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ComTel SpA — Audit Report / Information 2010
Feb 10, 2011
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Audit Report / Information
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COMPTEL CORPORATION'S FINANCIAL STATEMENTS FOR 2010
COMPTEL CORPORATION'S FINANCIAL STATEMENTS FOR 2010
Helsinki, 2011-02-10 07:02 CET (GLOBE NEWSWIRE) -- Financial statements bulletin
10 February 2011 at 8.00 am
COMPTEL CORPORATION'S FINANCIAL STATEMENTS FOR 2010
Net sales and operating profit grew from the previous year.
Key Figures for the Fourth Quarter
-- Net sales EUR 23.5 million, growth 8.9% (Q4 2009: 21.6)
-- Operating profit EUR 4.9 million (3.1), 20.8% of net sales
-- Earnings per share EUR 0.03 (0.01)
-- Order backlog EUR 34.0 million (37.6)
Key Figures for the Full Year
-- Net sales EUR 77.9 million, growth 4.0% (2009: 74.9)
-- Operating profit EUR 8.9 million (1.0), 11.4% of net sales
-- Earnings per share EUR 0.04 (-0.02)
-- Number of employees at the year end 589 (587)
Board of Directors proposes a dividend of EUR 0.04 (0.03) per share be paid for
2010.
Comptel net sales are estimated to grow moderately in 2011. During this year,
the company will invest in further development of its sales channels, and as a
result the operating profit is estimated to remain at the previous year's
level.
The full year financial information in this stock exchange release is based on
the company's audited financial statements. The auditor's report was issued on
9 February 2011.
Juhani Hintikka, President and CEO:
”Comptel's business developed favourably during the last quarter of the year.
Net sales grew and profitability was good in Europe, Asia-Pacific and in the
Americas. In the Middle East, the projects that had been delayed were started.
License sales improved towards the end of the year and we also agreed on
projects to consolidate and extend some of the systems that have been delivered
earlier.
In 2010, the financial results improved from the previous year: growth remained
low, but profitability improved significantly. Partner sales grew in line with
our strategy. Our financial position remained strong.
We are accelerating our customer and partner intimacy business model by placing
more experts in the growth markets. During this year we also aim to grow our
solution business and increase the value-add of our expert services.”
Business Review
In the fourth quarter, Comptel's net sales grew by 8.9 per cent compared to the
previous year and were EUR 23.5 million (21.6). The growth was generated by
license upgrades and improved license sales at the year end. Full year net
sales grew by 4.0 per cent compared to the previous year and were EUR 77.9
million (74.9).
In the fourth quarter, operating profit rose to EUR 4.9 million (3.1) and
operating profit margin was 20.8 per cent (14.5). Revenue recognition of major
license upgrades improved the profitability. Full year operating profit was EUR
8.9 million (1.0), representing 11.4 per cent of net sales (1.4).
In 2010, net financial items were EUR -0.7 million (-0.7). Profit before taxes
was EUR 8.5 million (0.4), which corresponds 10.9 per cent (0.5) of net sales.
Net profit was EUR 4.7 million (-2.1). Earnings per share for the financial
year were EUR 0.04 (-0.02).
Tax expense for the financial year was EUR 3.8 million (2.5). Including the
withholding taxes credited during the first half of the year, the net amount of
withholding taxes due to double taxation was EUR 0.2 million. The cumulative
amount of outstanding double withholding taxes payment since 2004 is EUR 6.5
million.
The Group's order backlog was EUR 34.0 million (37.6) at the end of the
financial year. Maintenance agreements represent EUR 20.5 million (22.6) and
other order backlog EUR 13.6 million (15.0) of the total.
The customer service centre in Bulgaria and its 26 employees were transferred
to Comptel Group as of 1 April.
In June, Comptel Corporation and Telenor Norway concluded a five year long
agreement on the license upgrades and maintenance of Comptel's major OSS
products. At the same time, the maintenance of Telenor Norway's old IT systems
was removed from Comptel. As part of the arrangement, 16 of Comptel's employees
were transferred to Telenor as of 1 July.
Business Areas
Net sales, 10-12 2010 10-12 2009 Change 1-12 2010 1-12 2009 Change
EUR million % %
Europe 10.8 9.2 17.7 37.1 33.3 11.5
Asia-Pacific 7.1 6.0 18.9 23.1 20.5 13.0
Middle East and 3.1 5.0 -37.7 9.8 16.1 -39.0
Africa
Americas 2.5 1.5 69.0 7.8 5.1 54.6
Total 23.5 21.6 8.9 77.9 74.9 4.0
Operating profit
by area,
EUR million
Europe 6.2 4.7 30.8 19.8 15.4 29.0
Asia-Pacific 4.8 3.2 49.2 13.1 11.5 13.5
Middle East and 1.6 2.3 -30.3 2.5 8.3 -70.1
Africa
Americas 1.8 0.2 1043.2 4.2 0.3 1421.3
Unallocated costs -9.5 -7.3 30.7 -30.6 -34.4 -11.0
Total 4.9 3.1 56.4 8.9 1.0 775.2
Operating profit,
% of net sales
Europe 57.5 51.7 -- 53.4 46.1 --
Asia-Pacific 67.8 54.1 -- 56.6 56.3 --
Middle East and 51.8 46.3 -- 25.3 51.6 --
Africa
Americas 71.2 10.5 -- 53.5 5.4 --
Total 20.8 14.5 -- 11.4 1.4 --
Net sales grew in Europe, Asia-Pacific and especially in the Americas. In the
Middle East, net sales decreased significantly compared to the previous year.
However, the deliveries that had been delayed started in the region towards the
end of the year.
In October - December, Comptel sold six (6) new core licenses, one Comptel
Fulfillment, Comptel Provisioning and Activation, Comptel Catalog, Comptel
Convergent Mediation, Comptel Policy Control and Comptel Interconnect Billing
solution. In addition, Comptel agreed on significant projects to extend some of
the earlier delivered Comptel Control & Charge and Comptel Fulfillment
solutions.
In 2010, Comptel sold 16 (19) new core licenses: three Comptel Fulfillment,
Comptel Convergent Mediation, Comptel Interconnect Billing, and Comptel
Provisioning and Activation solutions, two Comptel Policy Control, and one
Comptel Catalog and Comptel Dynamic SIM Management solution. Six licenses were
sold in the Middle East and Africa, five in Europe, three in the Americas and
two in Asia-Pacific. Comptel reports as new core licenses the software license
deliveries which value exceeds EUR 100,000.
Net sales 10-12 2010 10-12 2009 Change 1-12 2010 1-12 2009 Change
breakdown by type, % %
EUR million
Licenses 10.8 8.1 33.6 26.2 19.7 33.4
Services 4.3 5.4 -20.7 18.3 22.8 -19.8
Maintenance 8.5 8.2 4.1 33.4 32.4 2.9
agreements
Total 23.5 21.6 8.9 77.9 74.9 4.0
License sales grew compared to the previous year. A lower amount of larger
system deliveries decreased the share of service revenue. Maintenance revenue
consists of maintenance and support of the delivered systems.
Net sales by sales 10-12 2010 10-12 2009 Change 1-12 2010 1-12 2009 Change
channel, EUR % %
million
Direct sales 12.2 14.3 -14.7 48.7 51.7 -5.8
Partner sales 11.4 7.3 54.9 29.2 23.1 26.0
Total 23.5 21.6 8.9 77.9 74.9 4.0
The share of partner sales grew especially during the last quarter, in line
with Comptel's strategy. Comptel's key strategic partners are Alcatel-Lucent,
Cisco and IBM.
Financial Position
EUR million 31 Dec 2010 31 Dec 2009 Change %
Statement of financial position total 76.4 82.6 -7.6
Liquid assets 7.0 6.7 4.4
Trade receivables, gross 25.1 25.0 0.5
Bad debt provision -0.8 -1.4 -41.4
Trade receivables, net 24.3 23.6 3.0
Accrued income 7.6 13.5 -43.6
Deferred income related to partial debiting 1.9 1.6 19.7
Interest-bearing debt 0.1 8.0 -98.7
Equity ratio, per cent 71.6 62.6 14.5
Statement of financial position total on 31 December 2010 was EUR 76.4 million
(82.6), of which liquid assets amounted to EUR 7.0 million (6.7). The dividends
of EUR 3.2 million (4.3) were paid during the financial year.
Operating cash flow was EUR 1.7 million (1.4) in the last quarter, and EUR 16.6
million (6.3) during the financial year.
The trade receivables were EUR 24.3 million (23.6) at the end of the year.
Accrued income was EUR 7.6 million (13.5). Deferred income related to partial
debiting was EUR 1.9 million (1.6).
During the financial year, the Group amortised its interest-bearing debt by EUR
8.0 million and at the date of financial statements the Group had EUR 0.1
million (8.0) of interest-bearing debt. Comptel Corporation has fully available
a revolving credit facility of EUR 15.0 million maturing in the year 2013.
Equity ratio was 71.6 per cent (62.6) and the gearing ratio was 14.1 per cent
negative (2.8).
Research and Development (R&D)
EUR million 10-12 2010 10-12 Change 1-12 1-12 2009 Change 2009 % 2010 %
Direct R&D expenditure 3.7 3.7 -1.1 13.4 15.6 -13.9
Capitalisation of R&D -1.0 -1.4 -30.0 -3.9 -3.9 0.7
expenditure according to IAS
38
R&D depreciation and 1.1 0.9 17.7 3.7 3.0 22.9
impairment charges
R&D expenditure, net 3.8 3.3 16.2 13.2 14.7 -10.2
In the first half of the financial year, the number of R&D personnel was lower
than in the previous year, which resulted as a decreased R&D expenditure for
the full year. Direct R&D expenditure of the previous year's last quarter has
been adjusted to be comparable.
Comptel's R&D expenditure was mainly targeted at developing new dynamic
end-to-end solutions, which enable service providers to shorten time-to-market
for new services and to charge for them. The company is especially focusing on
development of fulfillment solutions in IP-based environment, in which area the
demand is growing.
Investments
EUR million 10-12 2010 10-12 Change 1-12 1-12 2009 Change
2009 % 2010 %
Gross investments in 0.2 0.1 181.7 1.1 0.7 63.8
property, plant and
equipment and intangible
assets
Gross investments in the financial year comprised of investments in devices,
software and furnishings. The investments were funded through cash flow from
operations.
Personnel
31 Dec 2010 31 Dec 2009 Change, %
Number of employees at the end of period 589 587 0.3
1-12 2010 1-12 2009 Change, %
Average number of personnel during the period 586 613 -4.4
The number of employees remained at the level of previous year's end.
In the last quarter, the personnel expenses were 38.6 per cent of net sales
(40.9). In the financial year, the personnel expenses were 45.6 per cent of net
sales (51.0 including one-off items).
At the year end 38.0 per cent (41.1) of the personnel were located in Finland,
23.6 per cent (20.4) in Malaysia, 7.0 per cent (12.1) in Norway, 8.8 per cent
(9.7) in the United Kingdom, and 22.6 per cent (16.7) in other countries where
Comptel operates.
Comptel share
The closing share price of the financial year was EUR 0.69 (0.78). Comptel's
market value at the year end was EUR 73.5 million (83.3).
Comptel share 10-12 2010 10-12 2009 Change 1-12 2010 1-12 2009 Change
% %
Shares traded, 26.1 3.9 567.1 38.3 35.8 6.9
million
Shares traded, EUR 18.9 3.0 524.2 29.0 24.3 19.6
million
Highest price, EUR 0.90 0.82 9.8 0.95 0.96 -1.0
Lowest price, EUR 0.68 0.72 -5.6 0.68 0.57 19.3
Of Comptel's outstanding shares, 6.6 per cent (6.4) were nominee registered or
held by foreign shareholders at the end of the financial year.
During the year, Comptel Corporation allotted 202,042 shares as part of
share-based incentives to persons involved in the program and 84,447 shares to
the members of the Board of Directors as part of their annual compensation.
During the year, a total of 1,250,000 share options 2009B have been distributed
to the key personnel of the Group. The current share subscription price is EUR
0.87, which corresponds to the trade volume weighted average quotation of the
Comptel share on the NASDAQ OMX Helsinki during 1 April - 30 April 2010.
Share options 2006C were listed on NASDAQ OMX Helsinki commencing from 1
November 2010. The trading code is CTL1VEW306 and ISIN code is FI0009652416.
The current share subscription price is EUR 1.41 which corresponds to the trade
volume weighted average quotation of the Comptel share on the Helsinki stock
exchange during 1 April - 30 April 2008 deducted by the dividends paid.
The share subscription period of 2006A share options expired on 30 November
2010. During the subscription period no shares were subscribed.
In April, the company completed its share buy-back programme during which a
number of 791,081 own shares were purchased through public trading on NASDAQ
OMX Helsinki. The average price per share was approximately EUR 0.79 and the
total purchase price approximately EUR 627,885.
The company held 599,905 of its own shares at the end of the financial year,
which is 0.56 per cent of the total number of its shares. The total
counter-book value of the shares held by the company was EUR 11,998.
Corporate Governance
The Annual General Meeting (AGM), held on 22 March 2010, elected the following
members for the Board of Directors: Mr Olli Riikkala, Mr Hannu Vaajoensuu, Mr
Timo Kotilainen, Mr Juhani Lassila, Mr Petteri Walldén and Mr Henri Österlund.
In its meeting held after the AGM, the Board of Directors re-elected Mr Olli
Riikkala as chairman and Mr Hannu Vaajoensuu as vice chairman. Mr Juhani
Lassila continued as chairman of the audit committee and Mr Petteri Walldén and
Mr Henri Österlund were elected as members. Mr Olli Riikkala continued as
chairman of the compensation committee and Mr Timo Kotilainen and Mr Hannu
Vaajoensuu were elected as members.
The AGM approved the Board of Directors' proposal for a dividend, according to
which a dividend of EUR 0.03 per share was paid for 2009. The AGM authorised
the Board of Directors to decide on share issues amounting to a maximum of
21,400,000 new shares and on repurchase of the company's own shares up to a
maximum number of 10,700,000 shares. The authorisations are valid until 30 June
2011.
Mr Sami Erviö was President and CEO of Comptel Corporation until 25 October
2010, after which Mr Simo Sääskilahti was the Acting President and CEO until 2
January 2011.
On 26 October 2010, the Board of Directors of Comptel Corporation appointed Mr
Juhani Hintikka, M.Sc. (Eng.), as the new President and CEO of the company as
of 3 January 2011. He joined Comptel from Nokia Siemens Networks where his most
recent position was the global Head of Operations Support Solutions (OSS)
Business Line.
Mr Mikko Hytönen, M.Sc. (Eng.), was appointed as the new Chief Financial
Officer, effective as of 1 March 2011, when Mr Markku Pirskanen will join
another employer. Mr Hytönen acted earlier as Group Controller for Comptel.
Subsequent Events
On 10 January 2011, Comptel announced to accelerate its customer and partner
intimate business model by having more resources closer to key customers and
partners in certain growth markets. At the same time, Comptel started statutory
cooperation negotiations to address the potential personnel impacts in Finland
due to restructuring of the European and MEA business units. It is estimated
that the maximum reduction need is 30 persons. The negotiation process is
expected to be completed during February 2011. Due to the investments in the
other markets the total Group headcount is not expected to decrease.
Near-term Risks and Uncertainties
Comptel develops dynamic end-to-end solutions for leading operators globally in
the telecom field. This requires Comptel to understand correctly the trends
taking place in its business environment and the needs of its customers and
resellers by each region. Failure to identify market conditions, address
customers' needs and develop its products in a timely way may significantly
undermine the growth of Comptel's business and its profitability.
Characteristics for Comptel's field of industry are significant variations of
net sales and profit, which are related to customers' purchasing behaviour and
the timing of major single deals.
Comptel operates globally so it is exposed to risks arising from different
currency positions. Exchange rate changes between the Euro, which is the
company's reporting currency, and the US Dollar, UK Pound Sterling and
Norwegian Krone affect the company's net sales, expenses and net profit.
The application process to prevent Comptel's double taxation is still partly
pending with the Ministry of Finance in Finland. The company believes the
treatment of its withholding taxation will be changed also concerning the
countries where the issue is still unsolved.
The risks and uncertainties of Comptel are described more in detail as a part
of the financial statements and the report of the Board of Directors for 2010.
Outlook
Comptel net sales are estimated to grow moderately in 2011. During this year,
the company will invest in further development of its sales channels, and as a
result the operating profit is estimated to remain at the previous year's
level.
Board of Directors' Proposal for the Disposal of Profits
The Group parent company's distributable equity on 31 December 2010 was EUR
24,980,408.87 (29,167,506.81).
The Board of Directors proposes to the General Meeting that a dividend of EUR
0.04 (0.03) per share be paid, totalling EUR 4,258,196.20 (3,197,119.68).
TABLE PART
The full year financial information in this stock exchange release is based on
the company's audited financial statements. The auditor's report was issued on
9 February 2011.
The release has been prepared in accordance with IAS 34, Interim Financial
Reporting, as adopted by the EU. The accounting policies and methods of
computation adopted in the financial statements are consistent with those of
the annual financial statements for the year ended 2009 except for the
application of new or amended standards and interpretations as set forth in
note 1.
All figures in the financial report have been rounded and consequently the sum
of the individual figures can deviate from the sum figure.
Consolidated Statement of Comprehensive 1 Jan -- 1 Jan - 1 Oct - 1 Oct -
Income (EUR 1,000) 31 Dec 31 Dec 31 Dec 31 Dec
2010 2009 2010 2009
Net sales 77,888 74,896 23,544 21,619
----------------------------------------- ---------
----------------------------------------- ---------
Other operating income 426 102 6 15
----------------------------------------- ---------
----------------------------------------- ---------
Materials and services -2,607 -5,828 -831 -1,408
----------------------------------------- ---------
Employee benefits -35,522 -38,231 -9,088 -8,834
----------------------------------------- ---------
Depreciation, amortisation and -5,941 -5,654 -1,443 -1,546
impairment charges
----------------------------------------- ---------
Other operating expenses -25,337 -24,268 -7,288 -6,713
-69,407 -73,980 -18,649 -18,501
----------------------------------------- ---------
Operating profit/loss 8,908 1,018 4,900 3,132
----------------------------------------- ---------
----------------------------------------- ---------
Financial income 864 1,156 139 286
----------------------------------------- ---------
Financial expenses -1,574 -1,825 -248 -454
----------------------------------------- ---------
Share of result of associated companies 314 40 314 40
----------------------------------------- ---------
----------------------------------------- ---------
Profit/loss before income taxes 8,512 388 5,105 3,005
----------------------------------------- ---------
----------------------------------------- ---------
Income taxes -3,811 -2,526 -1,984 -1,421
----------------------------------------- ---------
----------------------------------------- ---------
Profit/loss for the period 4,702 -2,138 3,121 1,584
----------------------------------------- ---------
----------------------------------------- ---------
Other comprehensive income
----------------------------------------- ---------
Cash flow hedges 8 -176 -242 -71
----------------------------------------- ---------
Translation differences 900 743 180 294
----------------------------------------- ---------
Income tax relating to components of -2 46 63 18
other comprehensive income
----------------------------------------- ---------
----------------------------------------- ---------
Total comprehensive income for the 5,607 -1,525 3,121 1,825
period
----------------------------------------- ---------
----------------------------------------- ---------
Profit/loss attributable to:
----------------------------------------- ---------
Equity holders of the parent company 4,702 -2,138 3,121 1,584
----------------------------------------- ---------
Non-controlling interest -- -- -- --
----------------------------------------- ---------
----------------------------------------- ---------
Total comprehensive income attributable
to:
----------------------------------------- ---------
Equity holders of the parent company 5,607 -1,525 3,121 1,825
----------------------------------------- ---------
Non-controlling interest -- -- -- --
----------------------------------------- ---------
----------------------------------------- ---------
Shareholders of the parent company:
----------------------------------------- ---------
Earnings per share, EUR 0.04 -0.02 0.03 0.01
----------------------------------------- ---------
Earnings per share, diluted, EUR 0.04 -0.02 0.03 0.01
Consolidated Statement of Financial Position (EUR 31 Dec 2010 31 Dec 2009
1,000)
------------------------------------------------------- ------------
Assets
------------------------------------------------------- ------------
------------------------------------------------------- ------------
Non-current assets
------------------------------------------------------- ------------
Goodwill 19,626 19,355
------------------------------------------------------- ------------
Other intangible assets 10,948 11,806
------------------------------------------------------- ------------
Tangible assets 1,842 1,589
------------------------------------------------------- ------------
Investments in associates 1,003 689
------------------------------------------------------- ------------
Available-for sale financial assets 87 87
------------------------------------------------------- ------------
Deferred tax assets 783 1,243
------------------------------------------------------- ------------
Other non-current receivables 432 346
34,721 35,116
------------------------------------------------------- ------------
Current assets
------------------------------------------------------- ------------
Trade and other receivables 34,580 38,668
------------------------------------------------------- ------------
Current tax assets 36 2,093
------------------------------------------------------- ------------
Cash and cash equivalents 7,028 6,730
41,644 47,491
------------------------------------------------------- ------------
Total assets 76,365 82,607
------------------------------------------------------- ------------
------------------------------------------------------- ------------
Equity and liabilities
------------------------------------------------------- ------------
------------------------------------------------------- ------------
Equity attributable to equity holders of the parent
company
------------------------------------------------------- ------------
Share capital 2,141 2,141
------------------------------------------------------- ------------
Fund of invested non-restricted equity 7,575 7,499
------------------------------------------------------- ------------
Translation difference -858 -1,757
------------------------------------------------------- ------------
Retained earnings 40,287 38,416
49,146 46,299
------------------------------------------------------- ------------
Total equity 49,146 46,299
------------------------------------------------------- ------------
------------------------------------------------------- ------------
Non-current liabilities
------------------------------------------------------- ------------
Deferred tax liabilities 5,762 5,458
------------------------------------------------------- ------------
Provisions 1,954 2,541
------------------------------------------------------- ------------
Non-current financial liabilities 68 --
------------------------------------------------------- ------------
Other non-current liabilities 1 1
7,784 8,000
------------------------------------------------------- ------------
Current liabilities
------------------------------------------------------- ------------
Trade and other current liabilities 18,819 20,117
------------------------------------------------------- ------------
Current tax liabilities 579 179
------------------------------------------------------- ------------
Current financial liabilities 36 8,012
19,435 28,308
------------------------------------------------------- ------------
Total liabilities 27,219 36,308
------------------------------------------------------- ------------
------------------------------------------------------- ------------
Total equity and liabilities 76,365 82,607
------------------------------------------------------- ------------
Consolidated Statement of Cash Flows 1 Jan - 1 Jan -
(EUR 1,000) 31 Dec 31 Dec
2010 2009
Cash flows from operating activities
------------------------------------------------------------- ---------
Profit/loss for the period 4,702 -2,138
------------------------------------------------------------- ---------
Adjustments:
------------------------------------------------------------- ---------
Non-cash transactions or items that are not part of cash 7,111 6,840
flows from operating activities
------------------------------------------------------------- ---------
Interest and other financial expenses 139 336
------------------------------------------------------------- ---------
Interest income -37 -64
------------------------------------------------------------- ---------
Income taxes 3,811 2,526
------------------------------------------------------------- ---------
Change in working capital:
------------------------------------------------------------- ---------
Change in trade and other receivables 4,082 273
------------------------------------------------------------- ---------
Change in trade and other current liabilities -1,711 1,648
------------------------------------------------------------- ---------
Change in provisions -587 -396
------------------------------------------------------------- ---------
Interest paid -163 -315
------------------------------------------------------------- ---------
Interest received 29 108
------------------------------------------------------------- ---------
Income taxes paid and tax returns received -820 -2,517
------------------------------------------------------------- ---------
------------------------------------------------------------- ---------
Net cash from operating activities 16,556 6,301
------------------------------------------------------------- ---------
------------------------------------------------------------- ---------
Cash flows from investing activities
------------------------------------------------------------- ---------
Purchase price adjustments -- 268
------------------------------------------------------------- ---------
Investments in tangible assets -1,085 -458
------------------------------------------------------------- ---------
Investments in intangible assets -39 -228
------------------------------------------------------------- ---------
Investments in development projects -3,932 -3,906
------------------------------------------------------------- ---------
Proceeds from sale of tangible and intangible assets -- 341
------------------------------------------------------------- ---------
Loans granted -- -75
------------------------------------------------------------- ---------
Change in other non-current receivables -3 5
------------------------------------------------------------- ---------
------------------------------------------------------------- ---------
Net cash used in investing activities -5,059 -4,053
------------------------------------------------------------- ---------
------------------------------------------------------------- ---------
Cash flows from financing activities
------------------------------------------------------------- ---------
Dividends paid -3,191 -4,278
------------------------------------------------------------- ---------
Acquisition of Corporation's own shares -468 -295
------------------------------------------------------------- ---------
Proceeds from borrowings 6,000 8,000
------------------------------------------------------------- ---------
Repayment of borrowings -14,000 -5,000
------------------------------------------------------------- ---------
Change in other non-current liabilities -- -11
------------------------------------------------------------- ---------
------------------------------------------------------------- ---------
Net cash used in financing activities -11,659 -1,585
------------------------------------------------------------- ---------
------------------------------------------------------------- ---------
Net change in cash and cash equivalents -163 663
------------------------------------------------------------- ---------
------------------------------------------------------------- ---------
Cash and cash equivalents at the beginning of the period 6,730 6,135
------------------------------------------------------------- ---------
Cash and cash equivalents at the end of the period 7,028 6,730
------------------------------------------------------------- ---------
Change 298 595
------------------------------------------------------------- ---------
------------------------------------------------------------- ---------
Effects of changes in foreign exchange rates 461 -68
------------------------------------------------------------- ---------
Consolidated Statement of Changes in Equity
Equity attributable to equity holders of the parent company Non-co Equity
ntrol- total
ling
intere
st
EUR Share Other Trans- Fair Treasu Retain Total
1,000 capita reserv lation value ry ed
l es diffe- reserv shares earnin
rences e gs
Equity 2,141 7,433 -2,500 85 -125 44,541 51,576 -- 51,576
at
31 Dec
2008
Dividend -4,278 -4,278 -4,278
s
--------- -------
Acquisit -336 -336 -336
ion of
Corporat
ion's
own
shares
--------- -------
Transfer 67 174 -174 67 67
of
treasury
shares
--------- -------
Share-ba 797 797 797
sed
compensa
tion
--------- -------
Total 743 -130 -2,138 -1,525 -1,525
comprehe
nsive
income
for the
period
Equity 2,141 7,499 -1,757 -45 -287 38,748 46,299 -- 46,299
at
31 Dec
2009
Equity attributable to equity holders of the parent company Non-co Equity
ntrol- total
ling
intere
st
EUR Share Other Trans- Fair Treasu Retain Total
1,000 capita reserv lation value ry ed
l es diffe- reserv shares earnin
rences e gs
Equity 2,141 7,499 -1,757 -45 -287 38,748 46,299 -- 46,299
at
31 Dec
2009
Dividend -3,191 -3,191 -3,191
s
--------- -------
Acquisit -468 -468 -468
ion of
Corporat
ion's
own
shares
--------- -------
Transfer 76 155 -155 76 76
of
treasury
shares
--------- -------
Share-ba 824 824 824
sed
compensa
tion
--------- -------
Total 900 6 4,702 5,607 5,607
comprehe
nsive
income
for the
period
Equity 2,141 7,575 -858 -40 -600 40,927 49,146 -- 49,146
at
31 Dec
2010
Notes
- Application of new or amended standards and interpretations
On 1 January 2010 the Group adopted the following new and amended standards and
interpretations endorsed by the EU and that are applicable to Comptel:
Revised IFRS 3 Business Combinations. The scope of the revised IFRS 3 is
broader than before. In respect of Comptel several significant amendments have
been made to the standard. The amendments impact the amount of goodwill to be
recognised on business combinations and sales results of businesses. The
amendments also have an effect on the amounts to be recognised in profit or
loss both on the financial year when the business combination is effected and
in those financial years when contingent consideration is paid or further
acquisitions are made. Under the transitional provisions of the standard those
business combinations where control is transferred prior to the effective date
of the revised standard are not adjusted to comply with the new rules.
Amended IAS 27 Consolidated and Separate Financial Statements. If the parent
company retains control, the amended standard requires impacts from changes in
ownership in a subsidiary be recognised directly in Group's equity. When
control is lost, the remaining interest is measured at fair value through
profit or loss. A similar accounting treatment will be extended to investments
in associated companies (IAS 28) and interests in joint ventures (IAS 31) in
the future. Resulting from the amendments losses of a subsidiary may be
allocated to non-controlling interest (minority) also when they exceed the
value of the minority shareholders' investment.
Amendment to IAS 39 Financial Instruments: Recognition and Measurement
(Eligible Hedged Items). The amendment deals with hedge accounting and relate
to designation of a one-sided risk in a hedged item and designation of
inflation in a financial hedged item.
IFRIC 17 Distributions of Non-Cash Assets to Owners. The interpretation gives
guidelines to a situation when owners receive dividends in other forms than
cash or the owners have the possibility to select whether they will receive
non-cash assets or cash.
Improvements to IFRSs (April 2009) (mainly effective for financial periods
beginning on or after 1 January 2010). Under this procedure minor and
non-urgent amendments are grouped together and carried out through a single
document annually. The related amendments deal with 12 standards. Impacts vary
by standard but the amendments did not have a significant impact on the
consolidated financial statements.
- Segment information
Net sales by segment
EUR 1,000 1 Jan - 1 Jan - 1 Oct - 1 Oct -
31 Dec 2010 31 Dec 2009 31 Dec 2010 31 Dec 2009
----------------------- ------------
Europe 37,127 33,296 10,776 9,155
----------------------- ------------
Asia-Pacific 23,118 20,455 7,147 6,009
----------------------- ------------
Middle East and Africa 9,810 16,078 3,084 4,954
----------------------- ------------
Americas 7,832 5,067 2,536 1,501
----------------------- ------------
Group total 77,888 74,896 23,544 21,619
Operating profit/loss by segment
EUR 1,000 1 Jan - 1 Jan - 1 Oct - 1 Oct -
31 Dec 31 Dec 31 Dec 31 Dec
2010 2009 2010 2009
---------------------------------- -----------
Europe 19,810 15,359 6,193 4,735
---------------------------------- -----------
Asia-Pacific 13,076 11,517 4,847 3,249
---------------------------------- -----------
Middle East and Africa 2,482 8,301 1,598 2,294
---------------------------------- -----------
Americas 4,189 275 1,806 158
---------------------------------- -----------
Group unallocated expenses -30,649 -34,436 -9,543 -7,303
---------------------------------- -----------
Group operating profit/loss total 8,908 1,018 4,900 3,132
---------------------------------- -----------
Financial income and expenses -710 -670 -109 -168
---------------------------------- -----------
Share of result of associated 314 40 314 40
companies
---------------------------------- -----------
Group profit/loss before income 8,512 388 5,105 3,005
taxes
---------------------------------- -----------
- Income tax expense
The tax expense according to the statement of comprehensive income for the
period was EUR 3,811 thousand (EUR 2,526 thousand 2009).
In 2006, Adjustment of the Tax Office for Major Corporations refused to accept
the crediting of taxes withheld at source in taxation of 2004 and 2005.
The Ministry of Finance has come to an agreement with Greece and Romania.
Relating to these countries, Comptel has booked EUR 595 thousand tax
receivables for taxes withheld in 2004 -2008. The refund process pertaining to
these countries is still pending with the relevant tax authorities. Comptel is
pursuing the negotiations with the Ministry of Finance and other countries that
have withheld tax at source to avoid double taxation. Comptel believes the
treatment of its withholding taxation will be changed.
According to the Board of Adjustment's decision currently in force, Comptel
Corporation has expensed taxes withheld at source amounting to EUR 1,006
thousand in January - December 2010 (EUR 1,234 thousand).
In June 2010, the Finnish tax authority credited a total of EUR 844 thousand
for the withholding taxes Comptel has paid in Brazil and China and which had
been collected again in Finland.
- Tangible assets
EUR 1,000 1 Jan - 31 Dec 2010 1 Jan - 31 Dec 2009
---------- --------------------
Additions 1,190 458
---------- --------------------
Disposals -38 -343
- Related party transactions
The Comptel Group has a related party relationship with its associates, the
Board of Directors, the Corporate Executives and also with people and companies
under Comptel management's influence.
Transactions, which have been entered into with related parties are as follows:
EUR 1,000 1 Jan - 31 Dec 2010 1 Jan - 31 Dec 2009
--------------------------------------- --------------------
Associates
--------------------------------------- --------------------
Purchases of goods and services 100 635
--------------------------------------- --------------------
Interest income 7 4
--------------------------------------- --------------------
--------------------------------------- --------------------
Companies under management's influence
--------------------------------------- --------------------
Purchases of goods and services 43 35
EUR 1,000 31 Dec 2010 31 Dec 2009
--------------------------------------- ------------
Associates
--------------------------------------- ------------
Non-current receivables 83 76
--------------------------------------- ------------
--------------------------------------- ------------
Companies under management's influence
--------------------------------------- ------------
Trade and other current liabilities 1 1
Remuneration to key management
The key management personnel compensation includes the employee benefits of the
members of the Board of Directors and the Corporate Executives.
EUR 1,000 1 Jan-31 Dec 1 Jan-31 Dec
2010 2009
--------------------------------------------- -----------------
Salaries and other short-term employee 2,560 2,249
benefits
--------------------------------------------- -----------------
Share-based payments 519 409
--------------------------------------------- -----------------
Total 3,078 2,657
- Commitments
Minimum lease payments on non-cancellable office facilities and other operating
leases are payable as follows:
EUR 1,000 31 Dec 2010 31 Dec 2009
--------------------------- ------------
Less than one year 3,597 3,904
--------------------------- ------------
Between one and five years 11,226 12,783
--------------------------- ------------
More than five years 751 2,248
--------------------------- ------------
Total 15,574 18,935
The group had no material capital commitments for the purchase of tangible
assets at 31 December 2010 and 31 December 2009.
- Contingent liabilities
EUR 1,000 31 Dec 2010 31 Dec 2009
---------------- ------------
Bank guarantees 2,061 1,616
---------------- ------------
- Subsequent events
On 10 January 2011, Comptel announced to accelerate its customer and partner
intimate business model by having more resources closer to key customers and
partners in certain growth markets. At the same time, Comptel started statutory
cooperation negotiations to address the potential personnel impacts in Finland
due to restructuring of the European and MEA business units. It is estimated
that the maximum reduction need is 30 persons. The negotiation process is
expected to be completed during February 2011. Due to the investments in the
other markets the total Group headcount is not expected to decrease.
- Key figures
Financial summary 1 Jan - 31 Dec 1 Jan - 31 Dec
2010 2009
Net sales, EUR 1,000 77,888 74,896
------------------------------------------------- ---------------
Net sales, change % 4.0 -11.7
------------------------------------------------- ---------------
Operating profit/loss, EUR 1,000 8,908 1,018
------------------------------------------------- ---------------
Operating profit/loss, change % 775.2 -91.1
------------------------------------------------- ---------------
Operating profit/loss, as % of net sales 11.4 1.4
------------------------------------------------- ---------------
Profit/loss before taxes, EUR 1,000 8,512 388
------------------------------------------------- ---------------
Profit/loss before taxes, as % of net sales 10.9 0.5
------------------------------------------------- ---------------
Return on equity, % 9.9 -4.4
------------------------------------------------- ---------------
Return on investment, % 16.3 1.1
------------------------------------------------- ---------------
Equity ratio, % 71.6 62.6
------------------------------------------------- ---------------
Gross investments in tangible and intangible 1,124 686
assets, EUR 1,0001)
------------------------------------------------- ---------------
Gross investments in tangible and intangible 1.4 0.9
assets, as % of net sales
------------------------------------------------- ---------------
Capitalisations according to IAS 38 to 3,932 3,906
intangible assets
------------------------------------------------- ---------------
Research and development expenditure, EUR 1,000 13,414 15,582
------------------------------------------------- ---------------
Research and development expenditure, as % of 17.2 20.8
net sales
------------------------------------------------- ---------------
Order backlog, EUR 1,000 2) 34,049 37,554
------------------------------------------------- ---------------
Average number of employees during the period 586 613
------------------------------------------------- ---------------
Interest-bearing net liabilities, EUR 1,000 -6,923 1,282
------------------------------------------------- ---------------
Gearing ratio, % -14.1 2.8
------------------------------------------------- ---------------
------------------------------------------------- ---------------
1) The figure does not include investments in
development projects.
2) The order book may vary significantly during
the financial period.
------------------------------------------------- ---------------
Per share data 1 Jan - 31 Dec 1 Jan - 31 Dec
2010 2009
Earnings per share (EPS), EUR 0.04 -0.02
------------------------------------------- ------------------
EPS diluted, EUR 0.04 -0.02
------------------------------------------- ------------------
Equity per share, EUR 0.46 0.43
------------------------------------------- ------------------
Dividend per share, EUR3) 0.04 0.03
------------------------------------------- ------------------
Dividend per earnings, %3) 90.6 -150.1
------------------------------------------- ------------------
Effective dividend yield, %3) 5.8 3.8
------------------------------------------- ------------------
P/E ratio 15.6 -39.0
------------------------------------------- ------------------
------------------------------------------- ------------------
Adjusted number of shares at the end of 107,054,810 107,054,810
the period
------------------------------------------- ------------------
- of which the number of treasury shares 599,905 304,004
------------------------------------------- ------------------
Outstanding shares 106,454,905 106,750,806
------------------------------------------- ------------------
Adjusted average number of shares during 106,477,113 106,953,918
the period
------------------------------------------- ------------------
Average number of shares, dilution 107,398,488 107,078,252
included
------------------------------------------- ------------------
------------------------------------------- ------------------
3) The Board's proposal
10. Definition of key figures
Operating margin % = Operating profit/loss x 100
----------------------------------- ------------------------------------------
Net sales
----------------------------------- ------------------------------------------
----------------------------------- ------
Profit margin (before income = Profit/loss before taxes x 100
taxes) %
----------------------------------- ------------------------------------------
Net sales
----------------------------------- ------------------------------------------
----------------------------------- ------
Return on equity % (ROE) = Profit/loss x 100
----------------------------------- ------------------------------------------
Total equity (average during year)
----------------------------------- ------------------------------------------
----------------------------------- ------
Return on investment % (ROI) = Profit/loss before taxes + x 100
financial expenses
----------------------------------- ------------------------------------------
Total equity + interest bearing
liabilities
(average during the year)
----------------------------------- ------------------------------------------
----------------------------------- ------
Equity ratio % = Total equity x 100
----------------------------------- ------------------------------------------
Statement of financial position
total - advances received
----------------------------------- ------------------------------------------
----------------------------------- ------
Gross investments in tangible and = Gross investments in tangible and x 100
intangible assets, as % of net intangible assets
sales
----------------------------------- ------------------------------------------
Net sales
----------------------------------- ------------------------------------------
----------------------------------- ------
Research and development = Research and development x 100
expenditure, as % of net sales expenditure
----------------------------------- ------------------------------------------
Net sales
----------------------------------- ------------------------------------------
----------------------------------- ------
Gearing ratio % = Interest-bearing liabilities - x 100
cash and cash equivalents
----------------------------------- ------------------------------------------
Total equity
----------------------------------- ------------------------------------------
----------------------------------- ------
----------------------------------- ------
Earnings per share (EPS) = Profit/loss for the financial year
attributable to equity
shareholders
----------------------------------- ------------------------------------------
Average number of outstanding
shares for the financial year
----------------------------------- ------------------------------------------
----------------------------------- ------
Equity per share = Equity attributable to the equity
holders of the parent company
----------------------------------- ------------------------------------------
Adjusted number of shares at end
of period
----------------------------------- ------------------------------------------
----------------------------------- ------
----------------------------------- ------
Dividend per share = Dividend
----------------------------------- ------------------------------------------
Adjusted number of shares at end
of period
----------------------------------- ------------------------------------------
----------------------------------- ------
Dividend per earnings % = Dividend per share x 100
----------------------------------- ------------------------------------------
Earnings per share (EPS)
----------------------------------- ------------------------------------------
----------------------------------- ------
Effective dividend yield % = Dividend per share x 100
----------------------------------- ------------------------------------------
Share closing price at end of
period
----------------------------------- ------------------------------------------
----------------------------------- ------
P/E ratio = Share closing price at end of
period
----------------------------------- ------------------------------------------
Earnings per share (EPS)
Comptel Corporation's Annual General Meeting will be held on 23 March 2011 at
11 am in Helsinki.
The Financial Statements and the report of the Board of Directors for 2010 can
be obtained from Comptel's website www.comptel.com in week 9.
Schedule for Comptel's interim reports in 2011:
January-March 15 April
January-June 20 July
January-September 21 October
COMPTEL CORPORATION
Board of Directors
Additional information:
Mr Juhani Hintikka, President and CEO, tel. +358 9 700 1131
Mr Markku Pirskanen, CFO, tel. +358 40 517 4606
Mr Samppa Seppälä, Director, IR and Corporate Communications, tel. +358 50 568
0533
Distribution:
NASDAQ OMX Helsinki
Major media
Attachments: