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Teleste Oyj Interim / Quarterly Report 2014
3345_rns_2014-08-07_552abdc1-a553-4766-9153-1fe3b51078c7.pdf
Interim / Quarterly Report
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TELESTE
January 1–June 30, 2014
Interim Report Q2
TELESTE CORPORATION
INTERIM REPORT
7 AUGUST 2014
TELESTE CORPORATION INTERIM REPORT 1 JAN TO 30 JUN 2014
INCREASED ORDERS RECEIVED AND NET SALES, INVESTMENTS INTO SERVICES BUSINESS LOWERED PROFITABILITY
Second quarter of 2014
- Net sales amounted to EUR 49.4 (46.5) million, an increase of 6.3%
- Operating profit stood at EUR 1.4 (1.7) million, a decrease of 20.4%
- Undiluted earnings per share stood at EUR 0.05 (EUR 0.07)
- Orders received totalled EUR 50.3 (44.2) million, an increase of 13.8%
- Cash flow from operations was EUR 0.3 (4.1) million, a decrease of 92.5%
Outlook for 2014
We estimate that net sales and operating profit for the year 2014 will not reach the 2013 level.
Comments on second quarter of 2014 by CEO Jukka Rinnevaara:
"Demand for Video and Broadband Solutions was good and orders received increased significantly over the comparative period. We managed to increase net sales more than expected, especially in optical products and headends of access networks. Growing areas of the market included particularly Germany, France and the UK. Nevertheless operating profit failed to reach the level of the reference period mainly due to the shift in sales towards lower-margin products.
As for Network Services, we continued to implement structural changes and investments designed to improve profitability and business expansion in Germany and the UK. These investments for growth and restructuring costs reduced the profitability of our services business. As for the new services business, we expect net sales and profitability to improve right in the latter part of the year."
Teleste Group in April to June 2014
| Key figures (EUR million) | 4-6/2014 | 4-6/2013 | Change % |
|---|---|---|---|
| Orders received | 50.3 | 44.2 | +13.8% |
| Net sales | 49.4 | 46.5 | +6.3% |
| EBIT | 1.4 | 1.7 | -20.4% |
| EBIT % | 2.8% | 3.7% | |
| Profit for the period | 0.9 | 1.3 | -29.0% |
| Other important key figures | |||
| Earnings per share, EUR | 0.05 | 0.07 | -29.6% |
| Cash flow from operations, M€ | 0.3 | 4.1 | -92.5% |
Orders received by the Group in the second quarter totalled EUR 50.3 (44.2) million, an increase of 13.8%. The year-on-year order backlog grew by EUR 5.1 million to EUR 17.4 (12.3) million.
Net sales grew by 6.3% amounting to EUR 49.4 (46.5) million. Compared to the same period in the previous year, operating profit decreased by 20.4% standing at EUR 1.4 (1.7) million, which is 2.8% (3.7%) of net sales. Operating profit of Video and Broadband Solutions increased, whereas that of Network Services was in the red. Personnel expenses amounted to EUR 15.4 (14.5) million. Undiluted earnings per share were EUR 0.05 (0.07). Operating cash flow stood at EUR 0.3 (4.1) million. Increased trade receivables decreased cash flow over the comparative period.
Teleste Group in January to June 2014
| Key figures (EUR million) | 1-6/2014 | 1-6/2013 | Change % | 1-12/2013 |
|---|---|---|---|---|
| Orders received | 97.2 | 87.6 | 11.0% | 188.9 |
| Net sales | 92.9 | 92.3 | 0.7% | 192.8 |
| EBIT | 2.7 | 4.3 | -38.4% | 11.0 |
| EBIT % | 2.9% | 4.7% | 5.7% | |
| Profit for the period | 1.8 | 3.1 | -40.4% | 8.1 |
| Other important key figures | ||||
| Earnings per share, EUR | 0.10 | 0.18 | -40.4% | 0.47 |
| Cash flow from operations | 1.8 | 4.3 | -59.1% | 10.0 |
| Net gearing, % | 18.2% | 21.8% | % | 13.8% |
| Equity ratio, % | 52.0% | 48.5% | % | 52.7% |
| Personnel at period-end | 1,303 | 1,325 | -1.7% | 1,261 |
Orders received by the Group improved by 11.0% standing at EUR 97.2 (87.6) million. Net sales grew by 0.7% amounting to EUR 92.9 (92.3) million. Operating profit decreased by 38.4% to EUR 2.7 (4.3) million. Personnel expenses amounted to EUR 29.3 (28.9) million. Financial items totalled EUR 0.2 (0.2) million. Taxes for the Group amounted to EUR 0.6 (1.1) million while the Group's tax rate was 25.7% (26.4%). Undiluted earnings per share were EUR 0.10 (0.18). Operating cash flow stood at EUR 1.8 (4.3) million.
Video and Broadband Solutions in April to June 2014
| Key figures (1,000 €) | 4-6/2014 | 4-6/2013 | Change % |
|---|---|---|---|
| Orders received | 27,898 | 23,350 | +19.5% |
| Net sales | 27,007 | 25,625 | +5.4% |
| EBIT | 1,835 | 2,308 | -20.5 |
| EBIT % | 6.8% | 9.0% |
Orders received totalled EUR 27.9 (23.4) million, an increase of 19.5%. Order backlog totalled EUR 17.4 (12.3) million. Net sales grew by 5.4% amounting to EUR 27.0 (25.6) million. The strong demand for access network products increased the year-on-year net sales to a higher level, even if net sales of the video surveillance solutions fell from the comparative period. Operating profit stood at EUR 1.8 (2.3) million making 6.8% (9.0%) of net sales. This decline in the operating profit percentage was primarily due to lower volume of sales of the video surveillance solutions over the period of comparison.
R&D expenses for the business area amounted to EUR 3.0 (2.7) million making 11.0% (10.5%) of net sales. Most of the R&D projects included further development of the product families in production and customer-specific projects. Capitalized R&D expenses amounted to EUR 0.3 (0.3) million. Depreciation on capitalized R&D expenses equalled EUR 0.3 (0.5) million.
Video and Broadband Solutions in January to June 2014
| Key figures (1,000 €) | 1-6/2014 | 1-6/2013 | Change % | 1-12/2013 |
|---|---|---|---|---|
| Orders received | 52,794 | 44,769 | +17.9% | 97,815 |
| Net sales | 48,492 | 49,438 | -1.9% | 101,716 |
| EBIT | 2,635 | 4,744 | -44.5% | 9,460 |
| EBIT % | 5.4% | 9.6% | 9.3% |
Orders received totalled EUR 52.8 (44.8) million, an increase of 17.9%. Net sales decreased by 1.9% amounting to EUR 48.5 (49.4) million. Operating profit decreased by 44.5% amounting to EUR 2.6 (4.7) million. The operating profit was adversely affected particularly by the quiet early year and lower year-on-
year deliveries of video surveillance solutions. Product development expenses equalled EUR 5.6 (5.1) million, in other words 11.5% (10.3%) of net sales.
Network Services in April to June 2014
| Key figures (1000 €) | 4-6/2014 | 4-6/2013 | Change % |
|---|---|---|---|
| Orders received | 22,405 | 20,870 | 7.4% |
| Net sales | 22,405 | 20,870 | 7.4% |
| EBIT | -452 | -570 | |
| EBIT % | -2.0% | -2.7% |
Second-quarter net sales stood at EUR 22.4 (20.9) million, which is 7.4% higher than in the comparison period. Net sales increased primarily in Germany, where the comparative period's net sales were lower than average. Operating result was a loss standing at EUR -0.5 (-0.6) million, or -2.0% (-2.7%) of net sales. This operating loss was caused by custom-specific rearrangements and increases made in the installation capacity for future growth in Germany, as well as investments aimed at business expansion in the UK. These changes will allow for improved profitability and expansion of business in the rest of the year.
Network Services in January to June 2014
| Key figures (1,000 €) | 1-6/2014 | 1-6/2013 | Change % | 1-12/2013 |
|---|---|---|---|---|
| Orders received | 44,453 | 42,816 | 3.8% | 91,060 |
| Net sales | 44,453 | 42,816 | 3.8% | 91,060 |
| EBIT | 38 | -404 | n/a | 1,587 |
| EBIT % | 0.1% | -0.9% | 1.7% |
The year-on-year net sales grew by 3.8% amounting to EUR 44.5 (42.8) million. Operating profit equalled EUR 0.0 (-0.4) million. While the demand for services was good, customer-specific rearrangements in Germany and investments to expand the business in the UK pulled the result down to zero.
Personnel and Organization in January to June 2014
In the period under review, the Group had an annual average of 1,275 people (1,336/2013, 1,326/2012), of whom 562 (554) were employed by Video and Broadband Solutions, and 713 (782) by Network Services. At the end of the review period, the Group employed 1,303 people (1,325/2013, 1,348/2012) of whom 69% (74%/2013, 70%/2012) were stationed abroad. About 3% of the Group's employees were working outside Europe.
Personnel costs amounted to EUR 29.3 million (28.9/2013, 30.5/2012).
Investments and Product Development in January to June 2014
Investments by the Group for the period under review totalled EUR 1.5 (4.6) million accounting for 1.7% (5.0%) of net sales. As for the year-on-year investments, EUR 3.5 million involved the acquisition of Asheridge. Product development investments amounted to EUR 0.6 (0.6) million while other investments equalled EUR 0.8 million.
Financing and Capital Structure in January to June 2014
Operating cash flow stood at EUR 1.8 (4.3) million. This decrease in cash flow from operating activities was mainly due to increased trade receivables. At the end of the period under review, the amount of unused binding stand-by credits amounted to EUR 17.0 (14.0) million. Credit limits are valid until August 2015.
The Group's equity ratio equalled 52.0% (48.5%) and net gearing 18.2% (21.8%). On 30 June 2014, the Group's interest-bearing debt stood at EUR 24.1 (27.7) million.
Key Risks 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 organizations 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 involved resource allocation and technical implementation pose a challenge involving, therefore, also reasonable risks. Our customers' network investments vary based on the relevant need for upgrading and their financial structure. 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 Chinese renminbi to euro affects our material costs.
The company hedges against short-term currency exposure by means of forward contracts. The situation in the European financial markets may slow down 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. Severe weather conditions have an impact on the business areas' ability to deliver products and services. Correct technological choices and their timing are vital for our success.
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. To ensure quality of services and cost-efficiency along with efficient service process management, customer satisfaction and improvements in productivity require innovative solutions in terms of processes, products and logistics. Smooth operation of cable networks requires effective technical management and functional hardware solutions in accordance with contractual obligations. This, in turn, demands continuous and determined development of skills and competences in Teleste's own personnel as well as those of our subcontractors. In addition, Teleste's ability to deliver and compete may be constrained by the adequacy of our sub-contractor network capacity. Tender calculation and management of larger projects with overall responsibility are complex and include risks.
It is important for our business areas to take into account any market developments such as consolidations taking place among the clientele and competition. The threats to information systems must be minimized to ensure business continuity. The Board of Directors annually reviews any essential risks related to the company operation and their management. Risk management is an integral part of the strategic and operational activities of the business areas. Risks are reported to the Board on a regular basis.
The company has covered any major risks of loss involving 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. Teleste Management Oy was merged with the parent company on 28 February 2014. Teleste Management II Oy, founded in December 2011, has been consolidated in the Teleste Group figures on account of financial arrangements.
Shares and Changes in Share Capital
On 30 June 2014, EM Group Oy was the largest single shareholder with a holding of 23.23%.
In the period under review, the lowest company share price was EUR 4.25 (3.78) and the highest was EUR 4.86 (4.47). Closing price on 30 June 2014 stood at EUR 4.55 (4.09). According to Euroclear Finland Ltd the number of shareholders at the end of the period under review was 5,052 (5,086). Foreign ownership accounted for 4.81% (5.83%). From 1 January to 30 June 2014, trading with Teleste share at NASDAQ OMX Helsinki amounted to EUR 5.9 (5.6) million. In the period under review, 1.3 (1.3) million Teleste shares were traded on the stock exchange.
At the end of June 2014, the Group held 1,189,654 of its own shares, of which the parent company Teleste Corporation had 647,654 shares while the Group and controlled companies had 542,000 shares, respectively. At the end of the period, the Group's holding of the total amount of shares amounted to 6.27% (6.35%).
The share subscription period for stock option rights 2007C began on 1 April 2012 and ended on 30 April 2014. Stock option rights 2007C enabled subscription of 280,000 shares in total. Based on option rights 2007C, a total of 256,998 Teleste Corporation's new shares were subscribed. Those 2007C option rights that were not used before the expiry of the subscription period, are null and void.
On 30 June 2014, the registered share capital of Teleste stood at EUR 6,966,932.80 divided in 18,985,588 shares.
Decisions by the Annual General Meeting
The Annual General Meeting (AGM) of Teleste Corporation on 1 April 2014 confirmed the financial statements for 2013 and discharged the Board of Directors and the CEO from liability for the financial period. The AGM confirmed the dividend of EUR 0.19 per share proposed by the Board. The dividend was paid out on 11 April 2014.
Ms. Marjo Miettinen, Mr. Pertti Ervi, Ms. Jannica Fagerholm, Mr. Esa Harju, Mr. Kai Telanne and Mr. Petteri Walldén continue in Teleste's Board of Directors. Ms. Marjo Miettinen was elected Chair of the Board in the organizational meeting held immediately after the AGM.
Authorized Public Accountants KPMG Oy Ab continues 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.
On 1 April 2014, the Annual General Meeting decided on the following authorizations of the Board of Directors:
- Purchases of own shares: maximum of 1,200,000 shares. This authorization is valid for 18 months from the date of the decision.
- Issue of new shares: maximum of 4,000,000 shares, valid for three years from the date of the decision.
- Disposal of own shares in possession: maximum of 1,800,000 shares, valid for three years from the date of the decision.
- 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 authorization will be valid for three years from the date of the decision.
Outlook for 2014
Video and Broadband Solutions aim at maintaining a strong market position in Europe and expand into selected new markets. Network capacity will continue to increase driven by the new broadband and video services provided by the operators. New products in line with communication standard Docsis 3.1 will enable network operators to activate their investments in the rest of the year. Price erosion in the market continues. The positive trend in the video surveillance market will continue, but the public sector decisions to start projects may be delayed in the current economic climate. We estimate profitability of Video and Broadband Solutions to improve compared to the first half of the year.
The business objective of Network Services is to develop the operational efficiency and give up any unprofitable services activities during the year. We estimate the demand for comprehensive network services in our key target markets to continue at par with the comparative year and the profitability to improve compared to the first half of the year.
We estimate that net sales and operating profit for the year 2014 will not reach the 2013 level.
6 August 2014
Teleste Corporation
Board of Directors
Jukka Rinnevaara
President and CEO
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. Teleste has prepared this interim report applying the same accounting principles as those described in detail in the consolidated financial statements. The data stated in this report is unaudited. 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.
| STATEMENT OF COMPREHENSIVE INCOME (tEUR) | 4-6/2014 | 4-6/2013 | Change % | 1-12/2013 |
|---|---|---|---|---|
| Net Sales | 49,412 | 46,495 | 6.3 % | 192,775 |
| Other operating income | 317 | 0 | n/a | 840 |
| Materials and services | -25,261 | -21,997 | 14.8 % | -94,456 |
| Personnel expenses | -15,363 | -14,455 | 6.3 % | -56,949 |
| Other operating expenses | -6,721 | -7,144 | -5.9 % | -26,536 |
| Depreciation | -1,001 | -1,161 | -13.8 % | -4,628 |
| Operating profit | 1,383 | 1,738 | -20.4 % | 11,047 |
| Financial income and expenses | -125 | -103 | 21.4 % | -386 |
| Profit after financial items | 1,258 | 1,635 | -23.1 % | 10,660 |
| Profit before taxes | 1,258 | 1,635 | -23.1 % | 10,660 |
| Taxes | -355 | -364 | -2.5 % | -2,513 |
| Net profit | 903 | 1,271 | -29.0 % | 8,147 |
| Attributable to: | ||||
| Equity holders of the parent | 903 | 1,271 | -29.0 % | 8,147 |
| Earnings per share for result of the year attributable to the equity holders of the parent (expressed in € per share) | ||||
| Basic | 0.05 | 0.07 | -29.6 % | 0.47 |
| Diluted | 0.05 | 0.07 | -29.0 % | 0.46 |
| Total comprehensive income for the period (tEUR) | ||||
| Net profit | 903 | 1,271 | -29.0 % | 8,147 |
| Possible items with future net profit effect | ||||
| Translation differences | -141 | -516 | -72.7 % | -559 |
| Fair value reserve | 8 | 27 | -70.4 % | 16 |
| Total comprehensive income for the period | 770 | 782 | -1.5 % | 7,604 |
| Attributable to: | ||||
| Equity holders of the parent | 770 | 782 | -1.5 % | 7,604 |
| STATEMENT OF COMPREHENSIVE INCOME (tEUR) | 1-6/2014 | 1-6/2013 | Change % | 1-12/2013 |
| Net Sales | 92,945 | 92,254 | 0.7 % | 192,775 |
| Other operating income | 503 | 458 | 9.8 % | 840 |
| Materials and services | -46,263 | -43,601 | 6.1 % | -94,456 |
| Personnel expenses | -29,348 | -28,890 | 1.6 % | -56,949 |
| Other operating expenses | -13,139 | -13,369 | -1.7 % | -26,536 |
|---|---|---|---|---|
| Depreciation | -2,025 | -2,512 | -19.4 % | -4,628 |
| Operating profit | 2,673 | 4,340 | -38.4 % | 11,047 |
| Financial income and expenses | -217 | -185 | 17.5 % | -386 |
| Profit after financial items | 2,456 | 4,155 | -40.9 % | 10,660 |
| Profit before taxes | 2,456 | 4,155 | -40.9 % | 10,660 |
| Taxes | -632 | -1,097 | -42.4 % | -2,513 |
| Net profit | 1,824 | 3,058 | -40.4 % | 8,147 |
| Attributable to: | ||||
| Equity holders of the parent | 1,824 | 3,058 | -40.4 % | 8,147 |
| Earnings per share for result of the year attributable to the equity holders of the parent (expressed in € per share) | ||||
| Basic | 0.10 | 0.18 | -40.4 % | 0.47 |
| Diluted | 0.10 | 0.17 | -40.4 % | 0.46 |
| Total comprehensive income for the period (tEUR) | ||||
| Net profit | 1,824 | 3,058 | -40.4 % | 8,147 |
| Possible items with future net profit effect | ||||
| Translation differences | -49 | -471 | -89.6 % | -559 |
| Fair value reserve | 1 | 51 | -98.0 % | 16 |
| Total comprehensive income for the period | 1,776 | 2,638 | -32.7 % | 7,604 |
| Attributable to: | ||||
| Equity holders of the parent | 1,776 | 2,638 | -32.7 % | 7,604 |
STATEMENT OF FINANCIAL POSITION (tEUR)
| 30.06.2014 | 30.06.2013 | Change % | 31.12.2013 | |
|---|---|---|---|---|
| Non-current assets | ||||
| Property,plant,equipment | 10,333 | 10,637 | -2.9 % | 10,499 |
| Goodwill | 33,250 | 33,301 | -0.2 % | 33,252 |
| Other intangible assets | 4,191 | 4,567 | -8.2 % | 4,448 |
| Deferred tax assets | 1,900 | 2,079 | -8.6 % | 2,002 |
| Available-for-sale investments | 422 | 286 | 47.6 % | 294 |
| 50,096 | 50,870 | -1.5 % | 50,494 | |
| Current assets | ||||
| Inventories | 20,115 | 20,295 | -0.9 % | 19,762 |
| Trade and other receivables | 41,381 | 38,546 | 7.4 % | 38,844 |
| Cash and cash equivalents | 12,242 | 14,570 | -16.0 % | 15,229 |
| 73,738 | 73,411 | 0.4 % | 73,835 | |
| Total assets | 123,833 | 124,280 | -0.4 % | 124,329 |
| Shareholder's equity and liabilities | ||||
| Share capital | 6,967 | 6,967 | 0.0 % | 6,967 |
| Other equity | 56,906 | 52,840 | 7.7 % | 58,160 |
| Non-controlling interest | 488 | 425 | 14.8 % | 425 |
|---|---|---|---|---|
| 64,361 | 60,232 | 6.9 % | 65,552 | |
| Non-current liabilities | ||||
| Provisions | 596 | 968 | -38.4 % | 634 |
| Deferred tax liabilities | 1,171 | 1,794 | -34.7 % | 1,293 |
| Non interest bearing liabilities | 2,509 | 2,342 | 7.1 % | 2,414 |
| Interest bearing liabilities | 360 | 1,102 | -67.3 % | 470 |
| 4,636 | 6,206 | -25.3 % | 4,810 | |
| Current liabilities | ||||
| Trade payables and other liabilities | 29,800 | 30,142 | -1.1 % | 28,130 |
| Current tax payable | 423 | 245 | 72.7 % | 1,206 |
| Provisions | 837 | 848 | -1.3 % | 832 |
| Interest bearing liabilities | 23,776 | 26,607 | -10.6 % | 23,799 |
| 54,836 | 57,842 | -5.2 % | 53,967 | |
| Total shareholder's equity and liabilities | 123,833 | 124,280 | -0.4 % | 124,329 |
| CONSOLIDATED CASH FLOW STATEMENT (tEUR) | 1-6/2014 | 1-6/2013 | Change % | 1-12/2013 |
| Cash flows from operating activities | ||||
| Profit for the period | 1,824 | 3,058 | -40.4 % | 8,147 |
| Adjustments | 2,874 | 3,794 | -24.2 % | 7,608 |
| Interest and other financial expenses and incomes | -217 | -185 | 17.5 % | -403 |
| Paid Taxes | -1,415 | -2,927 | -51.7 % | -3,402 |
| Change in working capital | -1,296 | 588 | n/a | -1,989 |
| Cash flow from operating activities | 1,770 | 4,328 | -59.1 % | 9,961 |
| Cash flow from investing activities | ||||
| A conditional supplementary contract price for prior subsidiary acquisitions | 0 | -2,576 | n/a | -2,585 |
| Purchases of property, plant and equipment (PPE) | -816 | -400 | 104.0 % | -1,180 |
| Purchases of intangible assets | -614 | -586 | 4.8 % | -1,442 |
| Acquisition of subsidiary, net of cash acquired | 0 | -965 | n/a | -965 |
| Acquisition of assets available for sale | -136 | 0 | n/a | 0 |
| Net cash used in investing activities | -1,566 | -4,527 | -65.4 % | -6,172 |
| Cash flow from financing activities | ||||
| Proceeds from borrowings | 0 | 5,000 | n/a | 5,000 |
| Payments of borrowings | -177 | -821 | -78.4 % | -4,178 |
| Dividends paid | -3,462 | -2,962 | 16.9 % | -2,962 |
| Proceeds from issuance of ordinary shares | 497 | 0 | n/a | 270 |
| Net cash used in financing activities | -3,142 | 1,217 | n/a | -1,870 |
| Change in cash | ||||
| Cash in the beginning | 15,229 | 13,880 | 9.7 % | 13,880 |
| Change in cash during period | -2,938 | 1,018 | n/a | 1,919 |
| Effect of currency changes | -49 | -328 | -85.1 % | -571 |
| Cash at the end | 12,242 | 14,570 | -16.0 % | 15,229 |
| KEY FIGURES | 1-6/2014 | 1-6/2013 | Change % | 1-12/2013 |
|---|---|---|---|---|
| Earnings per share, EUR | 0.10 | 0.18 | -40.4 % | 0.47 |
| Earnings per share fully diluted, EUR | 0.10 | 0.17 | -40.4 % | 0.46 |
| Shareholders' equity per share, EUR | 3.59 | 3.43 | 4.7 % | 3.73 |
| Return on equity | 5.6 % | 10.1 % | -44.7 % | 12.9 % |
| Return on capital employed | 6.0 % | 10.4 % | -42.0 % | 13.0 % |
| Equity ratio | 52.0 % | 48.5 % | 7.3 % | 52.7 % |
| Gearing | 18.2 % | 21.8 % | -16.5 % | 13.8 % |
| Investments, tEUR | 1,549 | 4,637 | -66.6 % | 6,313 |
| Investments % of net sales | 1.7 % | 5.0 % | 3.3 % | |
| Order backlog, tEUR | 17,402 | 12,331 | 41.1 % | 13,100 |
| Personnel, average | 1,275 | 1,336 | -4.6 % | 1,306 |
| Number of shares (thousands) including own shares | 18,897 | 18,729 | 0.9 % | 18,744 |
| Highest share price, EUR | 4.86 | 4.47 | 8.7 % | 4.47 |
| Lowest share price, EUR | 4.25 | 3.78 | 12.4 % | 3.78 |
| Average share price, EUR | 4.52 | 4.14 | 9.3 % | 4.17 |
| Turnover, in million shares | 1.3 | 1.3 | -1.5 % | 2.2 |
| Turnover, in MEUR | 5.9 | 5.6 | 5.6 % | 9.2 |
| Treasury shares | ||||
| Number of shares | % of shares | % of votes | ||
| Possession of company's own shares 30.6.2014 | 1,189,654 | 6.27 % | 6.27 % | |
| Contingent liabilities and pledged assets (tEUR) | ||||
| Leasing and rent liabilities | 5,711 | 7,194 | -20.6 % | 6,748 |
| Derivative instruments (tEUR) | ||||
| Value of underlying forward contracts | 6,748 | 8,288 | -18.6 % | 7,633 |
| Market value of forward contracts | -159 | 158 | n/a | -209 |
| Interest rate swap | 11,000 | 11,000 | 0.0 % | 11,000 |
| Market value of interest swap | -5 | 29 | n/a | -6 |
Taxes are computed on the basis of the tax on the profit for the period.
| OPERATING SEGMENTS (tEUR) | 1-6/2014 | 1-6/2013 | Change % | 1-12/2013 |
|---|---|---|---|---|
| Video and Broadband Solutions | ||||
| Orders received | 52,794 | 44,769 | 17.9 % | 97,815 |
| Net sales | 48,492 | 49,438 | -1.9 % | 101,716 |
| EBIT | 2,635 | 4,744 | -44.5 % | 9,460 |
| EBIT% | 5.4 % | 9.6 % | 9.3 % | |
| Network Services | ||||
| Orders received | 44,453 | 42,816 | 3.8 % | 91,060 |
| Net sales | 44,453 | 42,816 | 3.8 % | 91,060 |
| EBIT | 38 | -404 | n/a | 1,587 |
|---|---|---|---|---|
| EBIT% | 0.1% | -0.9% | 1.7% | |
| Total | ||||
| Orders received | 97,247 | 87,585 | 11.0% | 188,875 |
| Net sales | 92,945 | 92,254 | 0.7% | 192,776 |
| EBIT | 2,673 | 4,340 | -38.4% | 11,047 |
| EBIT% | 2.9% | 4.7% | 5.7% | |
| Financial items | -217 | -185 | 17.5% | -386 |
| Operating segments net profit before taxes | 2,456 | 4,155 | -40.9% | 10,660 |
| INFORMATION PER QUARTER (TEUR) | 4-6/14 | 1-3/14 | 10-12/13 | 7-9/13 |
| --- | --- | --- | --- | --- |
| Video and Broadband Solutions | ||||
| Orders received | 27,898 | 24,896 | 24,127 | 28,919 |
| Net sales | 27,007 | 21,485 | 28,020 | 24,258 |
| EBIT | 1,835 | 801 | 2,354 | 2,362 |
| EBIT % | 6.8% | 3.7% | 8.4% | 9.7% |
| Network Services | ||||
| Orders received | 22,405 | 22,048 | 26,024 | 22,220 |
| Net sales | 22,405 | 22,048 | 26,024 | 22,220 |
| EBIT | -452 | 490 | 1,168 | 823 |
| EBIT % | -2.0% | 2.2% | 4.5% | 3.7% |
| Total | ||||
| Orders received | 50,303 | 46,944 | 50,151 | 51,139 |
| Net sales | 49,412 | 43,533 | 54,044 | 46,478 |
| EBIT | 1,383 | 1,291 | 3,522 | 3,185 |
| EBIT % | 2.8% | 3.0% | 6.5% | 6.9% |
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 | |
|---|---|---|---|---|---|---|---|---|---|
| Shareholder's equity 1.1.2014 | 6,967 | 1,504 | 126 | 53,079 | 3,457 | -6 | 65,127 | 425 | 65,552 |
| Total comprehensive income for the period | -49 | 1,824 | 1 | 1,776 | 1,776 | ||||
| Used options | 497 | 497 | 497 | ||||||
| Paid dividend | -3,564 | -3,564 | 102 | -3,462 | |||||
| Interest, non | 39 | 39 | -39 | 0 |
| controll party | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Equity-settled share based payments | 0 | 0 | 0 | 0 | 0 | 0 | |||
| Shareholder's equity | |||||||||
| 30.6.2014 | 6,967 | 1,504 | 77 | 51,378 | 3,954 | -5 | 63,875 | 488 | 64,361 |
| Shareholder's equity 1.1.2013 | 6,967 | 1,504 | 685 | 48,007 | 2,737 | -22 | 59,878 | 678 | 60,557 |
| Total comprehensive income for the period | -471 | 3,058 | 51 | 2,638 | 0 | 2,638 | |||
| Paid dividend | -3,119 | -3,119 | 157 | -2,962 | |||||
| Interest, non control party | 34 | 34 | -34 | 0 | |||||
| Equity-settled share based payments | 376 | 376 | -376 | 0 | |||||
| Shareholder's equity | |||||||||
| 30.6.2013 | 6,967 | 1,504 | 214 | 47,980 | 3,113 | 29 | 59,807 | 425 | 60,232 |
CALCULATION OF KEY FIGURES
| Return on equity: | Profit/loss for the financial period
* 100
Shareholders' equity (average) |
| --- | --- |
| Return on capital employed: | Profit/loss for the period after financial items + financing charges
* 100
Total assets - non-interest-bearing liabilities (average) |
| Equity ratio: | Shareholders' equity
* 100
Total assets - advances received |
| Gearing: | Interest bearing liabilities - cash in hand and in bank - interest bearing assets
* 100
Shareholders' equity |
| Earnings per share: | Profit for the period attributable to equity holder of the parent
Weighted average number of ordinary shares outstanding during the period |
| Earnings per share, diluted: | Profit for the period attributable to equity holder of the parent (diluted)
Average number of shares - own shares + number of options at the period-end |
| Major shareholders 30.6.2014 | 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 | 953,854 | 5.02 | |
| Kaleva Mutual Insurance Company | 824,641 | 4.34 | |
| Teleste Corporation | 647,654 | 3.41 | |
| OP-Finland Small Firms Fund | 630,712 | 3.32 | |
| 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 | |
| FIM Fenno Mutual Fund | 271,288 | 1.43 | |
| Shareholders by sector 30.6.2014 | Number of shareholders | % of Owners | Number of shares % |
| Households | 4,694 | 92.91 | 4,643,053 |
| Public sector institutions | 4 | 0.08 | 1,990,004 |
| Financial and insurance institutions | 18 | 0.36 | 3,831,929 |
| Corporations | 268 | 5.30 | 7,234,769 |
| Non-profit institutions | 30 | 0.59 | 372,171 |
| Foreign and nominee registered owners | 38 | 0.75 | 913,662 |
| Total | 5,052 | 100.00 | 18,985,588 |
| Number of shares 30.6.2014 | Number of shareholders | % of shareholders | Number of shares % of shares |
| 1 - 100 | 1,104 | 21.9 | 74,892 |
| 101 - 500 | 2,192 | 43.4 | 594,056 |
| 501 - 1,000 | 800 | 15.8 | 661,296 |
| 1,001 - 5,000 | 768 | 15.2 | 1,692,602 |
| 5,001 - 10,000 | 89 | 1.8 | 637,271 |
| 10,001 - 50,000 | 72 | 1.4 | 1,412,603 |
| 50,001 - 100,000 | 4 | 0.1 | 360,131 |
| 100,001 - 500,000 | 15 | 0.3 | 3,343,814 |
| 500,001 - | 8 | 0.2 | 10,208,923 |
| Total | 5,052 | 100 | 18,985,588 |
| of which nominee registered | 770,312 |
Notes
TELESTE
Teleste Corporation
P.O.Box 323, FI-20101 Taiku, Finland
Telestenkatu 1, FI-20600 Utsumen, Finland
Phone +358 2 2605 611 (switchboard)
Investor (staff) + Teleste.com
Business ID 1103267-8
www.teelste.com