Annual Report • Feb 28, 2014
Annual Report
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Vaisala is a global leader in environmental and industrial measurement. Building on 78 years of experience, Vaisala contributes to a better quality of life by providing a comprehensive range of innovative observation and measurement products and services for chosen weather-related and industrial markets. Headquartered in Finland, the company employs over 1,500 professionals worldwide and is listed on the NASDAQ OMX Helsinki stock exchange.
www.vaisala.com
| President's Review | 4–5 |
|---|---|
| 2013 Key Figures | 6 |
| Weather Business Area | 7–8 |
| Controlled Environment Business Area | 9 |
| Board of Directors' Report 2013 | 11–19 |
| Shares and Shareholders | 20 |
| Financial Ratios | 21 |
|---|---|
| Share Figures | 22 |
| Calculation of Financial Ratios | 23 |
| Five Years in Figures | 24 |
| Consolidated Statement of Income | 25 |
|---|---|
| Consolidated Statement of Financial Position | 26–27 |
| Consolidated Statement of Changes in Shareholders' Equity | 28 |
| Consolidated Cash Flow Statement | 29 |
| Notes to the Consolidated Financial Statements | 30– 61 |
| Parent Company Income Statement | 62 |
|---|---|
| Parent Company Balance Sheet | 63–64 |
| Parent Company Cash Flow Statement | 65 |
| Notes to the Parent Company Financial Statements | 66–74 |
| Signing of the Board of Directors' Report and Financial Statements | 75 |
| Auditor's Report | 76 |
| Information for Shareholders | 78–80 |
| Vaisala Offices | 82–83 |
The papers used for the printed review are Munken Polar 300g/m2, 170g/m2 and 90g/m2.
during 2013 the global financial situation was challenging with some improvement showing towards the end of the year especially in the USA and Japan. Also early signs of market stabilization in EMEA were registered towards the end of the year. The slow order intake during the end of 2012 and the first half of 2013, however, negatively affected the full year. Weak governmental finances took a toll on the Weather Business Area. In the Controlled Environment Business Area, net sales were a disappointment in all market areas even though sales volumes increased in China. Further, appreciation of the euro weakened the competitiveness of Vaisala in export markets.
Order intake during the last quarter of 2013 grew by 25% and by 13% during the second half of the year as compared to the preceding year. Orders received for the full year 2013 increased by 7% year-on-year as order intake was especially strong in Meteorology and stable throughout the year in Airports. The order book at the end of 2013 is 16% higher than the previous year.
The slow order intake during the first half of 2013 led to lower sales volumes especially in the fourth quarter, down 10% from the previous year. For the full year 2013 net sales decreased by 7% from the previous year. From a geographic perspective the net sales decline was steepest in APAC where it was 13%. In EMEA, net sales decreased by 8% however in the Americas our
net sales were almost on previous year's level as the decline was just 1% in spite of the US government budget sequestration. Weather Business Area net sales decreased by 8%. However, net sales to Meteorology, Airports and New Weather Markets customer groups were growing as compared to the previous year. Controlled Environment Business Area net sales decreased by 3% year-on-year. The net sales declined both in the Americas and in APAC even though China was growing. Yet, net sales in EMEA remained stable in comparison to the previous year. Moreover, exchange rate fluctuations especially caused by USD ad JPY had a negative effect of EUR 7.8 million on Vaisala's net sales.
For the full year 2013 the operating profit was EUR 18.1 million and decreased by 40% in comparison to the preceding year. The most significant drivers for profit decline were lower sales volumes and one-time impairment charges. The main reason for the impairment charges was delayed Life Science business growth as markets in all geographic areas have not developed according to expectations. Gross margin, however, stayed at 49% level as improvements in the efficiency of operations and delivery projects compensated for the sales volume decline impact on profitability. Operating expenses decreased by 2% from previous year despite additional operating expenses of acquired companies.
Despite uncertain times, our key objective was to continue systematic work to implement our customer based strategy focusing on selected customer groups. This was exemplified by Vaisala's increased presence in the renewable energy markets. In August we acquired Second Wind Systems Inc., a global leader in remote sensing technology and data services for the wind energy industry. In December we acquired 3TIER, a provider of renewable energy assessment and forecasting services. These acquisitions were logical steps in our strategic path; we are now able to provide industry leading, full service renewable energy observation and information services and products.
During the year we have also continued to execute our other two strategic themes: reliability and simplification. Reliability refers to delivering a reliable customer experience. The aim here is to further improve our response time to customers, as well as ensuring that the quality of our offering meets the most demanding customer requirements. Simplification is needed to further increase our focus as well as to optimize our global network of suppliers, partners, and distribution.
The market launch of the fourth generation radiosonde took place in the last quarter of 2013 and represents a major achievement for Vaisala's R&D. This also demonstrates a novel way of involving the customer early on in the design phase of the product development process. Usability and customer experience, in addition to measurement performance and operating cost, are significantly improved in this volume product.
We will continue to invest in product development in order to bring high-end products to the market in the future as well. We have successfully brought R&D closer to our customers, improving our understanding of customer needs, and market demands, throughout the organization in a completely new way.
Sustainability is a part of our strategic framework. Our corporate targets are interlinked with our ambitions to grow through ethical business operations and responsible ambitions. Responsible investors take a long-term approach and look for something beyond quarterly financial statements. Vaisala makes a clear impact in society due to the nature of our offering.
We facilitate the objectives of our customers, working to help them improve their operations further and to mitigate environmental impacts or in the case of meteorology to protect life and property.
Vaisala is on a quest for deeper involvement in weather dependent renewable energy. Vaisala has invested in novel technologies for wind energy. These technologies support the development and installation of wind farms and monitoring of these farms to ensure maximum efficiency, for example. By combining our in-house portfolio with that of the two acquisitions made during 2013 we have a unique offering for actors in the renewable energy domain globally.
Entering 2014, economic uncertainty seems to be slightly easing off with several markets showing early signs of recovery. With our global presence and stateof-the-art offering we are ready to serve our customers as demand begins to pick up.
Great opportunities are ahead of us. Whilst being continuously prepared for external challenges, we continue to work to improve our performance and deliver on our strategic objectives.
EUR 4.3 million
MEUR, Dec. 31, 2013 MEUR, Dec. 31, 2013
For financial ratios and five year development, see pages 21–24.
Vaisala is a leader in environmental measurement business serving weather related and industrial markets globally. The customers of Weather business include meteorological institutes, airports, roads and railroad, defense, and energy industry. Controlled Environment business offers products and services to Life Science customers and chosen applications in various industries.
weather customers care for the safety and wellbeing of people and effectiveness of operations under all weather conditions. They include meteorological institutes, airports and airlines, road and railroad authorities, renewable energy customers, maritime market segments, as well as defense forces. We bring operational benefits to our customers through a wide offering of products, projects, weather information and services.
The Weather business is a partner to customers whose primary interest is the safety and protection of lives and property through effective operations and decision-making support under any weather conditions. Accurate, real-time, uninterrupted and reliable weather data is the cornerstone for efficient operations.
National meteorological institutes provide weather forecasts and warnings to safeguard people and property. They use weather observation data also to measure extreme weather phenomena and follow the changing climate. Turnkey projects and capability upgrades for prediction of severe weather are imperative for customers in the developing markets.
Vaisala's offering to the meteorological institutes includes a versatile range of high-end products, integrated measurement systems and services. Customer needs vary from standard weather observation equipment to further automation of weather networks and remote monitoring systems.
Aviation organizations, airport operators and airport service providers are responsible for passenger safety, flight schedules and the overall efficiency of the airports. Vaisala's aviation weather observation offering provides real-time and reliable observation information to all relevant airport stakeholders under all weather conditions. We support effective operational decisionmaking to improve the safety, efficiency and environmental compatibility of airport operations.
The national and regional road authorities ensure safe and smooth traffic management and maintenance operations. We help them to improve mobility and safety by measuring, forecasting and integrating environmental observations to support operational efficiency, and optimized decision-making.
Vaisala weather observation products and systems are also used in defense weather observation applications. Defense forces and security organizations use Vaisala's weather observation systems and solutions to support operational decision-making and improve safety and efficiency in air, land and sea operations. In addition to their defense functions, many national defense organizations also control civilian airports and contribute to national weather forecasts.
Weather impacts the operations of energy providers all over the world. Energy customers use Vaisala products and services to measure, forecast, and integrate weather information into their operations to improve the effectiveness and reliability of electrical energy systems. In order to ensure efficient and continuous energy production customers rely on Vaisala's real-time and historical lightning information to increase the reliability of the electrical transmission systems. Renewable energy developers utilize our wind resource assessment offering to understand the future performance of their investment. Renewable energy operators use our
high accuracy forecasts to integrate their clean energy into the electrical grid efficiently.
Safety, security and efficiency are top requirements also in various maritime operations. Accurate and reliable weather information is vital in ensuring safe operations in ports, on ships and offshore platforms. Maritime customers include the shipbuilding industry, offshore oil and gas platforms, and ports. Reliable measurements and environmental observations help customers enhance their operational efficiency and optimize decision-making.
More information on Weather Business Area's financial development in 2013 is available on page 12. Information on Weather's business can also be found at www.vaisala.com.
controlled environment serves customers in multiple industries with over 30-year wide industry knowledge. The main drivers for our customers are operational quality, risk reduction, productivity and energy savings. Our customers operate in different types of environments – from small incubators to massive engine rooms and high rise buildings – where reliable measuring and monitoring of the prevailing conditions are a prerequisite for their successful operations. Customers use our fixed and hand held measurement instruments as well as calibration services for temperature, humidity, dewpoint, carbon dioxide, moisture in oil and pressure.
Life science customers, such as pharmaceutical, biotechnical, medical device and drug distribution companies operate in demanding research, production, and storage areas under tight authority regulations. Vaisala monitoring systems provide them with continuous data, records, reports and alarms. We also offer
More information on Controlled Environment Business Area's financial development in 2013 is available on page 12. Information on Controlled Environment's business can also be found at www.vaisala.com.
support plans and field services for our life science customers.
Other industrial customers represent industries such as power generation and transmission, maritime, automotive, semiconductor, electronics and building automation. They all use Vaisala instruments for accurate and stable real time measurements to extend equipment lifetime, improve processes and end-product quality, as well as to optimize energy consumption and indoor air quality.
Challenging economic conditions and especially tight governmental austerity measures characterized weather and industrial measurement solutions market in 2013. Order intake slowdown started in 2012 and continued during the first half of 2013. Further, appreciation of EUR weakened the competitiveness of Vaisala in export markets. As a result, net sales of both Vaisala's Business Areas decreased in 2013. Positively, during the second half of the year early signs of market revival were registered and order intake improved.
In EMEA demand for Vaisala's products and services was slowed down by economic conditions. Early signs of market stabilization were registered towards the end of the year.
In Americas US government budget sequestration measures affected demand for weather measurement solutions in 2013 and order intake weakened as compared to 2012.
Vaisala net sales to APAC decreased in 2013. Nevertheless, weather infrastructure market still remained active. Demand for industrial measurement solutions improved towards the end of the year.
In January-December 2013, orders received were EUR 282.9 (264.7) million and they increased by 7% year-on-year. At the end of December 2013 the order book was EUR 122.0 (105.6) million which was 16% higher than at the end of December 2012. The increase in order book is mainly due to good order intake from Meteorology customer group during the second half of the year. Of the order book, approximately EUR 83 (78) million will be delivered in 2014.
In January-December 2013, net sales were EUR 273.2 (293.3) million and it decreased by 7% from previous year. Weather Business Area net sales were EUR 200.0 (218.0) million and it decreased by 8% year-on-year mainly due to lower purchase volume of governmental customers. Controlled Environment Business Area net sales were EUR 73.2 (75.3) million and it decreased by 3% year-on-year mainly due to appreciated euro and challenging economic conditions. At comparable exchange rates the net sales would have been EUR 281.0 (293.3) million. The negative exchange rate effect was EUR 7.8 million, which was mainly caused by JPY and USD exchange rate fluctuations.
Net sales were in the Americas EUR 107.8 (108.6) million in January-December 2013 and it decreased by 1% year-on-year, in EMEA EUR 98.6 (107.6) million and
it decreased by 8% year-on-year, and in APAC EUR 66.9 (77.2) million and it decreased by 13% year-on-year.
Operations outside Finland accounted for 97% (98%) of net sales.
In January-December 2013, the operating profit was EUR 18.1 (30.2) million. The operating profit decreased by 40% year-on-year. The decrease in operating profit was mainly caused by lower net sales and the impairment charge of EUR 4.3 million. The impairment charge is related to goodwill and intangible assets originating from the acquisitions of Veriteq Instruments Inc. in 2010. This impairment charge was mainly due to delayed Life Science business growth as markets in all geographic areas have not developed according to expectations. Vaisala's operating profit also included a net gain of EUR 1.5 million from the sale of three nonweather road transportation product lines.
Operating expenses excluding other income and expenses were EUR 113.6 (115.7) million and they decreased 2% from previous year. Main reasons were lower sales and marketing expenses as well as decreased bad debt provision.
Profit before taxes was EUR 17.2 (29.1) million for the period of January-December 2013. Income taxes were EUR 6.2 (7.4) million. Net profit was EUR 10.9 (21.7) million. Effective tax rate of 36.4% (25.6%) is high mainly due to non-tax deductibility of the impairment charge.
Earnings per share for January-December 2013 were EUR 0.60 (1.20).
Vaisala's financial position remained strong at the end of the December 2013. Cash and cash equivalents amounted to EUR 45.8 (74.8) million at the end of December 2013 and Vaisala did not have any material interest bearing liabilities.
The balance sheet total was EUR 225.6 (257.0) million. The solvency ratio at the end of the December 2013 was 72% (75%), the decrease was mainly caused by capital return.
In January-December 2013, Vaisala's cash flow from business operations was EUR 28.2 (48.2) million and the decrease is mainly related to lower operating profit and higher income taxes paid. In January-December 2013, Vaisala spent EUR 12.3 million in acquisitions as well as paid shareholders EUR 16.2 million dividend in April and EUR 22.2 million capital return in August.
In January-December 2013, gross capital expenditure including acquisitions totaled EUR 19.4 (5.4) million. Capital expenditure excluding acquisitions was EUR 7.1 (5.4) million and relates to production, IT and facilities. Depreciation total was EUR 14.8 (15.8) million.
In August 2013, Vaisala acquired Second Wind Systems Inc., a global leader in remote sensing technology and data services for the wind energy industry. In December, Vaisala acquired renewable energy assessment and forecasting services company 3TIER Inc. The total financial considerations for the Second Wind Inc. were EUR 1.4 million and for 3TIER Inc. was EUR 11.5 million. Vaisala used its existing cash balance to finance both transactions.
Vaisala divested Non-weather Road Transportation Product Lines in March 2013 with a sales price of EUR 3.5 million and recognized EUR 1.5 million profit. EUR 2.5 million of the sales price was paid in March 2013 and the remaining EUR 1.0 million will be paid in three annual installments during 2014–2016.
In January-December 2013, Weather Business Area net sales were EUR 200.0 (218.0) million and it decreased by 8%. The decrease was mainly caused by lower purchase volume from governmental customers. However, net sales to Meteorology, Airports and New Weather Markets customer groups was growing as compared to previous year. Net sales decreased in EMEA and APAC and remained stable in the Americas.
At comparable exchange rates, the net sales would have decreased by 6%. The negative exchange rate effect was EUR 4.4 million, which was mainly caused by USD and JPY exchange rate fluctuations.
Weather Business Area operating profit for January-December 2013 was EUR 14.5 million and it decreased by EUR 8.1 million from EUR 22.6 million in previous year. The decline was mainly due to lower volume of delivery projects. Despite of lower net sales gross margin percentage was on the same level as in previous year. Operating expenses decreased from previous year mainly due to decrease in sales and marketing expenses and decrease in bad debt provision and in spite of additional operating expenses of acquired companies.
In January-December 2013, orders received were EUR 208.3 (189.0) million and they increased by 10% year-on-year. Increase in orders received came mainly from Meteorology customer group in Weather Business Area. The order book was EUR 116.2.0 (101.2) million which is 15% higher than at the end of December 2012 due to good order intake and exceptionally low net
sales at year-end. Of the order book, approximately EUR 77 million will be delivered in 2014.
Weather Business Area's service sales totaled EUR 32.7 (34.1) million.
In August, 2013, Vaisala acquired Second Wind Systems Inc., a global leader in remote sensing technology and data services for the wind energy industry. In December, Vaisala acquired renewable energy assessment and forecasting services company 3TIER Inc. The total financial considerations for the Second Wind Inc. was EUR 1.4 million and for 3TIER Inc. was EUR 11.5 million. Vaisala used its existing cash balance to finance both transactions.
In January-December 2013, Controlled Environment Business Area net sales were EUR 73.2 (75.3) million and they decreased by 3% from previous year. Sales to both Life Science and Targeted Industrial Applications customer groups decreased. Controlled Environment Business Area net sales decreased in the Americas and also in APAC even though China was growing. Net sales in EMEA was stable as compared to previous year.
At comparable exchange rates, the net sales would have increased by 2%. The negative exchange rate effect was EUR 3.4 million which was mainly caused by JPY and USD exchange rate fluctuations.
Controlled Environment Business Area operating profit for January-December 2013 was EUR 4.0 million and it decreased by EUR 5.4 million from EUR 9.4 million in previous yearDecreased operating profit was mainly due to lower sales volumes and the impairment charge of EUR 4.3 million. The impairment charge is related to goodwill and intangible assets originating from the acquisitions of Veriteq Instruments Inc. in 2010. This impairment charge was mainly due to delayed Life Science business growth as markets in all geographic areas have not developed according to expectations.
Operating expenses decreased from previous year mainly due to decrease in sales and marketing expenses and decrease in bad debt provision, but investments in R&D continued.
In January-December 2013, orders received were EUR 74.6 (75.7) million and they decreased by 1% year-on-year. The order book was EUR 5.8 (4.4) million which is 31% higher than at the end of December 2012. The increase in order book is mainly due to new projects. Of the order book, approximately EUR 5 million will be delivered in 2014.
Controlled Environment Business Areas service sales totaled EUR 9.0 (8.2) million.
In January-December 2013, research and development (R&D) expenses amounted to EUR 28.9 (28.0) million, representing 10.6% (9.5%) of net sales. In addition to planned investments to strengthen Vaisala's position as technology leader, the increase is explained by R&D expenses of acquired businesses.
Weather Business Area R&D expenses were 11.2% (10.0%) of net sales. Controlled Environment Business Area R&D expenses were 8.9% (8.2%) of net sales.
Vaisala launched several products or software releases in 2013. More details concerning the new products can be found at www.vaisala.com. The most important ones are listed under.
During January-March, Controlled Environment Business Area launched three humidity and temperature probes and transmitters for building automation and for indoor industrial applications.
During January-March, Weather Business Area launched a browser application for Airports customers and two software updates for Defense and Roads & Rail customers.
During April-June 2013, Weather Business Area launched AviMet® Wind Panel Display for aviation applications, Automatic Weather Station AWS310, RoadDSS Manager, a decision support system for road maintenance operators. Vaisala RoadDSS Manager Software Suite combines critical weather information and offers instructions for road maintenance. The reports provided by the suite help road maintenance organizations to make quick and effective decisions.
During April-June 2013, Controlled Environment Business Area launched INTERCAP® outdoor humidity and temperature transmitters HMS82/83 for HVAC markets.
During July-September 2013, Weather Business Area launched a new version of a wind sensor. Vaisala Ultrasonic Wind Sensor WMT700 measures wind conditions accurately and reliably even in extremely cold climates with heavy snow and ice conditions. The new wind sensor is targeted for the wind energy industry, other applications include aviation industry and weather forecasting.
A new Vaisala Radiosonde RS41, the heart of Vaisala's 4th Generation Soundings, was launched at Meteorological Technology World Expo (MTWE2013) in Brussels in October 15, 2013. The Vaisala Radiosonde RS41 streamlines launch preparations, reduces human errors, and lowers operational costs of upper-air weather observations, while delivering industry-leading data accuracy.
On November, 2013, Vaisala released GMW90 carbon dioxide, temperature, and humidity instruments with
Vaisala-patented next generation infrared technology. The GMW90 is the ultimate tool for HVAC professionals looking for an easy to use, hassle-free solution to carbon dioxide measurements.
December, 2013, Vaisala released the Advanced Total Lightning sensor, offering the latest in precision lightning technology. It is the first, non-very high frequency, lightning detection sensor to detect total lightning and, at the same time, correctly differentiate between cloud and cloud-to-ground lightning. This brings most cost effective solution for customers needing to detect all lightning types.
On December 31, 2013, the number of Group employees was 1,563 (December 31, 2012: 1,442). The average number of personnel employed in the Vaisala in January-December 2013 was 1,485 (1,422).
At the end of 2013, 34% (32%) of Vaisala employees worked in Weather Business Area and 11% (7%) in Controlled Environment Business Area. 66% (65%) of employees were located EMEA, 25 % (26%) in the Americas and 9% (9%) in APAC. 41% (42%) of employees were based outside Finland. At the end of the year 19% (19%) of employees were employed in the company's research and development activities. 70% (73%) of employees were men and 30% (27%) women.
On May 3, 2012 the Board of Directors resolved for the key employees a new share-based incentive plan that is based on the development of profitability in calendar year 2012 and it will be paid partly in the Company's series A shares and partly in cash in spring 2015. The cash proportion will cover taxes and tax-related costs arising from the reward to a key employee. No reward will be paid, if a key employee's employment or service ends before the reward payment date.
In 2013, Vaisala established a new share incentive plan for the group key employees' that is based on the development of group's profitability in calendar year 2013. It will be paid partly in the Company's series A shares and partly in cash in spring 2016. The cash proportion will cover taxes and tax-related costs arising from the reward to a key employee. No reward will be paid, if a key employee's employment or service ends before the reward payment date. There will be no reward payment based on Group's profitability in calendar year 2013.
The total personnel expenses in 2013 were EUR 104.7 (104.5) million.
Vaisala's Management Group practices changed as of January 1, 2013. There is now one Vaisala Management Group in the company, led by the President and CEO. The Management Group has seven members and it convenes once a month to execute Vaisala's strategy and take care of the company's operative management. It consists of President and CEO, the heads of business areas, finance and control, operations, services and human resources.
Sampsa Lahtinen was appointed as a new Executive Vice President of Vaisala's Controlled Environment Business Area and a member of Vaisala Management Group as of October 22, 2013.
More details concerning members of the Vaisala's Management Group can be found at www.vaisala.com.
Vaisala has a risk management policy which has been approved by the Board of Directors, and which policy covers the company's business, operational, hazard, and financial risks. The policy aims at ensuring the safety of the company's personnel, operations and products, as well as the continuity and compliance of business operations.
Risk management is integrated into business processes and operations. This is accomplished by the risk management process, which consists of risk identification, assessment, treatment, follow-up, and reporting. The most significant risks are reported to the Audit committee and to the Board of Directors annually, and as needed.
Vaisala's Risk Management Steering Group, represented by key internal stakeholders, is responsible for the oversight of the risk management process and ensuring that all significant risks are identified and reported, and risks are acted upon on all necessary organizational levels and geographical locations.
Those risks common to international manufacturing business affect Vaisala's operating environment. The most significant of these are changes in the global economy, currency exchange rates, supply chain, and production. These may affect Vaisala's business both in the short and in the long term. Vaisala monitors these risks and prepares for them in accordance with the company's risk management policy.
Global insurance programs cover risks relating to property damage, business interruption, different liabilities, transportation, and business travel. In general, Vaisala's ability to tolerate risks is good due to strong capital structure.
Vaisala's business is exposed to changes in the global economy, politics, policies, regulations, Vaisala's supply chain, and accidents as well as natural disasters, which may affect business e.g. through order cancellations, disturbance in logistics, and loss of market potential. Vaisala's capability to successfully complete investments, acquisitions, divestments and restructurings on a timely basis and to achieve related financial and operational targets represent a risk which may impact revenue and profitability.
The most significant near term risks and uncertainties that may affect both revenue and profitability relate to the company's ability to maintain its delivery capability, availability of critical components, interruptions in manufacturing and associated IT systems, changes in the global economy, currency exchange rates, customers' financing capability especially in the EU and in the USA, changes in customers' purchasing or investment behavior, and delays or cancellations of orders. Changes in the competition may affect the volume and profitability of business through introduction of new competitors and price erosion in areas which traditionally have been strong for Vaisala. Changes in subcontractor relations, their operations or operating environment as well as the quality of the deliverables may have a negative impact on Vaisala's business.
A significant part of Vaisala's business is project business. Project business performance and schedules have dependencies to third parties, which may impact profitability and the timing of revenue recognition. Assumptions regarding new project and service business opportunities constitute a risk for both revenue and profitability.
Interest rate risk arises from the effects of interest rate changes on interest-bearing receivables and liabilities in different currencies. Vaisala does not have significant interest-bearing liabilities or receivables and in addition to cash at hand therefore interest rate risk is immaterial. A change of one percent point in the interest rate would affect the company's result after taxes and equity by around EUR 0.3 (EUR 0.2) million.
Vaisala operates globally and is exposed to foreign exchange transaction and translation risks in many currencies. Transaction risk relates to currency flows from revenues and expenses and translation risk relates translation of income statement and balance sheet or foreign subsidiaries into euros.
The sales takes place in various currencies. From the Group's sales 46% is in EUR, 39% in USD, 5% in JPY and 4% in GBP. The cost and purchases occurs mostly in Euro and US dollars. The group policy is to hedge around 50% of order book and net receivables with currency forwards. Vaisala does not apply hedge accounting in accordance with IFRS.
Group internal loans and deposits are primarily initiated in the local currencies of subsidiaries. Vaisala does not hedge internal loans, deposits or equities of foreign subsidiaries. Translation of subsidiaries' balance sheets into euros caused translation difference of EUR -3.4 (-1.1) million. The most significant translation risk exposures are in US dollars.
The foreign exchange sensitivity analysis in line with IFRS 9 has been calculated to the most important foreign currency nominated financial assets and liabilities of group companies. The calculation does not include order book or forecasted cash flows but include foreign exchange forwards. 10% strengthening of currencies against EUR has an effect of -1.4 (-1.5) million EUR on Vaisala profit after taxes and equity. In the following table are the most significant foreign exchanges exposures against EUR.
| MEUR | 2013 | 2012 |
|---|---|---|
| USD | -14.6 | -16.9 |
| AUD | -1.3 | -1.6 |
| JPY | -1.2 | -1.4 |
Vaisala cash at hand amounts to EUR 45.8 (74.8) million. The parent company has also EUR 20 million uncommitted credit loan limit, which is currently unused. Additionally, the subsidiaries have EUR 1.6 million credit loan limit, which can be drawn either guarantees or loans. Currently, EUR 0.0 (0.0) million has been draw from this facility. Vaisala does not have any other material external interest bearing liabilities.
Vaisala has substantial amount of cash which exposes Vaisala to financial counterparty risk. Vaisala invest cash only to counterparties with good credit worthiness. All the cash investment counterparties are approved by Board of Directors. Counterparty creditworthiness is evaluated constantly. The maturity of cash investments are less than one month as of 31 December 2013.
Credit risks are hedged by using letters of credit, advance payments and bank guarantees as terms of payment. According to Group management, the company has no material credit risk concentrations, because no individual customer or customer group represents an excessive risk, resulting from global diversification of the company's customer pool. Total credit losses arising from accounts receivable and recognized for the financial year amounted to EUR -0.7 million (0.7). Bad debts are written off when official announcement of receivership, liquidation or bankruptcy is received confirming that the receivable will not be honored.
Vaisala's share capital totaled EUR 7,660,808 on December 31, 2013. On December 31, 2013, Vaisala had 18,218,364 shares, of which 3,389,351 are series K shares and 14,829,013 are series A shares. The shares have no counter book value. The K shares and A shares are differentiated by the fact that each K share entitles its owner to 20 votes at a General Meeting of Shareholders while each A share entitles its owner to 1 vote. The A shares represent 81.4% of the total number of shares and 17.9% of the total votes. The K shares represent 18.6% of the total number of shares and 82.1% of the total votes.
The Annual General Meeting authorized the Board of Directors to decide on the directed acquisition of a maximum of 150,000 of the Company's own A shares in one or more installments with funds belonging to the Company's unrestricted equity. The new authorization replaces the previous one and is valid until the closing of the next Annual General Meeting, however, no longer than September 26, 2014. The Board of Directors did not utilize the authorization during 2013.
The Annual General Meeting authorized the Board of Directors to decide on the transfer of a maximum of 309,150 own A shares. The transfer of own shares may be carried out in deviation from the shareholders' preemptive rights and may be transferred as a directed issue without payment as part of the Company's share based incentive plan. The authorization can also be used to grant special rights entitling subscription of own shares, and the subscription price of the shares can instead of cash also be paid in full or in part as contribution in kind. The new authorization replaces the previous one and is valid until 26 March 2018. The Board of Directors did not utilize the authorization during 2013.
Vaisala Corporation's Annual General Meeting decided to decrease the share premium fund presented in the company's balance sheet on December 31, 2012 by EUR 22,306,293.52 by transferring all the funds in the share premium fund into the invested non-restricted equity fund. The Meeting also decided that of the funds
transferred into the invested non-restricted equity funds EUR 1.23 per share will be distributed to the shareholders as a return of capital, which equals to approximately EUR 22.2 million return of capital. The Annual General Meeting authorized the Board of Directors to decide on the record date for the distribution of funds and the payment date as soon as possible after the due date for the public summons notified to the Finnish National Board of Patents and Registration. The Board of Directors utilized the authorization. The record date for the distribution of funds was August 16, 2013 and the payment date for the return of capital was August 27, 2013.
The Annual General Meeting authorized the Board of Directors to donate at maximum 250,000 euros. The authorization is valid until the Annual General Meeting of 2014. The Board of Directors did not utilize the authorization during 2013.
Apart from the above, the Board of Directors has no other authorizations to issue shares, convertible bonds or warrants programs.
In 2013, a total of 2,876,861 (1,018,902) Vaisala shares with a value totaling EUR 56.5 (16.2) million were traded on the NASDAQ OMX Helsinki Ltd.
The closing price of the Vaisala Corporation share on the NASDAQ OMX Helsinki Ltd stock exchange in 2013 was EUR 23.21 (15.90). Vaisala's share price rose by 44% during the year while OMX Helsinki Cap index rose by 22%. Shares registered a high of EUR 23.47 (17.71) and a low of EUR 16.04 (14.48). The average share price was EUR 19.88.
The market value of Vaisala's A shares on December 31, 2013 was EUR 344.2 (233.3) million, excluding the Company's treasury shares. Valuing the K shares – which are not traded on the stock market – at the rate of the A share's closing price on the last day of December, the total market value of all the A and K shares together was EUR 419.2 million (287.1), excluding the Company's treasury shares.
At the end of December, Vaisala Corporation had 7,708 (7,000) registered shareholders. Ownership outside of Finland and nominee registrations represented 14.1% (12.9%) of the company's shares. Public sector entities owned 4.6% (6.5%), financial and insurance corporations 11.6% (12.3%), households 46.6% (45.9%), non-profit institutions 8.8% (8.9%), private companies 14.3% (13.6%).
Vaisala Corporation's Board of Directors held and controlled 1,281,690 A shares on December 31, 2013 and 656,320 K shares. The Board of Directors' A and K shares accounted for 17.5 (17.3%) of the total votes.
The company's President and CEO held and controlled 2,720 A shares and no K shares on December 31, 2013 (2012: 2,720 A shares). Other Management Group
members held and controlled 4,463 Vaisala A shares and no K shares (2012: 4,463 A shares).
At the end of December, the Company held a total of 159,150 (159,150) Vaisala A shares, which represented 0.9% (0.9%) of the share capital and 0.2% (0.2%) of the votes. The consideration paid for these shares was EUR 2,527,160.
More information about Vaisala's share and shareholders are presented on the website, www.vaisala.com/investors.
In accordance with Vaisala Corporationäs Articles of Association, the company's board of Directors comprises at least four and at most eight members. According to current practice, the board comprises six members. All Board members are appointed by General Meeting of Shareholders. The board elects a Chairman and a Vice Chairman from among it's members.
In deviation from recommendation no. 10 of the Finnish Corporate Governance Code, the term of office of members of the Board is not one year. Instead, the term of office is three years, as stipulated in the Articles of Association. The term of office begins after the General Meeting of Shareholders at which the member is elected, and ends at the close of the third Annual General Meeting that follows the member's election. Unless the General Meeting of Shareholders decides on a shorter term of office.
Evaluated against the criteria given in ecommendation 15, all seven members ofthe Board of Directors are independent of the company. Evaluated against the criteria given in Recommendation 15, Timo Lappalainen, Yrjö Neuvo, Mikko Niinivaara and Maija Torkko are independent of both the company and the shareholders. Evaluated against the criteria given in Recommendation 15 Raimo Voipio and Mikko Voipio are dependent on significant shareholders. The current composition of the Board of Directors fulfills the independence requirements stated in the Recommendation 14.
Vaisala's President and CEO is appointed by the Board. The President and CEO manages the company in accordance with the instructions and orders given by the Board, and informs the Board of the development of the company's business and financial situation. The President and CEO is also responsible for arranging the company's operative management.
Vaisala Group's related parties include subsidiaries, associated companies, members of the Board of Directors, and the President and CEO. Transactions with related parties are based on market prices and conditions. No loans were granted to the related parties, and no contingent liabilities were made on their behalf.
Vaisala's headquarters are located in Vantaa, Finland. On December 31, 2013, the company has subsidiaries in Australia, Brazil, Canada, China, Germany, France, India, Japan, Malaysia, United Kingdom and United States and a new operative entity in Panama. Further, the company has permanent establishments in Sweden and Kuwait, and regional offices in India, South Korea and the United Arab Emirates. The addresses and contact details of Vaisala offices are available on the company's website.
Since the company's foundation 78 years ago, Vaisala has been an active member of society and especially devoted to the scientific community and academia. Vaisala collaborates in several projects with leading research institutes in the field. In the USA, Vaisala collaborates in several projects with leading research institutes in the field, such as the National Oceanic and Atmospheric Administration (NOAA), Colorado State University, University of Massachusetts, and the US National Center for Atmospheric Research (NCAR) in the United States. In Finland, Vaisala conducts joint projects with Finnish Meteorological Institute, VTT (Technical Research Centre of Finland), University of Helsinki and Aalto University. In Asia Vaisala is working with Shanghai Meteorological Service and the Nanjing University for Information Science and Technology (NUIST) in China.
Vaisala grants research scholarships to universities, students, and researchers in the USA, Finland and China.
Vaisala collaborates closely with a number of national meteorological services around the world and is an active participant in UN World Meteorological Organization (WMO) projects. Vaisala also collaborates with Finnish Meteorological Institute on several projects.
Vaisala funds the annual Professor Vilho Väisälä Award, which was established in 1985. It is administered by the World Meteorological Organization (WMO) and awarded to stimulate interest in meteorological research that involves meteorological observation methods and instruments. The Award recognizes outstanding research papers which comprises a monetary award, a medal and a diploma.
Vaisala supports The Millennium Technology Prize, which is Finland's tribute to life-enhancing technological innovations. The prize has been established to steer the course of technological development to a more humane direction. In particular, the prize seeks to highlight innovations that assist and enrich our everyday lives today as well as in the future.
Vaisala is a partner of Cleen Oy, a strategic center for science, technology, and innovation for energy and environment businesses in Finland. Vaisala also partners with Technology Academy Finland.
Vaisala participates in the Distinguished Professor Program (Finland) by supporting scientists at the Finnish Meteorological Institute and University of Helsinki.
Vaisala's representatives are also members of the Board of the Federation of Finnish Technology Industries and in its committees, such as the Environmental Committee.
In the United States, Vaisala is an active member of the Board of Trustees at the University Corporation for Atmospheric Research (UCAR), the Director's Advisory Committee of the National Center for Atmospheric Research (NCAR), the External Advisory Committee of NCAR's Earth Observing Laboratory, the Industrial Advisory Board of the Center for Adaptive Sensing of the Atmosphere, and the Dean's Advisory Board to the College of Engineering at Colorado State University and an advisory committee for the University of Arizona's Atmospheric Sciences Department. Vaisala also is a member of the Board of CO-LABS in the state of Colorado and on the Environmental Information Services Working Group of the NOAA Science Advisory Board, as well as on the Executive Committee of the Weather Coalition.
Vaisala is also a participant in the International Electrotechnical Commission's Committee on Lightning Protection, which includes Lightning Location Systems and Lightning Warning Systems.
Vaisala expects that signs of economic recovery will gradually revive weather and industrial measurement solution market, normally expressing post-cyclical behavior. Vaisala's improved order backlog also indicates slight improvement in market conditions. However, outlook still varies significantly between customer groups and uncertainty in timings of weather customers' projects continues to limit forecasting visibility. Intensive competitive pressures also characterize many applications and market regions.
Hence, overall expectations do not refer to significant upturn.
In the Americas weather measurement solution market outlook is weakened by already implemented US government budget sequestration and uncertainty on further actions. Modest growth in demand for industrial measurement solutions is expected, but competitive pressures are not easing.
In EMEA demand for measurement solutions is expected to be supported by gradually improving economic conditions. Weather infrastructure markets in APAC are active. Outlook of industrial measurement solutions is solid in APAC.
Vaisala estimates its full year 2014 net sales to be in the range of EUR 290–320 million and the operating profit (EBIT) in the range of EUR 20–30 million.
In January-December 2013, Vaisala's net sales were EUR 273.2 million and operating profit (EBIT) was EUR 18.1 million.
The parent company's distributable earnings amount to EUR 144,858,803.54, of which the net result for the period is EUR 27,087,116.38.
The Board of Directors proposes to the Annual General Meeting that the distributable earnings be used as follows:
company.
There have been no significant changes to the company's financial position since the close of the financial period. According to the Board of Directors, the proposed dividend distribution does not endanger the company's financial standing.
The Board of Directors proposes to the Annual General Meeting a dividend of EUR 0.90 per share for the fiscal
year 2013 to be paid. The dividend would be paid to shareholders registered in the Register of Shareholders held by Euroclear Finland Ltd on the record date of the dividend distribution, March 31, 2014. The Board of Directors proposes that the dividend will be paid on April 7, 2014.
The Board of Directors proposes to the Annual General Meeting that the annual fee payable to the Board members elected at the same meeting for a term until the close of the Annual General Meeting in 2015 will be: the Chairman of the Board of Directors EUR 45,000 and each Board member EUR 35,000 per year. Approximately 40 percent of the annual remuneration will be paid in Vaisala Corporation's A shares acquired from the market and the rest in cash. The shares will be acquired directly in the name of the Board members within two weeks from the release of the interim report for January 1–March 31, 2014. The Company will pay the costs related to the acquisition of the Company shares.
The Board of Directors proposes to the Annual General Meeting that the compensation for the Chairman of the Audit Committee would be EUR 1,500 per attended meeting and EUR 1,000 for each member of the Audit Committee for a term until the close of the Annual General Meeting in 2015.
The Board of Directors proposes to the Annual General Meeting that the compensation for the Chairman and each member of the Remuneration Committee and any other committee established by the Board of Directors would be EUR 1,000 per attended meeting for a term until the close of the Annual General Meeting in 2015.
Shareholders representing more than 10% of all the votes in the company have announced their intention to propose to the Annual General Meeting, that the number of Board members be seven. The proposal for the number of the Board members is integrally related to the proposal by the same shareholders for the election of the members of the Board of Directors as presented in section 12 below.
The terms of office of Board members Raimo Voipio, Mikko Niinivaara and Timo Lappalainen will end at the Annual General Meeting. Board member Timo Lappalainen has informed that he will not be available for re-election at the Annual General Meeting. Mr. Lappalainen has been a Board member since 2011. As Mr. Lappalainen is not available for re-election the shareholders representing more than 10% of all the votes in the company have announced their intention to propose to the Annual General Meeting, that
Raimo Voipio and Mikko Niinivaara be re-elected as members of the Board of Directors and that Ms. Petra Lundström and Mr. Pertti Torstila be elected as a new members of the Board of Directors. Due to stipulations of the Articles of Association concerning the term of the members of the Board of Directors Ms. Petra Lundström would be elected for a term until the close of the Annual General Meeting in 2015 and the other member candidates proposed to be elected for a term until the close of the Annual General Meeting in 2017. The above mentioned candidates have given their consent to the election and their personal information is presented on the Company's website www.vaisala.com/investors.
The Board of Directors proposes to the Annual General Meeting that the Auditors be reimbursed according to their reasonable invoice presented to the company.
Following the competitive tenders for auditing services, the Board of Directors proposes to the Annual General Meeting that Authorized Public Accountants Deloitte & Touche Oy be elected to act as auditor of the Company until the end of the following Annual General Meeting. Deloitte & Touche Oy has informed that APA Merja Itäniemi will act as the auditor with the principal responsibility.
The Board of Directors proposes that the General Meeting authorize the Board of Directors to decide on the directed acquisition of a maximum of 160,000 of the Company's own A shares in one or more instalments with funds belonging to the Company's unrestricted equity.
The shares shall be acquired in a proportion other than that of the shareholders' current shareholdings in the Company in public trading arranged by NASDAQ OMX Helsinki Ltd at the market price on the moment of acquisition. The shares shall be acquired and paid according to the rules of NASDAQ OMX Helsinki Ltd and Euroclear Finland Ltd. The Board of Directors is authorized to decide on the acquisition of own shares in all other respects.
It is proposed that the authorization is valid until the closing of the next Annual General Meeting, however, no longer than September 26, 2015. The authorization replaces the previous authorization for directed acquisition of own A shares granted by the Annual General Meeting on March 26, 2013.
The Board of Directors proposes that the General Meeting authorize the Board of Directors to decide on the transfer of the Company's own shares as follows.
The authorization concerns only A shares held by
the Company. The authorization is limited to a maximum of 319,150 shares, which corresponds to approximately 2.15 per cent of all A shares in the Company and to approximately 1.75 per cent of all shares in the Company.
The transfer of own shares may be carried out in deviation from the shareholders' pre-emptive rights (directed issue). The authorization entitles the transfer of shares that are held by the Company as a directed issue without payment as part of the Company's share based incentive plan. The Board of Directors can also use this authorization to grant special rights entitling subscription of the Company's own shares that are held by the Company. The subscription price of the shares can instead of cash also be paid in full or in part as contribution in kind.
The Board of Directors decides on all other conditions of the transfer of own shares. It is proposed that the authorization is valid until March 26, 2019. The authorization replaces the previous authorization for transferring own A shares granted by the Annual General Meeting on March 26, 2013.
The Board of Directors proposes that the Annual General Meeting authorize the Board of Directors to decide on donations of maximum EUR 250,000. The donations may be granted in one or several payments. The Board of Directors decides on the related payments. It is proposed that the authorization is valid until the close of the Annual General Meeting in 2015.
Vaisala's Annual General Meeting will be held on Wednesday, March 26, 2014 at 6 p.m. at Vaisala Corporation's head office, Vanha Nurmijärventie 21, 01670 Vantaa.
Vantaa, February 10, 2014
Vaisala Corporation Board of Directors
The forward-looking statements in this report are based on the current expectations, known factors, decisions and plans of Vaisala's management. Although the management believes that the expectations reflected in these forward-looking statements are reasonable, there is no assurance that these expectations would prove to be correct. Therefore, the results could differ materially from those implied in the forward-looking statements, due to for example changes in the economic, market and competitive environments, regulatory or other government-related changes, or shifts in exchange rates.
| Total number | % of share | ||||
|---|---|---|---|---|---|
| Share A | Share K | of shares | capital | % of votes | |
| Novametor Oy | 1,389,000 | 465,801 | 1,854,801 | 10.2 | 13.0 |
| Finnish Academy of Science and Letters | 425,093 | 878,880 | 1,303,973 | 7.2 | 21.8 |
| Mandatum Life Insurance Company Limited | 629,250 | 137,400 | 766,650 | 4.2 | 4.1 |
| Voipio Hannu | 727,680 | 2,560 | 730,240 | 4.0 | 0.9 |
| Ilmarinen Mutual Pension Insurance | |||||
| Company | 635,000 | - | 635,000 | 3.5 | 0.8 |
| Voipio Mikko | 332,400 | 301,156 | 633,556 | 3.5 | 7.7 |
| Caspers Anja | 203,280 | 281,468 | 484,748 | 2.7 | 7.1 |
| Voipio Raimo Hannes | 253,280 | 227,148 | 480,428 | 2.6 | 5.8 |
| Voipio Tauno | 295,760 | 157,652 | 453,412 | 2.5 | 4.2 |
| Voipio Lauri | 279,310 | 41,176 | 320,486 | 1.8 | 1.3 |
| Voipio Riitta | 279,310 | 41,176 | 320,486 | 1.8 | 1.3 |
| Tapiola General Mutual Insurance Company | 244,700 | - | 244,700 | 1.3 | 0.3 |
| Nominee registered | 2,538,791 |
Each A share conveys 1 vote, each K share conveys 20 votes at a General Meeting at Shareholders.
| Number of shares | % of share capital | |
|---|---|---|
| Households | 8,489,643 | 46.6 |
| General Government | 828,905 | 4.6 |
| Financial and insurance corporations | 2,115,508 | 11.6 |
| Non-profit institutions | 1,610,555 | 8.8 |
| Non-financial corporations and | ||
| housing corporations | 2,605,992 | 14.3 |
| Outside Finland and nominee registered | 2,562,701 | 14.1 |
| In the joint book-entry account | 5,060 | 0.0 |
| Total | 18,218,364 | 100.0 |
| Number of shares | Number of shareholders |
% of share holders |
Number of shares |
% of share capital |
|---|---|---|---|---|
| 1–100 | 3,437 | 44.6 | 195,910 | 1.1 |
| 101–500 | 3,029 | 39.3 | 777,133 | 4.3 |
| 501–1,000 | 651 | 8.4 | 503,786 | 2.8 |
| 1,001–5,000 | 449 | 5.8 | 962,627 | 5.3 |
| 5,001–10,000 | 52 | 0.7 | 354,311 | 1.9 |
| 10,001–50,000 | 51 | 0.7 | 1,274,991 | 7.0 |
| 50,001– | 10 | 0.1 | 800,484 | 4.4 |
| 100,001– | 21 | 0.3 | 4,910,629 | 27.0 |
| 500,001– | 8 | 0.1 | 8,433,433 | 46.3 |
| Ownership groups total | 7,708 | 100.0 | 18,213,304 | 100.0 |
| In the joint book-entry account | 5,060 | 0.0 | ||
| Total | 7,708 | 100.0 | 18,218,364 | 100.0 |
| Nominee registered | 9 | 0.1 | 2,538,791 | 13.9 |
| IFRS 2013 |
IFRS 2012 |
IFRS 2011 |
|
|---|---|---|---|
| Net sales, EUR million | 273.2 | 293.3 | 273.6 |
| Exports and international operations, % | 97.1% | 98.3% | 98.2% |
| Operating profit, EUR million | 18.1 | 30.2 | 16.1 |
| % of net sales | 6.6% | 10.3% | 5.9% |
| Profit before taxes, EUR million | 17.2 | 29.1 | 16.1 |
| % of net sales | 6.3% | 9.9% | 5.9% |
| Return on equity (ROE) | 6.3% | 11.7% | 5.7% |
| Solvency ratio | 71.6% | 74.9% | 73.7% |
| Current ratio | 2.3 | 2.6 | 2.4 |
| Gross capital expenditure, EUR million | 7.1 | 5.4 | 16.7 |
| % of net sales | 2.6% | 1.8% | 6.1% |
| R&D expenditure, EUR million | 28.9 | 28.0 | 28.0 |
| % of net sales | 10.6% | 9.5% | 10.2% |
| Order book on Dec. 31, EUR million | 122.0 | 105.6 | 134.3 |
| Average personnel | 1,485 | 1,422 | 1,386 |
| IFRS 2013 |
IFRS 2012 |
IFRS 2011 |
|
|---|---|---|---|
| Earnings/share (EPS), EUR | 0.60 | 1.20 | 0.57 |
| Earnings/share (EPS), diluted, EUR | 0.60 | 1.19 | 0.57 |
| Cash flow from business operations/share, EUR | 1.55 | 2.66 | 2.06 |
| Shareholders' equity/share, EUR | 8.80 | 10.48 | 10.02 |
| Dividend/share, EUR | *0.90 | 0.90 | 0.65 |
| Dividend/earnings, % | **150.0% | 75.0% | 114.2% |
| Effective dividend yield *** | 3.9% | 5.7% | 4.0% |
| Price/earnings (P/E) | 38.68 | 13.29 | 28.80 |
| A share trading, EUR | |||
| highest, EUR | 23.47 | 17.71 | 24.80 |
| lowest, EUR | 16.04 | 14.48 | 15.56 |
| weighted average, EUR | 19.88 | 15.97 | 20.56 |
| at balance sheet date, EUR | 23.21 | 15.90 | 16.40 |
| Market capitalization at balance sheet date ***, EUR million | 419.2 | 287.1 | 298.6 |
| A shares traded | |||
| Traded, pcs | 2,876,861 | 1,018,902 | 878,205 |
| % of entire series | 19.4% | 6.9% | 5.9% |
| Adjusted number of shares, pcs | 18,218,364 | 18,218,364 | 18,218,364 |
| A shares, pcs | 14,829,013 | 14,829,013 | 14,829,013 |
| K shares, pcs | 3,389,351 | 3,389,351 | 3,389,351 |
| Number of shares outstanding at Dec. 31, pcs | 18,059,214 | 18,059,214 | 18,209,214 |
* Proposal by the Board of Directors
** Calculated according to the proposal by the Board of Directors
*** Value of A and K shares is here calculated to be equal
| Profit before taxes less taxes | |||||
|---|---|---|---|---|---|
| Return on equity, ROE, % | = | Shareholders' equity plus non-controlling interest (average) | x 100 | ||
| Shareholders' equity plus non-controlling interest | x 100 | ||||
| Solvency ratio, % | = | Balance sheet total less advance payments | |||
| Current assets | |||||
| Current ratio | = | Current liabilities | |||
| Profit before taxes less taxes +/- non-controlling interest | |||||
| Earnings / share, EUR | = | Average number of shares, adjusted | |||
| Cash flow from business | Cash flow from business operations | ||||
| operations / share, EUR | = | Number or shares at balance sheet date | |||
| Shareholders' equity | |||||
| Equity / share, EUR | = | Number of shares at balance sheet date, adjusted | |||
| Dividend | |||||
| Dividend / share, EUR | = | Number of shares at balance sheet date, adjusted | |||
| Dividend | x 100 | ||||
| Dividend / earnings, % | = | Profit before taxes less taxes +/- non-controlling interest | |||
| Dividend / share | x 100 | ||||
| Effective dividend yield, % | = | Share price at balance sheet date | |||
| Share price at balance sheet date | |||||
| Price / earnings, EUR | = | Earnings / share | |||
| Market capitalization, EUR million | = | Share price at balance sheet date times number of shares |
| Consolidated statement of income EUR million |
IFRS 2013 |
IFRS 2012 |
IFRS 2011 |
IFRS 2010 |
IFRS 2009 |
|---|---|---|---|---|---|
| Net sales | 273.2 | 293.3 | 273.6 | 253.2 | 231.8 |
| Other operating income | 1.8 | 0.5 | 2.1 | 1.8 | 0.1 |
| Costs | 237.8 | 247.9 | 245.0 | 229.0 | 210.4 |
| Depreciation, amortization and | |||||
| impairment charges | 19.1 | 15.8 | 14.7 | 14.1 | 9.6 |
| Operating profit | 18.1 | 30.2 | 16.1 | 11.8 | 12.0 |
| Financial income and expenses | -1.0 | -1.0 | 0.1 | 2.2 | -1.9 |
| Profit before tax | 17.2 | 29.1 | 16.1 | 14.0 | 10.1 |
| Income taxes | -6.2 | -7.4 | -5.8 | -3.8 | -3.2 |
| Net profit for the period | 10.9 | 21.7 | 10.4 | 10.2 | 6.9 |
| Consolidated statement of financial position EUR million |
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 |
|---|---|---|---|---|---|
| Assets | |||||
| Non-current assets | 92.5 | 88.3 | 101.0 | 100.2 | 80.0 |
| Inventories | 28.6 | 29.8 | 33.4 | 36.8 | 27.3 |
| Current assets | 104.6 | 138.9 | 116.4 | 111.7 | 124.1 |
| Statement of financial | |||||
| position, total | 225.6 | 257.0 | 250.8 | 248.7 | 231.4 |
| Shareholders' equity and liabilities | |||||
| Equity attributable to equity | |||||
| holders of the parent | 158.9 | 189.1 | 182.5 | 182.4 | 180.3 |
| Liabilities, total | 66.8 | 67.9 | 68.3 | 66.4 | 51.2 |
| Interest bearing | 0.0 | 0.6 | 0.5 | 0.5 | 0.6 |
| Non-interest bearing | 66.8 | 67.3 | 67.8 | 65.8 | 50.6 |
| Statement of financial | |||||
| position, total | 225.6 | 257.0 | 250.8 | 248.7 | 231.4 |
| EUR million | Notes | Jan. 1–Dec. 31, 2013 |
Jan. 1–Dec. 31, 2012 |
||
|---|---|---|---|---|---|
| Net sales | 2, 3 | 273.2 | 293.3 | ||
| Cost of sales | 7 | -138.9 | -148.0 | ||
| Gross profit | 134.3 | 49.2% | 145.3 | 49.5% | |
| Sales, marketing and administrative costs | 7, 8 | -84.7 | -87.5 | ||
| Research and development costs | 7, 8, 9 | -28.9 | -28.0 | ||
| Other operating income and expenses | 6 | -2.6 | 0.3 | ||
| Operating profit (loss) | 18.1 | 6.6% | 30.2 | 10.3% | |
| Share of result in associated companies | 16 | 0.1 | 0.1 | ||
| Financial income and expenses, net | 10 | -1.0 | -1.1 | ||
| Profit (loss) before taxes | 17.2 | 6.3% | 29.1 | 9.9% | |
| Income taxes | 11 | -6.2 | -7.4 | ||
| Profit (loss) for the period | 10.9 | 4.0% | 21.7 | 7.4% | |
| Earnings per share for profit attributable to the equity holders of the parent |
|||||
| Earnings per share, EUR | 12 | 0.60 | 1.20 | ||
| Diluted earnings per share, EUR | 0.60 | 1.19 | |||
| Consolidated Statement of Comprehensive Income |
| EUR million | |||||
|---|---|---|---|---|---|
| Items that will not be reclassified to profit or loss | |||||
| Actuarial loss on post-employment benefits* | 23 | -0.1 | -0.0 | ||
| Total | -0.1 | -0.0 | |||
| Items that may be reclassified subsequently to profit or loss | |||||
| Currency translation differences | -3.2 | -1.1 | |||
| Other income or expense | - | -0.2 | |||
| Total | -3.2 | -1.3 | |||
| Total other comprehensive income | -3.3 | -1.3 | |||
| Total comprehensive income | 7.6 | 20.4 |
* The figures are presented net of taxes.
The notes constitute an essential part of the financial statements.
| Assets | |||
|---|---|---|---|
| EUR million | Notes | Dec. 31, 2013 | Dec. 31, 2012 |
| Non-current assets | |||
| Intangible assets | 14 | 35.9 | 33.1 |
| Property, plant and equipment | 15 | 46.8 | 49.1 |
| Investments | 0.1 | 0.1 | |
| Investments in associated companies | 16 | 0.7 | 0.8 |
| Long-term receivables | 17 | 0.9 | 0.1 |
| Deferred tax assets | 11 | 8.0 | 5.1 |
| 92.5 | 88.3 | ||
| Current assets | |||
| Inventories | 18 | 28.6 | 29.8 |
| Trade and other receivables | 19 | 57.4 | 60.9 |
| Income tax receivables | 1.4 | 1.8 | |
| Cash and cash equivalents | 20 | 45.8 | 74.8 |
| Available-for-sale financial assets | 21 | - | 1.4 |
| 133.2 | 168.7 | ||
| Total assets | 225.6 | 257.0 |
The notes constitute an essential part of the financial statements.
| Shareholders' equity and liabilities EUR million |
Notes | Dec. 31, 2013 | Dec. 31, 2012 |
|---|---|---|---|
| Shareholders' equity | 22 | ||
| Share capital | 7.7 | 7.7 | |
| Share premium | - | 22.3 | |
| Other reserves | 1.5 | 0.8 | |
| Cumulative translation adjustment | -3.6 | -0.5 | |
| Treasury shares | -2.5 | -2.5 | |
| Retained earnings | 155.9 | 161.4 | |
| 158.9 | 189.1 | ||
| Total equity | 22 | 158.9 | 189.1 |
| Non-current liabilities | |||
| Interest-bearing liabilities | 26 | 0.0 | 0.3 |
| Post-employment benefit obligations | 23 | 0.7 | 1.7 |
| Deferred tax liabilities | 11 | 5.2 | 1.0 |
| Provisions for other liabilities and charges | 24 | - | 0.1 |
| Trade and other payables | 26 | 2.1 | 1.3 |
| 8.0 | 4.3 | ||
| Current liabilities | |||
| Interest-bearing liabilities | 26 | 0.0 | 0.3 |
| Advances received | 3.7 | 4.5 | |
| Income tax liabilities | 0.3 | 1.5 | |
| Provisions for other liabilities and charges | 24 | - | 0.9 |
| Trade and other payables | 25 | 54.8 | 56.4 |
| 58.7 | 63.6 | ||
| Total liabilities | 66.8 | 67.9 | |
| Total shareholders' equity and liabilities | 225.6 | 257.0 |
The notes constitute an essential part of the financial statements.
| EUR million | Share capital |
Share premium reserve |
Other reserves |
Own shares |
Translation differences |
Retained earnings |
Total equity |
|
|---|---|---|---|---|---|---|---|---|
| Balance at Jan 1, 2012 | Note | 7.7 | 22.3 | 0.3 | -0.3 | 0.6 | 151.9 | 182.5 |
| Effect of retrospective application of revised IAS 19 |
-0.1 | -0.1 | ||||||
| Restated equity at Jan 1, 2012 | 7.7 | 22.3 | 0.3 | -0.3 | 0.6 | 151.8 | 182.4 | |
| Profit for the year | 22 | 21.7 | 21.7 | |||||
| Other comprehensive income | 22 | -0.0 | -1.1 | -0.2 | -1.3 | |||
| Dividend paid | 22 | -11.8 | -11.8 | |||||
| Purchase of treasury shares | 22 | -2.3 | -2.3 | |||||
| Share-based payment | 8, 22 | 0.4 | 0.4 | |||||
| Balance at Dec. 31, 2012 | 7.7 | 22.3 | 0.8 | -2.5 | -0.5 | 161.4 | 189.1 | |
| Profit for the year | 22 | 10.9 | 10.9 | |||||
| Other comprehensive income | 22 | -0.0 | -3.1 | -0.1 | -3.3 | |||
| Dividend paid | 22 | -16.2 | -16.2 | |||||
| Reclassification | 22 | -22.3 | 22.4 | -0.1 | - | |||
| Return of capital | 22 | -22.2 | -22.2 | |||||
| Share-based payment | 8, 22 | 0.6 | 0.6 | |||||
| Balance at Dec. 31, 2013 | 7.7 | - | 1.5 | -2.5 | -3.6 | 155.9 | 158.9 |
| EUR million | Note | Jan. 1–Dec. 31, 2013 | Jan. 1–Dec. 31, 2012 |
|---|---|---|---|
| Cash flow from operating activities | |||
| Cash receipts from customers | 2, 3 | 282.8 | 301.2 |
| Other income from business operations | 0.2 | 0.0 | |
| Cash paid to suppliers and employees | -246.3 | -245.4 | |
| Financials paid, net | 10 | -0.8 | -2.7 |
| Dividends received from operating activities | - | 0.0 | |
| Income taxes paid, net | 11 | -7.7 | -5.0 |
| Total cash flow from business operations (A) | 28.2 | 48.2 | |
| Cash flow from investing activities | |||
| Acquisition of subsidiary, net of cash acquired | 4 | -12.3 | - |
| Capital expenditure on fixed assets | 14, 15 | -7.1 | -5.4 |
| Divestments | 2.6 | 0.4 | |
| Other investments | 14 | - | -0.0 |
| Total cash flow from investing activities (B) | -16.8 | -5.0 | |
| Cash flow from financing activities | |||
| Return of capital | 22 | -22.2 | - |
| Dividend paid | 22 | -16.2 | -11.8 |
| Other profit distribution | - | -0.2 | |
| Purchase of treasury shares | - | -2.3 | |
| Change in loan receivables | -0.1 | - | |
| Change in leasing liabilities | 26 | -0.6 | - |
| Total cash flow from financing activities (C) | -39.1 | -14.3 | |
| Change in cash and cash equivalents (A+B+C) | |||
| increase (+) / decrease (-) | -27.7 | 28.9 | |
| Cash and cash equivalents at beginning of period | 74.8 | 45.5 | |
| Net increase (+) / decrease (-) in cash and cash equivalents | -27.7 | 28.9 | |
| Effect from changes in exchange rates | -1.3 | 0.4 | |
| Cash and cash equivalents at the end of period | 20 | 45.8 | 74.8 |
Vaisala is a global leader in environmental and industrial measurement. Building on over 75 years of experience, Vaisala contributes to a better quality of life by providing a comprehensive range of innovative observation and measurement products and services for chosen weather-related and industrial markets.
The Group's parent company, Vaisala Corporation, is a Finnish public limited company established under Finnish law, its domicile is Vantaa and its registered address in Vanha Nurmijärventie 21, FI-01670 Vantaa (P.O. Box 26, FI-00421 Helsinki). The company's Business ID is 0124416-2. Vaisala has offices and business operations in Finland, Brazil, United States of America, Canada, France, the UK, Germany, China, South-Korea, Sweden, Malaysia, India, United Arab Emirates, Japan, Australia and Panama.
Copies of the consolidated financial statements can be obtained from the internet address www.vaisala.com or from the Group's head office at the address Vanha Nurmijärventie 21, FI-01670 Vantaa (P.O. Box 26, FI-00421 Helsinki).
At its meeting on February 10, 2014, the Board of Directors of Vaisala Corporation has approved these financial statements for publication. Under the Finnish Companies Act, shareholders have an opportunity to confirm or leave unconfirmed the financial statements in the Annual General Meeting to be held after their publication. The Annual General Meeting also has an opportunity to make a decision amending the financial statements.
Vaisala's consolidated financial statements have been prepared according to the International Financial Reporting Standards (IFRS) and in their preparation all the obligatory IAS and IFRS standards as well as the SIC and IFRIC interpretations in effect on December 31, 2013 have been followed. By international financial statement standards is meant standards approved for application in the EU, and interpretations issued about them, according to the procedure prescribed in Finnish law and provisions enacted thereon in EU Regulation (EC) No. 1606/2002. The notes to the consolidated financial statements are also in accordance with Finnish accounting and corporate law.
Financial statement data are presented in millions of
euros and they are based on original acquisition costs if not otherwise stated in the accounting principles outlined below.
The preparation of financial statements in accordance with IFRS standards requires Group management to make certain estimates and to exercise discretion in applying the accounting principles. Information about the discretion exercised by management in applying the accounting principles followed by the Group and that which has most impact on the figures presented in the financial statements has been presented in the item 'Accounting principles that require management discretion and main uncertainty factors relating to estimates'.
The company has a market segment based reporting model. Operating segments are reported in a manner consistent with the internal reporting provided for the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing the performance of the operating segments, is the company's management group.
The business segments consist of business operations whose resources to be allocated and profits company's management group reviews based on a measure of adjusted operating result. Pricing between segments takes place at the fair market price.
weather segment is a leading provider of reliable weather technology. Segment serves selected weatherdependent markets where weather data is essential to run efficient operations like meteorological institutes, roads and rail authorities, airport organizations, defense forces, energy and maritime.
controlled environment segment serves customers who operate in tightly controlled and demanding areas where the measurement of precise environmental conditions is required to increase operational quality, productivity and energy savings.
The consolidated financial statements include the parent company Vaisala Corporation and all subsidiaries in which it directly or indirectly owns more than 50% of the votes or in which the parent company otherwise exercises control. The existence of potential voting rights has been taken into account when assessing the terms of control when instruments conferring
entitlement to potential control are presently exercisable. Subsidiaries acquired or founded during the financial period are consolidated from the date on which the Group has acquired control and are no longer consolidated from the date that control ceases.
Acquisition of subsidiaries is handled by the acquisition cost method. The acquisition cost is the fair value of transferred assets, issued equity instruments and liabilities arising or assumed. All transaction costs are expensed. Identifiable acquired assets as well as assumed liabilities and contingent liabilities are valued initially at their fair values on the date of acquisition, irrespective of whether there are minority interests or not. The amount by which the acquisition cost exceeds the Group share of the fair value of the acquired identifiable net assets is recognized as goodwill. If the acquisition cost is lower than the acquired subsidiary's net assets, the difference is entered directly into the statement of income. Changes in contingent liabilities after initial recognition are recognized in profit and loss as other operating income or cost.
Intra-Group transactions, unrealized margins on internal deliveries, internal receivables and liabilities, and the Group's internal distribution of profit are eliminated. Unrealized losses on intra-Group transactions are also eliminated unless costs are not recoverable or the loss results from an impairment. The consolidated financial statements are prepared applying consistent accounting principles to the same transactions and other events which are implemented under the same conditions.
The share of profits or losses of associated companies, i.e. companies of which Vaisala owns between 20% and 50% and over which it has significant influence, are included in the consolidated financial statements using the equity method. If Vaisala's share of an associated company's losses exceeds the book value of the investment, the investment is entered in the statement of financial position at zero value and further losses are not recognized unless the Group has incurred obligations on behalf of the associated company. Unrealized gains on transactions between the Group and its associated companies have been eliminated to the extent of the Group's interest in the associated companies. The Group's investment in associated companies includes goodwill on acquisition.
The Group's share of associated companies' results is presented in the statement of income as a separate item before 'financial income and expenses'. Investments in associated companies are originally entered into the accounts at their acquisition cost and the book value increased or decreased by the share of post-acquisition profits or losses. Distribution of profit received from an investment reduces the book value of the investment.
Items relating to the consolidated result and financial position are measured using the currency which is the main currency of each entity's operating environment "functional currency". The consolidated financial statements have been presented in euros, which is the Group parent company's functional and presentation currency.
Transactions in foreign currencies are recognized at the rates of exchange on the date of transaction. Receivables and payables in foreign currency have been valued at the exchange rates quoted by the European Central Bank on the closing date. Exchange rate differences resulting from the settlement of monetary items or from the presentation of items in the financial statements at different exchange rates from which they were originally recognized during the financial period, or presented in the previous financial statements, are recognized as income or expenses in the statement of income group 'financial income and expenses' in the financial period in which they arise.
Items relating to the result and financial position of each entity of the Group are measured using the currency which is the main currency of each entity's operating environment. Balance sheets of Group companies outside the euro zone have been translated into euros using the official mid-market exchange rates of the European Central Bank on the closing date. In translating statement of incomes, mid-market exchange rates have been used. Exchange rate differences resulting from the translation of statement of income items at mid-market exchange rates and from the translation of balance sheet items at exchange rates on the closing date have been recognized as translation differences in shareholders' equity. Translation gains and losses which arose in the elimination of the shareholders' equity of subsidiaries have been recognized as a separate item under comprehensive income. When a foreign subsidiary or associated company is sold, the accumulated translation difference is recognized in the statement of income as part of the gain or loss on the sale.
Goodwill or fair value adjustments arising on the acquisition of an independent foreign entity are treated as that entity's foreign currency assets and liabilities and are translated at the period end rate.
Property, plant and equipment comprise mainly land and buildings as well as machinery and equipment. The asset values are based on original acquisition cost less accumulated depreciation and amortization as well as possible impairment losses. The cost of self-constructed assets includes materials and direct work as well as a proportion of overhead costs attributable to
construction work. If a tangible asset consists of several parts which have useful lives of different lengths, the parts are treated as separate assets. Accordingly, expenses relating to the renewal of a part are capitalized and the part remaining in connection with the renewal is recognized as an expense. In other cases, expenditures that arise later are included in the carrying amount of the tangible assets only if it is probable that the future financial benefit connected with the asset is for the benefit of the Group and that the asset's acquisition cost can be reliably determined. Other repair and maintenance expenses are recognized through profit and loss, when they are realized.
Depreciation is calculated using the straight-line method and is based on the estimated useful life of the asset. Land is not depreciated. Estimated useful lives for various assets are:
| Buildings and structures | 5–40 years |
|---|---|
| Machinery and equipment | 3–10 years |
| Other tangible assets | 5–15 years |
The residual value, depreciation method and useful life of assets are checked in connection with each financial statement and if necessary adjusted to reflect changes in the expectation of economic benefit. Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in the operating profit.
Public grants received for tangible asset investments are recognized as a reduction in the carrying amounts of tangible assets. Grants are recognized in the form of smaller depreciations during the useful life of the asset.
Depreciation of a tangible asset is discontinued when the tangible asset is classified as being for sale in accordance with the IFRS 5 standard Non-Current Assets Held for Sale and Discontinued Operations.
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net assets of the acquired subsidiary/associated company at the date of acquisition. Goodwill is calculated in the currency of the operating environment of the acquired entity. If the acquisition cost is lower than the value of the acquired subsidiary's net asset value the difference is entered directly into the statement of income.
Goodwill is not amortized, rather it is tested annually for any impairment. For this purpose goodwill has been attributed to cash generating units. Goodwill is valued at acquisition cost less impairment losses. Impairment costs are expensed.
Other intangible assets are e.g. patents and trademarks as well as software licenses. They are valued at their original acquisition cost and amortized using the straight-line method over their useful life. Intangible assets that have an indefinite useful life are not amortized, rather they are tested for impairment annually. Intangible assets of the acquired subsidiaries are valued at their fair values at the date of acquisition.
Estimated useful lives for intangible assets are:
Intangible rights at most 5 years Other intangible assets at most 10 years Software 3–5 years
Research and development expenditures have been recognized as expenses in the financial period in which they were incurred, except for machinery and equipment acquired for research and development use, which are amortized using the straight-line method over 5 years. Costs relating to the development of new products and processes are not capitalized because the future earnings obtained from them are only assured when the products come to market. According to IAS 38 an intangible asset is entered in the statement of financial position only when it is probable that the company will derive financial benefit from the asset. Moreover, it is typical of the industry that it is not possible to distinguish the research stage of an internal project that aims to create an asset from its development stage.
The group capitalizes borrowing costs that relate to qualifying assets directly attributable to acquisition, construction or production of the assets as part of the cost of the asset in question. Other borrowing costs are recognized as an expense. At the moment, the group does not have capitalized borrowing costs.
Inventories are valued at the lower of acquisition cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses. The cost of finished goods and work in progress comprises raw materials, direct labor costs, other direct costs and an appropriate proportion of variable and fixed production overheads based on normal operating capacity.
Acquisition cost is determined using the weighted average method, whereby the cost is determined as the weighted average of similar inventory items which were held at the beginning of the financial period and those bought or produced during the financial period.
Lease agreements of tangible assets where the Group has a substantial part of the risks and rewards of ownership are classified as finance leases. Finance leases are entered into tangible assets at the start of the lease term at the lower of the fair value of the leased property and the present value of the minimum lease payments. The asset acquired under a finance lease is depreciated over the shorter of the asset's useful life and the lease term. Lease payments are allocated between the liability and finance charges so as to achieve a constant interest rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in interest-bearing liabilities.
Lease agreements where the lessor retains a significant portion of the risks and rewards of ownership are treated as other leases. Payments made under other leases are charged to the statement of income on a straight-line basis over the period of the lease.
On every closing date the Group reviews asset items for any indication of impairment losses. The need for impairment is examined at the cash generating unit level, i.e. at the lowest unit level which is mainly independent of other units and whose cash flows are separate and highly independent from the cash flows of other, corresponding, units. If there are such indications, the amount recoverable from the said asset item is assessed. The recoverable amount is also assessed annually for the following asset items irrespective of whether there are indications of impairment: goodwill, intangible assets which have an indefinite useful life as well as incomplete intangible assets.
The recoverable amount is the higher of the asset item's fair value less the cost arising from disposal and its value in use. When determining value in use, the expected future cash flows are discounted based on their present values at discount interest rates which reflect the average capital cost before taxes of the country and business sector in question (WACC = weighted average cost of capital). The special risks of the assets in question are also taken into account in the discount interest rates. In terms of individual asset items which do not independently generate future cash flows, the
recoverable amount is determined for the cash generating unit to which the said asset item belongs.
An impairment loss is recognized in the statement of income when the carrying amount is greater than the recoverable amount. The impairment loss is reversed if a change in conditions has occurred and the recoverable amount of the asset has changed since the date when the impairment loss was recognized. The impairment loss is not reversed, however, by more than that which the carrying amount of the asset (less depreciation) would be without the recognition of the impairment loss. Impairment losses recognized for goodwill are not reversed under any circumstances.
IAS 39 classifies a group's financial assets into the following categories: financial assets measured at fair value through profit and loss, held-to-maturity investments, loans and receivables, and available-for-sale financial assets. Categorization is made on the basis of the purpose for which the financial assets were acquired and they are categorized in connection with the original acquisition. Transaction costs have been included in the original carrying amount of the financial assets when the item in question is not valued at fair value through profit and loss. All purchases and sales of financial assets are recognized on the clearance date.
Derecognition of financial assets takes place when the Group has lost a contractual right to receive the cash flows or when it has transferred substantially the risks and rewards outside the Group. On every closing date the Group assesses whether there is objective evidence that the value of a financial asset item or group of asset items has been impaired. If such evidence exists, the impairment is recognized in the statement of income item financial expenses.
The recoverable amount of financial assets is either the fair value or the present value of expected future cash flows discounted at the original effective interest rate. Short-term receivables are not discounted.
Financial assets held for trading purposes such as derivative instruments to which the Group does not apply hedge accounting under IAS 39 as well as income fund investments consisting of the short-term investment of liquid assets have been categorized as financial assets recognized at fair value through profit and loss. The fair value of income fund investments has been determined based on price quotations published in an active market, namely the bid quotations on the closing date. Realized and unrealized gains and losses arising from changes in fair value are recognized in the statement of income in the period in which they arise. Financial assets held for trading as well as those maturing within 12 months are included in current assets.
Loans and other receivables are assets not belonging to derivative assets whose payments are fixed and quantifiable and which are not quoted on an active market and which the company does not hold for trading purposes. This category includes Group financial assets which have arisen through the transfer of money, goods or services to debtors. They are valued at amortized cost and they include short-term and long-term financial assets, the latter if they mature after more than 12 months. If there are indications of value impairment, the carrying amount is estimated and reduced immediately to correspond with the recoverable amount.
Trade receivables are valued initially at fair value and thereafter at their anticipated realizable value, which is the original invoicing value less the estimated impairment of these receivables. An impairment for trade receivables is made when there are good grounds to expect that the Group will not receive all its receivables on original terms. A debtor's significant financial difficulties, probability of bankruptcy, default on payments, or a more than 180 day delay in the making of payments are evidence of an impairment of trade receivables. The magnitude of the impairment loss to be recognized in the statement of income is determined as the difference of the carrying amount of receivables and the present value of estimated future cash flows. If the amount of impairment loss falls in some later financial period and the reduction can be objectively considered to be related to an event after the recognition of the impairment, the recognized loss is reversed through profit and loss.
Cash and cash equivalents are carried in the statement of financial position at original cost. Cash and cash equivalents comprise cash on hand and deposits held at call with banks.
Financial liabilities are recognized at fair value on the basis of the original consideration received. Transactions costs have been included in the original carrying amount of the financial liabilities. Later, all financial liabilities are valued at amortized cost using the effective yield method. Financial liabilities include long-term and short-term liabilities and they can be interest-bearing or non-interest-bearing.
All derivative contracts are initially recognized at cost and subsequently remeasured at their fair value. Forward foreign exchange contracts are valued at their fair value using the market prices of forward contracts at the closing date. Derivatives are included in the statement of financial position as other receivables and payables. Unrealized and realized gains and losses arising from changes in fair value are recognized in the statement of income in "financial income and expenses" in the period during which they arise. The Group has sales in a number of foreign currencies, of which the most significant are the US dollar, the Japanese yen and the British pound. The Group does not apply hedge accounting under IAS 39 to forward foreign exchange contracts that hedge sales in foreign currencies. The Group has a number of investments in foreign subsidiaries whose net assets are exposed to foreign currency risk. The Group does not hedge the foreign exchange risk of subsidiaries' net assets.
Unrealized and realized gains and losses arising from changes in fair value are recognized in the statement of income in "financial income and expenses" in the period during which they arise
Non-current asset is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. Sale is considered highly probable when group management is committed to a plan to sell the asset, asset can be sold immediately in its current condition with general and common terms and sale will be completed within one year from the date of classification.
Before classification as held for sale, assets are measured according to the IFRS standard applying for them. After classification they are stated at the lower of carrying amount and fair value less costs to sell. These assets are not depreciated after classification. Noncurrent assets classified as held for sale are presented separately from other assets in the statement of financial position.
The Group has a number of pension schemes in different parts of the world which are based on local conditions and practices. These pension schemes are classified as either defined-contribution or defined-benefit schemes. Under defined-contribution plans, expenses are recognized in the statement of financial position in the financial period in which the contribution is payable.
In defined benefit pension plans, the liability recognized from the plan is the present value of the defined benefit obligation as of the period end date and it is adjusted by the fair value of the plan assets and by the unamortized portion of past service cost. Actuaries, who are independent from Vaisala, calculate the defined benefit obligation by applying the projected unit credit method under which the estimated future cash flows are discounted to their present value using the interest rates approximating the terms of the pension engagement. The cost of retirement is charged in the statement of income concurrently with the service rendered by the personnel. Actuarial gains and losses are recognized in comprehensive statement of income.
Provisions are recognized when the Group has a present legal or constructive obligation as the result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are valued at the present value of expenses required to cover the obligation. The discount factor used in calculating present value is selected so that it reflects the market view of the time value of money and the risks related to the obligations at the time of examination. If it is possible that the Group will be reimbursed for part of the obligation by some third party, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The amount of provisions is estimated at each closing date and the amount is changed to correspond to the best estimate at the given time. A provision is cancelled when the probability of financial settlement has been removed. A change in provisions is recognized in the same item of the statement of income in which the provision was originally recognized.
Provisions relate to the restructuring of operations, loss-making agreements and repairs under guarantee. Restructuring provisions are recognized when a detailed and appropriate plan relating to them has been prepared and the company has begun to implement the plan or has announced it will do so. Restructuring provisions generally comprise lease termination penalties and employee termination payments.
A provision for a loss-making agreement is recognized when unavoidable expenditure required to fulfil obligations exceeds the benefits obtainable from the agreement.
The tax item in the statement of income comprises tax based on taxable income for the financial year, adjustments to tax accruals related to previous years and the change in deferred taxes. Tax based on taxable income for the financial year is calculated for taxable income on the basis of each country's current tax rate.
Deferred taxes are calculated for all temporary differences between the carrying amount of an asset or liability and its tax base. The largest temporary differences arise from amortization of fixed assets, defined-benefit pension schemes and unused tax losses. In taxation deferred tax is not recognized for non-deductible goodwill impairment and deferred tax is not recognized for distributable earnings of subsidiaries where it is probable that the difference will not reverse in the foreseeable future. The Group's deferred tax assets and liabilities relating to the same tax recipient are stated net.
Deferred taxes have been calculated using tax rates prescribed by the closing date.
Deferred tax assets are recognized to the extent that it is probable that future taxable profit, against which the temporary differences can be utilized, will be available.
The Board of Directors' proposal for dividend distribution has not been recognized in the financial statements: the dividends are recognized only on the basis of the Annual General Meeting's approval.
Shares issued by the company are presented as share capital. Expenses related to the issue or acquisition of shareholders' equity instruments are presented as a shareholders' equity reduction item. If the company buys back its shareholders' equity instruments, the consideration paid for them including direct costs is deducted from shareholders' equity.
Revenue from the sale of goods is recognized when significant risks and rewards of owning the goods are transferred to the buyer. Revenue recognition generally takes places when the transfer has taken place. Revenue for rendering of services is recognized when the service has been performed. When recognizing net sales, indirect taxes and discounts, for example, have been deducted from sales revenue. Possible exchange rate differences are recognized in the financial income and expenses.
Revenues from long-term projects are recognized using the percentage of completion method, when the outcome of the project can be estimated reliably. The stage of completion is determined for each project by reference to the relationship between the costs incurred for work performed to date and the estimated total costs of the project or the relationship between the working hours performed to date and the estimated total working hours.
Expenses related to a project whose revenue is not yet recognized are entered as long-term projects in progress in inventories. If expenses arising and gains recognized are larger than the sum invoiced for the project, the difference is presented in the statement of financial position item "trade and other receivables". If expenses arising and gains recognized are smaller than the sum invoiced for the project, the difference is presented in the item "trade and other payables".
When the outcome of a long-term project cannot be estimated reliably, project costs are recognized as expenses in the same period when they arise and project revenues only to the extent of project costs incurred where it is probable that those costs will be recoverable. When it is probable that total costs necessary to complete the project will exceed total project revenue, the expected loss is recognized as an expense immediately.
Revenue arising from rents is recognized on an accrual basis in accordance with the substance of the relevant agreements. Interest income is recognized on a time-proportion basis, taking account of the effective yield of the asset item, and dividend income is recognized when the Group's right to receive payment is established.
Gains on the disposal of assets as well as income that are not relating to actual performance-based sales are recognized as other operating income.
Losses on the disposal of assets as well as expenses that are not relating to actual performance-based sales are recognized as other operating income. In addition, assets impairments are recognized into other operating income and expense.
Grants received from the state or another party are recognized in the statement of income at the same time as expenses are recognized as a deduction of the related expense group. Grants relating to asset acquisition are presented as an adjustment to the acquisition cost of the asset and they are recognized in the form of smaller depreciations over the useful life of the asset.
Share based payments are recognized as costs during the vesting period in line with IFRS 2. The costs are based on the estimate of the amount of shares to be paid at the end of vesting period. Assumptions that estimates are based on shall be updated at every period end date and cost effect of assumptions are recognized through statement of income.
The preparation of financial statements requires the use of estimates and assumptions relating to the future and the actual outcomes may differ from the estimates and assumptions made. In addition, discretion has to be exercised in applying the accounting principles of the financial statements. Estimates made and discretion exercised are based on previous experience and other factors, such as assumptions about future events. Estimates made and discretion exercised are examined regularly. The key areas in which estimates have been made and discretion has been exercised are outlined below. The biggest impact of these on the figures presented is reflected through impairment testing. Other estimates are connected mainly with environmental, litigation and tax risks, the determination of pension obligations as well as the utilization of deferred tax assets against future taxable income.
IFRS 3 requires the acquirer to recognize an intangible asset separately from goodwill, if the recognition criteria are fulfilled. Recognition of an intangible asset at fair value requires management estimates of future cash flows. Where possible, management has used available market values as the basis of acquisition cost recognition in determining fair values. When this is not possible, which is typical particularly with intangible assets, valuation is based principally on the historic cost of the asset item and its intended use in business operations. Valuations are based on discounted cash flows as well as estimated disposal and repurchase prices and require management estimates and assumptions about the future use of asset items and the effect on the company's financial position. Changes in the emphasis and direction of company operations can in future result in changes to the original valuation.
The Group uses the percentage of completion method in recognizing revenue for long-term projects. Revenue recognition according to percentage of completion is based on estimates of expected revenue and costs as well as on a determination of the progress of the percentage of completion. Changes can arise to recognized revenue and profit if estimates of a project's total costs and total income are adjusted. The cumulative effect of adjusted estimates is recognized in the period in which the change becomes probable and it can be estimated reliably. Further information on long-term projects is given in Note 5. Long-term projects.
The Group tests goodwill annually for possible impairment and reviews whether there are indications of impairment according to the accounting principle presented above. The recoverable amounts of cash generating units have been determined in calculations based on value in use. Although assumptions used according to the view of the company's management are appropriate, the estimated recoverable amounts might differ substantially from those realized in future. Further information on recoverable amount sensitivity to changes in the assumptions used is given in Note 14. Intangible assets.
A management principle is to recognize an impairment for slowly moving and outdated inventories based on the management's best possible estimate of possibly unusable inventories in the Group's possession at the closing date. Management bases its estimates on systematic and continuous monitoring and evaluations. Further information on inventories is given in Note 18. Inventories.
In preparing these financial statements, the group has followed the same accounting policies as in the annual financial statements for 2012 except for the effect of changes required by the adoption of the following new standards, interpretations and amendments to existing standards and interpretations on 1 January 2013.
Amendment to IAS-19, 'Employee benefits'. These amendments eliminate the corridor approach and calculate finance costs on a net funding basis. All actuarial profits and losses must be accounted immediately in other comprehensive income. The revised IAS 19 has been applied retrospectively. Retained earnings in the opening balance of equity decreased EUR 0.1 million and pension liabilities increased EUR 0.1 million in year 2012 June and December statement of financial positions. The operating profit increased EUR 0.1 million and financial income and expense decreased EUR 0.1 million in December 2012 statement of income.
Amendment to IFRS 7, 'Financial instruments: Disclosures', on asset and liability offsetting. This amendment includes new disclosures to enhance the presentation of financial assets and financial liabilities and when those can be offset. The amendment does not have a material effect on the consolidated financial statements.
Annual improvements 2011. Annual improvements 2009-2011 reporting cycle include changes to: IAS 1, 'Financial statement presentation', IAS 16, 'Property plant and equipment', IAS 32, 'Financial instruments; Presentation', IAS 34, 'Interim financial reporting'. These amendments do not have a material effect on the consolidated financial statements.
IFRS 13, 'Fair value measurement'. IFRS 13 aims to improve consistency in fair value measurement and provide new disclosure requirements when such measurements are required or permitted by other IFRSs. Standard incorporate the definition of fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The amendment does not have a material effect on the consolidated financial statements.
Below is a list of standards/interpretations that have been issued and are effective for periods after 1 January 2013.
IFRS 10, 'Consolidated financial statements'. The objective of IFRS 10 is to establish principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entity (an entity that controls one or more other entities) to present consolidated financial statements. It defines the principle of control, and establishes control as the basis for consolidation. It sets out how to apply the principle of control to identify whether an investor controls an investee and therefore must consolidate the investee. It also sets out the accounting requirements for the preparation of consolidated financial statements. This standards does not have material effect on consolidated financial statement.
IFRS 11, 'Joint arrangements'. IFRS 11 is a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement rather than its legal form. There are two types of joint arrangement: joint operations and joint ventures. Joint operations arise where a joint operator has rights to the assets and obligations relating to the arrangement and therefore accounts for its interest in assets, liabilities, revenue and expenses. Joint ventures arise where the joint operator has rights to the net assets of the arrangement and therefore equity accounts for its interest. Proportional consolidation of joint ventures is no longer allowed. This standards does not have material effect on consolidated financial statement.
IFRS 12, 'Disclosures of interests in other entities' IFRS 12. includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. This standard does not have material effect on consolidated financial statement.
IAS 27 (revised 2011), 'Separate financial statements'. IAS 27 (revised 2011) includes the provisions on separate financial statements that are left after the control provisions of IAS 27 have been included in the new IFRS 10. This amendment does not have material effect on consolidated financial statement.
IAS 28 (revised 2011), 'Associates and joint ventures'. IAS 28 (revised 2011) includes the requirements for joint ventures, as well as associates, to be equity
accounted following the issue of IFRS 11. This amendment does not have effect on consolidated financial statement. Amendment to IAS 32, 'Financial instruments: Presentation', on asset and liability offsetting, these amendments are to the application guidance in IAS 32, and clarify some of the requirements for offsetting financial assets and financial liabilities on the balance sheet. These amendments do not have material effect on consolidated financial statements.
Amendments to IFRS 10, 12 and IAS 27 on consolidation for investment entities. These amendments mean that many funds and similar entities will be exempt from consolidating most of their subsidiaries. Instead, they will measure them at fair value through profit or loss. The amendments give an exception to entities that meet an 'investment entity' definition and which display particular characteristics. Changes have also been made IFRS 12 to introduce disclosures that an investment entity needs to make. These amendments do not have material effect on consolidated financial statements.
Amendment to IAS 36, 'Impairment of assets' on recoverable amount disclosures. This amendment addresses the disclosure of information about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal. This amendment does not have material effect on consolidated financial statement.
IFRS 9, 'Financial instruments'. The IFRS 9 is to replace IAS 39. Currently IFRS 9 contains new requirements for the classification and measurement of financial assets and liabilities. IFRS 9 retains but simplifies the mixed measurement model and establishes two primary measurement categories for) financial assets: amortized cost and fair value. The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset. The new guidance for hedge accounting aligns hedge accounting more closely with risk management. Also IFRS 9 relaxes the requirements for hedge effectiveness and change what qualifies as a hedged item. IFRS 9 allows hedge accounting for example for risk components of commodities, aggregated exposures, groups of items when hedging foreign currency and equity investments. The guidance in IAS 39 on impairment of financial assets and hedge accounting continues to apply. This standard does not have material effect on consolidated financial statement.
Defined benefit plans: Employee contributions (Proposed amendments to IAS 19. The amendment allows contributions that are linked to service, and do not vary with the length of employee service, to be deducted from the cost of benefits earned in the period that the service is provided. Management is assessing the impact of these changes on the consolidated financial statement. This amendment does not have material effect on consolidated financial statement.
Annual improvements 2010–2012. Annual improvements 2010–2012 reporting cycle include changes to: IFRS 2, 'Share-based payments', IFRS 3, 'Business combinations', IFRS 8, 'Operating segments', IFRS 13, 'Fair value measurement', IAS 16, 'Property, plant, and equipment', and IAS 38, 'Intangible assets', IAS 24, 'Related party disclosures'. This amendment does not have material effect on consolidated financial statement.
Vaisala has a risk management policy which has been approved by the Board of Directors, and which policy covers the company's business, operational, hazard, and financial risks. The policy aims at ensuring the safety of the company's personnel, operations and products, as well as the continuity and compliance of business operations.
Risk management is integrated into business processes and operations. This is accomplished by the risk management process, which consists of risk identification, assessment, treatment, follow-up, and reporting. The most significant risks are reported to the Audit committee and to the Board of Directors annually, and as needed.
Vaisala's Risk Management Steering Group, represented by key internal stakeholders, is responsible for the oversight of the risk management process and ensuring that all significant risks are identified and reported, and risks are acted upon on all necessary organizational levels and geographical locations.
Those risks common to international manufacturing business affect Vaisala's operating environment. The most significant of these are changes in the global economy, currency exchange rates, supply chain, and production. These may affect Vaisala's business both in the short and in the long term. Vaisala monitors these risks and prepares for them in accordance with the company's risk management policy.
Global insurance programs cover risks relating to property damage, business interruption, different liabilities, transportation, and business travel. In general, Vaisala's ability to tolerate risks is good due to strong capital structure.
Vaisala's business is exposed to changes in the global economy, politics, policies, regulations, Vaisala's supply chain, and accidents as well as natural disasters, which may affect business e.g. through order cancellations, disturbance in logistics, and loss of market potential. Vaisala's capability to successfully complete investments, acquisitions, divestments and restructurings on a timely basis and to achieve related financial and operational targets represent a risk which may impact revenue and profitability.
The most significant near term risks and uncertainties that may affect both revenue and profitability relate to the company's ability to maintain its delivery capability, availability of critical components, interruptions in manufacturing and associated IT systems, changes in the global economy, currency exchange rates, customers' financing capability especially in the EU and in the USA, changes in customers' purchasing or investment behavior, and delays or cancellations of orders. Changes in the competition may affect the volume and profitability of business through introduction of new competitors and price erosion in areas which traditionally have been strong for Vaisala. Changes in subcontractor relations, their operations or operating environment as well as the quality of the deliverables may have a negative impact on Vaisala's business
A significant part of Vaisala's business is project business. Project business performance and schedules have dependencies to third parties, which may impact profitability and the timing of revenue recognition. Assumptions regarding new project and service business opportunities constitute a risk for both revenue and profitability.
Interest rate risk arises from the effects of interest rate changes on interest-bearing receivables and liabilities in different currencies. Vaisala does not have significant interest-bearing liabilities or receivables and in addition to cash at hand therefore interest rate risk is immaterial. A change of one percent point in the interest rate would affect the company's result after taxes and equity by around EUR 0.3 (EUR 0.2) million.
Vaisala operates globally and is exposed to foreign exchange transaction and translation risks in many currencies. Transaction risk relates to currency flows from revenues and expenses and translation risk relates translation of statement of income and balance sheet or foreign subsidiaries into euros.
The sales takes place in various currencies. From the Group's sales 46% is in EUR, 39% in USD, 5% in JPY and 4% in GBP. The cost and purchases occurs mostly in Euro and US dollars. The group policy is to hedge around 50% of order book and net receivables with currency forwards. Vaisala does not apply hedge accounting in accordance with IFRS.
Group internal loans and deposits are primarily initiated in the local currencies of subsidiaries. Vaisala does not hedge internal loans, deposits or equities of foreign subsidiaries. Translation of subsidiaries' balance sheets into euros caused translation difference of EUR -3.4 (-1.1) million. The most significant translation risk exposures are in US dollars.
The foreign exchange sensitivity analysis in line with IFRS 9 has been calculated to the most important foreign currency nominated financial assets and liabilities of group companies. The calculation does not include order book or forecasted cash flows but include foreign exchange forwards. 10% strengthening of currencies against EUR has an effect of EUR -1.4 (-1.5) million on Vaisala profit after taxes and equity. In the following table are the most significant foreign exchanges exposures against EUR.
| MEUR | 2013 | 2012 |
|---|---|---|
| USD | -14,6 | -16,9 |
| AUD | -1,3 | -1,6 |
| JPY | -1,2 | -1,4 |
Vaisala cash at hand amounts to EUR 45.8 (74.8) million. The parent company has also EUR 20 million uncommitted credit loan limit, which is currently unused. Additionally, the subsidiaries have EUR 1.6 million credit loan limit, which can be drawn either guarantees or loans. Currently, EUR 0.0 (0.0) million has been draw from this facility. Vaisala does not have any other material external interest bearing liabilities.
Vaisala has substantial amount of cash which exposes Vaisala to financial counterparty risk. Vaisala invest cash only to counterparties with good credit worthiness. All the cash investment counterparties are approved by Board of Directors. Counterparty creditworthiness is evaluated constantly. The maturity of cash investments are less than one month as of December 31, 2013.
Credit risks are hedged by using letters of credit, advance payments and bank guarantees as terms of payment. According to Group management, the company has no material credit risk concentrations, because no individual customer or customer group represents an excessive risk, resulting from global diversification of the company's customer pool. Total credit losses arising from trade receivable and recognized for the financial year amounted to EUR -0.7 million (0.7). Bad debts are written off when official announcement of receivership, liquidation or bankruptcy is received confirming that the receivable will not be honored.
| 2013 | Other | |||
|---|---|---|---|---|
| EUR million | WEA* | CEN* | operations | Group |
| Products | 97.3 | 64.2 | 0.1 | 161.6 |
| Projects | 70.0 | - | 70.0 | |
| Services | 32.7 | 9.0 | 41.7 | |
| Net sales | 200.0 | 73.2 | 0.1 | 273.2 |
| Operating profit | 14.5 | 4.0 | -0.4 | 18.1 |
| Share of result in associated companies | 0.1 | |||
| Financial income and expenses | -1.0 | |||
| Profit before taxes | 17.2 | |||
| Income taxes | -6.2 | |||
| Profit for the financial year | 10.9 |
* WEA = Weather
* CEN = Controlled Environment
| 2012 | Other | |||
|---|---|---|---|---|
| EUR million | WEA* | CEN* | operations | Group |
| Products | 99.7 | 67.0 | 0.0 | 166.8 |
| Projects | 84.2 | - | 0.0 | 84.2 |
| Services | 34.1 | 8.2 | 0.0 | 42.3 |
| Net sales | 218.0 | 75.3 | 0.0 | 293.3 |
| Operating profit | 22.6 | 9.4 | -1.9 | 30.2 |
| Share of result in associated companies | 0.1 | |||
| Financial income and expenses | -1.1 | |||
| Profit before taxes | 29.1 | |||
| Income taxes | -7.4 | |||
| Profit for the financial year | 21.7 |
* WEA = Weather
* CEN = Controlled Environment
The Group has three geographical segments, EMEA, Americas and APAC.
| 2013 EUR million |
Net sales, by destination country 1) |
Net sales, by location country 2) |
Non-current assets 2) |
|---|---|---|---|
| EMEA | 98.6 | 208.4 | 46.3 |
| of which Finland | 8.0 | 189.9 | 45.4 |
| Americas | 107.8 | 105.1 | 37.5 |
| of which United States | 80.1 | 100.3 | 37.2 |
| APAC | 66.9 | 31.8 | 0.6 |
| Group eliminations | -72.0 | ||
| Total | 273.2 | 273.2 | 84.5 |
1) Sales to external customers have been presented as net sales by destination country.
2) Net sales and non-current assets have been presented by the Group's and associated companies' countries of location.
| 2012 EUR million |
Net sales, by destination country 1) |
Net sales, by location country 2) |
Non-current assets 2) |
|---|---|---|---|
| EMEA | 107.6 | 219.5 | 51.3 |
| of which Finland | 4.9 | 196.3 | 50.3 |
| Americas | 108.6 | 110.8 | 32.5 |
| of which United States | 84.9 | 104.9 | 26.8 |
| APAC | 77.2 | 37.8 | 0.9 |
| Group eliminations | -74.8 | ||
| Total | 293.3 | 293.3 | 84.7 |
1) Sales to external customers have been presented as net sales by destination country.
2) Net sales and non-current assets have been presented by the Group's and associated companies' countries of location.
On August 14, 2013 Vaisala acquired Second Wind Systems Inc., a company located in Newton Massachusetts, USA. Second Wind is a global leader in remote sensing technology and data services for the wind energy industry. Second Wind Systems Inc. reached EUR 7.0 million net sales in 2012. The company employs 34 persons. Vaisala's ownership of Second Wind after the acquisition is 100%.
Net sales of the acquired company between August 15, 2013 and December 31, 2013 were EUR 2.9 million and operating profit EUR 0.1 million. Had the acquisition taken place on January 1, 2013, the group net sales would have been EUR 278.7 million and operating profit EUR 16.8 million.
The acquisition of Second Wind fits well Vaisala's strategic goal to expand Vaisala's presence in the renewable energy markets. The acquisition makes Vaisala a trusted wind energy application provider.
Vaisala incurred acquisition-related costs of EUR 0.1 million mainly related to external legal fees. The costs have been included in the other operating expenses in the consolidated statement of income.
The total final consideration of the transaction is EUR 1.4 million. No goodwill was recognized.
The values of the assets and liabilities arising from the acquisition were as follows:
| EUR million | Fair value recognized on acquisition |
|---|---|
| Technology (incl. in intangible assets) | 3.3 |
| Other intangible assets | 0.4 |
| Property, plant and equipment | 0.4 |
| Non-current receivables | 0.0 |
| Inventories | 0.6 |
| Trade and other receivables | 1.1 |
| Cash and cash equivalents | 0.2 |
| Total assets | 6.0 |
| Deferred tax liabilities | 0.9 |
| Interest-bearing liabilities | 0.1 |
| Advances received | 2.2 |
| Trade payables | 0.5 |
| Other liabilities | 0.9 |
| Total liabilities | 4.6 |
| Net assets | 1.4 |
| Cash flow on acquisition | |
| Purchase price paid in cash | -1.4 |
| Cash and cash equivalents in acquired subsidiary | 0.2 |
| Total net cash outflow on acquisition | -1.2 |
On December 17, 2013 Vaisala acquired 3TIER Inc. located in Seattle, USA. 3TIER provides project feasibility, asset management and forecasting services to companies operating in the renewable energy market globally. 3TIER reached EUR 6.3 million net sales in 2012. The company employed 55 persons on December 17, 2013. Vaisala's ownership of 3TIER after the acquisition is 100%.
Net sales of the acquired company between December 17, 2013 and December 31, 2013 were EUR 0.2 million and operating profit EUR 0.0 million. Had the acquisition taken place on January 1, 2013, the group net sales would have been EUR 279.8 million and operating profit EUR 16.1 million.
The acquisition of 3TIER fits well with Vaisala's strategic intent to build a stronger position in the renewable energy market.
Vaisala incurred acquisition-related costs of EUR 0.2 million mainly related to external legal fees. The costs have been included in the other operating expenses in the consolidated statement of income.
The total financial consideration of the transaction is EUR 11.5 million. No goodwill was recognized.
The values of the assets and liabilities arising from the acquisition were as follows:
| EUR million | Fair value recognized on acquisition |
|---|---|
| Technology (incl. in intangible assets) | 3.9 |
| Customer relationships | 6.2 |
| Other fixed assets | 0.6 |
| Trade and other receivables | 3.0 |
| Deferred tax assets | 3.0 |
| Cash and cash equivalents | 0.4 |
| Total assets | 17.2 |
| Deferred tax liabilities | 3.9 |
| Other liabilities | 1.8 |
| Total liabilities | 5.6 |
| Net assets | 11.5 |
| Cash flow on acquisition | |
| Purchase price paid in cash | -11.5 |
| Cash and cash equivalents in acquired subsidiary | 0.4 |
| Total net cash outflow on acquisition | -11.1 |
There were no business combinations in 2012.
| EUR million | 2013 | 2012 |
|---|---|---|
| Net sales recognized as revenue according to percentage of completion (in financial period) |
2.8 | 7.3 |
| Amount recognized as revenue during the financial year and previous years for long-term projects in progress |
26.3 | 23.6 |
| Total costs of incomplete long-term projects | 20.1 | 16.5 |
| Net amount of recognized costs, profits and losses from long-term projects |
6.3 | 8.2 |
| Order backlog | 6.1 | 7.6 |
| Specification of balances in the statement of financial position | ||
| Materials and supplies in inventory | 0.1 | - |
| Prepayments and accrued income recognized | 0.5 | 3.5 |
| Advances received | 1.2 | 2.6 |
Accounting principles for long-term projects are presented in the note Accounting Principles.
| Other operating income EUR million |
2013 | 2012 |
|---|---|---|
| Gains on the disposal of fixed assets | 1.5 | 0.4 |
| Other | 0.3 | 0.1 |
| Total | 1.8 | 0.5 |
Other operating income year 2013 includes the gain of road transportation product line divestment. Other operating income year 2012 includes the gain of wind profiler business divestment to Scintec AG.
| Other operating expenses EUR million |
2013 | 2012 |
|---|---|---|
| Loss on the disposal of fixed assets | 0.1 | 0.2 |
| Impairment of intangible assets | 4.3 | - |
| Total | 4.4 | 0.2 |
| Depreciation, amortization and impairments by function | ||
|---|---|---|
| EUR million | 2013 | 2012 |
| Procurement and production | 4.9 | 5.0 |
| Sales, marketing and administration | 9.4 | 10.1 |
| Research and development | 0.5 | 0.6 |
| Other income and expenses | 4.3 | - |
| Total | 19.1 | 15.8 |
| Depreciation, amortization and impairments by asset group | ||
| EUR million | 2013 | 2012 |
| Intangible assets | ||
| Intangible rights | 5.3 | 5.8 |
| Other intangible assets | 0.3 | 0.2 |
| Total | 5.5 | 6.0 |
| Property, plant and equipment | ||
| Buildings and structures | 2.3 | 2.6 |
| Machinery and equipment | 6.9 | 7.2 |
| Total | 9.3 | 9.8 |
| Impairments by asset group | ||
| Goodwill | 3.5 | - |
| Intangible rights | 0.8 | - |
| Total | 4.3 | - |
| Total | 19.1 | 15.8 |
| EUR million | 2013 | 2012 |
|---|---|---|
| Salaries | 84.7 | 87.0 |
| Share-based payment | 0.6 | 0.4 |
| Social costs | 8.8 | 7.6 |
| Pensions | ||
| Defined-benefit pension schemes | 0.0 | -0.1 |
| Defined-contribution pension schemes | 10.6 | 9.5 |
| Total | 104.7 | 104.5 |
| Expenses arising from employee benefits by function | ||
| EUR million | 2013 | 2012 |
| Procurement and production | 37.5 | 37.1 |
| Sales, marketing and administration | 44.5 | 45.2 |
| Research and development | 22.7 | 22.1 |
| Total | 104.7 | 104.5 |
| Group personnel, average during the financial year | ||
| by business unit | 2013 | 2012 |
| Weather | 462 | 234 |
| Controlled Environment | 169 | 110 |
| Other operations | 854 | 1,078 |
| Total | 1,485 | 1,422 |
| In Finland | 862 | 824 |
| Outside Finland | 623 | 598 |
| Total | 1,485 | 1,422 |
Vaisala integrated research and development functions into the business areas as of January 1, 2013.
On May 3, 2012 the Board of Directors resolved for the Group key employees a new share-based incentive plan that is based on the development of Group's profitability in calendar year 2012 and it will be paid partly in the Company's series A shares and partly in cash in spring 2015. The cash proportion will cover taxes and tax-related costs arising from the reward to a key employee. No reward will be paid, if a key employee's employment or service ends before the reward payment date. Maximum amount of 142,200 shares will be paid depending on the number of entitled persons in the company at the end of vesting period.
In 2013 EUR 0.6 million was expensed for the share-based incentive plan (EUR 0.4 million in 2012).
On February 6, 2013 the Board of Directors resolved for the Group key employees a share-based incentive plan that is based on the development of Group's profitability in calendar year 2013 and it will be paid partly in the Company's series A shares and partly in cash in spring 2016. The cash proportion will cover taxes and tax-related costs arising from the reward to a key employee. No reward will be paid, if a key employee's employment or service ends before the reward payment date. Maximum amount of 150,000 shares will be paid depending on the number of entitled persons in the company at the end of vesting period.
In 2013 no expense was recognized as the criteria was not met.
The statement of income includes research and development expenditure of EUR 28.9 million recognized as an expense in 2013 (EUR 28.0 million in 2012).
| Financial income | ||
|---|---|---|
| EUR million | 2013 | 2012 |
| Dividend income | 0.0 | 0.0 |
| Other interest and financial income | 0.5 | 0.1 |
| Realized and unrealized gains arising from changes in fair value | ||
| of derivative contracts and hedging activities | 1.8 | 2.0 |
| Other foreign exchange gains | 2.9 | 5.3 |
| Total | 5.2 | 7.5 |
| Financial expenses | ||
| EUR million | 2013 | 2012 |
| Interest expenses | ||
| Short- and long-term liabilities | -0.1 | -0.1 |
| Finance lease agreements | -0.0 | -0.0 |
| Other financial expenses | -0.4 | -0.1 |
| Realized and unrealized losses arising from changes in fair value | ||
| of derivative contracts and hedging activities | -0.6 | -1.7 |
| Other foreign exchange losses | -5.2 | -6.7 |
| Total | -6.3 | -8.6 |
Other foreign exchange gains and losses arise from the business transactions.
| EUR million | 2013 | 2012 |
|---|---|---|
| Tax based on taxable income for the financial year | 6.1 | 7.2 |
| Taxes from previous financial years | 0.6 | -0.9 |
| Change in deferred tax assets and liabilities | -0.4 | 1.1 |
| Total | 6.2 | 7.4 |
| EUR million | 2013 | 2012 |
|---|---|---|
| Profit before taxes | 17.2 | 29.1 |
| Taxes calculated at Finnish tax rate | 4.2 | 7.1 |
| Effect of foreign subsidiaries' tax rates | 0.9 | 0.8 |
| Non-deductible expenses and tax-free revenue | 0.2 | 0.2 |
| Impairment of goodwill | 0.9 | - |
| Taxes from previous years | 0.6 | -0.9 |
| Other direct taxes | 0.0 | 0.1 |
| Tax losses for which no deferred income tax asset was recognized | 0.1 | 0.1 |
| Deferred tax adjustment | -0.3 | - |
| Re-measurement of deferred tax - change in the Finnish corporate tax rate | -0.3 | - |
| Other | -0.0 | 0.0 |
| Tax in the statement of income | 6.2 | 7.4 |
| Effective tax rate | 36.4% | 25.6% |
| Deferred taxes in statement of financial position | |||
|---|---|---|---|
| EUR million | 2013 | 2012 | |
| Deferred tax assets | 8.0 | 5.1 | |
| Deferred tax liabilities | -5.2 | -1.0 | |
| Deferred tax asset, net | 2.8 | 4.1 | |
| Gross change in deferred taxes recognized in statement of financial position EUR million |
2013 | ||
| 2012 | |||
| Deferred taxes Jan. 1 | 4.1 | 4.8 | |
| Items recognized in statement of income | 0.4 | -1.1 | |
| Translation differences | -0.1 | 0.4 |
Items recognized in statement of comprehensive income -0.0 - Deferred tax asset, net 2.8 4.1
At December 31, 2013 the French subsidiary has unused losses of EUR 1.9 million, for which no deferred taxes have been booked. The limitation period of the losses is unlimited, but it is unlikely that the losses can be utilized in the near future.
| Changes in deferred taxes during 2013 EUR million |
Dec. 31, 2012 |
Recognized in statement of income |
Translation differences |
Acquired subsidiaries |
Recognized in statement of comprehensive income |
Dec. 31, 2013 |
|---|---|---|---|---|---|---|
| Deferred tax assets: | ||||||
| Internal margin of inventories | ||||||
| and fixed assets | 0.2 | 0.4 | 0.6 | |||
| Employee benefits | 0.7 | 0.3 | 1.0 | |||
| Unused tax losses | 0.2 | 0.3 | 3.0 | 3.5 | ||
| Timing difference of depreciation | ||||||
| on intangible items | 1.9 | -0.8 | 1.1 | |||
| Other temporary | ||||||
| timing differences* | 2.1 | -0.2 | -0.1 | 1.8 | ||
| Total | 5.1 | 0.0 | -0.1 | 3.0 | 8.0 | |
| Deferred tax liabilities: | ||||||
| Timing difference between | ||||||
| accounting and taxation | 1.0 | -0.4 | 0.6 | |||
| Timing difference of depreciation | ||||||
| on intangible items | 4.6 | 4.6 | ||||
| Other | 0.0 | 0.0 | 0.0 | |||
| Total | 1.0 | -0.4 | 4.6 | 0.0 | 5.2 | |
| Deferred tax asset, net | 4.1 | 0.4 | -0.1 | -1.7 | -0.0 | 2.8 |
Current portion of net deferred taxes is EUR 2.9 million.
| Recognized | ||||
|---|---|---|---|---|
| Changes in deferred taxes during 2012 | in statement | Translation | ||
| EUR million | Dec. 31, 2011 | of income | differences | Dec. 31, 2012 |
| Deferred tax assets: | ||||
| Internal margin of inventories and fixed assets | 0.6 | -0.4 | 0.2 | |
| Employee benefits | 0.7 | 0.7 | ||
| Unused tax losses | 0.3 | -0.1 | 0.2 | |
| Timing difference of depreciation on intangible items | 2.3 | -0.4 | 1.9 | |
| Other temporary timing differences* | 1.7 | -0.1 | 0.4 | 2.1 |
| Total | 5.7 | -1.0 | 0.4 | 5.1 |
| Deferred tax liabilities: | ||||
| Timing difference between accounting and taxation | 0.9 | 0.1 | 1.0 | |
| Deferred tax asset, net | 4.8 | -1.1 | 0.4 | 4.1 |
Current portion of net deferred taxes is EUR 2.6 million.
* Other temporary differences consist of intercompany sales, credit losses, inventory valuation and other temporary differences
The undiluted earnings per share figure is calculated by dividing the profit for the financial year belonging to the parent company's shareholders by the weighted average number of shares outstanding during the financial year.
| 2013 | 2012 | |
|---|---|---|
| Profit attributable to shareholders of the parent company, undiluted, EUR million | 10.9 | 21.7 |
| Weighted average number of shares outstanding, 1,000 pcs | 18,059 | 18,059 |
| Earnings per share, EUR | 0.60 | 1.20 |
| Profit attributable to shareholders of the parent company, diluted, EUR million | 10.9 | 21.7 |
| Weighted average number of shares outstanding, diluted, 1,000 pcs | 18,187 | 18,209 |
| Earnings per share, diluted, EUR | 0.60 | 1.19 |
In year 2013 and 2012 dilution is due to share-based payment.
For 2012 a dividend of 0.90 euros per share was paid.
At the Annual General Meeting to be held on March 26, 2014 the payment of a dividend of 0.90 euros per share will be proposed, representing a total dividend of EUR 16.3 million. The proposed dividend has not been recognized as a dividend liability in these financial statements.
| Intangible assets | Intangible | Other intangible | ||
|---|---|---|---|---|
| EUR million | rights* | Goodwill | assets | Total |
| Acquisition cost Jan. 1, 2013 | 46.8 | 17.9 | 3.3 | 68.0 |
| Translation difference | 1.5 | -0.8 | -0.1 | 0.7 |
| Increases | 0.3 | 0.1 | 0.5 | |
| Business combinations | 3.6 | 10.1 | 13.7 | |
| Decreases | -4.1 | -4.4 | -0.3 | -8.8 |
| Transfers between items | 0.0 | -0.0 | 0.0 | |
| Acquisition cost Dec. 31, 2013 | 48.2 | 12.7 | 13.2 | 74.1 |
| Accumulated amortization and impairment | ||||
| Jan. 1, 2013 | 32.1 | 2.8 | 34.9 | |
| Translation difference | 0.5 | -0.1 | 0.4 | |
| Accumulated amortization of decreases | ||||
| and transfers | -3.3 | -3.5 | -0.3 | -7.0 |
| Amortization in financial year | 5.3 | 0.3 | 5.5 | |
| Impairments in financial year | 0.8 | 3.5 | 4.3 | |
| Accumulated amortization and impairment | ||||
| Dec. 31, 2013 | 35.4 | - | 2.7 | 38.1 |
| Carrying amount Dec. 31, 2013 | 12.8 | 12.7 | 10.5 | 35.9 |
| Intangible assets | Intangible | Other intangible | ||
|---|---|---|---|---|
| EUR million | rights* | Goodwill | assets | Total |
| Acquisition cost Jan. 1, 2012 | 44.5 | 17.8 | 7.3 | 69.7 |
| Translation difference | -0.3 | 0.1 | -0.0 | -0.3 |
| Increases | 0.5 | 0.1 | 0.6 | |
| Decreases | -0.4 | -0.5 | -0.9 | |
| Transfers to non-current assets held for sale | -2.7 | -2.7 | ||
| Transfers between items | 5.2 | -3.7 | 1.5 | |
| Acquisition cost Dec. 31, 2012 | 46.8 | 17.9 | 3.3 | 68.0 |
| Accumulated amortization and impairment | ||||
| Jan. 1, 2012 | 28.4 | 3.1 | 31.5 | |
| Translation difference | -0.3 | -0.0 | -0.4 | |
| Accumulated amortization of decreases | ||||
| and transfers | -1.8 | -0.5 | -2.2 | |
| Amortization in financial year | 5.8 | 0.2 | 6.0 | |
| Accumulated amortization and impairment | ||||
| Dec. 31, 2012 | 32.1 | 2.8 | 34.9 | |
| Kirjanpitoarvo 31.12.2012 | 14.7 | 17.9 | 0.5 | 33.1 |
* Intangible rights contain patents, trademarks and software licenses
Following the changes in Vaisala's management group practices as of January 1, 2013 and suppressing the regional dimension, Vaisala has consequently allocated the goodwill to revised cash generating units "CGU"s. EUR 12.8 million goodwill in CGU Weather North America has been allocated to Weather CGU and EUR 3.5 million goodwill in CGU Life Science North America has been allocated to Life Science CGU belonging into Controlled environment segment. There was no impact on profit for the reported period.
Vaisala assesses the value of goodwill for impairment annually or more frequently in case facts and circumstances indicate a risk of impairment. The assessment is done using discounted cash flow methodology which is applied to five year forecasts that are approved by Vaisala management. The recoverable amount of cash generating unit is based on value in use calculations.
In Weather cash generating unit recoverable amount exceeds book value by EUR 251 million. Weather business sales are expected to grow annually 8% in average until year 2017. Terminal growth rate is based on 2% growth assumption and Weighted Average Costs of Capital (WACC) is 10.5%. Calculations show that with other assumptions unchanged cash generating unit can withstand sales deteriorating 15%, profitability deteriorating 9% or discount rate increase 20%.
Life Science cash generating unit recognized impairment charges of EUR 3.5 million related to goodwill and EUR 0.8 million related to intangible assets. After the charge there is no goodwill in Life Science. The related goodwill and intangible assets originated from the acquisitions of Veriteq Instruments Inc. in 2010. This impairment charge is mainly due to delayed Life Science business growth as markets in all geographic areas have not developed according to expectations.
| Property, plant and equipment EUR million |
Land and waters |
Buildings and structures |
Machinery and equipment |
Other tangible assets |
Advance payments and construction in progress |
Total |
|---|---|---|---|---|---|---|
| Acquisition cost Jan. 1, 2013 | 2.8 | 49.4 | 70.9 | 0.0 | 3.5 | 126.6 |
| Translation difference | -0.1 | -0.2 | 1.9 | -0.1 | 1.6 | |
| Increases | 0.0 | 3.0 | 0.0 | 4.1 | 7.1 | |
| Business combinations | 2.2 | 2.2 | ||||
| Decreases | -0.5 | -5.5 | -0.0 | -6.0 | ||
| Transfers between items | 0.1 | 3.3 | -3.5 | -0.0 | ||
| Acquisition cost Dec. 31, 2013 | 2.7 | 49.0 | 75.7 | 0.0 | 4.0 | 131.5 |
| Accumulated depreciation | ||||||
| and impairment Jan. 1, 2013 | 23.5 | 54.0 | 77.5 | |||
| Translation difference | -0.1 | 1.9 | 1.8 | |||
| Accumulated depreciation of | ||||||
| decreases and transfers | -0.1 | -3.8 | -3.9 | |||
| Depreciation in financial year | 2.3 | 6.9 | 9.3 | |||
| Accumulated depreciation | ||||||
| Dec. 31, 2013 | 25.7 | 59.0 | 84.7 | |||
| Carrying amount Dec. 31, 2013 | 2.7 | 23.3 | 16.7 | 0.0 | 4.0 | 46.8 |
The carrying amount of machinery and equipment used in production was EUR 11.3 million on December 31, 2013 (EUR 11.7 million on December 31, 2012).
| Property, plant and equipment | Land and | Buildings and | Machinery and | Other tangible |
Advance payments and construction in |
|
|---|---|---|---|---|---|---|
| EUR million | waters | structures | equipment | assets | progress | Total |
| Acquisition cost Jan. 1, 2012 | 2.8 | 47.8 | 72.9 | 0.0 | 7.2 | 130.7 |
| Translation difference | -0.0 | -0.0 | -0.4 | -0.0 | -0.5 | |
| Increases | 0.0 | 0.0 | 2.8 | 2.3 | 5.1 | |
| Decreases | -0.0 | -6.6 | -6.6 | |||
| Transfers to Non-current assets | ||||||
| held for sale | -0.6 | -0.6 | ||||
| Transfers between items | 1.6 | 2.8 | -6.0 | -1.5 | ||
| Acquisition cost Dec. 31, 2012 | 2.8 | 49.4 | 70.9 | 0.0 | 3.5 | 126.6 |
| Accumulated depreciation and | ||||||
| impairment Jan. 1, 2012 | 21.0 | 53.9 | 74.8 | |||
| Translation difference | -0.0 | -0.3 | -0.4 | |||
| Accumulated depreciation | ||||||
| of decreases and transfers | -6.7 | -6.7 | ||||
| Depreciation in financial year | 2.6 | 7.2 | 9.8 | |||
| Accumulated depreciation | ||||||
| Dec. 31, 2012 | 23.5 | 54.0 | 77.5 | |||
| Carrying amount Dec. 31, 2012 | 2.8 | 25.9 | 16.9 | 0.0 | 3.5 | 49.1 |
| 2013 EUR million |
Machinery and equipment |
|---|---|
| Acquisition cost | 0.1 |
| Accumulated depreciation | -0.0 |
| Carrying amount Dec. 31, 2013 | 0.0 |
| 2012 |
| EUR million | Machinery and equipment |
|---|---|
| Acquisition cost | 1.3 |
| Accumulated depreciation | -0.7 |
| Carrying amount Dec. 31, 2012 | 0.6 |
During 2013 Vaisala Corporation bought out the computers on finance lease. At December 31, 2013 the remaining assets on finance lease are leased forklift trucks.
| EUR million | 2013 | 2012 |
|---|---|---|
| Acquisition cost Jan. 1 | 0.8 | 0.6 |
| Share of result | 0.1 | 0.1 |
| Increase | - | 0.1 |
| Reclassification | -0.1 | - |
| Translation differences | -0.1 | 0.1 |
| Associated company investments, total Dec. 31 | 0.7 | 0.8 |
The carrying amount of associated companies does not include goodwill.
| Associated companies 2013 EUR million |
Domicile | Assets | Liabilities | Net sales | Profit/loss | Holding |
|---|---|---|---|---|---|---|
| Meteorage SA, France | Cedex | 4.0 | 1.9 | 3.3 | 0.3 | 35% |
The information presented in the table is based on the latest available financial statements.
| Associated companies 2012 EUR million |
Domicile | Assets | Liabilities | Net sales | Profit/loss | Holding |
|---|---|---|---|---|---|---|
| Meteorage SA, France | Cedex | 3.1 | 1.2 | N/A | 0.2 | 35% |
The information presented in the table is based on the latest available financial statements.
Associated company Meteorage SA maintains lightning detection networks and sales information related to lightning detection.
| 2013 | 2012 | |||
|---|---|---|---|---|
| Values in statement | Values in statement of | |||
| EUR million | of financial position | Fair values | financial position | Fair values |
| Loan receivables | 0.7 | 0.7 | 0.1 | 0.1 |
| Other receivables | 0.2 | 0.2 | - | - |
| Total | 0.9 | 0.9 | 0.1 | 0.1 |
| EUR million | 2013 | 2012 |
|---|---|---|
| Materials, supplies and finished goods | 24.8 | 27.7 |
| Project inventories | 3.8 | 2.0 |
| Total | 28.6 | 29.8 |
An expense of EUR 79.2 million (EUR 70.6 million in 2012) was recognized in the financial period.
In the financial year an expense of EUR 4.8 million was recorded, equivalent to the amount by which the carrying amount of inventories was reduced to correspond with their net realizable value (EUR 6.7 million in 2012).
| EUR million | 2013 | 2012 |
|---|---|---|
| Trade receivables | 45.8 | 50.2 |
| Loan receivables | 0.2 | 0.0 |
| Advances paid | 0.4 | 0.3 |
| Value-added tax receivables | 2.8 | 2.2 |
| Other receivables | 1.3 | 2.0 |
| Receivables from long-term project customers | 0.5 | 3.5 |
| Derivative contracts | 0.6 | 0.5 |
| Other prepaid expenses and accrued income | 5.8 | 2.3 |
| Total | 57.4 | 60.9 |
Fair values of trade and other receivables materially corresponds to book values.
| EUR million | 2013 | Provision | Net 2013 | 2012 | Provision | Net 2012 |
|---|---|---|---|---|---|---|
| Invoices not due | 31.7 | 31.7 | 28.0 | 28.0 | ||
| Due less than 30 days | 8.3 | 8.3 | 9.7 | 9.7 | ||
| Due 31- 90 days | 4.4 | 4.4 | 6.1 | 6.1 | ||
| Due over 90 days | 2.7 | 1.3 | 1.4 | 8.7 | 2.3 | 6.5 |
| Total | 47.0 | 1.3 | 45.8 | 52.5 | 2.3 | 50.2 |
Impairments of trade receivables were in year 2013 EUR 0.7 million (EUR 0.7 million in 2012).
| EUR million | 2013 | 2012 |
|---|---|---|
| EUR | 17.7 | 22.6 |
| USD | 21.2 | 20.1 |
| GBP | 2.9 | 3.1 |
| JPY | 2.0 | 2.0 |
| AUD | 0.7 | 0.8 |
| CNY | 0.2 | 1.2 |
| Others | 1.1 | 0.6 |
| Total | 45.8 | 50.2 |
| EUR million | 2013 | 2012 |
|---|---|---|
| Cash and bank deposits | 45.8 | 74.8 |
The values of cash and cash equivalents are equivalent to their carrying amounts.
In 2012 non-current assets held for sale consists of tangible and intangible assets related to divestment of non-core measurement systems. The value of assets in the statement of financial position was EUR 1.4 million. Business did not represent a separate major line of business and thus it was not classified as discontinued operation according to IFRS 5. Business belonged to Weather segment and the 2012 sales were EUR 4.5 million. The line of business was sold in 2013.
Vaisala applies the insider rules of the Helsinki Stock Exchange.
Vaisala has 18,218,364 shares, of which 3,389,351 are K shares and 14,829,013 are A shares. The shares do not have nominal value. Vaisala's maximum share capital is EUR 28,800,000. A maximum of 68,490,017 shares shall be K shares and a maximum of 68,490,017 shares shall be A shares, with the provision that the total number of shares shall be at least 17,122,505 and not more than 68,490,017. The K shares and A shares are differentiated by the fact that each K share entitles its owner to 20 votes at a General Meeting of Shareholders while each A share entitles its owner to 1 vote. The shares have the same rights to dividend. K shares can be converted to A shares according to specific rules stated in the Articles of Association.
| Number of | Share | Share premium | Other | Own | ||
|---|---|---|---|---|---|---|
| EUR million | shares 1,000 | capital | fund | reserves | shares | Total |
| December 31, 2011 | 18,209 | 7.7 | 22.3 | 0.3 | -0.3 | 30.1 |
| Purchase of treasury shares | -150 | -2.3 | -2.3 | |||
| Share-based compensation | 0.4 | 0.4 | ||||
| December 31, 2012 | 18,059 | 7.7 | 22.3 | 0.8 | -2.5 | 28.2 |
| Transfer | -22.3 | 22.4 | 0.1 | |||
| Return of capital | -22.2 | -22.2 | ||||
| Share-based compensation | 0.6 | 0.6 | ||||
| Translation differences | -0.0 | -0.0 | ||||
| December 31, 2013 | 18,059 | 7.7 | 0.0 | 1.5 | -2.5 | 6.6 |
| Own shares held | ||||||
| by company | 159 |
Shareholders' equity consists of the share capital, reserve fund, fund of invested non-restricted equity, translation differences and retained earnings.
Other reserves, EUR 0.4 million contains items based on the local rules of other Group companies.
Restrictions based on local rules apply to the distributability of the reserve fund.
The fund of invested non-restricted equity includes funds transferred from the share premium fund.
The translation differences fund contains translation differences arising from the conversion of the financial statements of foreign units. The profit for the financial year is entered in retained earnings.
On March 26, 2013 Vaisala Corporation's Annual General Meeting decided to decrease the share premium fund presented in the company's statement of financial position on December 31, 2012 by EUR 22,3 million by transferring all the funds in the share premium fund into the invested non-restricted equity fund. The Meeting also decided that of the funds transferred into the invested non-restricted equity funds EUR 1.23 per share will be distributed to the shareholders as a return of capital, which equals to approximately EUR 22.2 million return of capital.
Total 18,218
The own shares (treasury shares) fund includes the acquisition cost of own shares held by the Group, and it is presented as a reduction in shareholders' equity.
| Number of shares | Purchase price EUR million |
|
|---|---|---|
| Company's own shares on Dec. 31, 2011 | 9,150 | 0.3 |
| May, 2012 | 139,379 | 2.1 |
| June, 2012 | 10,621 | 0.2 |
| Company's own shares on Dec. 31, 2012 | 159,150 | 2.5 |
| Company's own shares on Dec. 31, 2013 | 159,150 | 2.5 |
On December 31, 2013, the Group had 159,150 treasury A shares (159.150 A shares on December 31, 2012) in its possession that represent approximately 0.9% of share capital and 0.2% of voting rights. The considerations paid for the A shares were EUR 2,527,160.
Treasury shares are to be used for share based incentive plan (note 8).
The Group has a number of pension schemes, which have been classified as either defined-contribution or defined-benefit schemes. Under defined-contribution plans, contributions made are recognized as an expense in the statement of income of the financial period in which the contributions are payable. TyEL pension cover managed in an insurance company are defined-contribution schemes.
The defined-benefit schemes are in Finland. The supplementary pension benefits managed in the Vaisala Pension Fund have been treated as defined-benefit pension schemes. The Pension Fund's obligations were transferred to a pension insurance company on December 31, 2005. The company retains, however, an obligation under IFRS 19 for future index and salary increases in terms of individuals covered by the Pension Fund who are employed by the company.
On January 1, 2013 the Group adopted the revised IAS 19 standard. The impact of the adoption is described in the Accounting Principles.
| 2012 | ||
|---|---|---|
| EUR million | 2013 | revised |
| Fair value of funded obligations | 1.5 | 1.4 |
| Fair value of assets | -0.9 | -0.9 |
| Deficit/surplus | 0.6 | 0.5 |
| Net liability in the statement of financial position | 0.6 | 0.5 |
| EUR million | 2013 | 2012 |
|---|---|---|
| Current service cost | 0.0 | 0.0 |
| Interest | 0.0 | 0.0 |
| Curtailment gain/loss | - | -0.0 |
| Expense recognized in the statement of income | 0.0 | 0.0 |
| Net actuarial loss (+) / gain (-) in other comprehensive income | 0.2 | 0.0 |
| Total recognized in the statement of income and the statement of other comprehensive income |
0.2 | 0.1 |
Defined-benefit pension schemes has been allocated to administration function.
| EUR million | 2013 | 2012 |
|---|---|---|
| Present value of obligation Jan. 1 | 1.4 | 1.6 |
| Current service cost | 0.0 | 0.0 |
| Interest cost | 0.0 | 0.1 |
| Settlement and curtailments | - | -0.2 |
| Remeasurements | ||
| Actuarial gain (-) loss(+) arising from changes in financial assumptions | 0.1 | 0.2 |
| Experience adjustment | 0.1 | -0.2 |
| Benefits paid | -0.1 | - |
| Present value of obligation on Dec. 31 | 1.5 | 1.4 |
| EUR million | 2013 | 2012 |
|---|---|---|
| Fair value of plan assets Jan. 1 | 0.9 | 1.0 |
| Interest income on assets | 0.0 | 0.0 |
| Settlements | - | -0.2 |
| Net return on plan assets | 0.0 | -0.1 |
| Benefits paid | -0.1 | - |
| Contributions | 0.0 | 0.2 |
| Fair value of plan assets Dec. 31 | 0.9 | 0.9 |
| EUR million | 2013 | 2012 |
|---|---|---|
| At beginning of financial year | 0.5 | 0.6 |
| Expense (+) / income (-) recognized in statement of income | 0.0 | 0.0 |
| Total recognized in other comprehensive income | 0.2 | 0.0 |
| Contributions paid | - | -0.2 |
| At end of financial year | 0.6 | 0.5 |
| Actuarial assumptions used | 2013 | 2012 |
| Discount rate | 3.30% | 3.00% |
| Expected yield from assets belonging to the scheme | 3.25% | 3.25% |
| Rate of inflation | 2.00% | 2.00% |
| Annual adjustments to pensions | 2.10% | 2.10% |
| Assumption | Change in assumption |
Increase in assumption |
Decrease in assumption |
|---|---|---|---|
| Discount rate | 0.25% | 2.26% decrease | 2.21% increase |
| Salary increase rate | 0.25% | 6.10% increase | 5.75% decrease |
| Inflation | 0.25% | 1.00% increase | 0.99% decrease |
| Pension increase rate | 0.25% | 5.10% increase | 5.00% decrease |
| Increase by one year |
Decrease by one year |
||
| Life expectancy at birth | 0.25% | 2.20% increase | 2.16% decrease |
The above analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the net liability using the above assumptions the same method has been applied as when measuring the net liability in the statement of financial position.
| Long term | ||
|---|---|---|
| EUR million | 2013 | 2012 |
| Provisions Jan. 1 | 0.1 | 0.1 |
| Decrease in provisions | -0.1 | 0.0 |
| Provisions Dec. 31 | 0.0 | 0.1 |
| Short term | ||
| EUR million | 2013 | 2012 |
| Provisions Jan.1 | 0.9 | 1.5 |
| Increase in provisions | - | 0.5 |
| Used provisions | -0.9 | -1.1 |
| Provisions Dec. 31 | 0.0 | 0.9 |
Provisions in 2012 relate to the restructuring of the company's organization.
| EUR million | 2013 | 2012 |
|---|---|---|
| Trade payables | 10.1 | 12.4 |
| Salary and social cost allocations | 14.9 | 20.3 |
| Other accrued expenses and deferred income | 25.1 | 7.4 |
| Other short-term liabilities | 4.7 | 16.3 |
| Total | 54.8 | 56.4 |
The fair value of the trade payables and other liabilities is equivalent to their carrying amounts.
of financial position 2013
| EUR million | Assets/liabilities recognized at fair value through profit and loss and derivatives used for hedging |
Loans and receivables |
Financial liabilities at amortized cost |
Carrying amount of statement of financial position items |
Fair value |
Note |
|---|---|---|---|---|---|---|
| Financial assets | ||||||
| Long-term receivables | 0.9 | 0.9 | 0.9 | 17 | ||
| Trade receivables and other | ||||||
| receivables | 0.6 | 56.7 | 57.4 | 57.4 | 19 | |
| Cash and cash equivalents | 45.8 | 45.8 | 45.8 | 20 | ||
| Total | 0.6 | 103.4 | 104.1 | 104.1 | ||
| Liabilities | ||||||
| Interest-bearing long-term liabilities | 0.0 | 0.0 | 0.0 | 26 | ||
| Other interest bearing liabilities | 0.0 | 0.0 | 0.0 | 26 | ||
| Trade payables and other liabilities | 0.0 | 54.8 | 54.8 | 54.8 | 25 | |
| Total | 0.0 | 54.8 | 54.8 | 54.8 |
| EUR million | Assets/liabilities recognized at fair value through profit and loss and derivatives used for hedging |
Loans and receivables |
Financial liabilities at amortized cost |
Carrying amount of statement of financial position items |
Fair value |
Note |
|---|---|---|---|---|---|---|
| Financial assets | ||||||
| Long-term receivables | 0.1 | 0.1 | 0.1 | 17 | ||
| Trade receivables and other | ||||||
| receivables | 0.5 | 60.5 | 60.9 | 60.9 | 19 | |
| Cash and cash equivalents | 74.8 | 74.8 | 74.8 | 20 | ||
| Total | 0.5 | 135.3 | 135.8 | 135.8 | ||
| Liabilities | ||||||
| Interest-bearing long-term liabilities | 0.3 | 0.3 | 0.3 | 26 | ||
| Other interest bearing liabilities | 0.3 | 0.3 | 0.3 | 26 | ||
| Trade payables and other liabilities | 0.0 | 56.3 | 56.4 | 56.4 | 25 | |
| Total | 0.0 | 56.9 | 57.0 | 57.0 |
At the end of year 2013 and 2012 the Group did not have interest bearing loans. The company has no loans that would mature after five years or a longer period. Other non-interest bearing long-term liabilities comprise of long-term part of trade payable of ASIC-circuits EUR 0.8 million ((EUR 1.1 million). Circuits are Vaisala's property and they will be paid according to the use of current circuits during the years 2012 to 2016. The liability is interest-free.
| EUR million | 2013 | 2012 |
|---|---|---|
| Finance lease liabilities – total amount of minimum lease payments | ||
| Up to 1 year | 0.0 | 0.3 |
| 1–5 years | 0.0 | 0.3 |
| 0.0 | 0.6 | |
| Future financial expenses | 0.0 | 0.0 |
| Present value of finance lease liabilities | 0.0 | 0.6 |
| Present value of minimum payments of finance lease liabilities | ||
| Up to 1 year | 0.0 | 0.3 |
| 1–5 years | 0.0 | 0.3 |
| Total | 0.0 | 0.6 |
During 2013 Vaisala Corporation bought out the finance leases relating to computers.
| EUR million | 2013 | 2012 |
|---|---|---|
| Capital value of off-balance sheet contracts made to hedge against exchange rate and interest rate risks |
||
| Currency forwards | 19.7 | 20.9 |
| Capital value, total | 19.7 | 20.9 |
| in the following currencies: | 2013 | 2012 | ||
|---|---|---|---|---|
| Currency million | EUR million | Currency million | EUR million | |
| USD | 22.5 | 16.8 | 22.5 | 17.4 |
| AUD | 2.0 | 1.4 | 2.0 | 1.6 |
| JPY | 165.0 | 1.2 | 165.0 | 1.6 |
| GBP | 0.3 | 0.3 | 0.3 | 0.3 |
| Total | 19.7 | 20.9 |
| EUR million | 2013 | 2012 |
|---|---|---|
| Less than 90 days | 9.8 | 10.4 |
| Over 90 days and less than 120 days | 2.6 | 2.8 |
| Over 120 days and less than 230 days | 7.4 | 7.6 |
| Total | 19.7 | 20.9 |
| EUR million | 2013 | 2012 |
|---|---|---|
| Currency forwards | 0.6 | 0.4 |
| Fair value, total | 0.6 | 0.4 |
Fair value of the derivative contracts are based on information that are observable for the assets or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). In addition to the quoted prices the group will prepare own assessment using commonly acceptable valuation techniques. Hence group's derivative contracts belongs to the level 2. There were no transfers between the hierarchy levels during the financial period.
| EUR million | 2013 | 2012 |
|---|---|---|
| For own loans/commitments | ||
| Guarantees | 8.9 | 10.5 |
| Other own liabilities | ||
| Pledges given | 0.1 | 0.1 |
| Other leases | 6.5 | 5.5 |
| Contingent liabilities and pledges given, total | 15.5 | 16.2 |
The lease agreements are based on common market terms in each country.
Related parties of Vaisala group are group companies, associated companies, members of Board and Management Group.
| Company | Group ownership % | share of votes % | |
|---|---|---|---|
| Parent company Vaisala Corporation | Finland | ||
| Vaisala Limited | United Kingdom | 100% | 100% |
| Vaisala Pty Ltd. | Australia | 100% | 100% |
| Vaisala GmbH | Germany | 100% | 100% |
| Vaisala KK | Japan | 100% | 100% |
| Vaisala Holding Inc. | United States | 100% | 100% |
| Vaisala Inc. | United States | 100% | 100% |
| Vaisala China Ltd | China | 100% | 100% |
| Vaisala Canada Inc. | Canada | 100% | 100% |
| Tycho Technology Inc. | United States | 100% | 100% |
| Vaisala S.A. | Argentina | 100% | 100% |
| Vaisala SAS | France | 100% | 100% |
| Vaisala Sdn Bhd | Malaysia | 100% | 100% |
| Vaisala Servicos De Marketing Ltda | Brazil | 100% | 100% |
| Second Wind Systems Inc. | United States | 100% | 100% |
| 3TIER Inc. | United States | 100% | 100% |
| 3TIER R&D India Pvt Ltd | India | 100% | 100% |
| 3TIER S.A. | Panama | 100% | 100% |
| 3TIER (Europe) Limited | United Kingdom | 100% | 100% |
| Associated companies | |||
| Meteorage SA | France | 35% | 35% |
Related party transactions are based on market price of goods and services and common market terms.
Transactions with related parties and related party receivables and liabilities:
| 2013 | ||
|---|---|---|
| EUR million | Sales | Receivables |
| Associated companies | 0.5 | 0.0 |
| 2012 | ||
| EUR million | Sales | Receivables |
| Associated companies | 0.5 | - |
| Employee benefits of management | ||
|---|---|---|
| EUR million | 2013 | 2012 |
| Salary and bonuses of the President and CEO | ||
| Forsén Kjell | ||
| Salary | 0.5 | 0.5 |
| Bonuses | 0.1 | 0.2 |
| Share-based payment | 0.1 | 0.1 |
| Obligatory pension | 0.1 | 0.1 |
| Voluntary pension | 0.1 | 0.1 |
| Total | 0.8 | 0.8 |
| Other group management | ||
| Salary | 1.0 | 1.8 |
| Bonuses | 0.2 | 0.4 |
| Share-based payment | 0.2 | 0.2 |
| Obligatory pension | 0.2 | 0.3 |
| Voluntary pension | 0.2 | 0.2 |
| Total | 1.9 | 2.9 |
As of January 1, 2013 Vaisala has only one Management Group
| Remuneration to members of the Board of Directors 2013 EUR 1,000 |
Annual remuneration |
Compensation, audit committee |
Compensation, remuneration committee |
Total | |
|---|---|---|---|---|---|
| Lappalainen Timo | Member of the Board | 33 | 7 | 40 | |
| Neuvo Yrjö | Vice Chairman of the Board | 33 | 5 | 38 | |
| Niinivaara Mikko | Member of the Board | 33 | 7 | 40 | |
| Torkko Maija | Member of the Board | 33 | 11 | 5 | 48 |
| Voipio Mikko | Member of the Board | 33 | 33 | ||
| Voipio Raimo | Chairman of the Board | 43 | 5 | 48 | |
| Total | 205 | 25 | 15 | 245 |
| Remuneration to members of the Board of Directors 2012 EUR 1,000 |
Annual remuneration |
Compensation, audit committee |
Compensation, remuneration committee |
Total | |
|---|---|---|---|---|---|
| Gustavsson Stig | Member of the Board | 6 | 6 | ||
| Lappalainen Timo | Member of the Board | 25 | 6 | 31 | |
| Neuvo Yrjö | Vice Chairman of the Board | 25 | 7 | 32 | |
| Niinivaara Mikko | Member of the Board | 25 | 6 | 31 | |
| Torkko Maija | Member of the Board | 25 | 9 | 7 | 41 |
| Voipio Mikko | Member of the Board | 25 | 25 | ||
| Voipio Raimo | Chairman of the Board | 35 | 7 | 42 | |
| Total | 166 | 21 | 21 | 208 |
Age of retirement for the President and CEO is 62 years. The President and CEO has a compensation based retirement plan. Notice period, severance pay and conditions of other severance compensations: 6 months for the employee, 12 months for the employer, compensation equal to the salary.
Vaisala Corporation's Board of Directors held and controlled 1,938,010 shares on December 31, 2013, accounting for 17.5% of the total votes (2012: 1,928,391 shares and 17.3% of the total votes). A regularly updated table reporting the holdings of public insiders is available on www. vaisala.com.
The company's President and CEO held and controlled 2,720 A shares on December 31, 2013.
The Management Group of Vaisala held and controlled 4,463 Vaisala shares on December 31, 2013 accounting for 0.0% of total votes. (In 2012 the extended management team held 11,087 shares and 0.0% voting rights.)
The President and CEO and the members of the Board have not been granted loans nor have guarantees or commitments been given on their behalf.
| EUR million | 2013 | 2012 |
|---|---|---|
| Auditors of PricewaterhouseCoopers-chain | ||
| Auditor's fees | 0.3 | 0.3 |
| Statements | 0.0 | 0.0 |
| Tax advice | 0.0 | 0.1 |
| Other fees | 0.0 | 0.1 |
| Total | 0.3 | 0.6 |
| EUR million | Note | Jan. 1–Dec. 31, 2013 |
Jan. 1–Dec. 31, 2012 |
||
|---|---|---|---|---|---|
| Net sales | 2 | 189.7 | 196.3 | ||
| Cost of production and procurement | -103.9 | -109.2 | |||
| Gross profit | 85.8 | 87.1 | |||
| Cost of sales and marketing Cost of administration |
5 | -20.6 | -21.7 | ||
| Development costs | 5 | -22.0 | -19.6 | ||
| Other administrative costs | 5 | -27.0 | -49.0 | -24.8 | -44.4 |
| Other operating income | 4 | 0.0 | 0.1 | ||
| Other operating costs | 4 | -0.3 | -0.0 | ||
| Operating profit | 15.9 | 21.0 | |||
| Financial income and expenses | 7 | 14.1 | 1.6 | ||
| Profit before appropriations and taxes | 30.0 | 22.7 | |||
| Appropriations | 8 | 1.1 | -0.4 | ||
| Profit before taxes | 31.1 | 22.3 | |||
| Direct taxes | 9 | -4.0 | -4.0 | ||
| Net profit for the financial year | 27.1 | 18.3 |
| Assets EUR million |
Note | Dec. 31, 2013 | Dec. 31, 2012 |
|---|---|---|---|
| Non-current assets | |||
| Intangible assets | 10 | ||
| Intangible rights | 8.5 | 11.5 | |
| Other long-term expenditure | 0.3 | 0.3 | |
| 8.7 | 11.9 | ||
| Property, plant and equipment | 10 | ||
| Land and waters | 1.3 | 1.3 | |
| Buildings | 27.0 | 29.2 | |
| Machinery and equipment | 10.2 | 10.7 | |
| Other tangible assets | 0.0 | 0.0 | |
| Advance payments and construction in progress | 3.8 | 2.3 | |
| 42.3 | 43.5 | ||
| Investments | 10 | ||
| Shares in subsidiaries | 30.4 | 30.4 | |
| Other shares | 0.1 | 0.1 | |
| Receivables from subsidiaries | 19 | 25.6 | 9.5 |
| 56.1 | 40.0 | ||
| Total non-current assets | 107.1 | 95.3 | |
| Current assets | |||
| Inventories | |||
| Materials, consumables and finished goods | 19.5 | 20.3 | |
| Project inventories | 3.1 | 0.0 | |
| 22.6 | 20.4 | ||
| Receivables | |||
| Trade receivables | 19 | 29.2 | 30.6 |
| Loan receivables | 19 | 4.9 | 5.5 |
| Other receivables | 11 | 1.7 | 2.8 |
| Prepaid expenses and accrued income | 12, 19 | 6.0 | 8.3 |
| 41.8 | 47.2 | ||
| Cash and bank balances | 13 | 26.8 | 52.2 |
| Total current assets | 91.2 | 119.8 | |
| Total assets | 198.3 | 215.1 |
| Shareholders' equity and liabilities EUR million |
Note | Dec. 31, 2013 | Dec. 31, 2012 |
|---|---|---|---|
| Shareholders' equity | 16 | ||
| Share capital | 7.7 | 7.7 | |
| Reserve fund | - | 22.3 | |
| Fund of invested non-restricted equity | 0.1 | - | |
| Retained earnings | 117.7 | 115.6 | |
| Profit for the financial year | 27.1 | 18.3 | |
| 152.5 | 163.9 | ||
| Total shareholders' equity | 152.5 | 163.9 | |
| Appropriations | |||
| Accumulated depreciation difference | 14 | 2.9 | 4.0 |
| Provisions | 15 | - | 0.1 |
| Liabilities | |||
| Non-current | |||
| Other non-current liabilities | 17 | 0.8 | 1.1 |
| Current | |||
| Advances received | 3.2 | 4.2 | |
| Trade payables | 19 | 10.3 | 11.5 |
| Other current liabilities | 1.8 | 2.8 | |
| Accrued expenses and deferred income | 18, 19 | 27.0 | 27.7 |
| 42.1 | 46.1 | ||
| Total liabilities | 42.9 | 47.2 | |
| Total shareholders' equity and liabilities | 198.3 | 215.1 |
| EUR million | Note | Jan. 1–Dec. 31, 2013 |
Jan. 1–Dec. 31, 2012 |
|---|---|---|---|
| Cash flow from operating activities | |||
| Cash receipts from customers | 195.2 | 200.9 | |
| Other income from business operations | 0.0 | 0.0 | |
| Cash paid to suppliers and employees | -171.3 | -164.6 | |
| Cash flow from business operations before financial items and taxes | 23.9 | 36.4 | |
| Interest received | 7 | 0.9 | 0.6 |
| Interest paid | 7 | -0.0 | -0.0 |
| Other financial items, net | 7 | -1.7 | -2.3 |
| Dividend received from business operations | 7 | 14.6 | 2.2 |
| Direct tax paid | 9 | -4.3 | -4.5 |
| Cash flow from business operations (A) | 33.3 | 32.4 | |
| Cash flow from investing activities | |||
| Investments in intangible assets | 10 | -0.6 | -2.0 |
| Investments in property, plant and equipment | 10 | -4.1 | -2.0 |
| Loans granted | 19 | -24.7 | -1.2 |
| Other investments | 10 | - | -0.5 |
| Repayments on loan receivables | 19 | 9.1 | 11.7 |
| Cash flow from investing activities (B) | -20.3 | 6.1 | |
| Cash flow from financing activities | |||
| Purchase of treasury shares | 16 | - | -2.3 |
| Return of capital | 16 | -22.2 | - |
| Dividend paid | 16 | -16.2 | -11.8 |
| Other transactions from Equity | 16 | - | -0.2 |
| Cash flow from financing activities (C) | -38.5 | -14.3 | |
| Change in liquid funds (A+B+C) increase (+) / decrease (-) | -25.4 | 24.1 | |
| Liquid funds at beginning of period | 13 | 52.2 | 28.1 |
| Liquid funds at end of period | 13 | 26.8 | 52.2 |
The financial statements of the parent company have been prepared according to the Finnish accounting standards (FAS). Financial statement data are based on original acquisition costs if not otherwise stated in the accounting principles outlined below. Revaluations are not taken into account if not separately mentioned.
The balance sheet values of fixed assets are stated at historical cost, less accumulated depreciation and amortization, with the exception of the office and factory premises in Vantaa, which were revalued in previous years by a total of EUR 5.7 million. Despite of the revaluations, the asset value is significantly less than the market value of the office and factory premises. The cost of self-constructed assets also includes overhead costs attributable to construction work. Interest is not capitalized on fixed assets. Depreciation and amortization is calculated on a straight-line basis over the expected useful lives of the assets, except for land, which is not depreciated. Estimated useful lives for various assets are:
| Intangible rights | 3–5 years |
|---|---|
| Buildings and structures | 5–40 years |
| Machinery and equipment | 3–10 years |
| Other tangible assets | 5–15 years |
The cost of inventories comprises all costs of purchase. Finished goods produced include also fixed and variable production overheads. Inventories are valued using the average cost method.
Transactions in foreign currencies are recorded at the rates of exchange prevailing at the date of transaction. Receivables and payables in foreign currency are valued at the exchange rates quoted by the European Central Bank at the balance sheet date. All foreign exchange gains and losses, including foreign exchange gains and losses on trade receivables and payables, are recorded as financial income and expenses.
Pension costs are recorded according to the Finnish regulations. The additional pension coverage of parent company personnel is arranged by the Vaisala Pension
Fund (closed on January 1,1983). The pension liability of the fund is fully covered.
Except for investments in machinery and equipment, which are amortized on a straight line basis over a period of five years, research and development costs are expensed in the financial period in which they occurred.
Income taxes consist of current and deferred tax. Current taxes in the income statement include estimated taxes payable or refundable on tax returns for the financial year and adjustments to tax accruals related to previous years. The deferred taxes in the income statement represent the net change in deferred tax liabilities and assets during the year.
Revenue from the sale of goods is recognized when significant risks and rewards of owning the goods are transferred to the buyer. Revenue recognition generally takes place when the transfer has taken place. Revenue for rendering of services is recognized when the service has been performed. When recognizing net sales, indirect taxes and discounts, for example, have been deducted from sales revenue. Possible exchange rate differences are recognized in the financial income and expenses.
Revenues from long-term projects are recognized using the percentage of completion method, when the outcome of the project can be estimated reliably. The stage of completion is determined for each project by reference to the relationship between the costs incurred for work performed to date and the estimated total costs of the project or the relationship between the working hours performed to date and the estimated total working hours.
When the outcome of a long-term project cannot be estimated reliably, project costs are recognized as expenses in the same period when they arise and project revenues only to the extent of project costs incurred where it is probable that those costs will be recoverable. When it is probable that total costs necessary to complete the project will exceed total project revenue, the expected loss is recognized as an expense immediately.
Gains on the disposal of assets as well as income other than that relating to actual performance-based sales, such as rental income, are recognized as other operating income.
Losses on the disposal of assets and expenses other than those relating to actual performance-based sales are included in other operating expenses.
| Net sales by market area | Parent Company | Parent Company |
|---|---|---|
| EUR million | 2013 | 2012 |
| EMEA | 87.9 | 98.5 |
| from which Finland | 8.0 | 5.7 |
| Americas | 48.4 | 41.4 |
| from which United States | 34.1 | 29.5 |
| APAC | 53.4 | 56.4 |
| Total | 189.7 | 196.3 |
| Net sales by function | Parent Company | Parent Company |
| EUR million | 2013 | 2012 |
| Weather | 133.5 | 142.1 |
| Controlled environment | 56.2 | 54.2 |
| Total | 189.7 | 196.3 |
| Parent Company | Parent Company | |
|---|---|---|
| EUR million | 2013 | 2012 |
| Net sales recognized as revenue according to percentage of completion (in financial period) |
2.3 | 7.3 |
| Amount recognized as revenue during the financial year and previous years for long-term project in progress |
24.9 | 22.6 |
| Total costs of incomplete long-term projects | 18.6 | 15.2 |
| Net amount of recognized costs, profits and losses from long-term projects |
6.5 | 8.9 |
| Order backlog | 5.3 | 7.6 |
| Specification of balances in the statement of financial position | ||
| Materials and supplies in inventory | 0.1 | - |
| Prepayments and accrued income recognized | 0.4 | 3.5 |
| Advances received | 0.9 | 2.8 |
| Accounting principles for long-term projects are presented in the note Accounting Principles. |
| Other operating income EUR million |
Parent Company 2013 |
Parent Company 2012 |
|---|---|---|
| Gains on the disposal of fixed assets | 0.0 | 0.0 |
| Other operating income | 0.0 | 0.1 |
| Total | 0.0 | 0.1 |
| Other operating expenses EUR million |
Parent Company 2013 |
Parent Company 2012 |
|---|---|---|
| Losses from disposal of fixed assets | 0.1 | 0.0 |
| Impairment of intangible assets | 0.3 | - |
| Total | 0.3 | 0.0 |
| Personnel costs | Parent Company | Parent Company | ||
|---|---|---|---|---|
| EUR million | 2013 | 2012 | ||
| Wages and salaries | 48.9 | 47.3 | ||
| Pension costs | 9.0 | 8.4 | ||
| Other personnel costs | 2.6 | 1.7 | ||
| Total | 60.4 | 57.4 | ||
| Personnel on average during the year (persons) | ||||
| In Finland | 862 | 814 | ||
| Outside Finland | 10 | 10 | ||
| Total | 872 | 824 | ||
| Personnel Dec. 31 | ||||
| In Finland | 871 | 827 | ||
| Outside Finland | 10 | 10 | ||
| Total | 881 | 837 | ||
| Management salaries | Parent Company | Parent Company | ||
| EUR million | 2013 | 2012 | ||
| Salary and bonuses of the President and CEO | ||||
| Forsén Kjell | ||||
| Salary | 0.5 | 0.5 | ||
| Bonuses | 0.1 | 0.2 | ||
| Share-based payment | 0.1 | 0.1 | ||
| Obligatory pension | 0.1 | 0.1 | ||
| Voluntary pension | 0.1 | 0.1 | ||
| Total | 0.8 | 0.8 | ||
| Remuneration to members of the | Compensation, | Compensation, | ||
| Board of Directors 2013 | Annual | audit | remuneration | |
| EUR 1,000 | remuneration | committee | committee | Total |
| Lappalainen Timo | Member of the Board | 33 | 7 | 40 | |
|---|---|---|---|---|---|
| Neuvo Yrjö | Vice Chairman of the Board | 33 | 5 | 38 | |
| Niinivaara Mikko | Member of the Board | 33 | 7 | 40 | |
| Torkko Maija | Member of the Board | 33 | 11 | 5 | 48 |
| Voipio Mikko | Member of the Board | 33 | 33 | ||
| Voipio Raimo | Chairman of the Board | 43 | 5 | 48 | |
| Total | 205 | 25 | 15 | 245 |
| Remuneration to members of the Board of Directors 2012 EUR 1,000 |
Annual remuneration |
Compensation, audit committee |
Compensation, remuneration committee |
Total | |
|---|---|---|---|---|---|
| Gustavsson Stig | Member of the Board | 6 | 6 | ||
| Lappalainen Timo | Member of the Board | 25 | 6 | 31 | |
| Neuvo Yrjö | Vice Chairman of the Board | 25 | 7 | 32 | |
| Niinivaara Mikko | Member of the Board | 25 | 6 | 31 | |
| Torkko Maija | Member of the Board | 25 | 9 | 7 | 41 |
| Voipio Mikko | Member of the Board | 25 | 25 | ||
| Voipio Raimo | Chairman of the Board | 35 | 7 | 42 | |
| Total | 166 | 21 | 21 | 208 |
Cash loans, securities or contingent liabilities were not granted to the President and CEO or to the members of the Board of Directors.
Age of retirement for the President and CEO is 62 years.
The President and CEO has a compensation based retirement plan. Notice period, severance pay and conditions of other severance compensations: 6 months for the employee, 12 months for the employer, compensation equal to the salary.
| Parent Company | Parent Company | |
|---|---|---|
| EUR million | 2013 | 2012 |
| Amortization on intangible assets | 3.5 | 3.4 |
| Depreciation on property, plant and equipment | 5.8 | 6.5 |
| Impairment on intangible assets | 0.3 | - |
| Total | 9.5 | 9.9 |
| Parent Company | Parent Company | |
|---|---|---|
| EUR million | 2013 | 2012 |
| Dividend income | ||
| From Group companies | 14.6 | 2.2 |
| From others | 0.0 | 0.0 |
| Interest income on long-term investments | ||
| From Group companies | 0.2 | 0.4 |
| Other interest and financial income | ||
| From others | 2.3 | 2.1 |
| Interest and other financial expenses | ||
| From others | -0.7 | -1.8 |
| Foreign exchange gains and losses | ||
| From Group companies | -0.4 | -0.2 |
| From others | -1.9 | -1.1 |
| Total | 14.1 | 1.6 |
Appropriations consist of accumulated depreciation differences.
| EUR million | Parent Company 2013 |
Parent Company 2012 |
|---|---|---|
| Taxes for the financial year | 3.9 | 4.9 |
| Taxes from previous years | 0.1 | -0.9 |
| Total | 4.0 | 4.0 |
| Parent Company 2013 | |||
|---|---|---|---|
| Intangible assets | |||
| EUR million | Intangible rights | Other long-term expenditure | Total |
| Acquisition cost Jan. 1 | 31.9 | 1.0 | 32.9 |
| Increases | 0.6 | 0.6 | |
| Decreases | -1.8 | -1.8 | |
| Transfers between items | 0.0 | 0.0 | |
| Acquisition cost Dec. 31 | 30.8 | 1.0 | 31.8 |
| Accumulated amortization and write-downs Jan. 1 | 20.4 | 0.7 | 21.1 |
| Accumulated amortization of decreases and transfers | -1.8 | -1.8 | |
| Amortization for the financial year | 3.4 | 0.1 | 3.5 |
| Impairment | 0.3 | 0.3 | |
| Accumulated amortization Dec. 31 | 22.3 | 0.8 | 23.1 |
| Balance sheet value Dec. 31, 2013 | 8.5 | 0.3 | 8.7 |
| Parent Company 2012 | |||
| Intangible assets | |||
| EUR million | Intangible rights | Other long-term expenditure | Total |
| Acquisition cost Jan. 1 | 30.1 | 1.0 | 31.1 |
| Increases | 0.5 | 0.5 | |
| Decreases | -0.2 | -0.2 | |
| Transfers between items | 1.5 | 0.1 | 1.5 |
| Acquisition cost Dec. 31 | 31.9 | 1.0 | 32.9 |
| Accumulated amortization and write-downs Jan. 1 | 17.1 | 0.6 | 17.8 |
| Accumulated amortization of decreases and transfers | -0.1 | -0.1 | |
| Amortization for the financial year | 3.3 | 0.1 | 3.4 |
| Accumulated amortization Dec. 31 | 20.4 | 0.7 | 21.1 |
| Balance sheet value Dec. 31, 2012 | 11.5 | 0.3 | 11.9 |
| Property, plant and equipment | Land and |
Machinery and |
Other tangible |
Advance payments and construction in |
||
|---|---|---|---|---|---|---|
| EUR million | waters | Buildings | equipment | assets | progress | Total |
| Acquisition cost Jan. 1 | 1.2 | 45.3 | 50.1 | 0.0 | 2.3 | 98.8 |
| Increases | 0.0 | 2.2 | 0.0 | 4.0 | 6.2 | |
| Decreases | -0.5 | -3.0 | -3.5 | |||
| Transfers between items | 0.1 | 2.3 | -2.5 | -0.0 | ||
| Acquisition cost Dec. 31 | 1.2 | 45.0 | 51.6 | 0.0 | 3.8 | 101.5 |
| Accumulated depreciation and | ||||||
| write-downs Jan. 1 | 21.7 | 39.3 | 61.1 | |||
| Accumulated depreciation of | ||||||
| decreases and transfers | -0.1 | -1.7 | -1.9 | |||
| Depreciation for the financial year | 2.0 | 3.7 | 5.8 | |||
| Accumulated depreciation Dec. 31 | 23.6 | 41.3 | 65.0 | |||
| Revaluation | 0.1 | 5.6 | 5.7 | |||
| Balance sheet value Dec. 31, 2013 | 1.3 | 27.0 | 10.2 | 0.0 | 3.8 | 42.3 |
| Property, plant and equipment | Land and |
Machinery and |
Other tangible |
Advance payments and construction in |
||
|---|---|---|---|---|---|---|
| EUR million | waters | Buildings | equipment | assets | progress | Total |
| Acquisition cost Jan. 1 | 1.2 | 43.6 | 46.6 | 0.0 | 6.0 | 97.4 |
| Increases | 1.3 | 2.3 | 3.6 | |||
| Decreases | -0.6 | -0.6 | ||||
| Transfers between items | 1.7 | 2.8 | -6.0 | -1.5 | ||
| Acquisition cost Dec. 31 | 1.2 | 45.3 | 50.1 | 0.0 | 2.3 | 98.8 |
| Accumulated depreciation and | ||||||
| write-downs Jan. 1 | 19.4 | 35.6 | 55.0 | |||
| Accumulated depreciation | ||||||
| of decreases and transfers | -0.5 | -0.5 | ||||
| Depreciation for the financial year | 2.3 | 4.3 | 6.5 | |||
| Accumulated depreciation Dec. 31 | 21.7 | 39.3 | 61.1 | |||
| Revaluation | 0.1 | 5.6 | 5.7 | |||
| Balance sheet value Dec. 31, 2012 | 1.3 | 29.2 | 10.7 | 0.0 | 2.3 | 43.5 |
The carrying amount of machinery and equipment used in production was EUR 7.5 million on December 31, 2013 (EUR 6.9 million on December 31, 2012).
| Investments EUR million |
Subsidiary shares |
Other shares and holdings |
Other long-term receivables from Group companies |
Total |
|---|---|---|---|---|
| Acquisition cost Jan. 1 | 30.4 | 0.1 | 9.5 | 40.0 |
| Increases | 22.3 | 22.3 | ||
| Decreases | -6.2 | -6.2 | ||
| Balance sheet value Dec. 31, 2013 | 30.4 | 0.1 | 25.6 | 56.1 |
| Investments EUR million |
Subsidiary shares |
Other shares and holdings |
Other long-term receivables from Group companies |
Total |
|---|---|---|---|---|
| Acquisition cost Jan. 1 | 29.9 | 0.1 | 15.5 | 45.5 |
| Increases | 0.5 | 1.2 | 1.6 | |
| Decreases | -7.1 | -7.1 | ||
| Balance sheet value Dec. 31, 2012 | 30.4 | 0.1 | 9.5 | 40.0 |
| Parent Company | Parent Company | ||
|---|---|---|---|
| EUR million | 2013 | 2012 | |
| Advances paid | 0.2 | 0.1 | |
| Value added tax receivables | 1.4 | 2.6 | |
| Other | 0.1 | 0.1 | |
| Total | 1.7 | 2.8 |
| Parent Company | Parent Company | ||
|---|---|---|---|
| EUR million | 2013 | 2012 | |
| Tax related deferred assets | 1.4 | 1.1 | |
| Deferred revenue | 3.0 | 5.4 | |
| Other deferred assets | 1.6 | 1.8 | |
| Total | 6.0 | 8.3 |
| Cash and Bank Balances EUR million |
Parent Company 2013 |
Parent Company 2012 |
|---|---|---|
| Cash and balance in the bank accounts | 26.8 | 52.2 |
| Total | 26.8 | 52.2 |
| Fair value of off-balance sheet contracts made to hedge against exchange rate and interest rate risks EUR million |
Parent Company 2013 |
Parent Company 2012 |
| Currency forwards | 0.6 | 0.4 |
| Fair value, total | 0.6 | 0.4 |
The change in fair value has been recognized in the income statement group financial income and expenses.
| Deferred tax assets EUR million |
Parent Company 2013 |
Parent Company 2012 |
|---|---|---|
| Deferred depreciation | 0.1 | - |
| Credit loss provision | 0.1 | - |
| Total | 0.2 | - |
| Deferred tax liabilities EUR million |
Parent Company 2013 |
Parent Company 2012 |
| Accumulated depreciation differences | 0.6 | 1.0 |
Deferred taxes have not been recognized in the parent company balance sheet. Deferred taxes arising from revaluation have not been recognized. If realized the tax effect of revaluation would be EUR 1,149 thousands at the current 20% tax rate.
| Parent Company | Parent Company | |
|---|---|---|
| EUR million | 2013 | 2012 |
| Provision for R&D function restructuring | - | 0.1 |
The parent company's shares are divided into series, with 3,389,351 series K shares (20 votes/share) and 14,829,013 series A shares ( 1 vote/share). In accordance with the Company Articles, series K shares can be converted into series A shares through a procedure defined in detail in the Company Articles.
| Parent Company | Parent Company | |
|---|---|---|
| EUR million | 2013 | 2012 |
| Share capital | ||
| Series A Jan.1 | 6.4 | 6.4 |
| Converted from series K to A | - | - |
| Series A Dec.31 | 6.4 | 6.4 |
| Series K Jan.1 | 1.3 | 1.3 |
| Converted from series K to A | - | - |
| Share capital Dec. 31 | 7.7 | 7.7 |
| Reserve fund Jan.1 | 22.3 | 22.3 |
| Transfer to fund of invested non-restricted equity | -22.3 | - |
| Reserve fund Dec. 31 | - | 22.3 |
| Fund of invested non-restricted equity Jan. 1 | - | - |
| Transfer from reserve fund | 22.3 | - |
| Return of capital | -22.2 | - |
| Fund of invested non-restricted equity Dec. 31 | 0.1 | - |
| Retained earnings Jan. 1 | 133.9 | 129.9 |
| Dividends paid | -16.3 | -11.8 |
| Treasury shares | - | -2.3 |
| Other transactions from Equity | - | -0.2 |
| Retained earnings Dec. 31 | 117.7 | 115.6 |
| Profit for the financial year | 27.1 | 18.3 |
| Total equity | 152.5 | 163.9 |
| Distributable funds | Parent Company | Parent Company |
| EUR million | 2013 | 2012 |
| Retained earnings | 117.7 | 115.6 |
| Profit for the financial year | 27.1 | 18.3 |
| Fund of invested non-restricted equity | 0.1 | - |
| Total | 144.9 | 133.9 |
The company has no loans that would mature after five years or a longer period. Other non-interest bearing long-term liabilities EUR 0.8 million (2012: 1.1 million) comprise of long-term part of trade payable of ASIC-circuits. Circuits are Vaisala's property and they will be paid according to the use of current circuits during the years 2012 to 2016. The liability is interest-free.
| EUR million | Parent Company 2013 |
Parent Company 2012 |
|---|---|---|
| Wages, salaries and wage-related liabilities | 9.7 | 11.0 |
| Tax liabilities | - | 1.1 |
| Deferred revenue | 12.7 | 10.6 |
| Other accrued expenses and deferred income | 4.6 | 4.9 |
| Total | 27.0 | 27.7 |
| EUR million | Parent Company 2013 | Parent Company 2012 |
|---|---|---|
| Non-current loan receivables | 25.6 | 9.5 |
| Current loan receivables | 4.9 | 5.5 |
| Trade receivables | 7.3 | 5.9 |
| Prepaid expenses and accrued income | 1.5 | 1.2 |
| Total receivables | 39.3 | 22.1 |
| Trade payables | 1.8 | 1.6 |
| Accrued expenses and deferred income | 1.6 | 0.0 |
| Total liabilities | 3.4 | 1.6 |
| EUR million | Parent Company 2013 | Parent Company 2012 |
|---|---|---|
| For own debt or liability | ||
| Guarantees | 8.9 | 10.5 |
| For Group companies | ||
| Guarantees | 2.0 | 2.0 |
| Other own liabilities | ||
| Pledges given | 0.1 | 0.1 |
| Leasing liabilities | ||
| Payable during the financial year | 0.3 | 0.7 |
| Payable later | 0.3 | 0.6 |
| 0.6 | 1.3 | |
| Total contingent liabilities and pledges given | 11.5 | 13.9 |
| Derivative contracts | ||
| EUR million | Parent Company 2013 | Parent Company 2012 |
| Capital of off-balance sheet contracts made to | ||
| hedge against exchange rate and interest risks | ||
| Currency forwards | 19.7 | 20.9 |
| Total capital | 19.7 | 20.9 |
| EUR million | Parent Company 2013 | Parent Company 2012 |
|---|---|---|
| PricewaterhouseCoopers Oy, Authorized Public Accountants | ||
| Auditor's fees | 0.1 | 0.1 |
| Statements | 0.0 | 0.0 |
| Tax advice | 0.0 | 0.0 |
| Other fees | 0.0 | 0.1 |
| Total | 0.2 | 0.3 |
The parent company's distributable earnings amount to EUR 144,858,803.54, of which the net result
for the period is EUR 27,087,116.38.
The Board of Directors proposes to the Annual General Meeting that the distributable earnings be used as follows:
• a dividend of EUR 0.90 per share, totaling EUR 16,253,292.60 to be paid to shareholders
• EUR 128,605,510.94 to be carried forward in distributable earnings
No dividend will be paid for own shares held by the company.
There have been no significant changes to the company's financial position since the close of the financial period. According to the Board of Directors, the proposed dividend distribution does not endanger the company's financial standing.
Vantaa, February 10, 2014
Timo Lappalainen Yrjö Neuvo Mikko Niinivaara Vice Chairman of the Board
Maija Torkko Mikko Voipio Raimo Voipio
Chairman of the Board
Kjell Forsén President and CEO
We have audited the accounting records, the financial statements, the report of the Board of Directors and the administration of Vaisala Oyj for the year ended 31 December, 2013. The financial statements comprise the consolidated statement of financial position, income statement, statement of comprehensive income, statement of changes in equity and statement of cash flows, and notes to the consolidated financial statements, as well as the parent company's balance sheet, income statement, cash flow statement and notes to the financial statements.
The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, as well as for the preparation of financial statements and the report of the Board of Directors that give a true and fair view in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the company's accounts and finances, and the Managing Director shall see to it that the accounts of the company are in compliance with the law and that its financial affairs have been arranged in a reliable manner.
Our responsibility is to express an opinion on the financial statements, on the consolidated financial statements and on the report of the Board of Directors based on our audit. The Auditing Act requires that we comply with the requirements of professional ethics. We conducted our audit in accordance with good auditing practice in Finland. Good auditing practice requires that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the report of the Board of Directors are free from material misstatement, and whether the members of the Board of Directors of the parent company or the Managing Director are guilty of an act or negligence which may result in liability in damages towards the company or whether they have violated the Limited Liability Companies Act or the articles of association of the company.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the report of the Board of Directors. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements and report of the Board of Directors that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the report of the Board of Directors.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the consolidated financial statements give a true and fair view of the financial position, financial performance, and cash flows of the group in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
In our opinion, the financial statements and the report of the Board of Directors give a true and fair view of both the consolidated and the parent company's financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The information in the report of the Board of Directors is consistent with the information in the financial statements.
We support that the financial statements and the consolidated financial statements should be adopted. The proposal by the Board of Directors regarding the use of the profit shown in the balance sheet and the distribution of other unrestricted equity is in compliance with the Limited Liability Companies Act. We support that the Members of the Board of Directors and the Managing Director of the parent company should be discharged from liability for the financial period audited by us.
Vantaa, February 10, 2014
Authorised Public Accountants
Hannu Pellinen Authorised Public Accountant
Notice is given to the shareholders of Vaisala Corporation of the Annual General Meeting to be held on Wednesday, March 26, 2014 at 6 p.m. at Vaisala Corporation's head office, Vanha Nurmijärventie 21, 01670 Vantaa, Finland. The reception of persons who have registered for the meeting will commence at 5:15 p.m.
At the Annual General Meeting, the following matters will be handled:
3. Election of the persons to confirm the minutes and to verify the counting of votes
4. Recording the legal convening of the Meeting
5. Recording the attendance at the Meeting and adoption of the list of votes
6. Presentation of the annual accounts, the review by the Board of Directors and the auditor's report for the year 2013 Review by the President and CEO
The Board of Directors proposes to the Annual General Meeting a dividend of EUR 0.90 per share for the fiscal year 2013 to be paid. The dividend would be paid to shareholders registered in the Register of Shareholders held by Euroclear Finland Ltd on the record date of the dividend distribution, March 31, 2014. The Board of Directors proposes that the dividend will be paid on April 7, 2014.
9. Resolution on the discharge of the members of the Board of Directors and the CEO and President from liability
The Board of Directors proposes to the Annual General
Meeting that the annual fee payable to the Board members elected at the same meeting for a term until the close of the Annual General Meeting in 2015 will be: the Chairman of the Board of Directors EUR 45,000 and each Board member EUR 35,000 per year. Approximately 40 percent of the annual remuneration will be paid in Vaisala Corporation's A shares acquired from the market and the rest in cash. The shares will be acquired directly in the name of the Board members within two weeks from the release of the interim report for January 1–March 31, 2014. The Company will pay the costs related to the acquisition of the Company shares.
The Board of Directors proposes to the Annual General Meeting that the compensation for the Chairman of the Audit Committee would be EUR 1,500 per attended meeting and EUR 1,000 for each member of the Audit Committee for a term until the close of the Annual General Meeting in 2015.
The Board of Directors proposes to the Annual General Meeting that the compensation for the Chairman and each member of the Remuneration Committee and any other committee established by the Board of Directors would be EUR 1,000 per attended meeting for a term until the close of the Annual General Meeting in 2015.
Shareholders representing more than 10% of all the votes in the company have announced their intention to propose to the Annual General Meeting, that the number of Board members be seven. The proposal for the number of the Board members is integrally related to the proposal by the same shareholders for the election of the members of the Board of Directors as presented in section 12 below.
The terms of office of Board members Raimo Voipio, Mikko Niinivaara and Timo Lappalainen will end at the Annual General Meeting. Board member Timo Lappalainen has informed that he will not be available for re-election at the Annual General Meeting. Mr. Lappalainen has been a Board member since 2011. As Mr. Lappalainen is not available for re-election the shareholders representing more than 10% of all the votes in the company have announced their intention to propose to the Annual General Meeting, that Raimo Voipio and Mikko Niinivaara be re-elected as members of the Board of Directors and that Ms. Petra Lundström and Mr. Pertti Torstila be elected as a new members of the Board of Directors. Due to stipulations of the Articles of Association concerning the term of
the members of the Board of Directors Ms. Petra Lundström would be elected for a term until the close of the Annual General Meeting in 2015 and the other member candidates proposed to be elected for a term until the close of the Annual General Meeting in 2017. The above mentioned candidates have given their consent to the election and their personal information is presented on the Company's website www.vaisala.com/investors.
The Board of Directors proposes to the Annual General Meeting that the Auditors be reimbursed according to their reasonable invoice presented to the company.
Following the competitive tenders for auditing services, the Board of Directors proposes to the Annual General Meeting that Authorized Public Accountants Deloitte & Touche Oy be elected to act as auditor of the Company until the end of the following Annual General Meeting. Deloitte & Touche Oy has informed that APA Merja Itäniemi will act as the auditor with the principal responsibility.
The Board of Directors proposes that the General Meeting authorize the Board of Directors to decide on the directed acquisition of a maximum of 160,000 of the Company's own A shares in one or more instalments with funds belonging to the Company's unrestricted equity.
The shares shall be acquired in a proportion other than that of the shareholders' current shareholdings in the Company in public trading arranged by NASDAQ OMX Helsinki Ltd at the market price on the moment of acquisition. The shares shall be acquired and paid according to the rules of NASDAQ OMX Helsinki Ltd and Euroclear Finland Ltd. The Board of Directors is authorized to decide on the acquisition of own shares in all other respects.
It is proposed that the authorization is valid until the closing of the next Annual General Meeting, however, no longer than September 26, 2015. The authorization replaces the previous authorization for directed acquisition of own A shares granted by the Annual General Meeting on March 26, 2013.
The Board of Directors proposes that the General Meeting authorize the Board of Directors to decide on the transfer of the Company's own shares as follows.
The authorization concerns only A shares held by the Company. The authorization is limited to a maximum of 319,150 shares, which corresponds to approximately 2.15 per cent of all A shares in the Company and to approximately 1.75 per cent of all shares in the Company.
The transfer of own shares may be carried out in deviation from the shareholders' pre-emptive rights (directed issue). The authorization entitles the transfer of shares that are held by the Company as a directed issue without payment as part of the Company's share based incentive plan. The Board of Directors can also use this authorization to grant special rights entitling subscription of the Company's own shares that are held by the Company. The subscription price of the shares can instead of cash also be paid in full or in part as contribution in kind.
The Board of Directors decides on all other conditions of the transfer of own shares. It is proposed that the authorization is valid until March 26, 2019. The authorization replaces the previous authorization for transferring own A shares granted by the Annual General Meeting on March 26, 2013.
The Board of Directors proposes that the Annual General Meeting authorize the Board of Directors to decide on donations of maximum EUR 250,000. The donations may be granted in one or several payments. The Board of Directors decides on the related payments. It is proposed that the authorization is valid until the close of the Annual General Meeting in 2015.
The aforementioned proposals of the Board of Directors on the agenda of the Annual General Meeting and this notice are available at Vaisala Corporation's web site at at www.vaisala.com/investors starting from the date of this notice. The Company's annual accounts, the review by the Board of Directors and the Auditor's report are available on the above-mentioned website no later than March 5, 2014. The proposals of the Board of Directors and the annual accounts will also be available on view at the Annual General Meeting at Corporation's head office in Vantaa, Vanha Nurmijärventie 21. Copies of these documents and of this notice will be sent to shareholders upon request.
Each shareholder, who is registered on March 14, 2014 in the Register of Shareholders held by Euroclear Finland Ltd, has the right to participate in the Annual General Meeting. A shareholder, whose shares are registered on his/her Finnish book-entry account,
is registered in the Register of Shareholders of the Company.
A shareholder, who wishes to participate in the Annual General Meeting, may register for the Meeting by giving a prior notice of participation no later than on March 21, 2014 at 10:00 a.m. (Finnish time).
A prior notice of participation can be given:
In connection with the registration, a shareholder is expected to notify his/her name, personal identification number, address, telephone number, the name of a possible assistant or representative and the name and the personal identification number of a possible proxy representative. The personal data given to Vaisala Corporation by the shareholders will be used only in connection with the Annual General Meeting and with the processing of related registrations.
A shareholder may participate in the Annual General Meeting and exercise his/her rights at the Meeting by representative. A proxy representative shall produce a dated proxy document or otherwise in a reliable manner demonstrate his/her right to represent the shareholder. Should a shareholder participate in the meeting by means of several proxy representatives representing the shareholder with shares in different book-entry accounts, the shares by which each proxy representative represents the shareholder shall be identified in connection with the registration for the Annual General Meeting.
Possible proxy documents should be delivered in originals to Vaisala Oyj, Päivi Aaltonen, PL 26, 00421 Helsinki or by email to [email protected] before the end of the registration time.
A holder of nominee registered shares is advised without delay to request from his/her custodian bank necessary instructions regarding the registration in the Register of Shareholders of the Company, issuing of proxy documents and registration for the Annual General Meeting.
The account management organization of the custodian bank will register a holder of nominee registered shares, who wants to participate in the Annual General Meeting, to be entered in the temporary Register of Shareholder of the Company at the latest on March 21, 2014 at 10:00 a.m. (Finnish time).
A shareholder present in the meeting has the right to present questions at the Annual General Meeting in accordance with Chapter 5 Section 25 of the Companies Act relating to the matters handled in the meeting.
On the date of this notice of the Annual General Meeting, February 10, 2014, the total number of shares in Vaisala Corporation is 18,218,364 shares constituted of 3,389,351 K shares and 14,829,013 A shares. Vaisala has 159,150 A shares in treasury. Each K share entitles its holder to twenty (20) votes and each A share entitles its holder to one (1) vote. The total number of votes excluding the treasure shares is 82,456,883 of which K shares represent 67,787,020 votes and A shares represent 14,669,863 votes.
Vantaa, February 10, 2014
Vaisala Corporation Board of Directors
Vaisala's Financial Review is published in Finnish and English. A pdf version of the review is available at www.vaisala.com/investors. Hard copies can be ordered from www.vaisala.com/publications.
Interim reports, result presentations, webcasts and stock exchange releases are available at www.vaisala.com/investors.
Hard copies of Vaisala's corporate responsibility report can be ordered from www.vaisala.com/publications. The report is also available in pdf at www.vaisala.com/sustainability.
Vaisala press releases are available on the company website at www.vaisala.com/news. You can subscribe to releases at www.vaisala.com/subscribetoreleases.
Vaisala News is the corporate customer magazine published three times a year. Pdf versions of the magazine are available at www.vaisala.com/vaisalanews. Hard copies can be ordered from www.vaisala.com/publications.
Vaisala Knowledge eNewsletter introduces updates on environmental and industrial measurement topics. The different themes cover meteorology and hydrology, energy and water, life science, building automation, road solutions and industrial measurements. The enewsletter is published six times a year and can be subscribed at www.vaisala.com/knowledge.
Vaisala's Corporate Governance Statement has been drawn up in accordance with the recommendation 54 of the Finnish Corporate Governance Code and Chapter 2, section 6, of the Finnish Securities Market Act. Vaisala's Corporate Governance Statement is available at www.vaisala.com/investors.
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Vaisala Corporation P.O. Box 26, 00421 Helsinki Street address: Vanha Nurmijärventie 21, 01670 Vantaa Switchboard: +358 9 894 91 Corporate communications: [email protected] Business ID 0124416-2
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82 Vaisala Corporation 2013
www.vaisala.com
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