Solteq Oyj — Interim / Quarterly Report 2013

Jul 17, 2013

SOLTEQ PLC’S INTERIM REPORT 1.1.-30.6.2013

SOLTEQ PLC’S INTERIM REPORT 1.1.-30.6.2013

Solteq Plc Stock Exchange Bulletin 17.7.2013 at 9.00 am

• Solteq Plc's turnover increased 2.2 per cent and totalled 19.7 million euros
  (19.3 million euros).

• Solteq Plc's operating profit totalled 1.080 thousand euros (1.342 thousand
  euros). The operating profit for the collation period includes a total of 276
  thousand EUR of one-time profit and expenses as gross.

• The company's operating margin was 5.5 % (6.9 % in 2012, cleared from
  one-time profit and expenses 5.5 %).

• Solteq Group's equity ratio was 39.1 per cent (36.6 per cent).

• For 2013, we estimate our turnover to be approx. 40-43 million EUR the level
  of EBIT approx. 6-9 %.

• Earnings per share were 0.05 euros (0.06 euros).

KEY FIGURES
Turnover by operation:
% 1-6/13 1-6/12 1-12/12
Softwareservices 68 62 61
Licences 27 32 32
Hardware 5 6 7

CEO Repe Harmanen:

“The second quarter continued very much like the first, which proceeded more or
less as planned. We are slightly behind our good target level, which means that
we must continue paying close attention to our operations. It is clear that the
market has changed and uncertainty in the investment world is in the increase
as summer gets closer.

During the review period, we have both completed existing client projects and
launched new ones. The positive effect of completing large projects has been
that we have been able to start new projects with both old and new clients. In
the second quarter, two major projects had an adverse effect on the result
level of the Wholesale Trade, Logistics and Services Unit. Corrective measures
are, however, being taken.

The growth in our turnover and the ability to maintain the reported result
level has been due to our successful client projects and sharpened focus in the
operations. We will continue this work to minimize the impacts of external
market changes that may affect our predictability and operations.

During the second quarter, we took cost saving measures which we expect to
contribute to our profitability in the second half year. These measures caused
minor non-recurring costs in the second quarter. We will continue promoting
projects like this to enable us to alter our cost structure towards increasing
flexibility. The decisions that we have made and measures we have taken earlier
have proven to be correct and brought us the cost flexibility that we have
needed.

There were no significant changes in the overall demand situation during the
second quarter, but it is our opinion that the weakening consumption and
economic indicators will make it more difficult to predict the developments in
the fall. We also feel that this will have an impact on the start-up schedules
of new projects and on general investment readiness in an uncertain time. The
postponement of decisions on large projects and the general economic
uncertainty may impact also our operations in the coming fall.

As to our long-term and large-scale clients, our operations have continued much
in the same way as last year. These long-term client relationships, which are
based on mutual confidence, have significantly contributed to our fairly
balanced economic situation.

During the second half year, we will start strategy work to define our goals
from 2015 onwards. I feel that after this strategy period, which will end in
2014, we should follow the current strategy lines but at the same time look for
new, sufficiently challenging and bold goals. With the security of our clients'
continuity as our first priority, we will seek new directions for our
operations.

We wish all our stakeholders the very best for the summer season!”

BUSINESS ENVIRONMENT AND BUSINESS DEVELOPMENT

Solteq is a leading retail and service industry software service company. We
offer long-term partnership and the markets' widest range of retail and service
industry software services, from the optimisation of the entire supply chain to
the management of consumer-customer information. Our technology-independent
solutions help our customers to guide their business operations as efficiently
and profitably as possible.

Solteq Plc's reported segments are Grocery and special retail, HoReCa;
Wholesale trade, Logistics and Services and Service Business and Maintenance
Management.

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 2013 was 19.716 thousand euros (19.290
thousand euros).

Solteq's operating profit was 1.080 thousand euros (1.342 thousand euros). The
operating profit for the collation period includes a total of 276 thousand EUR
of one-time profit and expenses as gross.

The company's operating margin was 5.5 % (6.9 % in 2012, cleared from one-time
profit and expenses 5.5 %).

Grocery and Special Retail, HoReCa

Solteq's Grocery and Special Retail Segment provides its clients with total
solutions that they can utilise to improve efficiency in terms of logistics,
store operations, customer service, point of sale operations, as well as loyal
customer management.

The grocery and special retail solutions help optimise the management of the
product selection, space, deliveries, logistics and customer satisfaction while
increasing sales and improving the result. The solutions speed up the basic
operations, improve delivery reliability, reduce storage value, increase stock
turnover and enhance predictability. The store always has the right products in
the right place, at the right time, and at the right price.

During the review period the revenue of the Grocery and Special Retail segment
totalled 9.3 million euros and the operating result was 0.7 million euros.

Wholesale Trade, Logistics and Services

Solteq's Wholesale Trade, Logistics and Services Segment provides its clients
with ERP and financial management systems, as well as optimisation, integration
and reporting solutions that support these systems.

Solteq's solutions help clients manage their operations and enhance purchases,
sales, stock management and reporting. The systems can be utilised to improve
delivery reliability, reduce storage value, increase stock turnover and enhance
predictability. Materials flow management ensures that the right goods reach
the right customers at the right time, packed in an optimal manner.

Solteq's wholesale trade, logistics and services systems improve the
effectiveness of operations and enable more flexible and versatile customer
service. At the same time, automated data management enhances the company's
internal operations. Solteq's solutions are used daily by a large number of
clients representing various industries and sectors, such as wholesale, retail
and public administration.

During the review period the revenue of the Wholesale Trade, Logistics and
Services segment totalled 7.7 million euros and the operating result was 0.0
million euros. In the second quarter, two major projects in progress had an
adverse effect on the result level of the Wholesale Trade, Logistics and
Services Unit. Corrective measures are, however, being taken.

Service Business and Maintenance Management

Solteq's Service Business and Maintenance Management Segment provides its
clients with ERP and master data management solutions.

The enterprise resource planning solutions developed for the optimisation of
service processes help clients manage their operations in many ways, for
instance enhance production plant reliability, task and resources management,
field work, sales and customer service, partner network management and
materials management. The solutions are utilised by a large number of clients
representing various industries and sectors, such as energy production,
maintenance services, life cycle services, engineering and technical services
of cities and municipalities, property management services, and home and care
services.

The Service Business and Maintenance Management Segment also provides client
companies with services and products related to business critical data (master
data) in the form of master data improvement projects, data maintenance
services outsourced to master data service centres, software technologies for
master data management, and consultation services. The aim of these services is
to ensure that the data in the systems that support the clients' enterprise
resource planning and decision making processes are of high quality, compatible
and up-to-date. Solteq's master data management solutions are used by clients
across industries and sectors.

During the review period the revenue of the Enterprise resource planning of
services segment totalled 2.7 million euros and the operating result was 0.4
million euros.

TURNOVER AND RESULT

Turnover increased by 2.2 % compared to the previous review period and totalled
19.716 thousand euros (previous review period 19.290 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 was 1.080 thousand euros (1.342 thousand
euros), the operating profit before taxes was 973 thousand euros (1.157
thousand euros) and the operating profit for the review period was 745 thousand
euros (745 thousand euros).

Due to successful customer projects and the intensification and specification
of own activities, the company has managed to maintain the turnover and level
of EBIT at the level of the year of comparison despite the weakened general
market situation.

During the second quarter, we put into practice cost saving measures were which
are estimated to contribute to some extend to our relative profitability in the
second half year.

BALANCE SHEET AND FINANCING

The total assets amounted to 26.239 thousand euros (26.196 thousand euros).
Liquid assets totalled 1.823 thousand euros (389 thousand euros). In addition
to liquid assets the company had unused account limits totalling 1.500 thousand
euros at the end of the review period. Solteq Group's interest-bearing
liabilities were 6.148 thousand euros (7.353 thousand euros).

Solteq Group's equity ratio was 39.1 per cent (36.6 per cent).

INVESTMENTS, RESEARCH AND DEVELOPMENT

Net investment during the review period was 612 thousand euros (6.992 thousand
euros).

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, Symphony EYC and Microsoft 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 (none in the reference year, either).

PERSONNEL

The number of permanent employees at the end of the review period was 293
(291). The average number of personnel during the review period was 290 (238).
In the end of the review period the number of personnel could be divided as
follows: Grocery and special retail, HoReCa segment: 98 people; Wholesale
trade, Logistics and Services: 95 people; Service Business and Maintenance
Management segment: 42 people and 58 people in shared functions.

RELATED PARTY TRANSACTIONS

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

the management team. There has not been any significant changes related parties
after the 2012 year end closing.

SHARES, SHAREHOLDERS AND TREASURY SHARES

Solteq Plc's equity on 30.6.2013 was 1.009.154,17 euros which was represented
by 14.998.061 shares. The shares have no nominal value.

At the end of the review period, the amount of treasury shares in Solteq Plc
and the group companies Solteq Management Oy's and Solteq Management Team Oy's
possessions were 773.404 shares. The amount of treasury shares represented 5.2
% of the total amount of shares and votes at the end of the review period. The
equivalent value of acquired shares was 52.039 euros.

During the review period, 2.4.2013 one flagging announcement was made. The
Mutual Insurance Company Pension Fennia and LocalTapiola Mutual Pension
Insurance Company will form a new Pension Company starting from 1.1.2014. The
merger still requires the acceptance from the authorities and the general
meeting. If the merger is realized, this leads to a situation where the new
company owns more than 10 % of the shares and votes in Solteq Plc.

Exchange and share price

During the review period, the exchange of Solteq's shares on the Helsinki Stock
Exchange was 0.5 million shares (1.1 million shares) and 0.7 million euros (1.2
million euros). The highest price during the review period was 1.77 euros and
the lowest price was 1.20 euros. The weighted average price of the share was
1.47 euros and the price ending was 1.49 euros. The market value of the
company's shares in the end of the review period totalled 22.3 million euros
(16.5 million euros).

Ownership

At the end of the review period, Solteq had a total of 1.767 shareholders
(1.810 shareholders). Solteq's 10 largest shareholders owned 11.308 thousand
shares, amounting to 75.4 per cent of the company's shares and votes. Solteq
Plc board members owned a total of 5.523 thousand shares which equals 36.8 per
cent of the company's shares and votes.

ANNUAL GENERAL MEETING

At Solteq Plc's Annual General Meeting on 15 March 2013 the 2012 financial
statements were adopted and the members of the board and the managing director
were discharged from liability for the 2012 review period.

In the meeting was accepted the proposal by the board that for the financial
year 2012, there will be paid a dividend of 0.04 euros per each share on the
market. In addition to this, the annual general meeting authorized the board to
decide on a distribution of dividend, or other distribution of funds from the
equity trust, for an amount of maximum 0.04 euros. The board is also allowed to
decide on the timing and other details of this.

The Annual General Meeting authorized the board to acquire or pledge the
company's own shares in such a way that the amount of own shares can be at any
time maximum 10 per cent of the whole amount of company shares. With this
authorization, shares can be acquired or pledged in order to develop the equity
structure; or to be used as part of the personnel incentive system; or as a
funding or for the realization of acquisitions of another company; or for other
business arrangements; or they can be disclosed or invalidated. These shares
can be acquired also in other ratios than the shareowners ownership ratio. The
shares should be acquired from the public stock exchange. The board can decide
on the other conditions for this procedure. This authorization is valid until
next annual general meeting.

The Annual General Meeting authorized the board to decide on an issue of shares
for a maximum amount of 3 000 000 new or existing shares, owned by the company,
in one or several lots. The issue of shares should be implemented as a directed
issue, on the contrary to shareowners subscription rights. With this
authorization the board decides on all other conditions for the share issue.
This authorization is valid until next Annual General Meeting.

BOARD OF DIRECTORS AND AUDITORS

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

KPMG Oy Ab, Authorized Public Accountants, is re-elected as Solteq's auditors.
Lotta Nurminen, APA, was elected to act as the chief auditor.

EVENTS AFTER THE REVIEW PERIOD

No events have occurred that require reporting after the review period.

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

Solteq Plc estimates that for 2013 our turnover to be approx. 40-43 million EUR
the level of EBIT approx. 6-9 %.

Financial Reporting

This interim report has been prepared in accordance with the recognition and
measurement principles of IFRS-standards as is Financial Statements 2012.

The financial result is reported through three business areas: Grocery and
special retail, HoReCa; Wholesale Trade, Logistics and Services and Service
Business and Maintenance 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.-
30.6.2013 30.6.2012 30.6.2013 30.6.2012 31.12.2012
NET TURNOVER 9 729 10 441 19 716 19 290 39 016
Other operating
income 4 0 8 891 900
Raw materials and
services -2 103 -2 870 -4 288 -5 083 -10 369
Staff expenses -5 297 -5 440 -10 339 -9 812 -19 304
Depreciation and -310 -299 -609 -526 -1 126
impairments
Other operating
expenses -1 487 -1 440 -3 408 -3 419 -6 386
OPERATING RESULT 536 393 1 080 1 342 2 731
Financial income and
expenses -44 -73 -107 -185 -298
RESULT BEFORE TAXES 492 320 973 1 157 2 433
Income taxes -107 -68 -228 -412 -735
RESULT FOR THE PERIOD
385 252 745 745 1 697
OTHER ITEMS OF TOTAL COMPREHENSIVE
INCOME
Cash flow hedging 0 -31 20 -12 -45
Other items of total comprehensive
income
after taxes 0 -23 15 -9 -34
TOTAL COMPREHENSIVE
INCOME
385 229 760 736 1 663
Total profit for the period
attributable to
Owners of the parent 385 252 745 745 1 697
Total comprehensive income
attributable to
Owners of the parent 385 229 760 736 1 663
Earnings / share,
e(undiluted) 0,02 0,02 0,05 0,06 0,12
Earnings / share,
e(diluted) 0,02 0,02 0,05 0,06 0,12
Taxes corresponding to the result have been presented as taxes
for the period.

GROUP BALANCE SHEET (TEUR) 30.6.2013 30.6.2012 31.12.2012
ASSETS
NON-CURRENT ASSETS
Intangible assets
Intangible rights 3 221 3 845 3 590
Goodwill 12 730 12 728 12 728
Tangible assets 1 313 924 942
Investments
Other shares and similar
rights of ownership 546 523 538
Trade receivables 63 67 63
Total non-current
assets 17 873 18 087 17 861
CURRENT ASSETS
Inventories 91 81 126
Short-term debtors 6 452 7 638 7 867
Cash and cash equivalents 1 823 389 1 242
Total current
assets 8 366 8 108 9 235
TOTAL ASSETS 26 239 26 196 27 096
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 -933 -933
Share premium account 74 74 75
Account for cash flow
hedging -34 -24 -49
Unrestricted equity
fund 6 392 6 817 6 368
Retained earnings 3 004 1 911 1 910
Result for the
financial period 745 745 1 697
Total equity 10 257 9 599 10 077
Non-current liabilities
Deferred tax liabilities 1 064 166 1 048
Other non-current liabilities 4 448 5 327 4 827
Current liabilities 10 470 11 103 11 144
Total liabilities 15 982 16 596 17 019
TOTAL EQUITY AND
LIABILITIES 26 239 26 196 27 096

FINANCIAL PERFORMANCE 1-6/2013 1-6/2012 1-12/2012
INDICATORS (IFRS)
Net turnover MEUR 19,7 19,3 39,0
Change in net turnover 2,2 % 36,2 % 43,7 %
Operating result MEUR 1,1 1,3 2,7
% of turnover 5,5 % 6,9 % 7,0 %
Result before taxes MEUR 1,0 1,2 2,4
% of turnover 4,9 % 6,0 % 6,2 %
Equity ratio, % 39,1 36,6 37,2
Gearing, % 42,2 % 72,5 % 51,5 %
Gross investments in
non-current assets MEUR 0,6 7,0 7,4
Return on equity, % 15,1 % 19,7 % 21,2 %
Return on investment, % 13,4 % 20,0 % 20,8 %
Personnel at end of
period 293 291 288
Personnel average
for period 290 238 270
KEY INDICATORS PER SHARE
Earnings / share, e 0,05 0,06 0,12
Earnings / share,
e(diluted) 0,05 0,06 0,12
Equity / share, e 0,68 0,68 0,67
SEGMENT INFORMATION
Turnover by segment:
Me 1-6/13 1-6/12 Change
Grocery and special retail, HoReCa 9,3 7,5 +1,8
Wholesale trade, Logistics and
Services 7,7 9,1 -1,4
Service Business and
Maintenance Management 2,7 2,7 0,0
Total 19,7 19,3 +0,4
Operating result by segment:
Me 1-6/13 1-6/12 Change
Grocery and special retail, HoReCa 0,7 0,4 +0,3
Wholesale trade, Logistics and
Services 0,0 1,2 -1,2
Service Business and
Maintenance Management 0,4 -0,3 +0,7
Total 1,1 1,3 -0,2

QUARTERLY KEY INDICATORS (MEUR)
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
3Q/12 4Q/12 1Q/13 2Q/13
Net turnover 8,52 11,21 9,99 9,73
Operating result 0,51 0,88 0,54 0,54
Result before taxes 0,44 0,84 0,48 0,49

CASH FLOW STATEMENT (MEUR)
1-6/2013 1-6/2012 1-12/2012
Cash flow from business
operations 2,07 -0,27 2,28
Cash flow from capital
expenditure -0,62 -5,58 -5,95
Cash flow from financing activities
Own shares 0,00 -0,10 -0,10
Dividend distribution -0,60 0,00 0,00
Return of equity (paid) 0,00 0,00 -0,45
Directed issue 0,00 3,02 3,02
Loan agreements -0,27 3,04 2,17
Cash flow from financing
activities -0,87 5,96 4,64
Change in cash and cash
equivalents 0,58 0,11 0,97
TOTAL INVESTMENTS (TEUR)
1-6/2013 1-6/2012 1-12/2012
Continuing operations,
group total 612 6 992 7 439
LIABILITIES (MEUR) 30.6.2013 30.6.2012 31.12.2012
Company quorantee for
credit limits 10,00 10,00 10,00
Lease contracts, machinery &
equipment 0,06 0,82 0,10
Lease liability,
premises 3,71 4,60 4,08
MAJOR SHAREHOLDERS JUNE 30, 2013
Shares and votes
Number %
1. Saadetdin Ali 3 481 383 23,2
2. Eläke-Fennia Keskinäinen vakuutusyhtiö 2 000 000 13,3
3. Profiz Business Solution Oyj 1 740 180 11,6
4. Aalto Seppo 1 662 206 11,1
5. Keskinäinen Työeläkevakuutusyhtiö Varma 644 917 4,3
6. Pirhonen Jalo 513 380 3,4
7. Solteq Management Oy 400 000 2,7
8. Roininen Matti 359 000 2,4
9. Solteg Management Team Oy 350 000 2,3
10. Saadetdin Katiye 156 600 1,0
10 largest shareholders total 11 307 666 75,4
Total of nominee-registered 20 047 0,1
Others 3 670 348 24,5
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 1.1.2012 1 009 -835 75 -14 3 800 1 910 5 945
Total comprehensive income -9 745 736
Acquiring of own shares -99 -99
Directed issue 3 017 3 017
EQUITY 30.6.2012 1 009 -933 74 -24 6 817 2 656 9 599
EQUITY 1.1.2013 1 009 -933 75 -49 6 368 3 607 10 077
Total comprehensive income 15 745 760
Directed issue 24 24
Dividend distribution -603 -603
EQUITY 30.6.2013 1 009 -933 74 -34 6 392 3 749 10 257

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

Financial Reporting

Solteq Plc's financial information bulletins in 2013 have been scheduled as
follows:

• Interim Report 1-9/2013 on Friday October 18, 2013 at 9 am

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

Additional information:

CEO Repe Harmanen,

Tel +358 400 467 717,

E-mail repe.harmanen@solteq.com

CFO Antti Kärkkäinen,

Tel+358 40 8444 393,

E-mail antti.karkkainen@solteq.com

Distribution:

NASDAQ OMX Helsinki

Key media

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