Annual / Quarterly Financial Statement • Feb 4, 2009
Annual / Quarterly Financial Statement
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January 1– December 31, 2008 Financial Statement
Due to the rapid weakening in the global economy, strong fl uctuations in the exchange rates and the tightening in the fi nancial markets Teleste's business environment became increasingly uncertain and harder to predict towards the end of the year. e changes in the business environment made our clientele increasingly cautious regarding their investment plans, and the relevant projects were partially pushed back. Similarly, year-on-year framework deliveries were reduced.
On the other hand, the developing Indian market was active and Teleste managed to secure the largest single order on record of EUR 12.0 million from Digicable Networks PVT Ltd for delivery of IP-headends.
Measures designed to increase fl exibility in the cost structure were initiated in the second half of the year. Suffi cient fi nancing was secured by way of binding credit limits agreed with two separate banks. ese limits amount to EUR 40 million in total and remain valid until November 2013.
Product development eff orts continued on a par with last year. e most important project involved the video processing system making use of the IP-based technology.
e services business was strengthened right in the beginning of January 2009 by acquiring three German companies providing network maintenance services to German operators. In 2009, the acquisitions will increase Teleste's net sales by approximately EUR 30 million. e relevant acquisition cost calculation will be completed by the release of the interim report for Q1 of 2009.
With the share transactions carried out on 14 and 29 January 2009, EM Group Oy fl agged their holding of Teleste to have increased up to 5.04% and 10.57%, respectively.
Teleste net sales totaled EUR 108.7 (125.1) million, a decrease of 13.1 % over the previous year. Net sales in Q4 amounted to EUR 28.1 (31.1) million.
Operating profi t stood at EUR 5.6 (13.2) million making 5.2 % (10.5 %) of the net sales. Operating profi t for Q4 stood at EUR 1.6 (3.0) million making 5.6% (9.8%) of the net sales.
Orders received by the Group equaled last year's level, i.e. EUR 118.6 (118.5) million. Order accrual weakened for the amplifi er solutions included in frame agreements, especially in the second half-year. Orders received in Q4 stood at EUR 25.3 (29.7) million. Teleste's order backlog grew by 11.6% amounting to EUR 24.0 (21.5) million at the year-end. is increase in order backlog was mainly attributable to the signifi cant contract of EUR 12 million secured in June by Broadband Cable Networks in India. Orders worth EUR 7.5 million entered in 2006 and 2007 have been taken away from the order backlog as the relevant deliveries have been estimated uncertain.
Profi t after fi nancial items totaled EUR 5.1 (12.7) million while the net profi t after taxes equaled EUR 5.5 (9.4) million. Accounting period taxes include a tax refund of EUR 1.3 million. e relevant adjustment applied to the tax deductibility of specifi c items for 2004 to 2006. Undiluted result per share for the Group stood at EUR 0.32 (EUR 0.55). Return on capital employed amounted to 10.4% (27.1%) and return on equity was 11.8% (22.2%).
R&D expenditure for the period under review totalled EUR 13.5 (13.1) million making 12.4% (10.5%) of net sales. e most signifi cant R&D eff ort involved further development of the so-called Luminato video processing system based on Internet protocol. Our on-going product development eff orts also included the broadband data transfer system EttH, the new generation amplifi er technology Access, the high-density optics solution HDO, video surveillance transfer system MP-X and the CCTV management system VMX. Specifi cation of the Gateway involved in the last mile system FttX and the selection of partners for the implementation stage were successfully completed.
Some 60% (40%) of product development expenses involved further development of product platforms currently in production and their maintenance as well as customer-specifi c product applications. Activated product development expenses stood at EUR 2.5 (2.7) million. is capitalization mainly involved the IP-headend, EttH, and MP-X. Depreciation on activated R&D expenses amounted to EUR 2.2 (1.4) million.
e R&D expenditure in Q4 amounted to EUR 3.4 (3.5) million.
A number of Teleste's projects involved co-operation with Finnish universities and research institutes. 25% of Teleste's personnel (23%/2007, 22%/2006) worked in R&D related assignments.
Investments for the period under review totalled EUR 3.9 (12.3) million making 3.6 % (9.8 %) of net sales. Investments of EUR 2.5 million involved product development while EUR 0.7 million included acquisitions. As to investments for the period, EUR 0.2 (1.8) million was carried out by fi nancial leasing.
Liquidity of the Group remained good throughout the year. Operating cash fl ow stood at EUR 9.7 (12.0) million. At the end of the period, the amount of unused binding stand-by credits amounted to EUR 31.0 (23.0) million. e current binding stand-by credits of EUR 40.0 million run till November 2013. e Group's equity ratio was 61.7% (60.2%) and gearing 3.6% (3.8%). Interest bearing debt on 31 December 2008 was EUR 11.0 (9.5) million.
In 2008, the Group employed, on average, 702 people (681/2007, 608/2006). At the year-end, the fi gure totaled 677 (672/2007, 621/2006) of which approximately 33% (34%/2007, 30%/2006) were stationed overseas. e stated number of personnel does not include temporary labor averaging 29 (64) persons in the fi nancial period. e number of temporary labor at the year-end was 8 (36).
Employees stationed outside Europe accounted for less than 10% of the Group's personnel. Expenditure on employee benefi ts amounted to EUR 33.2 (31.5/2007, 27.1/2006) million.
In the co-determination negotiations concluded in December, temporary lay-off of the personnel was agreed upon as part of the cost structure adaptation procedures required by the market situation. Additional lay-off s involving personnel will be continued in a fl exible manner as required by the market situation.
Founded in 1954, Teleste is a technology company currently running the business units of Broadband Cable Networks and Video Networks. In line with its strategy Teleste continues to focus on the chosen product and technology segments as well services business.
Integrated deliveries of solutions create favorable conditions for growth even if the involved resource allocation and technical implementation pose a challenge involving, therefore, also reasonable risks. e current diffi cult situation in the fi nancial market may slow down implementation of investment plans among the clientele. e way customers proceed with their investments follows a typically cyclic pattern. In compliance with its strategy, by increasing the services business Teleste intends to smoothen this cyclic pattern in its net sales. Furthermore, the prevailing circumstances may undermine the solvency of some customers.
Correct technological choices and their timing are vital for the success of our business areas. It is equally important to take into account any developments in the market such as consolidations taking place among the clientele and competition. Much of Teleste's competition comes from the USA and, therefore, strong euro up against the US dollar erodes the company competitiveness. Teleste hedges against shortterm currency exposure by means of forward contracts.
e Board of Directors annually reviews any essential risks related to the company operation and 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 reporting.
e company has covered risks related to damage in operative functions of the business areas mainly by insurance policies. ese insurances do not include credit loss risks. No such risks materialized in 2008, and no legal proceedings or judicial procedures were pending that would have had any essential signifi cance for the Group operation.
Broadband Cable Networks provides its main clientele of cable operators with equipment and systems designed for the construction of transmission network and signal processing. Deliveries include individual pieces of equipment and turnkey networks alike. Increasingly the business also makes available a number of services related to the maintenance and engineering of network infrastructure.
e main market area of Broadband Cable Networks is Europe, which business area involves 21 own sales offi ces supported by a number of retail and integration partners. Outside Europe, Broadband Cable Networks has own offi ces located in China and India. Acquired in February 2008, Ortikon Interactive Oy strengthens the provision of IPTV solutions for the business area.
e product development eff orts of the business area focused, in particular, on further development of the IP-based headend system Luminato, the broadband data transfer system EttH, the new generation amplifi er technology presented by Access and the high-defi nition fi bre-optic solution HDO.
Orders received by Broadband Cable Networks were level with the year of comparison standing at EUR 101.4 (101.4) million. e order backlog was strengthened by the order of EUR 12.0 million received from India in June for the Luminato headend solution. e related deliveries are expected to start towards the end of fi rst half of 2009.
Net sales fell by 14.4% (+26.5 %) standing at EUR 92.6 (108.2) million. is reduction in net sales was mainly caused by a decrease in amplifi er deliveries based on the frame agreements.
Operating profi t decreased by 52.4% (+41.7%) standing at EUR 6.1 (12.8) million. Weakening in the operating profi t was mainly due to diminished net sales.
At the year-end, order backlog stood at EUR 21.0 (19.7) million. Orders worth EUR 7.5 million entered in 2006 and 2007 have been deleted from the order backlog as the relevant deliveries have come to be deemed uncertain.
Orders received in the last quarter of the period under review remained at EUR 19.7 (25.2) million. e decrease in the order accrual for Q4 over the period of comparison was caused by a reduction in orders on amplifi er deliveries related to frame agreements and a weakening in orders obtained from the Eastern Europe.
Net sales for Q4 amounted to EUR 23.8 (25.5) million while the operating profi t stood at EUR 1.7 (2.3) million.
Primary clientele of Video Networks includes public sector organizations and system integrators. e business area is specializing in high-quality video surveillance transfer and management systems carrying real-time video, audio and data. e product development eff orts of the business area focused particularly on further development of IP-based video surveillance transfer systems MP-X and the CCTV management system VMX.
e business has seven sales offi ces in Europe with two overseas, in the United States and Australia, more specifi cally. Sales offi ces in ailand and China were closed in 2008.
Orders received by Video Networks were level with the year of comparison amounting to EUR 17.2 (17.1) million. Net sales fell by 4.8 % (+4.3 %) standing at EUR 16.1 (16.9) million. Operating profi t was EUR 0.5 (+0.3) million in the red. Weakened profi tability was mainly caused by diminished net sales. At the year-end, order backlog stood at EUR 3.0 (1.8) million.
In the last quarter of the year under review, orders received amounted to EUR 5.6 (4.5) million with net sales equaling EUR 4.4 (5.5) million. e year-on-year decrease in the net sales is attributable to rescheduling of deliveries agreed with specifi c customers. Operating profi t was EUR 0.1 million in the red (0.7 million in the black) due to low volume of net sales.
In 2009, price competition will continue to intensify, especially in the area of network solutions. Large companies have entered the market with determination. Moreover, technology involved in these applications is renewing rapidly.
In geographical terms, the Group's business areas are divided up into Scandinavia, rest of Europe and others.
Net sales in the Nordic countries amounted to EUR 32.2 (35.5) million. Investments for the area totalled EUR 3.4 (6.1) million.
Rest of Europe:
Net sales for the rest of Europe stood at EUR 70.5 (78.3) million while the investments made in the area amounted to EUR 0.3 (6.1) million.
Others:
Net sales amounted to EUR 5.9 (11.3) million. Investments totaled EUR 0.1 (0.1) million.
In the period under review, Teleste acquired the share capital of the Finnish Ortikon Interactive Oy. e parent company of Teleste Group has branch offi ces in Australia, China, Denmark, France, India, the Netherlands, Russia and Spain with subsidiaries in 12 countries outside Finland.
e Annual General Meeting (AGM) on 1 April 2008 confi rmed the fi nancial statements for 2007 and discharged the Board and the CEO from liability for the fi nancial period. e AGM confi rmed the Board's proposed dividend of EUR 0.24 per share. e dividend was paid out on 15 April 2008.
e AGM decided that the Board of Directors shall consist of six members. Mr. Tapio Hintikka was re-elected Chairman of the Board whilst Mr. Tero Laaksonen, Mr. Pertti Raatikainen, Mr. Timo Toivila and Mr. Pekka Vennamo continued as members on the Board of Directors. Mr. Kai Telanne was elected new member of the Board.
Authorised Public Accountants KPMG Oy Ab continue as the auditor until the next AGM.
e AGM authorised the Board to acquire the maximum of 1,400,000 of the company's own shares and to convey the maximum of 1,744,721 company's own shares. e AGM also authorised the company to issue 5,000,000 new shares. e maximum number of shares that may be subscribed with the special rights granted by the Company is 2,000,000 shares.
ese authorisations will be valid until the AGM due to be held in 2009.
CEO of the company has been Mr. Jukka Rinnevaara. e AGM elected KPMG Oy Ab as the auditor.
At the end of 2008, Mandatum Life was the largest single shareholder with a holding of 9.43%.
In terms of the company share price in 2008, the low was EUR 1.90 (6.47) and the high EUR 7.49 (12.34), respectively. Closing price at the end of the year stood at EUR 2.24 (6.71). According to the Finnish Central Security Depository, the number of shareholders at the end of the period was 5532 (5270) while foreign ownership accounted for 11.18% (20.51 %). Trading with Teleste share at NASDAQ OMX Helsinki Oy amounted to EUR 51.1 (72.4) million. In 2008, 11.5 (7.2) million shares standing for 64.6% (40.5%) of the shares were traded at NASDAQ OMX Helsinki Oy.
In May 2008, the Board of the company decided to launch a repurchase program of own shares based on authorisation granted by the Annual General Meeting. In compliance with the Board's decision, in the review period 421,470 shares were purchased out of the total amount of 500,000; the purchase price averaged EUR 3.29 per share. At the end of December, the number of own shares in the Group possession stood at 766,191 (352,482) out of which Teleste Corporation had 266,191 shares and the subsidiary Teleste Incentive Oy had 500,000 shares, respectively. e Group's holding of the total amount of shares at the end of the period amounted to 4.3% (1.9%).
In the period under review, 7,761 own shares were conveyed to the Management Team share bonus scheme. is equals 0.04 % of the total number of shares. On 22 December 2008, 500,000 own shares were conveyed unrequited to Teleste Incentive Oy owned 100% by Teleste Corporation.
In the review period, 134,285 new shares were subscribed by Teleste 2002B options.
e 2004B options received by Teleste key personnel were listed in NASDAQ OMX Helsinki Oy on 1 April 2008.
On behalf of their customers, Schroder Investment Management Limited fl agged their holding of Teleste to have decreased below fi ve per cent by transactions performed
on 22 July 2008. New holding at the moment of fl agging was 4.96% of the company share capital and 4.42% of the votes.
At the balance sheet date, the registered share capital of Teleste stood at EUR 6,966,932.80 divided in 17,805,590 shares.
Other matters aff ecting the company governance will be stated in the Annual Report under Good Governance.
As the off ering of services for the clientele of Broadband Cable Networks increases and becomes more versatile and with the competition intensifying, the operators will need to invest in increased network capacity and improved quality. e competitive solutions of the business area and the strengthening in the demand for the services business ensure our strong market position in the current challenging business environment.
Increased needs for security and more eff ective traffi c infrastructure push up demand for solutions by Video Networks. We estimate the demand for Video Networks' high-quality video surveillance solutions and the systems designed for the industry to remain at a reasonable level in 2009.
In the prevailing uncertain market situation, regardless of the increasing demand by the end-users, our clientele may be cautious with their network investments, which can cause delays in the fi nal investment decisions in the fi rst half of 2009. We believe the market situation to normalize towards the end of the year and get back on the growth path.
Teleste will keep its strong market position it the core markets and continue to implement its strategy in a goal-directed manner while adapting its cost structure as required. In 2009, the recent strategic investments in the services business performed by Teleste cushion the cyclic pattern in the company net sales under the uncertain market conditions.
Due to the temporary delays in network investments, preparations for weakening net sales and profi tability will be made in the 2009 operating plan at least for the fi rst half of the year.
Regarding the Annual General Meeting scheduled for 7 April 2009, the Board proposes that a dividend of EUR 0.12 (EUR 0.24) per share would be paid for the outstanding shares for the year 2008.
3 February 2009
Teleste Corporation Jukka Rinnevaara Board of Directors CEO
I
The audited Financial Statements have been prepared according to IAS 34 valuation principles.
| 1.1. - 31.12. 2008 |
1.1. - 31.12. 2007 |
Change % | |
|---|---|---|---|
| Net sales | 108 695 | 125 100 | -13,1 % |
| Other operating income Change in inventories of finished products and |
1 820 | 1 772 | 2,7 % |
| work in progress | -1 082 | -673 | 60,8 % |
| Raw material and consumables used | -48 063 | -59 692 | -19,5 % |
| Employee benefits expense | -33 226 | -31 455 | 5,6 % |
| Depreciation and amortisation expense | -4 705 | -3 552 | 32,5 % |
| Other operating expenses | -17 811 | -18 324 | -2,8 % |
| Operating profit | 5 628 | 13 176 | -57,3 % |
| Financial income | 446 | 627 | -28,9 % |
| Financial expenses | -979 | -1 131 | -13,4 % |
| Profit before taxes | 5 095 | 12 672 | -59,8 % |
| Taxes | 433 | -3 309 | n/a |
| Profit for the period | 5 528 | 9 363 | -41,0 % |
| Attributable to: | |||
| Equity holders of the parent | 5 528 | 9 363 | -41,0 % |
| Earnings per share for profit of the year attributable to the equity holders of the parent | |||
| Basic (expressed in euro per share) | 0,32 | 0,55 | -41,4 % |
| Diluted (expressed in euro per share) | 0,32 | 0,52 | -38,9 % |
| 10-12 | 10-12 | ||
| INCOME STATEMENT 1000 EUROS | 2008 | 2007 | |
| Net sales | 28 125 | 31 076 | -9,5 % |
| Other operating income | 469 | 618 | -24,1 % |
| Change in inventories of finished products and work in progress |
-119 | -4 068 | -97,1 % |
| Raw material and consumables used | -12 271 | -10 179 | 20,5 % |
| Employee benefits expense | -8 755 | -8 836 | -0,9 % |
| Depreciation and amortisation expense | -1 191 | -1 018 | 17,0 % |
| Other operating expenses | -4 686 | -4 558 | 2,8 % |
| Operating profit | 1 571 | 3 035 | -48,2 % |
| Financial income | 58 | 365 | -84,1 % |
| Financial expenses | -161 | -180 | -10,6 % |
| Profit before taxes | 1 468 | 3 220 | -54,4 % |
| Taxes | 393 | -862 | n/a |
| Profit for the period | 1 861 | 2 358 | -21,1 % |
| Attributable to: Equity holders of the parent |
1 861 | 2 358 | -21,1 % |
|---|---|---|---|
| Earnings per share for profit of the year attributable to the equity holders of the parent | |||
| Basic ( expressed in euro per share) | 0,11 | 0,14 | -20,8 % |
| Diluted (expressed in euro per share) | 0,11 | 0,13 | -17,0 % |
| CONSOLIDATED BALANCE SHEET, 1000 EUROS | |||
| Assets 1000 euros | 31.12.2008 | 31.12.2007 | Change % |
| Non-current assets | |||
| Property, plant and equipment | 6 373 | 7 757 | -17,8 % |
| Goodwill | 13 865 | 12 686 | 9,3 % |
| Other intangible assets | 6 466 | 6 629 | -2,5 % |
| Available-for-sale investments | 790 | 723 | 9,3 % |
| Total | 27 494 | 27 795 | -1,1 % |
| Current assets | |||
| Inventories | 14 049 | 15 936 | -11,8 % |
| Trade and other receivables | 24 728 | 26 455 | -6,5 % |
| Cash Total |
9 268 48 045 |
7 702 50 093 |
20,3 % -4,1 % |
| Total assets | 75 539 | 77 888 | -3,0 % |
| Equity and liabilities | |||
| Equity attributable to equity holders of the parent |
|||
| Share capital | 6 967 | 6 967 | 0,0 % |
| Share premium | 1 504 | 1 504 | 0,0 % |
| Translation differences | -561 | -53 | 958,5 % |
| Invested nonrestricted equity | 1 451 | 2 531 | -42,7 % |
| Retained profits | 37 284 | 35 720 | 4,4 % |
| Total | 46 645 | 46 669 | -0,1 % |
| Non-current liabilities | |||
| Interest-bearing liabilities Other liabilities |
1 175 66 |
1 700 0 |
-30,9 % n/a |
| Deferred tax liabilities | 959 | 1 197 | -19,9 % |
| Provisions | 314 | 425 | -26,0 % |
| Total | 2 514 | 3 322 | -24,3 % |
| Current liabilities | |||
| Trade and other liabilities | 15 851 | 19 016 | -16,6 % |
| Current tax payable | 113 | 580 | -80,5 % |
| Provisions | 629 | 518 | 21,4 % |
| Interest-bearing liabilities | 9 787 | 7 783 | 25,7 % |
| Total | 26 380 | 27 897 | -5,4 % |
| Total liabilities | 28 894 | 31 219 | -7,4 % |
| Equity and liabilities total | 75 539 | 77 888 | -3,0 % |
| 1.1.-31.12. 2008 |
1.1.-31.12. 2007 |
Change % | |
|---|---|---|---|
| Cash flows from operating activities | |||
| Profit for the period | 5 528 | 9 363 | -41,0 % |
| Adjustments for: | |||
| Non-cash transactions | 4 955 | 4 202 | 17,9 % |
| Interest and other financial expenses | 979 | 1 131 | -13,4 % |
| Interest income and other financial income | -436 | -617 | -29,3 % |
| Dividends | -10 | -10 | 0,0 % |
| Taxes Change in working capital |
-433 | 3 309 | n/a |
| Increase in trade and other receivables | 1 932 | -1 209 | -259,8 % |
| Increase in inventories | 1 887 | 1 216 | 55,2 % |
| Increase in trade and other payables | -3 296 | -1 414 | 133,1 % |
| Decrease in provisions | 0 | -332 | n/a |
| Paid interests and other financial expenses | -1 096 | -647 | 69,4 % |
| Received interests and dividends | 246 | 208 | 18,3 % |
| Paid taxes | -583 | -3 211 | -81,8 % |
| Cash flow from operating activities | 9 673 | 11 988 | -19,3 % |
| Cash flow from investing activities | |||
| Acquisition of subsidiary, net of cash acquired Purchases of property, plant and equipment |
-378 | -5 301 | -92,9 % |
| (PPE) | -293 | -1 257 | -76,7 % |
| Purchases of intangible assets | -2 692 | -2 724 | -1,2 % |
| Proceeds from sales of shares | 221 | 814 | -72,9 % |
| Investments in shares | -80 | 0 | n/a |
| Net cash used in investing activities | -3 222 | -8 468 | -62,0 % |
| Cash flow from financing activities | |||
| Proceeds from borrowings | 6 093 | 11 000 | -44,6 % |
| Payments of borrowings | -4 596 | -11 113 | -58,6 % |
| Payment of finance lease liabilities | -578 | -594 | -2,7 % |
| Dividends paid | -4 158 | -3 413 | 21,8 % |
| Own shares | -1 386 | 0 | n/a |
| Proceeds from issuance of ordinary shares | 249 | 1 630 | -84,7 % |
| Net cash used in financing activities | -4 376 | -2 490 | 75,7 % |
| Change in cash | |||
| Cash and cash equivalents 1.1. | 7 702 | 6 789 | 13,4 % |
| Effect of currency changes | -508 | -118 | 330,5 % |
| Cash and cash equivalents 31.12. | 9 268 | 7 702 | 20,3 % |
Consolidated statement of changes in equity,1000 euros Attributable to equity holders of the parent
| Trans | Invested | ||||
|---|---|---|---|---|---|
| Share | Share | differ | Retained | rest-ricted | |
| capital | premium | rences | earnings | equity | Total |
| 6 967 | 1 504 | -53 | 35 720 | 2 531 | 46 669 |
| 0 | 0 | 0 | 5 528 | 0 | 5 528 |
| 0 | 0 | 0 | -4 158 | 0 | -4 158 |
| lation | non |
| Equity-settled share | ||||||
|---|---|---|---|---|---|---|
| based payments | 0 | 0 | 0 | 194 | -1 329 | -1 135 |
| Used share options | 0 | 0 | 0 | 0 | 249 | 249 |
| Exchange differences | 0 | 0 | -508 | 0 | 0 | -508 |
| Equity 31.12.2008 | 6 967 | 1 504 | -561 | 37 284 | 1 451 | 46 645 |
| Broadband Cable Networks |
Video Networks | Group | |
|---|---|---|---|
| External sales | |||
| Services | 5 459 | 218 | 5 677 |
| Goods | 87 146 | 15 872 | 103 018 |
| External sales total | 92 605 | 16 090 | 108 695 |
| Operating profit of segments | 6 098 | -470 | 5 628 |
| Unallocated expenses | -100 | ||
| Profit for the period | 5 528 | ||
| Segments assets | 50 930 | 15 341 | 66 271 |
| Unallocated assets | 9 268 | ||
| Total assets | 75 539 | ||
| Segments liabilities | 14 443 | 2 351 | 16 794 |
| Unallocated liabilities | 12 100 | ||
| Total liabilities | 28 894 | ||
| Capital expenditure for the period | 3 378 | 518 | 3 896 |
| Depreciations for the period | 3 713 | 992 | 4 705 |
| Broadband Cable Networks |
Video Networks | Group | |
|---|---|---|---|
| External sales | |||
| Services | 4 681 | 363 | 5 044 |
| Goods | 103 523 | 16 533 | 120 056 |
| External sales total | 108 204 | 16 896 | 125 100 |
| Operating profits of the segments | 12 837 | 339 | 13 176 |
| Unallocated expenses | -3 813 | ||
| Profit for the period | 9 363 | ||
| Segments assets | 54 952 | 15 234 | 70 186 |
| Unallocated assets | 7 702 | ||
| Total assets | 77 888 | ||
| Segments liabilities | 17 165 | 2 794 | 19 959 |
| Unallocated liabilities | 11 260 | ||
| Total liabilities | 31 219 | ||
| Capital expenditure for the period | 11 082 | 1 201 | 12 283 |
| Depreciations for the period | 2 800 | 752 | 3 552 |
| Information per quarter (tEUR) | 10- 12/08 |
7-9/08 | 4-6/08 | 1-3/08 | 10- 12/07 |
1- 12/2008 |
|
|---|---|---|---|---|---|---|---|
| Broadband Cable Networks | Order intake Net sales EBIT EBIT % |
19 680 23 765 1 711 7,2 % |
22 838 20 873 1 657 7,9 % |
32 872 24 995 1 829 7,3 % |
26 040 22 972 901 3,9 % |
25 250 25 530 2 371 9,3 % |
101 430 92 605 6 098 6,6 % |
| Video Networks | Order intake Net sales EBIT EBIT % |
5 583 4 360 -140 -3,2 % |
3 753 3 245 -197 -6,1 % |
4 535 4 265 -113 -2,6 % |
3 332 4 220 -20 -0,5 % |
4 510 5 546 664 12,0 % |
17 203 16 090 -470 -2,9 % |
| Total | |||||||
| Order intake Net sales EBIT EBIT % |
25 263 28 125 1 571 5,6 % |
26 591 24 118 1 460 6,1 % |
37 407 29 260 1 716 5,9 % |
29 372 27 192 881 3,2 % |
29 760 31 076 3 035 9,8 % |
118 633 108 695 5 628 5,2 % |
|
| GEOGRAPHICAL SEGMENTS 2008, 1000 EUROS | |||||||
| Sales by origin Assets Capital expenditure for the period |
Nordic countries 32 248 61 082 3 448 |
Other Europe 70 522 12 582 330 |
Others 5 925 1 875 118 |
Group 108 695 75 539 3 896 |
|||
| GEOGRAPHICAL SEGMENTS 2007, 1000 EUROS | |||||||
| Sales by origin Assets Capital expenditure for the period |
Nordic countries 35 535 57 483 6 113 |
Other Europe 78 260 18 837 6 120 |
Others 11 305 1 568 50 |
Group 125 100 77 888 12 283 |
|||
| Commitments and contingencies Guarantees Other securities Rental liabilities Lease liabilities Value of underlying forward contracts Market value of forward contracts |
2008 259 2 233 1 466 9 094 419 |
0 | 2007 184 365 1 112 1 523 7 746 -152 |
Change % n/a -29,0 % 100,8 % -3,7 % 17,4 % n/a |
|||
| The average number of employees broken down by following categories Research and development Production and material management Sales and marketing Finance, quality and IT Total |
2008 173 302 189 38 702 |
2007 158 305 179 39 681 |
Change % 9,5 % -1,0 % 5,6 % -2,6 % 3,1 % |
| IFRS | IFRS | IFRS | IFRS | IFRS | |
|---|---|---|---|---|---|
| KEY FIGURES | 2004 | 2005 | 2006 | 2007 | 2008 |
| Profit and loss account, balance | |||||
| sheet | |||||
| Net sales, Meur | 66,0 | 82,6 | 101,8 | 125,1 | 108,7 |
| Change % | 21,8 % | 25,1 % | 23,2 % | 22,9 % | -13,1 % |
| Sales outside Finland, % | 85,1 % | 89,3 % | 90,6 % | 91,2 % | 90,2 % |
| Operating profit, Meur | 5,6 | 8,6 | 9,8 | 13,2 | 5,6 |
| % of net sales | 8,5 % | 10,4 % | 9,6 % | 10,5 % | 5,2 % |
| Profit after financial items, Meur | 5,4 | 8,3 | 9,3 | 12,7 | 5,1 |
| % of net sales | 8,2 % | 10,1 % | 9,1 % | 10,1 % | 4,7 % |
| Profit before taxes, Meur | 5,4 | 8,3 | 9,3 | 12,7 | 5,1 |
| % of net sales | 8,2 % | 10,1 % | 9,1 % | 10,1 % | 4,7 % |
| Profit for the financial period, | |||||
| Meur | 3,9 | 6,0 | 6,9 | 9,4 | 5,5 |
| % of net sales | 5,9 % | 7,2 % | 6,8 % | 7,5 % | 5,1 % |
| R&D expenditure, Meur | 6,9 | 8,6 | 9,8 | 13,1 | 13,5 |
| % of net sales | 10,4 % | 10,5 % | 9,7 % | 10,5 % | 12,4 % |
| Gross investments, Meur | 5,4 | 4,1 | 6,2 | 12,3 | 3,9 |
| % of net sales | 8,2 % | 4,9 % | 6,1 % | 9,8 % | 3,6 % |
| Interest bearing liabilities, Meur | 10,8 | 3,9 | 8,0 | 9,5 | 11,0 |
| Shareholder's equity, Meur | 27,7 | 32,4 | 37,7 | 46,7 | 46,6 |
| Total assets, Meur | 54,4 | 54,8 | 68,2 | 77,9 | 75,5 |
| Personnel and orders | |||||
| Average personnel | 492 | 546 | 608 | 681 | 702 |
| Order backlog at year end, Meur | 20,7 | 22,7 | 28,1 | 21,5 | 24,0 |
| Orders received, Meur | 80,5 | 85,4 | 107,2 | 118,5 | 118,6 |
| Key metrics | |||||
| Return on equity, % | 15,1 % | 19,8 % | 19,7 % | 22,2 % | 11,8 % |
| Return on capital employed, % | 16,1 % | 23,7 % | 24,3 % | 27,1 % | 10,4 % |
| Equity ratio, % | 51,1 % | 59,1 % | 55,3 % | 60,2 % | 61,7 % |
| Gearing, % | -22,9 % | -14,3 % | 3,2 % | 3,8 % | 3,6 % |
| Earnings per share, euro | 0,23 | 0,35 | 0,41 | 0,55 | 0,32 |
| Earnings per share fully diluted, | |||||
| euro | 0,22 | 0,33 | 0,38 | 0,52 | 0,32 |
| Shareholders' equity per share, | |||||
| euro | 1,65 | 1,92 | 2,22 | 2,69 | 2,74 |
| Teleste share | |||||
| Highest price, euro | 7,06 | 8,35 | 12,75 | 12,34 | 7,49 |
| Lowest price, euro | 5,14 | 5,85 | 6,46 | 6,47 | 1,90 |
| Closing price, euro | 6,02 | 7,45 | 11,63 | 6,71 | 2,24 |
| Average price, euro | 6,03 | 6,97 | 9,83 | 10,10 | 4,52 |
| Price per earnings | 25,8 | 21,0 | 28,6 | 12,3 | 7,0 |
| Market capitalization, Meur | 101,4 | 129,2 | 202,2 | 118,6 | 39,9 |
| Stock turnover, Meur | 74,2 | 75,3 | 138,9 | 72,4 | 51,1 |
| Turnover, number in millions | 12,3 | 10,8 | 14,2 | 7,2 | 11,5 |
| Turnover, % of share capital | 70,9 % | 62,3 % | 81,4 % | 40,5 % | 64,6 % |
| Average number of shares | 17334235 | 17339752 | 17363102 | 17494435 | 17708782 |
| Number of shares at the year-end | 17339752 | 17339752 | 17389302 | 17671305 | 17805590 |
| Average number of shares, | |||||
| diluted w/o own shares | 17918580 | 18001437 | 18022505 | 17971752 | 17372555 |
| Number of shares at the year | |||||
| end, diluted w/o own shares | 17999752 | 18004752 | 18034752 | 17972785 | 17039399 |
| Paid dividend, Meur | 2,0 | 2,7 | 3,4 | 4,2 | 2,0 |
|---|---|---|---|---|---|
| Dividend per share, euro | 0,12 | 0,16 | 0,20 | 0,24 | *0,12 |
| Dividend per net result, % | 52,2 % | 45,7 % | 49,1 % | 43,9 % | 37,4 % |
| Effective dividend yield, % | 2,0 % | 2,1 % | 1,7 % | 3,6 % | 5,4 % |
CALCULATION OF KEY FIGURES
| Return on equity: | Profit/loss for the financial period ------------------------------ * 100 |
|---|---|
| Shareholders' equity (average) | |
| Return on capital employed: | Profit/loss for the period after financial items + financing charges ------------------------------ * 100 |
| Total assets - non-interest-bearing liabilities (average) |
|
| Equity ratio: | Shareholders' equity ----------------------------- * 100 |
| Total assets - advances received | |
| Gearing: | Interest bearing liabilities - cash in hand and in bank - interest bearing assets ----------------------------- * 100 |
| Shareholders' equity | |
| Earnings per share: | Profit for the period attributable to equity holder of the parent |
| ---------------------------------------------- Weighted average number of ordinary shares outstanding during the period |
|
| Earnings per share, diluted: | Profit for the period attributable to equity holder of the parent (diluted) ----------------------------------------------- |
| Average number of shares - own shares + number of options at the period-end |
|
| Equity per share: | Shareholders' equity |
| -------------------- Number of shares - number of own shares at year-end |
|
| Price per earnings (P/E): | Share price at year-end |
| ------------------- Earnings per share |
|
| Effective dividend yield: | Dividend per share |
| ------------------- Share price at year-end |
| MAJOR SHAREHOLDERS 31.12.2008 | Shares | % |
|---|---|---|
| 1. Mandatum Henkivakuutusosakeyhtiö | 1 679 200 | 9.43% |
| 2. Ilmarinen Mutual Pension Insurance Company | 894 776 | 5.03% |
| 3. EM Group Oy | 887 000 | 4.98% |
| 4. Kaleva Mutual Insurance Company | 798 541 | 4.48% |
| 5. Varma Mutual Pension Insurance Company | 521 150 | 2.93% |
| 6. State Pension Fund | 500 000 | 2.81% |
| 7. Teleste Incentive Oy | 500 000 | 2.81% |
| 8. Aktia Capital Mutual Fund | 487 200 | 2.74% |
| 9. Alfred Berg Finland Sijoitusrahasto | 458 828 | 2.58% |
| 10. Skagen Vekst Verdipapierfond | 437 000 | 2.45% |
| SECTOR DISPERSION OF SHAREHOLDERS |
Number of shareholders |
% of owners |
Number of shares |
% of total shares |
|---|---|---|---|---|
| Corporations | 321 | 5,8 | 2 989 398 | 16,79 |
| Financial and insurance corporations | 23 | 0,42 | 4 674 291 | 26,25 |
| Public institutions | 12 | 0,22 | 2 879 657 | 16,17 |
| Non-profit organizations | 47 | 0,85 | 773 431 | 4,34 |
| Households | 5 084 | 91,9 | 4 499 012 | 25,27 |
| Foreign and nominee -registered | 45 | 0,81 | 1 989 801 | 11,18 |
| Total | 5 532 | 100 | 17 805 590 | 100 |
| HOLDING DISPERSION | |||||
|---|---|---|---|---|---|
| Number of shares | Owners | % | Shares | % | |
| 1 - 100 | 1 225 | 22.18% | 87 389 | 0.49% | |
| 101 - 1 000 | 3 278 | 59.35% | 1 356 341 | 7.62% | |
| 1 001 - 10 000 | 908 | 16.44% | 2 567 530 | 14.42% | |
| 10 001 - 100 000 | 84 | 1.52% | 2 115 967 | 11.88% | |
| 100 001 - | 28 | 0.51% | 10 611 478 | 59.60% | |
| Total | 5 523 | 100.00% | 16 738 705 | 94.01% | |
| Nominee registered | 1 066 885 | 5.99% | |||
| Total | 17 805 590 | 100.00% | |||
The range of products and services of Broadband Cable Networks was strengthened by acquisition of 100% of shares of Finish Ortikon Interactive Oy at 6 February 2008. The purchase price was 100 thousand EUR and it was paid in cash. The acquisition resulted in 202 thousands EUR of intangible assets, which was allocated to trade marks, customer relationships and technology. The goodwill, amounted 605 thousands EUR, is mainly due to synergy effects in the future. The impact of the acquisition on Teleste's net sales during the period was 563 thousand EUR and on the EBIT -119 thousands EUR
| Recognised fair values on acquisition | |
|---|---|
| 1 000 € | |
| Fair values used in consolidation | |
| Trade marks (inc. in intangible assets) | 46 |
| Customer relationship (inc. in intangible assets) | 108 |
| Technology (inc. in intangible assets) | 48 |
| Book values used in consolidation | |
| Tangible assets | 13 |
| Trade receivables | 19 |
| Other receivables | 126 |
|---|---|
| Total assets | 360 |
| Book values used in consolidation Interest-bearing liabilities Deferred tax liabilities Other liabilities Total liabilities |
556 53 256 865 |
| Net identifiable assets and liabilities | -505 |
| Total consideration | 100 |
| Goodwill on acquisition | 605 |
| Consideration paid in cash | -100 |
| Cash and cash equivalents in acquired subsidiary | 0 |
| Total net cash outflow on the acquisition | -100 |
P.O.Box 323, FI-20101 Turku, Finland Seponkatu 1, FI-20660 Littoinen, Finland Phone +358 (0)2 2605 611 (switchboard) [email protected] Business ID 1102267-8
www.teleste.com
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