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Teleste Oyj — Audit Report / Information 2015
Feb 4, 2016
3345_rns_2016-02-04_0b0b61b6-8d13-4ab2-95ff-b90bcbefc487.html
Audit Report / Information
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FINANCIAL STATEMENTS OF TELESTE CORPORATION 1 JANUARY TO 31 DECEMBER 2015
FINANCIAL STATEMENTS OF TELESTE CORPORATION 1 JANUARY TO 31 DECEMBER 2015
RECORD LEVEL NET SALES AND OPERATING PROFIT IN 2015
Turku, Finland, 2016-02-04 07:30 CET (GLOBE NEWSWIRE) --
TELESTE CORPORATION FINANCIAL STATEMENTS 4.2.2016 AT 08:30
FINANCIAL STATEMENTS OF TELESTE CORPORATION 1 JANUARY TO 31 DECEMBER 2015
RECORD LEVEL NET SALES AND OPERATING PROFIT IN 2015
Fourth quarter of 2015
- Net sales amounted to EUR 68.4 (53.9) million, an increase of 27.0%
- Operating profit stood at EUR 3.3 (3.5) million, a decrease of 7.1%
- Undiluted result per share equalled EUR 0.16 (0.17), a decrease of 8.0%
- Orders received totalled EUR 68.2 (53.0) million, an increase of 28.7%
- Cash flow from operations was EUR 3.5 (7.5) million, a decrease of 53.7%
January-December 2015
- Net sales amounted to EUR 247.8 (197.2) million, an increase of 25.7%
- Operating profit stood at EUR 14.3 (11.1) million, an increase of 28.4%
- Undiluted earnings per share stood at EUR 0.61 (0.48), an increase of 27.6%
- Orders received totalled EUR 251.3 (199.3) million, an increase of 26.1%
- Cash flow from operations was EUR 4.9 (9.2) million, a decrease of 46.7%
The Board of Directors proposes that a dividend of EUR 0.23 (0.20) per
outstanding share will be paid.
Outlook for 2016
We estimate that net sales and operating profit for 2016 will exceed the 2015
level.
Comments on the last quarter of 2015 by CEO Jukka Rinnevaara:
"Orders received and net sales from the fourth quarter were the best in
Teleste's history. Also, the order backlog surpassed the previous year,
particularly in access network products, whereas the operating profit fell from
the comparative period. Operating profit was impacted negatively by the
weaker-than-expected profitability of the services business and the fact that
the main part of deliveries in access network products fell on lower-margin
products subject to competition. Moreover, fixed costs were exceptionally at a
higher level than those of the previous quarters. Management of working capital
called for special attention as the business continued to grow rapidly.
Orders received by Video and Broadband Solutions grew, especially in the access
network products and in the information solutions by Mitron. Net sales, too,
increased in the said product groups. For the access network products, the most
significant increase in the orders received and the deliveries took place in
the UK, Belgium and Holland. We estimate that Teleste's position remained
strong in the new products complying with the Docsis 3.1 standard. In the
fourth quarter, deliveries and profitability in the Video Security and
Information solutions remained at a good level.
Net sales of Network Services reached the level of the comparative period,
whereas the operating profit remained below that of the comparative period.
Operating profit decreased in the UK, where the launch of new customer projects
and the expansion of business continued to cause losses. In Germany, operating
profit fell slightly short of the comparative period."
Group Operations in October-December 2015
Key figures (M€)
10-12/2015 10-12/2014 Change
Orders received 68.2 53.0 +28.7%
Net sales 68.4 53.9 +27.0%
EBIT 3.3 3.5 -7.1%
EBIT % 4.8% 6.5%
Profit for the period 2.9 3.1 -6.3%
Other important key figures
Earnings per share, EUR 0.16 0.17 -8.0%
Cash flow from operations, M€ 3.5 7.5 -53.7%
The fourth-quarter orders received by Teleste Group increased by 28.7% and
stood at EUR 68.2 (53.0) million. Order backlog totalled EUR 42.2 (15.2)
million.
Net sales grew by 27.0% to EUR 68.4 (53.9) million, which is the highest
quarterly net sales in Teleste’s history. Net sales increased influenced by the
Mitron acquisition and organically in the Video and Broadband Solutions
business area.
Expenses for material and production services increased and amounted to 54.5%
(50.0%) of the net sales. Personnel expenses totalled EUR 18.1 (16.4) million,
an increase of 10.2%. These expenses were pushed up by the number of personnel,
which increase by 12.1%. Depreciation, amortisation, and other fixed operating
expenses increased by 23.2% to EUR 10.8 (8.8) million. This increase in
expenses was particularly affected by the Mitron acquisition. Operating profit
decreased by 7.1% to EUR 3.3 (3.5) million, representing 4.8% (6.5%) of the net
sales. Other income includes reversed provision of EUR 0.7 million, which
relates to the supplementary contract price of the Mitron acquisition. Taxes
stood at EUR 0.2 (0.3) million. Undiluted result per share was EUR 0.16 (0.17).
Cash flow from operations equalled EUR 3.5 (7.5) million, a decrease of 53.7%
due to an increase in net working capital. The single most significant reason
behind this growth in net working capital was the expansion of business of
Video and Broadband Solutions.
Group Operations in January-December 2015
Key figures (M€)
1-12/2015 1-12/2014 Change
Orders received 251.3 199.3 +26.1%
Net sales 247.8 197.2 +25.7%
EBIT 14.3 11.1 +28.4%
EBIT % 5.8% 5.6%
Profit for the financial period 11.0 8.5 +29.8%
Other important key figures
Earnings per share, EUR 0.61 0.48 +27.6%
Cash flow from operations, M€ 4.9 9.2 -46.7%
Net gearing, % 26.3% 9.5%
Equity ratio, % 48.3% 53.4%
Personnel at period-end 1,506 1,343 +12.1%
Orders received by the Group improved by 26.1 % standing at EUR 251.3 (199.3)
million. Net sales increased 25.7 % equalling EUR 247.8 (197.2) million.
Expenses for material and production services increased and amounted to 51.8%
(49.5%) of the net sales. Personnel expenses totalled EUR 70.5 (59.5) million,
an increase of 18.5%. Personnel expenses were increased by the number of
personnel and exchange rate changes. Depreciation, amortisation, and other
fixed operating expenses increased by 18.9% to EUR 37.5 (31.5) million. This
increase in the fixed expenses was particularly affected by the Mitron
acquisition. Operating profit grew by 28.4 % standing at EUR 14.3 (11.1)
million. Taxes for the Group amounted to EUR 2.9 (2.4) million while the tax
rate equalled 21.0% (21.7%). Undiluted earnings per share increased by 27.6% to
EUR 0.61 (0.48). Cash flow from operations decreased by 46.7% to EUR 4.9 (9.2)
million. The cash flow was negatively affected, in particular, by the working
capital tied to the growth of Video and Broadband Solutions.
Video and Broadband Solutions October-December 2015
1,000 euros 10-12/2015 10-12/2014 Change
Orders received 43,419 28,642 +51.6%
Net sales 43,584 29,500 +47.7%
EBIT 2,666 2,616 +1.9%
EBIT, % 6.1% 8.9%
Year-on-year orders received improved by 51.6% standing at EUR 43.4 (28.6)
million. Order backlog totalled EUR 42.2 (15.2) million. Net sales grew by
47.7% amounting to EUR 43.6 (29.5) million. Net sales were increased by the
Mitron information solutions and increased deliveries of access network
products. Operating profit increased by 1.9% standing at EUR 2.7 (2.6) million
and making 6.1% (8.9%) of the net sales. Operating profit from Video Security
and Information solutions increased while the profitability of the access
network products was weaker than in the comparative period.
R&D expenses amounted to EUR 3.2 (2.6) million, i.e. 7.4% (8.8%) of the
business area's net sales. Product development projects focused on network
products complying with the Docsis 3.1 standard, video security and information
solutions, as well as customer-specific projects. Capitalized R&D expenses
amounted to EUR 0.8 (0.4) million. Depreciation on activated R&D expenses
amounted to EUR 0.4 (0.3) million.
Video and Broadband Solutions in January-December 2015
1,000 euros 1-12/2015 1-12/2014 Change
Orders received 157,951 109,007 +44.9%
Net sales 154,396 106,901 +44.4%
EBIT 12,781 9,673 +32.1%
EBIT % 8.3% 9.0%
Year-on-year orders received improved by 44.9% standing at EUR 158.0 (109.0)
million. Net sales grew by 44.4% amounting to EUR 154.4 (106.9) million. Orders
and net sales were increased by the Mitron information solutions and access
network products. Operating profit increased by 32.1% standing at EUR 12.8
(9.7) million and making 8.3% (9.0%) of the net sales. The operating profit was
improved by the information solutions and an improvement in profitability of
the IP headend business.
Product development expenses equalled EUR 11.0 (10.3), i.e. 7.1% (9.6%) of the
net sales. Product development projects focused on network products complying
with the Docsis 3.1 standard, a network management system, distributed access
architecture, video security and information solutions, as well as
customer-specific projects. Capitalized R&D expenses amounted to EUR 1.7 (1.1)
million. Depreciation on activated R&D expenses amounted to EUR 1.1 (1.2)
million.
Network Services in October-December 2015
1,000 euros 10-12/2015 10-12/2014 Change
Orders received 24,809 24,367 +1.8%
Net sales 24,809 24,367 +1.8%
EBIT 607 909 -33.2%
EBIT % 2.4% 3.7%
Year-on-year orders received and net sales increased by 1.8% amounting to EUR
24.8 (24.4) million. Operating profit decreased by 33.2% standing at EUR 0.6
(0.9) million, which is 2.4% (3.7%) of the net sales. Operating profit
decreased in the UK, where the launch of new customer projects and the
expansion of business caused losses. Operating profit was below the comparative
period also in Germany but improved in other markets.
Network Services in January-December 2015
1,000 euros 1-12/2015 1-12/2014 Change
Orders received 93,362 90,275 +3.4%
Net sales 93,362 90,275 +3.4%
EBIT 1,520 1,463 +3.9%
EBIT % 1.6% 1.6%
Year-on-year orders received and net sales increased by 3.4% amounting to EUR
93.4 (90.3) million. Net sales increased in Switzerland and the UK. Operating
profit increased by 3.9% standing at EUR 1.5 (1.5) million and making 1.6%
(1.6%) of the net sales. Operating profit weakened in the UK and was a loss.
Operating profit was below the comparative period also in Germany but improved
in other markets.
Personnel and Organisation in January-December 2015
In the period under review, the average number of people employed by the Group
was 1,485 (1,302/2014, 1,306/2013); of these 697 (560) were employed by Video
and Broadband Solutions, and 788 (741) by Network Services. At the end of the
review period, the Group employed 1,506 people (1,343/2014, 1,261/2013) of whom
68% (72%/2014, 71%/2013) were stationed abroad. About 3% of the Group's
employees were working outside Europe.
Personnel expenses increased from the previous year by 18.5% to EUR 70.5
(59.5/2014 and 56.9/2013) million. This growth in personnel expenses was due to
the Mitron acquisition, increased number of personnel abroad and exchange rate
changes. From the beginning of the reporting period, the number of employees
increased by more than 160 people. The average number of employees increased by
14.2%. Most of this growth resulted from the Mitron acquisition, but also the
number of personnel employed by Network Services increased.
Investments in January-December 2015
Investments by the Group in the period under review totalled EUR 16.9 (3.7)
million accounting for 6.8% (1.9%) of the net sales. EUR 11.5 million of these
investments involved the acquisition of Mitron. Investments in product
development equalled EUR 1.7 (1.1) million. Other investments involved
information systems and machines as well as equipment. Investments of EUR 1.7
(0.3) million were carried out under financial lease arrangements.
Product development projects focused on network products complying with the
Docsis 3.1 standard, a network management system, distributed access
architecture, video security and information solutions, as well as
customer-specific projects.
Financing and Capital Structure in January to December 2015
Cash flow from operations stood at EUR 4.9 (9.2) million. This year-on-year
decline in the operating cash flow was due to a growth in net working capital.
The single most significant reason behind this growth in net working capital
was the expansion of business of Video and Broadband Solutions.
In January, Teleste Corporation signed new overdraft and revolving credit
facilities with a total value of EUR 45.0 million. These new agreements
replaced the corresponding previous funding agreements. These credit limits are
valid until the end of March 2018. At the end of the period under review, the
amount of unused binding stand-by credits amounted to EUR 17.7 (17.0) million.
The Group's equity ratio equalled 48.3% (53.4%) while net gearing was 26.3%
(9.5%). On 31 December 2015, the Group's interest-bearing debt stood at EUR
33.0 (24.4) million.
Key Risks Faced by the Business Areas
Founded in 1954, Teleste is a technology and services company consisting of two
business areas – Video and Broadband Solutions and Network Services. With
Europe as the main market area, our clients include European cable operators
and specified organisations in the public sector.
As to Video and Broadband Solutions, client-specific and integrated deliveries
of solutions create favourable conditions for growth, even if the concerned
resource allocation and technical implementation pose a challenge involving,
therefore, also reasonable risks. In particular, deliveries of integrated
safety and information systems for the passenger transport may be large in
size, setting high demands for the project quotation calculation and management
and, consequently, there are risks involved. Our customers' network investments
vary based on the relevant need for upgrading and their financial structure.
A significant part of Teleste's competition comes from the USA so the exchange
rate of euro up against the US dollar affects our competitiveness. The exchange
rate development of the US dollar and the Chinese renminbi to the euro affects
our product costs. The company hedges against short-term currency exposure by
means of forward exchange contracts. The modest development in economic growth
and the financial challenges faced by the European public sector may slow down
the implementation of our customers' investment plans. Furthermore, a weakening
in the consumer purchasing power in Europe could slow down the network
investments by the cable operators. Competition increased by the new service
providers (OTT) may undermine the cable operators' ability to invest.
Availability of components is subject to natural phenomena, such as floods and
earthquakes. Correct technological choices and their timing are vital to our
success. Regardless of careful planning and quality assurance, complex products
may fail in the customer's network and lead to expensive repair obligations.
Net sales of Network Services comes, for the most part, from a small number of
large European customers, so a significant change in the demand for our
services by any one of them is reflected in the actual deliveries and
profitability. Improvements in customer satisfaction and productivity require
efficient control of service process management as well as innovative solutions
in processes, products and logistics to ensure the quality of services and cost
effectiveness. Smooth operation of cable networks necessitates efficient
technical management of the networks and functional solutions for devices in
accordance with contractual obligations. This, in turn, demands continuous and
determined development of skills and competencies in Teleste's own personnel as
well as those of our subcontractors. In addition, adequacy and utilization
rates of our own personnel and subcontractor network capacity affect the
Company's delivery capacity and profitability. Tender calculation and
management of larger projects with overall responsibility are complex and
risky. Severe weather conditions may affect the supply conditions of our
products and services.
Teleste’s strategy involves risks and uncertainties: new business opportunities
may fail to be identified or they cannot be acted upon successfully. The
business areas will have to keep an eye on market movements, such as
consolidations among the customers and competitors. Intensifying competition
may decrease the prices of products and solutions faster than we manage to
reduce our products’ manufacturing and delivery costs. Various information
systems are critical to the development, manufacturing and supply of products
to our customers. Maintenance of information systems and deployment of new
systems involve risks that may affect our ability to deliver products and
services. Information systems may also be subject to external threats, from
which we aim to protect ourselves. Acquisition of skilled personnel and
maintenance of their competence require encouragement, development and
recruitment, which can fail.
The Board of Directors annually reviews any essential risks related to the
company operation and the management thereof. Risk management constitutes an
integral part of the strategic and operative practices of our business areas.
Risks are reported to the Board on a regular basis.
The company has covered any major risks of loss related to the business areas
through insurance policies. Insurance will also cover credit loss risks related
to sales receivables. In the period under review, no such legal proceedings or
judicial procedures were pending that would have had any essential significance
for the Group operation.
Group Structure
Parent company Teleste has branch offices in Australia, the Netherlands, and
Denmark with subsidiaries in 14 countries outside Finland. On 7 January 2015,
the parent company acquired the entire share capital of Mitron Group Oy Ltd. On
15 May 2015, the parent company bought the entire share capital of Teleste
Management II Oy to acquire its holding of Teleste Corporation's shares.
Shares and Changes in Share Capital
On 31 December 2015, EM Group Oy was the largest single shareholder with a
holding of 23.2%.
In the period under review, the lowest company share price was EUR 5.32 (4.25)
while the highest was EUR 9.88 (5.29). Closing price on 31 December 2015 stood
at EUR 9.80 (5.27). According to Euroclear Finland Ltd, the number of
shareholders at the end of the period under review was 5,355 (4,962). Foreign
ownership accounted for 5.0% (5.0%). The value of shares traded on the Nasdaq
Helsinki on 1 January to 31 December 2015 was EUR 24.6 (10.9) million. In the
period under review, 3.3 (2.3) million Teleste shares were traded on the stock
exchange.
On 31 December 2015, the Group held 863,953 of its own shares, of which the
parent company Teleste Corporation had 321,953 shares and the Group companies
had 542,000 shares, respectively. At the end of the period, the Group's holding
of the total amount of shares amounted to 4.6% (6.3%).
In January, the Company transferred 56,924 shares as part of the purchase price
in the context of the acquisition of the entire share capital of Mitron Group
Oy Ltd by Teleste Corporation. In February, the Company transferred 73,644
shares in a directed free share issue constituting part of Teleste
Corporation's 2012 long-term incentive plan. In May, the Company transferred
195,133 shares when purchasing the entire share capital of Teleste Management
II Oy.
On 31 December 2015, the registered share capital of Teleste stood at EUR
6,966,932.80 divided into 18,985,588 shares.
Valid authorizations at the end of the review period:
- Purchases of own shares: maximum 1,200,000 of the Company's own shares, valid
until 8 October 2016. - Issue of new shares: maximum 4,000,000 shares, valid until 31 March 2017.
- Disposal of own shares in possession: maximum 1,800,000 shares, valid until
31 March 2017. - Based on the special rights granted by the Company, the number of shares to
subscribe may not exceed 2,500,000 shares; these special rights are included in
the maximum warrants concerning new shares and the Group's own shares mentioned
above. This authorisation is valid until 31 March 2017.
Decisions by the Annual General Meeting
The Annual General Meeting (AGM) of Teleste Corporation on 09 April 2015
confirmed the financial statements for 2014 and discharged the Board of
Directors and the CEO from liability for the financial period. The AGM
confirmed the dividend of EUR 0.20 per share as proposed by the Board. The
dividend was paid out on 20 April 2015.
The AGM decided that the Board of Directors consists of six members. Mr. Pertti
Ervi, Ms. Jannica Fagerholm, Mr. Esa Harju, Ms. Marjo Miettinen, Mr. Kai
Telanne and Mr. Petteri Walldén were re-elected as members of Teleste
Corporation's Board of Directors. Ms. Marjo Miettinen was elected Chair of the
Board in the organising meeting held immediately after the AGM.
Authorized Public Accountants KPMG Oy Ab continue as the auditor until the next
AGM. Mr. Esa Kailiala, accountant authorized by the Central Chamber of Commerce
of Finland, was chosen auditor-in-charge.
The Annual General Meeting decided to authorize the Board of Directors to
decide on repurchasing the Company's own shares as proposed by the Board. Based
on this authorization, the Board of Directors may repurchase a maximum of
1,200,000 own shares of the Company otherwise than in proportion to the
holdings of the shareholders by using the non-restricted equity through the
regulated market on NASDAQ OMX Helsinki Ltd at the market price prevailing at
the time of acquisition. This authorization of purchasing is valid for 18
months from the date of the decision.
Outlook for 2016
The business objective of Video and Broadband Solutions is to maintain its
strong market position in Europe and to strengthen this market position in
selected new markets outside Europe. Network capacity will continue to increase
driven by the new broadband and video services provided by the operators. Our
new products in line with the Docsis 3.1 communication standard allow the cable
operators to increase their network capacity competitively. Price erosion in
the market continues. Changes in the value of the euro, particularly against
the US dollar and the Chinese renminbi, affect Teleste’s competitiveness, on
the one hand, and product manufacturing costs, on the other. The positive trend
in the markets for video security and passenger information solutions will
continue whereas the public sector decisions concerning initiation of projects
may be delayed by the current economic situation. The security solution for
public areas introduced in Paris provides new opportunities for other major
cities of the world. Train manufacturers and public transport operators benefit
from Teleste's video security and passenger information solutions.
As to Network Services, our business objective is to further develop the
operational efficiency and increase the share of those services that provide
our customers with higher value. In the UK, our aim is to improve the
profitability of the provided services. We estimate the demand for
all-inclusive network services in our key target markets to continue at least
at the previous year level.
We estimate that net sales and operating profit for 2016 will exceed the 2015
level.
3 February 2016
Teleste Corporation Jukka Rinnevaara
Board of Directors President and CEO
Teleste's Annual Report for 2015, which includes the audited financial
statements, will be published no later than 18th of March 2016. The Company
will issue a statement of its corporate governance as a separate report, which
will be published together with the Annual Report, and will be simultaneously
available on the Company's web site.
This interim report has been compiled in compliance with IAS 34, as it is
accepted within EU, using the recognition and valuation principles with those
used in the Annual Report. The changes in IAS1, IFRS13 and IAS19 have been
applied in this interim report and they do not have any material impact on the
financial reporting. The data stated in this report is audited.
STATEMENT OF COMPREHENSIVE INCOME, 1000 euros 10-12/ 10-12/ Change %
2015 2014
Net sales 68,393 53,867 27.0 %
Other operating income 1,001 1,752 -42.9 %
Raw material and consumables used -37,248 -26,930 38.3 %
Employee benefits expense -18,083 -16,407 10.2 %
Depreciations -1,313 -1,097 19.7 %
Other operating expenses -9,478 -7,661 23.7 %
Operating profit 3,273 3,525 -7.1 %
Financial income 5 5 2.7 %
Financial expenses -169 -178 -4.9 %
Profit before taxes 3,109 3,352 -7.3 %
Taxes -211 -258 -18.4 %
Profit for the period 2,898 3,093 -6.3 %
Attributable to:
Equity holders of the parent 2,898 3,093 -6.3 %
Earnings per share for profit of the year attributable to the equity holders of
the parent
Basic (expressed in euro per share) 0.16 0.17 -8.0 %
Diluted (expressed in euro per share) 0.16 0.17 -8.0 %
Total comprehensive income for the period,
1000 euros
Net profit 2,898 3,093 -6.3 %
Items that may be reclassified to profit or loss:
Translation differences 273 -290 n/a
Fair value reserve 11 8 37.5 %
Total comprehensive income for the period 3,181 2,811 13.1 %
Attributable to:
Equity holders of the parent 3,181 2,811 13.1 %
STATEMENT OF COMPREHENSIVE INCOME, 1000 euros 1-12/ 1-12/ Change %
2015 2014
Net sales 247,758 197,176 25.7 %
Other operating income 2,854 2,536 12.5 %
Raw material and consumables used -128,300 -97,561 31.5 %
Employee benefits expense -70,532 -59,497 18.5 %
Depreciation -4,874 -4,211 15.8 %
Other operating expenses -32,604 -27,309 19.4 %
Operating profit 14,302 11,135 28.4 %
Financial income 582 225 158.1 %
Financial expenses -945 -526 79.6 %
Profit before taxes 13,939 10,835 28.7 %
Taxes -2,928 -2,353 24.4 %
Profit for the period 11,011 8,482 29.8 %
Attributable to:
Equity holders of the parent 11,011 8,482 29.8 %
Earnings per share for profit of the year attributable to the equity holders of
the parent
Basic (expressed in euro per share) 0.61 0.48 27.6 %
Diluted (expressed in euro per share) 0.61 0.48 28.3 %
Total comprehensive income for the period (tEUR)
Net profit 11,011 8,482 29.8 %
Items that may be reclassified to profit or loss:
Translation differences 240 -465 n/a
Fair value reserve 31 -25 n/a
Total comprehensive income for the period 11,282 7,992 41.2 %
Attributable to:
Equity holders of the parent 11,282 7,992 41.2 %
STATEMENT OF FINANCIAL POSITION, 1000 euros
Assets 1000 euros
31.12.2015 31.12.2014 Change %
Non-current assets
Property, plant and equipment 11,648 9,627 21.0 %
Goodwill 37,849 33,121 14.3 %
Other intangible assets 6,653 3,891 71.0 %
Available-for-sale investments 704 701 0.5 %
Deferred tax assets 1,843 1,698 8.5 %
Total 58,698 49,037 19.7 %
Current assets
Inventories 32,661 20,483 59.5 %
Trade and other receivables 60,159 44,694 34.6 %
Income tax receivables 263 582 -54.9 %
Cash 12,677 17,672 -28.3 %
Total 105,759 83,430 26.8 %
Total assets 164,458 132,467 24.1 %
Equity and liabilities
Equity attributable to equity holders of the
parent
Share capital 6,967 6,967 0.0 %
Share premium 1,504 1,504 0.0 %
Translation differences -99 -339 -70.7 %
Invested non restricted equity 3,140 3,923 -19.9 %
Retained profits 66,033 58,139 13.6 %
Non-controlling interest 0 487 n/a
Total 77,545 70,682 9.7 %
Non-current liabilities
Interest-bearing liabilities 30,723 595 5060.9 %
Other liabilities 2,730 31 8681.3 %
Deferred tax liabilities 1,662 1,327 25.2 %
Provisions 1,026 1,238 -17.1 %
Total 36,141 3,192 1032.3 %
Current liabilities
Trade and other liabilities 46,505 33,536 38.7 %
Current tax payable 1,062 793 33.9 %
Provisions 889 480 85.2 %
Interest-bearing liabilities 2,315 23,784 -90.3 %
Total 50,771 58,593 -13.3 %
Total liabilities 86,912 61,785 40.7 %
Equity and liabilities total 164,458 132,467 24.1 %
CONSOLIDATED CASH FLOW STATEMENT, 1000 euros 1.1.-31.12. 1.1.-31.12. Change %
2015 2014
Cash flows from operating activities
Profit for the period 11,011 8,482 29.8 %
Adjustments for:
Non-cash transactions 3,856 4,211 -8.4 %
Interest and other financial expenses 961 542 77.3 %
Interest income and other financial income -582 -225 158.1 %
Dividends -3 -2 50.0 %
Taxes 2,928 2,353 24.4 %
Change in working capital
Increase/decrease in trade and other -5,096 -6,157 -17.2 %
receivables
Increase/decrease in inventories -6,950 -721 863.9 %
Increase/decrease in trade and other 1,361 3,510 -61.2 %
payables
Increase/decrease in provisions 197 252 -21.8 %
Paid interests and other financial expenses -945 -526 79.6 %
Received interests and dividends 582 225 158.1 %
Paid taxes -2,400 -2,717 -11.7 %
Cash flow from operating activities 4,920 9,227 -46.7 %
Cash flow from investing activities
A conditional supplementary contract price -1,147 0 n/a
for prior subsidiary acquisition
Purchases of property, plant and equipment -1,258 -1,782 -29.4 %
(PPE)
Proceeds from sales of PPE 17 64 -73.4 %
Purchases of intangible assets -1,644 -1,077 52.6 %
Proceeds from available-for-sale investments 0 -407 n/a
Acquisition of subsidiary, net of cash -6,826 0 n/a
acquired
Net cash used in investing activities -10,858 -3,202 239.1 %
Cash flow from financing activities
Proceeds from borrowings 44,300 1,000 4330.0 %
Payments of borrowings -38,130 -888 4193.9 %
Payment of finance lease liabilities -391 -367 6.5 %
Dividends paid -3,694 -3,360 9.9 %
Proceeds from issuance of ordinary shares -1,382 497 n/a
Net cash used in financing activities 703 -3,118 n/a
Change in cash
Cash and cash equivalents 1.1. 17,672 15,229 16.0 %
Effect of currency changes 240 -465 n/a
Cash and cash equivalents 31.12. 12,677 17,672 -28.3 %
Consolidated statement of changes in equity,1000 euros
Attributable to equity holders of the parent (tEUR)
A Share capital
B Share premium
C Translation differences
D Retained earnings
E Invested free capital
F Other funds
G Total
H Share of non-controlling interest
I Total equity
A B C D E F G H I
Equity 31.12.2014 6,967 1,504 -339 58,139 3,954 -31 70,194 487 70,682
Total 0 0 240 11,011 0 31 11,282 0 11,282
comprehensive
income for the
period
Share issue -814 -814 0 -814
Dividends 0 0 0 -3,802 0 0 -3,802 108 -3,694
Changes in 10 10 -10 0
subsidiary
interest
Equity-settled 0 0 0 676 0 0 676 -585 91
share-based
payments
Equity 31.12.2015 6,967 1,504 -99 66,034 3,140 0 77,545 0 77,545
BUSINESS SEGMENTS 2015, Video and Network Group
1000 EUROS Broadband Services
Solutios
External sales
Services 7,860 93,362 101,222
Goods 146,536 0 146,536
External sales total 154,396 93,362 247,758
Operating profit of segments 12,781 1,520 14,302
Financial items -363
Profit before taxes 13,939
Business segments 2014, 1000 euros Video and Network Group
Broadband Services
Solutions
External sales
Services 6,512 90,275 96,787
Goods 100,389 0 100,389
External sales total 106,901 90,275 197,176
Operating profits of the segments 9,673 1,463 11,136
Financial items -301
Profit before taxes 10,835
GEOGRAPHICAL SEGMENTS 2015, Nordic Other Finlan Others Group
1000 EUROS countries Europe d
Sales by origin 20,290 209,172 12,223 6,073 247,758
Assets 82 13,750 42,763 260 56,855
Capital expenditure for the 0 1,843 14,982 123 16,948
period
Geographical segments 2014, Nordic Other Finlan Others Group
1000 euros countries Europe d
Sales by origin 15,792 159,572 14,858 6,954 197,176
Assets 89 12,730 33,937 583 47,339
Capital expenditure for the 5 1,755 1,446 470 3,676
period
Information per 10-12/ 7-9/15 4-6/15 1-3/15 10-12/ 1-12/ 1-12/
quarter, 1000 euros 15 14 2015 2014
Video and Broadband Solutions
Order intake 43,419 39,616 40,926 33,990 28,642 157,951 109,007
Net sales 43,584 43,760 36,519 30,532 29,500 154,396 106,901
EBIT 2,666 5,113 2,999 2,003 2,616 12,781 9,673
EBIT % 6.1 % 11.7 % 8.2 % 6.6 % 8.9 % 8.3 % 9.0 %
Network Services
Order intake 24,809 22,432 23,211 22,911 24,367 93,362 90,275
Net sales 24,809 22,432 23,211 22,911 24,367 93,362 90,275
EBIT 607 811 -492 595 909 1,520 1,463
EBIT % 2.4 % 3.6 % -2.1 % 2.6 % 3.7 % 1.6 % 1.6 %
Total
Order intake 68,228 62,048 64,137 56,901 53,009 251,313 199,282
Net sales 68,393 66,192 59,730 53,443 53,867 247,758 197,176
EBIT 3,273 5,924 2,507 2,598 3,525 14,302 11,135
EBIT % 4.8 % 8.9 % 4.2 % 4.9 % 6.5 % 5.8 % 5.6 %
Commitments and contingencies, 1000 euros 2015 2014 Change
%
Rental liabilities 2,980 2,567 16.1 %
Lease liabilities 4,878 2,992 63.0 %
Value of underlying forward contracts 24,599 13,141 87.2 %
Market value of forward contracts -27 65 n/a
Interest rate swap 10,000 11,000 -9.1 %
Market value of interest swap 0 -31 n/a
Guarantees 3,124 0 n/a
The number of employees broken down by following 2015 2014 Change
categories 31.12. %
Research and development 149 113 31.9 %
Production and material management 1,089 1,003 8.5 %
Sales and marketing 197 170 15.9 %
Administration 71 57 24.6 %
Total 1,506 1,343 12.1 %
IFRS IFRS IFRS IFRS IFRS
Key figures 2015 2014 2013 2012 2011
Profit and loss account,
balance sheet
Net sales, Meur 247.8 197.2 192.8 193.9 183.6
Change % 25.7 % 2.3 % -0.6 % 5.6 % 8.6 %
Sales outside Finland, % 95.1 % 92.5 % 93.2 % 93.4 % 94.1 %
Operating profit, Meur 14.3 11.1 11.0 10.9 9.4
% of net sales 5.8 % 5.6 % 5.7 % 5.6 % 5.1 %
Profit after financial items, 13.9 10.8 10.7 10.1 8.8
Meur
% of net sales 5.6 % 5.5 % 5.5 % 5.2 % 4.8 %
Profit before taxes, Meur 13.9 10.8 10.7 10.1 8.8
% of net sales 5.6 % 5.5 % 5.5 % 5.2 % 4.8 %
Profit for the financial 11.0 8.5 8.1 6.7 6.3
period, Meur
% of net sales 4.4 % 4.3 % 4.2 % 3.5 % 3.4 %
R&D expenditure, Meur 11.0 10.3 10.0 11.2 11.6
% of net sales 4.4 % 5.2 % 5.2 % 5.8 % 6.3 %
Gross investments, Meur 16.9 3.7 6.3 3.3 5.2
% of net sales 6.8 % 1.9 % 3.3 % 1.7 % 2.9 %
Interest bearing liabilities, 33.0 24.4 24.3 22.1 33.2
Meur
Shareholder's equity, Meur 77.5 70.7 65.6 60.6 55.3
Total assets, Meur 164.5 132.5 124.3 120.2 133.2
Personnel and orders
Average personnel 1,485 1,302 1,306 1,326 1,297
Order backlog at year end, 42.2 15.2 13.1 17.0 21.2
Meur
Orders received, Meur 251.3 199.3 188.9 189.7 188.1
Key metrics
Return on equity, % 14.9 % 12.5 % 12.9 % 11.6 % 11.9 %
Return on capital employed, % 14.2 % 12.2 % 13.0 % 13.0 % 11.5 %
Equity ratio, % 48.3 % 53.4 % 52.7 % 50.5 % 41.6 %
Net gearing, % 26.3 % 9.5 % 13.8 % 13.7 % 32.2 %
Earnings per share, euro 0.61 0.48 0.47 0.38 0.36
Earnings per share fully 0.61 0.48 0.46 0.38 0.36
diluted, euro
Shareholders equity per share, 4.28 3.94 3.73 3.48 3.17
euro
Teleste share
Highest price, euro 9.88 5.29 4.47 4.44 4.82
Lowest price, euro 5.32 4.25 3.78 3.04 2.50
Closing price, euro 9.80 5.27 4.25 4.17 3.00
Average price, euro 7.42 4.67 4.17 3.98 3.64
Price per earnings 16.1 11.0 9.1 10.8 8.3
Market capitalization, Meur 177.6 98.7 79.6 78.1 56.2
Stock turnover, Meur 24.6 10.9 9.2 10.8 6.2
Turnover, number in millions 3.3 2.3 2.2 2.7 1.7
Turnover, % of share capital 17.5 % 12.5 % 11.7 % 14.4 % 9.1 %
Average number of shares 18985588 18918869 18743507 18728590 18189560
Number of shares at the 18985588 18985588 18816691 18728590 18728590
year-end
Average number of shares, 18036667 17729215 17513799 17688527 17425605
diluted w/o own shares
Number of shares at the 18121635 17795934 17838599 17709672 17425605
year-end, diluted w/o own
shares
Paid dividend, Meur 4.2 3.6 3.3 3.0 2.4
Dividend per share, euro 0,23* 0.20 0.19 0.17 0.14
Dividend per net result, % 37.7 % 41.7 % 40.8 % 44.5 % 38.9 %
Effective dividend yield, % 2.3 % 3.8 % 4.5 % 4.1 % 4.7 %
* The Board's proposal to the
AGM
Treasury shares Number % of % of
of shares votes
shares
Teleste companies own shares 863,953 4.55% 4.55%
31.12.2015
CALCULATION OF KEY FIGURES
Return on equity: Profit/loss for the financial period
------------------------------ * 100
Shareholders’ equity (average)
Return on capital Profit/loss for the period after financial items +
employed: financing charges
------------------------------ * 100
Total assets - non-interest-bearing
liabilities (average)
Equity ratio: Shareholders' equity
----------------------------- * 100
Total assets - advances received
Gearing: Interest bearing liabilities - cash in hand and in bank -
interest bearing assets
----------------------------- * 100
Shareholders' equity
Earnings per share: Profit for the period attributable to equity holder of
the parent
----------------------------------------------
Weighted average number of ordinary shares outstanding
during the period
Earnings per share, Profit for the period attributable to equity holder of
diluted: the parent (diluted)
-----------------------------------------------
Average number of shares - own shares + number of options
at the period-end
Major shareholders 31.12.2015 Number of shares % of share capital
EM Group Oy 4,409,712 23.23
Mandatum Life Insurance Company Limited 1,679,200 8.84
Ilmarinen Mutual Pension Insurance Company 963,860 5.08
Kaleva Mutual Insurance Company 824,641 4.34
Teleste Management II Oy 542,000 2.85
Varma Mutual Pension Insurance Company 521,150 2.74
The State Pension Fund 500,000 2.63
Teleste Oyj 321,953 1.7
Danske Invest Finnish Small Cap Fund 290,000 1.53
FIM Fenno Equity fund 277,520 1.46
Shareholders by sector Number of % of Number of % of
shareholders Owners shares shares
Households 5,015 93,65 4,785,023 25,2
Public sector institutions 3 0,06 1,985,010 10,5
Financial and insurance 20 0,37 3,457,533 18,2
institutions
Corporations 251 4,69 7,105,394 37,4
Non-profit institutions 29 0,54 360,531 1,9
Foreign and nominee 37 0,69 1,292,097 6,8
registered owners
Total 5,355 100,00 18,985,588 100,0
Number of shares Number of % of Number of % of
shareholders shareholders shares shares
1 - 100 1,300 24,3 84,146 0,4
101 - 500 2,343 43,8 634,303 3,3
501 - 1000 767 14,3 627,507 3,3
1001 - 5000 768 14,3 1,686,218 8,9
5001 - 10000 78 1,5 550,011 2,9
10001 - 50000 67 1,3 1,447,835 7,6
50001 - 100000 10 0,2 759,875 4,0
100001 - 500000 15 0,3 3,638,547 19,2
500001 - 7 0,1 9,557,146 50,3
Total 5,355 100,0 18,985,588 100,0
of which nominee 1,078,100 5,7
registered
The following assets are liabilities were recognised in the acquisition Mitron:
1 000 € Recognised fair values on
acquisition
Fair values used in consolidation
Trade marks (inc. in intangible assets) 746
Customer relationship (inc. in intangible 585
assets)
Technology (inc. in intangible assets) 1,362
Inventories 4,983
Trade receivables 8,514
Book values used in consolidation
Tangible assets 944
Intangible assets 537
Shares and immaterial rights 29
Accrued income 1,315
Deferred tax asset 314
Other receivables 425
Cash and cash equivalents 874
Total assets 20,628
Book values used in consolidation
Interest-bearing liabilities 1,174
Trade payables 5,672
Deferred tax liabilites 539
Advance payments 2,984
Other liabilities 3,159
Total liabilities 13,528
Net identifiable assets and liabilities 7,100
Total consideration 11,500
Goodwill on acquisition 4,400
Consideration paid in cash -7,700
Cash and cash equivalents in acquired 874
subsidiary
Total net cash outflow on the acquisition -6,826
ADDITIONAL INFORMATION:
CEO Jukka Rinnevaara, phone +358 2 2605 611 or +358 400 747 488
DISTRIBUTION:
Nasdaq Helsinki
Main Media
www.teleste.com
Attachments: