Solteq Oyj

Quarterly Report • Apr 24, 2013

SOLTEQ PLC'S INTERIM REPORT 1.1.-31.3.2013

Solteq Plc Stock Exchange Bulletin 24.4.2013 at 9.00 am

• Solteq Plc's turnover increased 12.9 per cent and totalled 10.0 million euros (8.8 million euros).

• Solteq Plc's operating profit totalled 544 thousand euros (949 thousand euros). The operating profit for the collation period includes a total of 276 thousand EUR of one-time profit and expenses as gross.

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

• Earnings per share were 0.03 euros (0.04 euros).

KEY FIGURES

Turnover by operation:

%	1-3/13	1-3/12	1-12/12
Softwareservices	67	64	61
Licences	27	31	32
Hardware	6	5	7

CEO Repe Harmanen:

"In the first quarter, our growth continued at the same level as last year. On-going projects proceeded as planned and several new solutions were delivered to serve our clients.

We fell slightly behind the comparable performance target before non-recurring items but we will continue taking systematic measures to reach the target performance level.

The growth in the turnover continued in some of our units, but our emphasis continues to be on overall profit making ability. We are pleased to be able to state that the business areas in which we have faced challenges before are now on a good growth and performance path. Preparation for the large projects which will be completed later this year has, however, impacted our profitability in the first quarter.

There have been no major changes in the demand for solutions in the sectors that are important to us, but we are monitoring the situation to be able to react to possible changes. The prevailing uncertainty in the economy and consumption seems to delay decisions to launch large new projects. During the review period, we also encountered a few cases like this.

During the first quarter, we continued the implementation of our strategy. This year, we will also review the strategy period ending in 2014 and estimate possible improvement needs. We will report on this process separately during the course of this year.

In the second quarter, we will continue our measures to make us increasingly more flexible and better prepared for possible changes in the market situation."

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 quarter of was 9.987 thousand euros (8.849 thousand euros).

Solteq's operating profit was 544 thousand euros (949 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 % (10.7 % in 2012, cleared from one-time profit and expenses 7.6 %).

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 4.7 million euros and the operating result was 0.6 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 3.9 million euros and the operating result was -0.2 million euros.

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-todate. 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 1.4 million euros and the operating result was 0.2 million euros.

TURNOVER AND RESULT

Turnover increased by 12.9 % compared to the previous year and totalled 9.987 thousand euros (previous review period 8.849 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 544 thousand euros (949 thousand euros), the operating profit before taxes was 481 thousand euros (837 thousand euros) and the operating profit for the review period was 360 thousand euros (493 thousand euros).

BALANCE SHEET AND FINANCING

The total assets amounted to 27.522 thousand euros (26.760 thousand euros). Liquid assets totalled 2.169 thousand euros (1.455 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 6.333 thousand euros (7.175 thousand euros).

Solteq Group's equity ratio was 35.9 per cent (35.5 per cent).

INVESTMENTS, RESEARCH AND DEVELOPMENT

Net investment during the review period was 420 thousand euros (6.891 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 290 (288). The average number of personnel during the review period was 289 (218). In the end of the review period the number of personnel could be divided as follows: Grocery and special retail, HoReCa segment: 103 people; Wholesale trade, Logistics and Services: 95 people; Service Business and Maintenance Management segment: 40 people and 52 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 31.3.2013 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.

After 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 0.3 million shares (0.7 million shares) and 0.5 million euros (0.7 million euros). The highest price during the review period was 1.65 euros and the lowest price was 1.20 euros. The weighted average price of the share was 1.45 euros and the price ending was 1.46 euros. The market value of the company's shares in the end of the review period totalled 21.9 million euros (13.7 million euros).

Ownership

At the end of the review period, Solteq had a total of 1.795 shareholders (1.821 shareholders). Solteq's 10 largest shareholders owned 11.298 thousand shares, amounting to 75.3 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)

	1.1.- 31.3.2013	1.1.- 31.3.2012	1.1.- 31.12.2012
NET TURNOVER	9 987	8 849	39 016
Other operating income	4	891	900
Raw materials and services	-2 185	-2 213	-10 369
Staff expenses	-5 042	-4 372	-19 304
Depreciation and impairments	-299	-227	-1 126
Other operating expenses	-1 921	-1 979	-6 386
OPERATING RESULT	544	949	2 731
Financial income and expenses	-63	-112	-298
RESULT BEFORE TAXES	481	837	2 433
Income taxes	-121	-344	-735
RESULT FOR THE PERIOD	360	493	1 697
OTHER ITEMS OF TOTAL COMPREHENSIVE INCOME Cash flow hedging	20	19	-45
Other items of total comprehensive income after taxes	15	14	-34

TOTAL COMPREHENSIVE INCOME

	375	507	1 663
Total profit for the period attributable to Owners of the parent	360	493	1 697
Total comprehensive income attributable to Owners of the parent	375	507	1 663
Earnings / share, e(undiluted) Earnings / share,	0,03	0,04	0,12
e(diluted)	0,03	0,04	0,12
Taxes corresponding to the result have been presented as taxes for the period.
GROUP BALANCE SHEET (TEUR)	31.3.2013	31.3.2012	31.12.2012
ASSETS
NON-CURRENT ASSETS
Intangible assets Intangible rights Goodwill	3 408 12 730	4 022 12 728	3 590 12 728
Tangible assets	1 276	944	942
Investments Other shares and similar rights of ownership	546	524	538
Trade receivables	63	67	63
Total non-current assets	18 023	18 285	17 861
CURRENT ASSETS
Inventories	101	0	126
Short-term debtors	7 229	7 020	7 867
Cash and cash equivalents	2 169	1 455	1 242
Total current assets	9 499	8 475	9 235

TOTAL ASSETS	27 522	26 760	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	75	75	75
Account for cash flow
hedging	-34	0	-49
Unrestricted equity
fund	6 392	6 935	6 368
Retained earnings	3 004	1 911	1 910
Result for the
financial period	360	493	1 697
Total equity	9 873	9 490	10 077
Non-current liabilities
Deferred tax liabilities	1 196	47	1 048
Other non-current liabilities	4 562	5 568	4 827
Current liabilities	11 891	11 655	11 144
Total liabilities	17 649	17 270	17 019
TOTAL EQUITY AND
LIABILITIES	27 522	26 760	27 096
FINANCIAL PERFORMANCE	1-3/2013	1-3/2012	1-12/2012
INDICATORS (IFRS)
Net turnover MEUR	10,0	8,8	39,0
Change in net turnover	12,9 %	29,2 %	43,7 %
Operating result MEUR	0,5	0,9	2,7
% of turnover	5,5 %	10,7 %	7,0 %
Result before taxes MEUR	0,5	0,8	2,4
% of turnover	4,8 %	9,5 %	6,2 %
Equity ratio, %	35,9	35,5	37,2
Gearing, %	42,2 %	60,3 %	51,5 %
Gross investments in
non-current assets MEUR	0,4	6,9	7,4
Return on equity, %	15,1 %	26,8 %	21,2 %
Return on investment, %	13,8 %	27,7 %	20,8 %
Personnel at end of
period	290	288	288

Personnel average for period	289		218	270
KEY INDICATORS PER SHARE
Earnings / share, e Earnings / share,	0,03		0,04	0,12
e(diluted)	0,03		0,04	0,12
Equity / share, e	0,66		0,67	0,67
SEGMENT INFORMATION
Turnover by segment:
Me	1-3/13	1-3/12		Change
Grocery and special retail, HoReCa Wholesale trade, Logistics and	4,7		3,1	+1,6
Services Service Business and	3,9		4,4	-0,5
Maintenance Management	1,4		1,3	+0,1
Total	10,0		8,8	+1,2
Operating result by segment:
Me	1-3/13	1-3/12		Change
Grocery and special retail, HoReCa Wholesale trade, Logistics and	0,6		0,2	+0,4
Services Service Business and	-0,2		0,9	-1,1
Maintenance Management	0,2		-0,1	+0,3
Total	0,5		0,9	-0,4
QUARTERLY KEY INDICATORS (MEUR)
Net turnover	2Q/11 7,32	3Q/11 5,32	4Q/11 7,65	1Q/12 8,85
Operating result	0,32	0,29	0,47	0,95
Result before taxes	0,27	0,26	0,43	0,87
	2Q/12	3Q/12	4Q/12	1Q/13
Net turnover Operating result	10,4 0,39	8,52 0,51	11,21 0,88	9,99 0,54
Result before taxes	0,32	0,44	0,84	0,48

CASH FLOW STATEMENT (MEUR)

	1-3/2013	1-3/2012	1-12/2012
Cash flow from business
operations	2,00	0,65	2,28
Cash flow from capital
expenditure	-0,46	-5,47	-5,95
Cash flow from financing activities
Own shares	0,00	-0,09	-0,10
Dividend distribution	-0,52	0,00	0,00
Return of equity (paid)	0,00	0,00	-0,45
Directed issue	0,00	3,13	3,02
Loan agreements	-0,09	2,96	2,17
Cash flow from financing
activities	-0,61	6,00	4,64
Change in cash and cash
equivalents	0,93	1,18	0,97
TOTAL INVESTMENTS (TEUR)
	1-3/2013	1-3/2012	1-12/2012
Continuing operations,
group total	420	6 891	7 439
LIABILITIES (MEUR)	31.3.2013	31.3.2012	31.12.2012
Company quorantee for
credit limits	10,00	10,00	10,00
Lease contracts, machinery &
equipment	0,08	0,86	0,10
Lease liability,
premises	3,89	4,55	4,08

MAJOR SHAREHOLDERS MARCH 31, 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	1 730 170	11,5
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	11 297 656	75,3 %
Total of nominee-registered	20 047	0,1 %
Others	3 680 358	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				14		493	507
Acquiring of own shares Directed issue		-99			3 135		-99 3 135
EQUITY 31.3.2012	1 009	-933	75	0	6 935	2 404	9 490
EQUITY 1.1.2013	1 009	-933	75	-49	6 368	3 607	10 077
Total comprehensive income				15		360	375
Directed issue Dividend distribution					24	-599	24 -599
EQUITY 31.3.2013	1 009	-933	75	-34	6 392	3 364	9 873

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
pre-tax result - taxes
+/- minority interest
corrected number of shares
Diluted earnings per share
diluted profit before taxation -
taxes +/- minority interest
diluted average share issue
corrected number of shares
equity
	------------------------------------------- ---------------------------------------- ---------------------------------------- ------------------------------------ diluted average share issue ----------------------------------------------- ----------------------- number of shares

Financial Reporting

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

• Interim Report 1-6/2013 on Wednesday July 17, 2013 at 9 am
• 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 20 1444 393 or +358 40 8444 393, E-mail antti.karkkainen@solteq.com

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