly completed the work. As for the integration and connectivity of the solutions, we have also succeeded well, and the organisational change from July has will speed up the process. The feedback we have received from our clients has been extremely encouraging and motivates us to continue our work with increased energy in the coming autumn.

Most of our units increased the turnover and improved their results on the previous year. In addition to the result of the corporate acquisition, Solteq also grew inorganically in terms of both turnover and result. The development of our client services and project business has been an essential factor behind the development of our business operations. Demand has been moderate in all our segments, but the economic uncertainty in Europe and in the rest of the world raises some questions concerning the second half of the year and the year 2013. The consequences of the turbulent financial policies in Europe are unpredictable, and therefore it is extremely difficult to prepare for them. We will do our best and plan our operations to be prepared for possible changes in the market and also listen to the needs of our clients with an attentive ear.

During the second half of the year, we will continue monitoring our financial situation carefully, and in view of integration, this still requires great accuracy and frequent assessments of the situation. We will regularly assess the impacts of our activities on our strategic goals in this respect as well. We expect to see benefits from the integration in the last quarter of the year at the earliest, and effectively not until 2013. We also believe that the integration work will be completed in the next six months.

In the second half of the year, we will continue, as expected, the implementation of our strategy and operative development measures. We will continue ensuring continuity for our clients by improving both our solutions and our own operational ability. We will look for methods to improve our predictable profitability in several different ways to be able to move forward on the current path.

We wish all our stakeholders a happy summer season!"

BUSINESS ENVIRONMENT AND BUSINESS DEVELOPMENT

Solteq offers systematically developing operational and financial control services to commercial, logistics, industrial and public administration actors. We complement our core offering with solutions for specialized retail management, maintenance and servicing management, as well as solutions for quality improvement and the management of systems in which master data is contained. With the help of our solutions developed using technology from the world's leading companies, our clients guide their businesses more efficiently and improve their profitability.

Since the beginning of 2012, Solteq Plc's reported segments are Enterprise Resource Planning and Financial Management solutions (ERP business area until 2011), and Value Added Solutions (EAM, Data and STORE business areas until 2011), which includes store solutions and technologies, enterprise asset management as well as solutions for master data management. Solteq Retail Oy (former. Aldata Solution Finland Oy) figures are reported as part of Value Added Solutions segment starting from 1.3.2012.

Solteq Group will change its organizational structure starting 1.7.2012 as part of integration of the acquisition announced in 20.3.2012 to sharpen and accelerate the acting as a new company according to the acquisition plan and Solteq Group´s strategy.

As of the beginning of July 2012, Solteq Plc's reported segments are:

  • Grocery and special retail, HoReCa
  • Wholesale trade, Logistics and Services
  • Optimisation of supply and services processes

The aim of the segmentation is to respond to customer demand as a field total supplier and therefore to improve the availability of services and ease for our customers.

Solteq's turnover in the first half of 2012 was 19.290 thousand euros (14.167 thousand euros). The turnover of the acquired company totalled 3.866 thousand euros is included in year 2012 figures.

Solteq's operating profit was 1.342 thousand euros (692 thousand euros). The operating profit of the acquired company totalled 299 thousand euros is included in year 2012 figures.

The company's operating margin was 6,9 % (4,9 % in 2011).

Enterprise Resource Planning and Financial Management Solutions

Solteq's Enterprise Resource Planning and Financial Management Solutions segment offers its clientele enterprise resource planning systems and supporting optimization and reporting solutions as well as a set of other different added value solutions. These solutions help customers lead their operations and enhance, for example, their purchases, sales and warehouse management, as well as reporting. A wide group of customers use these solutions every day in the trade, industry, auto trade and public sector operating areas, among others.

The revenue of the ERP business area totalled 10,7 million euros. The business area's operating profit was 1,2 million euros.

Value Added Solutions

Solteq's Value Added Solutions segment supports the enterprise resource management and financial management segment by offering field solutions to support operations, such as store solutions and technologies, enterprise asset management and solutions for master data management.

The solutions of Solteq's Store business sector enhance the management of the purchases, sales and customer relationships of specialty stores and chained commerce. Every day hundreds of retailers, entrepreneurs and salespersons lead their businesses and serve their customers in thousands of store locations by means of these solutions.

Value Added Solutions segment includes the systems for maintenance management, asset management optimization, fieldwork management and maintenance. Through these solutions, Solteq's customers can anticipate the need for service of production lines and machines, monitor the malfunction history and control the machinery maintenance related material flows from purchasing to warehousing. The clientele consists of, among others, energy and production plants, companies in the processing and engineering industries, as well as the maintenance related service sector.

The segment is responsible for services and products relating to the data (namely, masterdata) that are crucial to the customers' businesses. Solteq offers to its customers masterdata-related quality improvement projects, data maintenance services in which the services are outsourced to masterdata service centres, software technologies and consultancy services that can be utilized in masterdata management. The aim of these services is to ensure that the data that is stored in the programs that support customers' enterprise resource planning and decisionmaking is high-quality, compatible and up to date.

During the review period the revenue of the Value Added Solutions segment totalled 8,6 million euros and the operating result was 0,2 million euros. Solteq Retail Oy, acquired during the review period, has merged with the Solteq Group as of 1.3.2012. The company will be presented in its entirety as a part of the Value Added Solutions segment, and its effect on the turnover for the review period is EUR 3,9 million and operating profit EUR 0.3 million.

TURNOVER AND RESULT

Turnover increased by 36,2 % compared to the previous year and totalled 19.290 thousand euros (previous review period 14.167 thousand euros).

Turnover consists of several individual clienteles. At the most, one client corresponds to less than ten per cent of the turnover.

The profit for the review period increased 93,4% compared to the previous year and was 1.342 thousand euros (692thousand euros), the operating profit before taxes was 1.157 thousand euros (585 thousand euros) and the operating profit for the review period was 745 thousand euros (424 thousand euros).

Growth in the operating profit results from the impact of the company acquisition on the financial result (299 thousand EUR), profitable organic growth and the accelerating actions in accordance with the Solteq Group's strategy.

The operating profit for the review period includes a total of 276 thousand EUR of one-time profit and expenses as gross. The instalments are sales profit from property, EUR 887 thousand, which is presented in other income for the financial period and 611 thousand EUR relating to the acquisition of Aldata Finland Solution Ltd, which is presented in other expenses for the financial period.

BALANCE SHEET AND FINANCING

The total assets amounted to 26.196 thousand euros (17.350 thousand euros). Liquid assets totalled 389 thousand euros (131 thousand euros). In addition to liquid assets the company had unused account limits totalling 1.149 thousand euros at the end of the review period. Solteq Group's interest-bearing liabilities were 7.353 thousand euros (6.103 thousand euros). As part of the corporate acquisition announced on 20 March 2012, Solteq signed a total of 3.500 thousand EUR of long-term funding agreements. At the same time, the main financial backer also changed.

The directed issue of shares, carried out during the review period on 20 March 2012 was entered in its entirety into the invested unrestricted equity fund. During the directed issue of shares, 2.849.632 new shares were subscribed as the subscription price was EUR 1.10. Therefore, the addition adjusted by the related costs of the directed issue to the invested unrestricted equity fund was 3.017 thousand EUR.

Solteq Group's equity ratio was 36,6 per cent (32,2 per cent).

As part of the financial arrangements for the funding of the corporate acquisition announced on 20.3.2012, the company bought and re-leased its office space properties in Tampere. The balance sheet value of the office space properties at the time of sale was 1.590 thousand EUR. The sales profit relating to the sale of commercial property shares, 887 thousand EUR, is presented in other income.

Of the corporate acquisition's 8.301 thousand EUR in the acquisition cost calculations, 6.529 thousand EUR of business value, 2.344 thousand EUR of allocated intangible rights and deferred tax debt of 574 thousand EUR were entered on the balance sheet.

Costs arising from the execution of the corporate acquisition are totally presented as part of the cash flow from business operations.

INVESTMENTS, RESEARCH AND DEVELOPMENT

Gross investment during the review period was 6.992 thousand euros (37 thousand euros).

Of the investments during the review period, 8.301 thousand EUR was connected to the corporate acquisition, and correspondingly, 1.590 thousand EUR of disinvestments was

connected to the sale of the office space properties in Tampere. Otherwise, investments are replacement investments.

On 22 March 2012, Solteq Plc and Aldata Solution Plc completed a transaction in which Solteq Plc acquired Aldata Solution Finland Ltd, the daughter company under 100% ownership of Aldata Solution Plc. After the acquisition took place, the company's name was changed to Solteq Retail Oy. The company was merged into the Solteq Group from 1.3.2012.

Research and development

Solteq's research and development costs consist mainly of personnel costs. When developing basic products, it is Solteq's strategy to cooperate with global actors such as SAP, Microsoft and Wincor-Nixdorf and utilize their resources and distribution channels. Own development efforts are focused on added value products and developing tailored service concepts.

During the review period product development costs were not amortized in accordance with IFRS standards (comparison year also not amortized for the review period).

PERSONNEL

The number of permanent employees at the end of the review period was 291 (212). The average number of personnel during the review period was 238 (218). In the end of the review period the number of personnel could be divided as follows Enterprise Resource Planning and Financial Management solutions segment: 116 people; Value Added Solutions segment: 144 people and 31 people in shared functions. The increase of personnel in Value Added Solutions contains the personnel of Solteq Retail Ltd, acquired in March 2012, a total of 75 employees.

RELATED PARTY TRANSACTIONS

Solteq's related parties include the board of directors, managing director and the management team.

There have been no significant changes in the company's related party transactions since the financial statements 2011.

SHARES, SHAREHOLDERS AND TREASURY SHARES

Solteq Plc's equity on 30.6.2012 was 1.009.154,17 euros which was represented by 14.998.061 shares. The shares have no nominal value. The increase in the amount of shares during the review period is related to the directed issue of shares carried out on 20 March 2012, in which 2.849.632 new shares were subscribed. The subscription price of the shares was entered entirely into the invested unrestricted equity fund.

At the end of the review period, the amount of treasury shares in Solteq Plc and the group company Solteq Management Oy's possession were 788.404 shares. The amount of treasury shares represented 5,3 % of the total amount of shares and votes at the end of the review period. The equivalent value of acquired shares was 53.048 euros.

During the review period, five flagging announcements were made. As a result of the directed issue of shares carried out in relation to the funding of the corporate acquisition in March, Mutual insurance company Eläke-Fennia's share exceeded the 10 per cent flagging threshold in accordance with the Securities Market Act, Ali Saadetdin's share decreased below the 25 per cent flagging threshold in accordance with the Securities Market Act, and Profiz Business Solution Plc's share fell below the 10 per cent flagging threshold in accordance with the Securities Market Act. The fourth flagging announcement was caused by a correction regarding Markku Pietilä's ownership share. In May Profiz Business Solution Plc's share exceeded the 10 per cent lagging threshold and the fifth flagging announcement was made.

After the directed issue of shares during the review period, Mutual insurance company Eläke-Fennia's ownership of Solteq is 13.3% and Mutual pension insurance company Varma's ownership is 4.3%.

Exchange and share price

During the review period, the exchange of Solteq's shares on the Helsinki Stock Exchange was 1,1 million shares (1,2 million shares) and 1,2 million euros (1,2 million euros). The highest price during the review period was 1.30 euros and the lowest price was 0.99 euros. The weighted average price of the share was 1.12 euros and the price ending was 1,10 euros. The market value of the company's shares in the end of the review period totalled 16,5 million euros (13,2 million euros).

Ownership

At the end of the review period, Solteq had a total of 1.810 shareholders (1.884 shareholders). Solteq's 10 largest shareholders owned 11.209 thousand shares, amounting to 74.7 per cent of the company's shares and votes. Solteq Plc board members owned a total of 5,499 thousand shares which equals 36,7 per cent of the company's shares and votes.

ANNUAL GENERAL MEETING

At Solteq Plc's Annual General Meeting on 14 March 2012 the 2011 financial statements were adopted and the members of the board and the managing director were discharged from liability for the 2011 review period.

The Annual General Meeting accepted that the Board is authorized in accordance with the Finnish Companies Act 13 chapter 6§ 2 paragraph to decide on a maximum dividend of 0,05 euros per share or other distribution of funds from the distributable equity fund as well as to decide upon the timing of the distribution and other details was accepted. The authorization is valid until the beginning of the next Annual General Meeting.

The Annual General Meeting authorized the Board of Directors to decide on the purchase of the Company's own shares to improve the capital structure, to be used as a part of remuneration of personnel, to finance and execute business acquisitions and other business arrangements or to be further transferred or cancelled. The proposal includes authorization to take company's own shares as a pledge. According to the proposal, the total number of the shares purchased shall not exceed 10 percent of all shares of the Company and they can be purchased otherwise than in proportion to the shareholdings of the shareholders. The shares shall be purchased through public trading. The authorization includes that the Board of Directors may decide the terms and other matters concerning the purchase of own shares. The authorization is effective until the next Annual General Meeting.

The Annual General Meeting authorized the Board of Directors to give new shares or convey company's own shares. The authorization would be executed by one or more share issues, maximum total amount being 3.000.000 shares. The authorization includes a right to deviate from the shareholders' pre-emptive right of subscription. The authorization includes that the Board of Directors may decide the terms and other matters concerning the share issue. The authorization is effective until March 31, 2013. This authorization does not overrule earlier given authorizations by the Annual General Meeting.

BOARD OF DIRECTORS AND AUDITORS

Six members were elected to the Board of Directors. Ali Saadetdin, Seppo Aalto, Markku Pietilä, Sirpa Sara-aho and Jukka Sonninen continued as members of the board. Matti Roininen was elected as a new member of the Board. The Board elected Ali Saadetdin to act as the Chairman of the Board.

KPMG Oy Ab, Authorized Public Accountants, was re-elected as Solteq's auditors. Frans Kärki, APA, acts as the chief auditor.

EVENTS AFTER THE REVIEW PERIOD

On 12 July 2012 Solteq Plc released a stock exchange bulletin related to the plan Solteq Retail Ltd to merge with its parent Solteq Plc. The planned registration date for the implementation of the merger is 31 December 2012.

RISKS AND UNCERTAINITIES

The key uncertainties and risks in short term are related to the timing and pricing of business deals that are the basis for revenue, changes in the level of costs and the company's ability to manage extensive contract agreements and deliveries.

The key business risks and uncertainties of the company are monitored constantly as a part of the board of directors' and management team's duties. The company has not organized a separate internal audit organization or committee.

PROSPECTS

For 2012, we estimate our turnover to be approx. 35-37 million EUR and operating profit approx. 6-8 %.

Financial Reporting

This interim report has been prepared in accordance with the recognition and measurement principles of IFRS-standards as is Financial Statements 2011.

The financial result is reported through two business areas. The Enterprise Resource Planning and Financial Management Solutions segment includes systems for finance and enterprise resource planning. The Value Added Solution segment includes point-of-sale and store management systems, asset management, field service and maintenance management systems and also masterdata management. The most essential product and service types of the Solteq group of companies are software services, licenses and hardware sales.

All forecasts and estimates presented in the interim report are based on the current views of management on the economic environment and outlook. Because of this, the results can differ as a result of, among other factors, changes in economy, markets and competitive conditions, changes in the regulatory environment and other government actions.

The interim report is unaudited.

FINANCIAL INFORMATION

GROUP PROFIT AND LOSS ACCOUNT (TEUR)

1.4.- 1.4.- 1.1.- 1.1.- 1.1.-
30.6.2012 30.6.2011 30.6.2012 30.6.2011 31.12.2011
NET TURNOVER 10 441 7 317 19 290 14 167 27 144

Other operating

income 0 0 891 9 15
Raw materials and
services
-2 870 -1 585 -5 083 -3 070 -6 383
Staff expenses -5 440 -3 991 -9 812 -7 734 -14 165
Depreciation -299 -202 -526 -407 -750
Other operating
expenses
-1 440 -1 212 -3 419 -2 273 -4 408
OPERATING RESULT 393 327 1 342 692 1 453
Financial income and
expenses
-73 -57 -185 -107 -174
RESULT BEFORE TAXES 320 270 1 157 585 1 280
Income taxes -68 -74 -412 -161 -383
RESULT FOR THE PERIOD 252 196 745 424 897
OTHER ITEMS OF TOTAL
COMPREHENSIVE INCOME
Cash flow hedging
Other items of total comprehensive
-31 1 -12 21 8
income
after taxes
-23 1 -9 16 6
TOTAL COMPREHENSIVE INCOME 229 197 736 440 903
Total profit for the period
attributable to
Owners of the parent
252 196 745 424 897
Total comprehensive income
attributable to
Owners of the parent
229 197 736 440 903
Earnings / share,
e(undiluted)
0,02 0,02 0,06 0,04 0,08
Earnings / share,
e(diluted)
0,02 0,02 0,06 0,04 0,08

Taxes corresponding to the result have been presented as taxes for the period.

GROUP BALANCE SHEET
(TEUR)
30.6.2012 30.6.2011 31.12.2011
ASSETS
NON-CURRENT ASSETS
Intangible assets
Intangible rights
Goodwill
3 845
12 728
1 919
6 199
1 780
6 199
Tangible assets 924 2 631 2 264
Investments
Other shares and similar
rights of ownership
523 93 524
Deferred tax
assets
Other receivables
0
67
494
87
280
67
Total non-current
assets
18 087 11 423 11 114
CURRENT ASSETS
Inventories 81 0 0
Short-term debtors 7 638 5 796 5 983
Cash in hand and at banks 389 131 277
Total current
assets
8 108 5 927 6 260
TOTAL ASSETS 26 196 17 350 17 374
EQUITY AND LIABILITIES
CAPITAL AND RESERVES ATTRIBUTABLE TO THE
SHAREHOLDERS OF THE PARENT COMPANY
Share capital
1 009 1 009 1 009
Company's own shares -933 -734 -835
Share premium account 74 75 75

hedging -24 -4 -14

Account for cash flow

Unrestricted equity
fund 6 817 3 801 3 801
Retained earnings 1 911 1 012 1 012
Result for the
financial period 745 424 897
Total equity 9 599 5 583 5 945
Non-current liabilities
Deferred tax liabilities 166 0 0
Other non-current liabilities 5 327 2 433 1 951
Current liabilities 11 103 9 334 9 478
Total liabilities 16 596 11 767 11 429
TOTAL EQUITY AND
LIABILITIES 26 196 17 350 17 374

FINANCIAL PERFORMANCE INDICATORS (IFRS) 1-6/2012 1-6/2011 1-12/2011

Net turnover MEUR 19,3 14,2 27,1
Change in net turnover 36,2 % 11,0 % 0,5 %
Operating result MEUR 1,3 0,7 1,5
% of turnover 6,9 % 4,9 % 5,4 %
Result before taxes MEUR 1,2 0,6 1,3
% of turnover 6,0 % 4,1 % 4,7 %
Equity ratio, % 36,6 32,2 34,2
Gearing, % 72,5 % 83,7 % 65,4 %
Gross investments in
non-current assets MEUR 6,99 0,0 0,5
Return on equity, % 19,7 % 13,2 % 16,0 %
Return on investment, % 20,0 % 10,9 % 13,1 %
Personnel at end of
period 291 212 212
Personnel average
for period 238 218 211
KEY INDICATORS PER SHARE
Earnings / share, e 0,06 0,04 0,08
Earnings / share,
e(diluted) 0,06 0,04 0,08
Equity / share, e 0,68 0,48 0,52

SEGMENT INFORMATION

Turnover by segment:

Me 1-6/12 1-6/11 Change
Enterprise Resource Planning and Financial Management
Solutions 10,7 8,9 +1,8
Value Added Solutions 8,6 5,2 +3,3
Total 19,3 14,2 +5,1
Operating result by segment:
Me 1-6/12 1-6/11 Change
Enterprise Resource Planning and Financial Management
Solutions 1,2 0,8 +0,4
Value Added Solutions 0,2 -0,1 +0,3
Total 1,3 0,7 +0,7

On 22 May 2012 Solteq Plc released a stock exchange bulletin concerning the reorganization of its organizational structure starting 1 July 2012. As of the beginning of July 2012, Solteq Plc's reported segments are: Grocery and special retail, HoReCa, Wholesale trade, Logistics and Services and Optimisation of supply and services processes. Below are the actual figures for the financial period in accordance with the new segment division:

Turnover by new segments (reported beginning from 1.7.2012)

Me 1-6/12 1-6/11 Change
Grocery and special retail, HoReCa 7,5 4,8 +2,7
Wholesale trade, Logistics and Services 9,1 6,3 +2,8
Optimisation of supply and services processes 2,7 3,1 -0,4
Total 19,3 14,2 +5,1
Operating result by new segments (reported beginning from
1.7.2012)
Me 1-6/12 1-6/11 Change
Grocery and special retail, HoReCa 0,4 0,4 0
Wholesale trade, Logistics and Services 1,2 0,5 +0,8
Optimisation of supply and services processes -0,3 -0,2 -0,1
Total 1,3 0,7 +0,7
QUARTERLY KEY INDICATORS (MEUR)
3Q/10
4Q/10
1Q/11 2Q/11

1-6/2012 1-6/2011 1-12/2011

Net turnover 6,75 7,49 6,85 7,32
Operating result -0,04 -2,1 0,37 0,32
Result before taxes -0,08 -2,15 0,32 0,27
3Q/11 4Q/11 1Q/12 2Q/12
Net turnover 5,32 7,65 8,85 10,40
Operating result 0,29 0,47 0,95 0,39
Result before taxes 0,26 0,43 0,84 0,32

CASH FLOW STATEMENT (MEUR)

Cash flow from business
operations -0,27 2,46 3,78
Cash flow from capital
expenditure -5,58 -0,04 -0,47
Cash flow from financing activities
Own shares -0,10 -0,12 -0,22
Directed issue 3,02 0,00 0,00
Loan agreements 3,04 -2,30 -2,94
Cash flow from financing
activities 5,96 -2,42 -3,16
Change in cash and cash
equivalents 0,11 0,00 0,15
TOTAL INVESTMENTS (TEUR)
1-6/2012 1-6/2011 1-12/2011
Continuing operations,
group total 6 992 37 471
LIABILITIES (MEUR) 30.6.2012 30.6.2011 31.12.2011
Company quorantee for
credit limits 10,00 2,61 2,28
Lease contracts, machinery &
equipment 0,82 0,61 0,23
Lease liability,
premises 4,60 1,60 1,42
Pledged shares 0,00 1,59 1,59

MAJOR SHAREHOLDERS JUNE 30, 2012

%
1. Saadetdin Ali 3 481 383 23,2
2. Eläke-Fennia Keskinäinen Vakuutusyhtiö 2 000 000 13,3
3. Aalto Seppo 1 662 206 11,1
4. Profiz Business Solution Oyj 1 610 937 10,7
5. Keskinäinen Vakuutusyhtiö Varma 644 917 4,3
6. Pirhonen Jalo 513 380 3,4
7. Solteq Management Oy 400 000 2,7
8. Solteq Oyj 388 404 2,6
9. Roininen Matti 350 000 2,3
10. Hakamäki Jorma 157 430 1,0
10 largest shareholders total 11 208 657 74,7
Total of nominee-registered 20 047 0,1
Others 3 769 357 25,1
Total 14 998 061 100,0

STATEMENT OF CHANGES IN GROUP EQUITY (TEUR)

A=Share capital B=Company's own shares C=Share premium account D=Account for cash flow hedging E=Unrestricted equity fund F=Retained earnings G=Total

A B C D E F G
EQUITY 1.1.2011 1 009 -618 75 -20 7 213 -2 400 5 259
Total comprehensive income 16 424 440
Acquiring of own shares
Covering the losses
-116 -3 413 3 413 -116
0
EQUITY 30.6.2011 1 009 -734 75 -4 3 800 1 437 5 583
EQUITY 1.1.2012 1 009 -835 75 -14 3 800 1 910 5 945
Total comprehensive income -9 745 736
Acquiring of own shares
Directed issue
-99 3 017 -99
3 017
EQUITY 30.6.2012 1 009 -933 74 -24 6 817 2 656 9 599

CALCULATION OF FINANCIAL RATIOS

Solvency ratio, in percentage
equity
----------------------------------
x 100
balance sheet total - advances received
Gearing
interest bearing liabilities - cash,
bank balances and securities
-------------------------------------------
x 100
equity
Return on Equity (ROE) in percentage
profit or loss before taxation - taxes
----------------------------------------
x 100
equity
Profit from invested equity in percentage profit or loss before taxation +
interest expenses and other financing expenses
x 100
----------------------------------------
balance sheet total - non-interest bearing
liabilities
Earnings per share
pre-tax result - taxes
+/- minority interest
------------------------------------
diluted average share issue
corrected number of shares
Diluted earnings per share
diluted profit before taxation -
taxes +/- minority interest
-----------------------------------------------
diluted average share issue
corrected number of shares
Equity per share equity
-----------------------
number of shares

ACQUISITIONS

Solteq Retail Ltd (Aldata Solution Finland Ltd)

On 22 March 2012, Solteq acquired the entire capital stock of Aldata Solutions Plc's daughter company responsible for operations in Finland, Aldata Solution Finland Ltd. As a result of the corporate acquisition, Aldata Solution Finland Ltd became a daughter company entirely owned by Solteq Plc, and as of 30.3.2012, its trade name is registered as Solteq Retail Ltd.

The company offers software and related services to the retail industry. Its range of software is comprised of the Company's own software, whose product development is in Finland, and mediation products. Mediation products are order-supply chain management and optimisation products owned by the Aldata Group, which are offered in connection with the corporate acquisition based on agreed licence and distribution contracts, and Microsoft's ERP systems. At the end of 2011, Aldata Solution Finland Ltd had 77 employees. The company was merged into the Solteq Group from 1.3.2012.

The Group had no business acquisitions during financial year 2011.

The impact of the acquired company on Solteq Group

Aggregate figures for the acquisition 1-6/2012
thousand EUR
Purchase price
Fixed price, paid 8 301
Total 8 301
Price allocation
Share capital 400
Distributable equity reserve 1 616
Share premium reserve 375
Retained earnings -2 390
Total 1
Remaining 8 300
Intangible rights, technology 1 736
Intangible rights, customerships 608
Deferred tax -574
Goodwill 6 529
Total 8 300

The goodwill value from the acquisition includes assets which are not separable, such as synergy advantages, skilful personnel, market share and access to the new markets.

Adjustments of the fair value to the other intangible assets reflect the value of Solteq Retail's customerships and technology.

611
611
Impact on the Solteq Group's comprehensive income statement 1-6/2012
Revenue* 3.866
Operating profit* 299

*The amount of the revenue and the operating profit from acquisition date to the end of the reporting period. The acquired company is consolidated into the Solteq Group as of 1.3.2012

The revenue and the operating profit of the acquired company as the acquisition had taken place at the first day of the reporting period are not presented , because many significant pre-acquisition arrangements were performed in January and February 2012.

Impact on the Solteq Group's number of personnel 75
Impact on the Solteq Group's assets and liabilities 30.6.2012
Intangible assets 19
Tangible assets 90
Non-current assets, total 109
Trade and other receivables 892
Cash and cash equivalents 304
Current assets, total 1 196
Assets total 1 305
Financial liabilities 964
Current liabilities total 964
Net identifiable assets and liabilities 341
Purchase price of the acquisition 8 301
Intangible rights, technology * 1 642
Intangible rights, customerships * 583
Goodwill 6 529
Deferred tax liabilities -545
Consideration paid, satisfied in cash 22.3.2012 8 301
Cash acquired 542
Net cash outflow 7 759

The company acquired during the reporting period is consolidated 100% into the Solteq Group as of the first day of the month when acquired.

*Depreciations of the intangible rights during the reporting period are 94 thousand euros (technology) and 25 thousand euros (customerships)

Financial Reporting

Solteq Plc's financial information bulletins in 2012 have been scheduled as follows:

  • Interim Report 1-9/2012 Thursday 18.10.2012 at 9.00 am

More investor information is available from Solteq's website at www.solteq.com

Additional information:

CEO Repe Harmanen Telephone: +358 400 467 717 Email: [email protected]

CFO Antti Kärkkäinen Telephone: +358 20 1444 393 or +358 40 8444 393 Email: [email protected]

Distribution: NASDAQ OMX Helsinki Key Media

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