FINANCIAL STATEMENTS OF TELESTE CORPORATION 1 JANUARY TO 31 DECEMBER 2013

Turku, Finland, 2014-02-06 07:30 CET (GLOBE NEWSWIRE) --
 

TELESTE CORPORATION  FINANCIAL STATEMENTS 6 FEBRUARY 2014  AT 08:30

FINANCIAL STATEMENTS OF TELESTE CORPORATION 1 JANUARY TO 31 DECEMBER 2013

 

2013 NET SALES AT PAR WITH THE YEAR OF COMPARISON, EARNINGS PER SHARE IMPROVED CLEARLY

Fourth quarter of 2013
- Net sales amounted to EUR 54.0 (47.5) million, an increase of 13.9%
- Operating profit amounted to EUR 3.5 (2.7) million, an increase of 30.0% 
- Undiluted earnings per share stood at EUR 0.17 (0.09) per share, an increase of 87.6%
- Orders received totaled EUR 50.2 (50.8) million, a decrease of 1.3%
- Operating cash flow was EUR 2.7 (5.1) million 

 

January-December 2013
- Net sales amounted to EUR 192.8 (193.9) million, a decrease of 0.6%
- Operating profit amounted to EUR 11.0 (10.9) million, an increase of 1.0%
- Undiluted earnings per share stood at EUR 0.47 (0.38) per share, an increase of 21.9%
- Orders received totaled EUR 188.9 (189.7) million, a decrease of 0.4%
- Cash flow from operations was EUR 10.0 (15.3) million, a decrease of 34.9%
- The Board of Directors proposes that a dividend of EUR 0.19 (0.17) per outstanding share will be paid.

 

Outlook for 2014

We estimate net sales and operating profit for the first half of 2014 to fall clearly from the comparative period. Due to this, we estimate that net sales and operating profit for the full year of 2014 will not reach the 2013 level.

 

Comments on the last quarter of 2013 by CEO Jukka Rinnevaara:

“Orders received were at par with the comparative period, but focused now more on cable network equipment and the related services. Successful deliveries in this area led to a clear growth in net sales during the quarter, and as a result, Teleste achieved its all-time record quarterly net sales. Performance of the services business, being one of the Company's special development areas, showed a pleasant improvement.

Increased net sales and, in relative terms, decreased personnel costs raised operating profit clearly over the period of comparison. Earnings per share increased by 87%.

The year-on-year net sales of Video Broadband Solutions grew, which was mainly brought about by increased deliveries of IP headends (Luminato) and optical product solutions. Particularly strong markets included France, Poland and the USA. In addition, the Asheridge acquisition contributed slightly to the increased net sales. Deliveries related to video surveillance were below the reference period.

The year-on-year net sales and operating profit of Network Services increased. Net sales were increased by maintenance and upgrading of cable networks. This growth in the operating profit was based on the development of productivity and the cost adjustment measures carried out earlier in 2013."

 

Teleste Group in October-December 2013

Key figures (EUR million)      
   10-12/2013  10-12/2012 Change %
Orders received 50.2 50.8 -1.3%
Net sales 54.0 47.5 13.9%
EBIT 3.5 2.7 30.0%
EBIT % 6.5% 5.7%  
Profit for the period 3.1 1.6 88.4%
       
Other important key figures      
Earnings per share, EUR 0.17 0.09 87.6%
Cash flow from operations, M€ 2.7 5.1 -47.6%

Orders received by the Group in Q4 totaled EUR 50.2 (50.8) million, a decrease of 1.3%. Order backlog totaled EUR 13.1 (17.0) million.

Net sales increased by 13.9% to EUR 54.0 (47.5) million. Operating profit stood at EUR 3.5 (2.7) million making 6.5% (5.7%) of the net sales. Material costs increased and amounted to 50.9% (47.4%) of the net sales. Personnel expenses amounted to EUR 15.2 (14.8) million. Taxes stood at EUR 0.5 (1.0) million. Tax rate decreased to 14.2% (37.8%). This decline in tax rate was contributed mainly by changes in the Group structure that enabled establishing a tax group for German subsidiaries. Undiluted earnings per share was EUR 0.17 (0.09). Cash flow from operations EUR 2.7 (5.1) million was less than the comparative period, mainly due to the decrease in accounts payable.

Teleste Group in January-December 2013

Key figures (EUR million)      
   1-12/2013  1-12/2012 Change %
Orders received 188.9 189.7 -0.4%
Net sales 192.8 193.9 -0.6%
EBIT 11.0 10.9 1.0%
EBIT % 5.7% 5.6%  
Profit for the financial period 8.1 6.7 21.6%
       
Other important key figures      
Earnings per share, EUR 0.47 0.38 21.9%
Cash flow from operations, EUR million 10.0 15.3 -34.9%
Net gearing, % 13.8% 13.7%  
Equity ratio, % 52,7% 50,5%  
Personnel at period-end 1,261 1,325 -4.8%

Orders received totaled EUR 188.9 (189.7) million. Net sales decreased by 0.6% to EUR 192.8 (193.9) million. This decline in net sales over the previous year was caused by the lower level of the services business in the first half of the year. Operating profit equaled EUR 11.0 (10.9) million. Operating profit of the comparative period included a sale of a real estate and a reserve reversal of an additional purchase price related to a business acquisition totaling EUR 1.2 million. Taxes amounted to EUR 2.5 (3.4) million and the tax rate was 23.6% (33.7%). This decrease in tax rate was contributed by changes in the Group structure that enabled establishing a tax group for German subsidiaries and shifts in the geographic distribution of profits. Undiluted earnings per share increased by 21.9% to EUR 0.47 (0.38). Cash flow from operations decreased to EUR 10.0 (15.3) million due to a decrease in the short-term non-interest-bearing liabilities.

Video and Broadband Solutions October-December 2013

1,000 euros  10-12/2013  10-12/2012 Change %
       
Orders received 24,127 27,830 -13.3%
Net sales 28,020 24,659 13.6%
EBIT 2,354 2,002 17.6%
EBIT % 8.4% 8.1%  

Year-on-year orders received decreased by 13.3% standing at EUR 24.1 (27.8) million. Orders for the comparative period included a EUR four-million order from the United States for an onboard video management and recording solution. Order backlog totaled EUR 13.1 (17.0) million. Net sales grew by 13.6% amounting to EUR 28.0 (24.7) million. This increase in net sales was promoted by the sales of IP headends (Luminato) and optical product solutions as well as the acquisition of Asheridge. Operating profit stood at EUR 2.4 (2.0) million making 8.4% (8.1%) of the net sales. This improvement in the operating profit was mainly attributed to increased net sales.

R&D expenses were 2.9 (3.0) million, i.e. 10.4% (12.3%) of the business area's net sales. Capitalized R&D expenses amounted to EUR 0.6 (0.3) million. The R&D efforts focused on the next generation innovative broadband solution (Data Access HUB), the future access network solutions (Docsis 3.1), video headend systems (Luminato), video surveillance software development, as well as a number of client-specific development projects. Depreciation on capitalized R&D expenses amounted to EUR 0.3 (0.5) million.                      

Video and Broadband Solutions in January-December 2013

1,000 euros  1-12/2013  1-12/2012 Change %
       
Orders received 97.815 97.730 0.1%
Net sales 101,716 101,230 0.5%
EBIT 9,460 8,497 11.3%
EBIT % 9.3% 8.4%  

Orders received totaled EUR 97.8 (97.7) million. Net sales amounted to EUR 101.7 (101.2) million. Operating profit increased by 11.3% to EUR 9.5 (8.5) million, representing 9.3% (8.4%) of net sales. This profit performance was affected particularly by increased deliveries of video surveillance solutions and improved profitability of the IP headend business. Product development expenses equaled EUR 10.0 (11.2) million, in other words 9.8% (11.2%) of net sales. The most significant R&D efforts included the next generation innovative broadband solution Data Access HUB, the future access network solutions Docsis 3.1, and the video surveillance software development S-VMX. Capitalized R&D expenses stood at EUR 1.4 (0.8) million while depreciation on product development capitalizations equaled EUR 1.8 (2.0) million.

Network Services in October-December 2013

1,000 euros  10-12/2013  10-12/2012 Change %
Orders received 26 024 22 995 13,2%
Net sales 26 024 22 809 14,1%
EBIT 1 168 706 65,4%
EBIT % 4,5% 3,1%  

In Q4, the year-on-year orders received increased by 13.2% standing at EUR 26.0 (23.0) million. Net sales grew by 14.1% amounting to EUR 26.0 (22.8) million. This increase in net sales was mainly attributable to maintenance and upgrading of cable networks. Operating profit stood at EUR 1.2 (0.7) million making 4.5% (3.1%) of net sales. This improvement in operating profit was brought about by increased net sales and a reduction in personnel costs.

Network Services in January-December 2013

1,000 euros  1-12/2013  1-12/2012 Change %
Orders received 91 060 91 931 -0,9%
Net sales 91 060 92 645 -1,7%
EBIT 1 587 2 439 -34,9%
EBIT % 1,7% 2,6%  

Orders received totaled EUR 91.1 (91.9) million. Net sales decreased by 1.7% to EUR 91.1 (92.6) million. This decline in sales over the previous year was due to a decrease in invoicing in the German fiber-optic projects. Operating profit stood at EUR 1.6 (2.4) million making 1.7% (2.6%) of net sales. This year-on-year weakening of operating profit was due to low sales and high human resources in relation to demand in the first half of the year. Adjustment of the resources was successfully completed by the beginning of second half of the year, with the result that in Q4 the business profitability rose to a good level.

Personnel and Organization in January-December 2013   

In the period under review, the average number of people employed by the Group was 1,306 people (1,326/2012, 1,297/2011); of these 559 (567) were employed by Video and Broadband Solutions, and 747 (759) by Network Services. At the end of the review period, the Group employed 1,261 people (1,325/2012, 1,319/2011) of whom 71% (73%/2012, 72%/2011) were stationed abroad. About 3% of the Group's employees were working outside Europe.

Wages, salaries and social expenses decreased by 2.7% over the previous year and amounted to EUR 56.9 (58.5/2012, 54.6/2011) million. This reduction in personnel costs was primarily due to a decrease in incentive expenses and a decline in headcount. This decrease in costs was also contributed by the partial temporary lay-off of the personnel in Finnish operations in the first quarter. In the first quarter, the number of German services operations personnel was reduced in line with customers’ service demand. This reduction was 85 people.

In January 2014, temporary lay-offs were initiated involving Operations unit personnel. Average length of these lay-offs is three weeks, and they will be implemented before the end of Q1. These temporary lay-offs were launched within the framework agreed earlier in the co-determination negotiations. 

Investments in January-December 2013

Investments by the Group for the period under review totaled EUR 6.3 (3.3) million accounting for 3.3% (1.7%) of net sales. EUR 3.5 million of these investments involved the acquisition of Asheridge. Investments in product development equaled EUR 1.4 (0.8) million. Other investments involved information systems and machines as well as equipment. Investments of EUR 0.1 (0.8) million were made under financial lease arrangements.

Financing and Capital Structure in January to December 2013

Operating cash flow stood at EUR 10.0 (15.3) million. This reduction in cash flows from operating activities was caused by the decrease in trade and other payables. At the end of the period under review, the amount of unused binding stand-by credits amounted to EUR 17.0 (19.0) million. Credit limits are valid until August 2015.

The Group's equity ratio equaled 52.7% (50.5%) and net gearing 13.8% (13.7%). On 31 December 2013, the Group's interest-bearing debt stood at EUR 24.3 (22.1) million.

Key Risks by the Business Areas

Founded in 1954, Teleste is a technology and services company consisting of two business areas: Video and Broadband Solutions and Network Services. With Europe as the main market area, our clients include European cable operators and specified organizations in the public sector.

As to Video and Broadband Solutions, client-specific and integrated deliveries of solutions create favorable conditions for growth, even if the involved resource allocation and technical implementation pose a challenge involving, therefore, also reasonable risks. Our customers' network investments vary based on the relevant need for upgrading and their financial structure. Significant part of Teleste's competition comes from the USA so the exchange rate of euro up against the US dollar affects our competitiveness. The exchange rate development of the Chinese renminbi to euro affects our material costs.

The company hedges against short-term currency exposure by means of forward contracts. The situation in the European financial markets may slow down our customers' investment plans. Furthermore, a weakening in the consumer purchasing power in Europe could slow down the network investments by the cable operators. Competition increased by the new service providers (OTT) may undermine the cable operators' ability to invest. Availability of components is subject to natural phenomena, such as floods and earthquakes. Severe weather conditions have an impact on the business areas' ability to deliver products and services. Correct technological choices and their timing are vital for our success.

Net sales of Network Services comes, for the most part, from a small number of large European customers, so a significant change in the demand for our services by any one of them is reflected in the actual deliveries and profitability. To ensure quality of services and cost-efficiency along with efficient service process management, customer satisfaction and improvements in productivity require innovative solutions in terms of processes, products and logistics. Smooth operation of cable networks requires effective technical management and functional hardware solutions in accordance with contractual obligations. This, in turn, demands continuous and determined development of skills and competences in Teleste's own personnel as well as those of our subcontractors. In addition, our ability to deliver and compete may be constrained by the adequacy of our sub-contractor network capacity. Tender calculation and management of larger projects with overall responsibility are complex and include risks.

It is important for our business areas to take into account any market developments such as consolidations taking place among the clientele and competition. The threats to information systems must be minimized to ensure business continuity. The Board of Directors annually reviews any essential risks related to the company operation and their management. Risk management is an integral part of the strategic and operational activities of the business areas. Risks are reported to the Board on a regular basis.

The company has covered any major risks of loss involving the business areas through insurance policies. Insurance will also cover credit loss risks related to sales receivables. In the period under review, no such legal proceedings or judicial procedures were pending that would have had any essential significance for the Group operation.

Group Structure

Parent company Teleste has branch offices in Australia, the Netherlands, and Denmark with subsidiaries in 14 countries outside Finland. In April 2013 Teleste Management Oy became a Group company through exchange of shares. Teleste Management II Oy, founded in December 2011, has been consolidated in the Teleste Group figures on account of financial arrangements. Suomen Turvakamera Oy has been merged with Teleste Corporation on 30 April 2013. In Germany, the group structure has been streamlined. In Sweden, PromaCom AB has been merged with Teleste Sweden AB. Asheridge Group has been consolidated with the Group figures as of 7 April 2013.

Shares and Changes in Share Capital

On 31 December 2013, EM Group Oy was the largest single shareholder with a holding of 23.44%.

In the period under review, the lowest company share price was EUR 3.78 (3.04) and the highest was EUR 4.47 (4.44). Closing price on 31 December 2013 stood at EUR 4.25 (4.17). According to Euroclear Finland Ltd the number of shareholders at the end of the period under review was 5,087 (5,182). Foreign ownership accounted for 5.1% (5.8%). From 1 January to 31 December 2013, trading with Teleste share at NASDAQ OMX Helsinki amounted to EUR 9.2 (10.8) million. In the period under review, 2.2 (2.7) million Teleste shares were traded on the stock exchange.

On 31 December 2013, the Group held 1,189,654 (1,302,985) of its own shares, of which the parent company Teleste Corporation had 266,654 shares while the Group and controlled companies had 923,000 shares, respectively. At the end of the period, the Group’s holding of the total amount of shares amounted to 6.32% (6.96%).

On 31 December 2013, the registered share capital of Teleste stood at EUR 6,966,932.80 divided in 18,816,691 shares.

The period for subscription of Teleste 2007B options expired on 30 April 2013. No Teleste Corporation shares were subscribed by the specified options in the subscription period. During the financial year, 88,101 shares were subscribed with Teleste 2007C options. Up until 30 April 2014, 2007C options allow for subscription of maximum 280,000 Teleste Corporation shares. Teleste 2007C options have been listed on NASDAQ OMX Helsinki Oy since 2 April 2012.

In the period under review, 113,331 treasury shares were conveyed. This conveyance was related to the acquisition of the share capital of the management holding company Teleste Management Oy, which was carried out through a share exchange. Value of the consideration was EUR 4.08 per share. At the time this exchange of shares was realized, Teleste Management Oy held 381,000 Teleste Corporation shares, accounting for 2.02 % of the number of shares at end of the period.

Decisions by the Annual General Meeting

The Annual General Meeting (AGM) of Teleste Corporation on 12 April 2013 confirmed the financial statements for 2012 and discharged the Board of Directors and the CEO from liability for the financial period. The AGM confirmed the dividend of EUR 0.17 per share proposed by the Board. The dividend was paid out on 24 April 2013.

Ms. Marjo Miettinen, Mr. Pertti Ervi, Mr. Esa Harju, Mr. Kai Telanne and Mr. Petteri Walldén continue in Teleste's Board of Directors. Ms. Jannica Fagerholm was elected new member of the Board of Directors. Mr. Pertti Raatikainen's membership of the Board of Directors ended. Ms. Marjo Miettinen was elected Chair of the Board in the organizational meeting held immediately after the AGM.

Authorized Public Accountants KPMG Oy Ab continues as the auditor until the next AGM. Mr. Esa Kailiala, accountant authorized by the Central Chamber of Commerce of Finland, was chosen auditor-in-charge.

Valid authorizations granted by the AGM:
- Authorization to purchase own shares: 1,400,000 
- Disposal of own shares: 1,779,985, valid until the 2014 Annual General Meeting
- Issue of new shares: 5,000,000, valid until the 2014 Annual General Meeting
- Pursuant to the special rights granted by the company, the maximum number of shares is 2,500,000; these special rights are included in the authorization to issue 5,000,000 new shares.

Outlook for 2014  

Video and Broadband Solutions aim at maintaining a strong market position in Europe and expand into selected new markets. Network capacity will continue to increase driven by the new broadband and video services provided by the operators. Limited product offering of the new Docsis 3.1 communications standard may delay the network investments in the beginning of the year. Price erosion in the market continues. The positive trend in the video surveillance market will continue, but the public sector decisions to start projects may be delayed in the current economic climate. We estimate the market for Video and Broadband Solutions to fluctuate greatly during the year and the demand to be emphasized on the second half of the year.

The business objective of Network Services is to develop the operational efficiency and give up any unprofitable services activities during the year. These measures will be taken to create conditions for better business profitability over the reference year, but these will have a slight reducing effect on net sales. We estimate the demand for comprehensive network services in our key target markets to continue at par with the comparative year.

We estimate net sales and operating profit for the first half of 2014 to fall clearly from the comparative period. Due to this, we estimate that net sales and operating profit for the full year of 2014 will not reach the 2013 level.

 

5 February 2014

Teleste Corporation              Jukka Rinnevaara
Board of Directors               President and CEO    

 

 

Teleste's Annual Report for 2013, which includes the audited financial statements, will be published no later than 7 March 2014. The Company will issue a statement of its corporate governance as a separate report, which will be published together with the Annual Report, and will be simultaneously available on the Company's web site.

This interim report has been compiled in compliance with IAS 34, as it is accepted within EU, using the recognition and valuation principles with those used in the Annual Report. The changes in IAS1, IFRS13 and IAS19 have been applied in this interim report and they do not have any material impact on the financial reporting. The data stated in this report is audited.

  

STATEMENT OF COMPREHENSIVE INCOME, 1000 euros      
   10-12/2013  10-12/2012 Change %
       
Net sales 54,043 47,468 13.9 %
       
Other operating income 35 362 -90.3 %
Raw material and consumables used -27,505 -22,482 22.3 %
Employee benefits expense -15,244 -14,752 3.3 %
Depreciations -1,031 -1,209 -14.7 %
Other operating expenses -6,777 -6,679 1.5 %
Operating profit 3,521 2,708 30.0 %
       
Financial income 93 155 -39.9 %
Financial expenses -56 -259 -78.5 %
Profit before taxes 3,559 2,605 36.6 %
       
Taxes -505 -984 -48.7 %
       
Profit for the period 3,054 1,621 88.4 %
       
Attributable to:      
Equity holders of the parent 3,054 1,621 88.4 %
       
Earnings per share for profit of the year attributable to the equity holders of the parent
Basic (expressed in euro per share) 0.17 0.09 87.6 %
Diluted (expressed in euro per share) 0.17 0.09 87.7 %
       
Total comprehensive income for the period, 1000 euros      
Net profit 3,054 1,621 88.4 %
Items that may be reclassified to profit or loss:      
Translation differences -132 -48 175.0 %
Fair value reserve -16 24 n/a
Total comprehensive income for the period 2,906 1,597 82.0 %
       
Attributable to:      
Equity holders of the parent 2,906 1,597 82.0 %
       
STATEMENT OF COMPREHENSIVE INCOME, 1000 euros  1-12/2013  1-12/2012 Change %
       
Net sales 192,775 193,875 -0.6 %
       
Other operating income 840 1,150 -27.0 %
Raw material and consumables used -94,456 -94,747 -0.3 %
Employee benefits expense -56,949 -58,511 -2.7 %
Depreciation -4,628 -5,078 -8.9 %
Other operating expenses -26,536 -25,753 3.0 %
Operating profit 11,047 10,936 1.0 %
       
Financial income 162 328 -50.8 %
Financial expenses -548 -1,150 -52.3 %
Profit before taxes 10,660 10,115 5.4 %
       
Taxes -2,513 -3,412 -26.3 %
       
Profit for the period 8,147 6,703 21.6 %
       
Attributable to:      
Equity holders of the parent 8,147 6,703 21.6 %
       
Earnings per share for profit of the year attributable to the equity holders of the parent
Basic (expressed in euro per share) 0.47 0.38 21.9 %
Diluted (expressed in euro per share) 0.46 0.38 21.8 %
       
Total comprehensive income for the period (tEUR)      
Net profit 8,147 6,703 21.6 %
Items that may be reclassified to profit or loss:      
Translation differences -559 631 n/a
Fair value reserve 16 144 -88.9 %
Total comprehensive income for the period 7,604 7,478 1.7 %
       
Attributable to:      
Equity holders of the parent 7,604 7,478 1.7 %

 

 

STATEMENT OF FINANCIAL POSITION, 1000 euros
Assets 1000 euros      
   31.12.2013  31.12.2012 Change %
Non-current assets      
Property, plant and equipment 10,499 10,127 3.7 %
Goodwill 33,252 31,350 6.1 %
Other intangible assets 4,448 4,174 6.6 %
Available-for-sale investments 294 294 0.0 %
Deferred tax assets 2,002 2,086 -4.0 %
Total 50,494 48,031 5.1 %
       
Current assets      
Inventories 19,762 19,495 1.4 %
Trade and other receivables 38,537 38,524 0.0 %
Income tax receivables 307 287 7.0 %
Cash 15,229 13,880 9.7 %
Total 73,835 72,186 2.3 %
       
Total assets 124,329 120,217 3.4 %
       
Equity and liabilities      
Equity attributable to equity holders of the parent
Share capital 6,967 6,967 0.0 %
Share premium 1,504 1,504 0.0 %
Translation differences 126 685 -81.6 %
Invested non restricted equity 3,451 2,715 27.1 %
Retained profits 53,079 48,008 10.6 %
Non-controlling interest 425 678 -37.3 %
Total 65,552 60,557 8.2 %
       
Non-current liabilities      
Interest-bearing liabilities 470 788 -40.3 %
Other liabilities 2,414 22 10870.5 %
Deferred tax liabilities 1,293 1,297 -0.3 %
Provisions 634 503 26.1 %
Total 4,810 2,610 84.3 %
       
Current liabilities      
Trade and other liabilities 28,130 32,612 -13.7 %
Current tax payable 1,206 2,075 -41.9 %
Provisions 832 1,004 -17.1 %
Interest-bearing liabilities 23,799 21,360 11.4 %
Total 53,967 57,050 -5.4 %
       
Total liabilities 58,777 59,660 -1.5 %
       
Equity and liabilities total 124,329 120,217 3.4 %

 

 

CONSOLIDATED CASH FLOW STATEMENT, 1000 euros
  1.1.-31.12. 1.1.-31.12. Change %
  2013 2012  
Cash flows from operating activities      
Profit for the period 8,147 6,703 21.5 %
Adjustments for:      
Non-cash transactions 4,711 4,877 -3.4 %
Interest and other financial expenses 548 1,150 -52.3 %
Interest income and other financial income -162 -326 -50.4 %
Dividends -2 -2 0.0 %
Taxes 2,513 3,412 -26.3 %
Change in working capital      
Increase in trade and other receivables 1,113 5,802 -80.8 %
Increase in inventories 600 4,580 -86.9 %
Increase in trade and other payables -3,660 -5,901 -38.0 %
Decrease in provisions -41 -309 -86.8 %
Paid interests and other financial expenses -565 -726 -22.1 %
Received interests and dividends 162 328 -50.7 %
Paid taxes -3,402 -4,290 -20.7 %
       
Cash flow from operating activities 9,961 15,297 -34.9 %
       
Cash flow from investing activities      
A conditional supplementary contract price for prior subsidiary acquisitions -2,585 -828 212.2 %
Purchases of property, plant and equipment (PPE) -1,180 -1,609 -26.7 %
Proceeds from sales of PPE 0 499 n/a
Purchases of intangible assets -1,442 -844 70.9 %
Acquisition of subsidiary, net of cash acquired -965 0 n/a
Net cash used in investing activities -6,172 -2,782 121.9 %
       
Cash flow from financing activities      
Proceeds from borrowings 5,000 0 n/a
Payments of borrowings -3,809 -11,500 -66.9 %
Payment of finance lease liabilities -369 -321 15.0 %
Dividends paid -2,962 -2,440 21.4 %
Proceeds from issuance of ordinary shares 270 0 n/a
Net cash used in financing activities -1,870 -14,261 -86.9 %
       
Change in cash      
Cash and cash equivalents 1.1. 13,880 15,404 -9.9 %
Effect of currency changes -571 221 n/a
Cash and cash equivalents 31.12. 15,229 13,880 9.7 %

 

 

Consolidated statement of changes in equity,1000 euros
Attributable to equity holders of the parent (tEUR)
A Share capital
B Share premium
C Translation differences
D Retained earnings
E Invested free capital
F Other funds
G Total
H Share of non-controlling interest
I Total equity
  A B C D E E F G I
Equity 31.12.2012 6,967 1,504 685 48,007 2,737 -22 59,878 678 60,557
Total comprehensive income for the period 0 0 -559 8,147 0 16 7,604 0 7,604
Dividends 0 0 0 -3,119 0 0 -3,119 157 -2,962
Changes in subsidiary interest       43     43 -43 0
Equity-settled share-based payments 0 0 0 0 450 0 450 -367 83
Used share options 0 0 0 0 270   270 0 270
Equity 31.12.2013 6,967 1,504 126 53,079 3,457 -6 65,127 425 65,552

 

 

Business segments 2013, 1000 euros Video and
Broadband
Solutions
Network
Services
Group
External sales      
Services 4,017 91,060 95,077
Goods 97,698 0 97,698
External sales total 101,715 91,060 192,775
Operating profit of segments 9,460 1,587 11,047
Financial items     -386
Profit before taxes     10,660
       
       
Business segments 2012, 1000 euros Video and
Broadband
Solutions
Network
Services
Group
External sales      
Services 5,862 92,645 98,507
Goods 95,368 0 95,368
External sales total 101,230 92,645 193,875
Operating profits of the segments 8,497 2,439 10,936
Financial items     -821
Profit before taxes     10,115

 

 

Geographical segments 2013, 1000 euros Nordic countries Other Europe Finland Others Group
Sales by origin 15,630 151,545 13,164 12,436 192,775
Assets 8,528 88,980 24,265 2,556 124,329
Capital expenditure for the period 4 4,227 2,059 24 6,314
           
Geographical segments 2012, 1000 euros Nordic countries Other Europe Finland Others Group
           
Sales by origin 17,358 150,936 12,776 12,805 193,875
Assets 8,800 83,634 26,162 1,621 120,217
Capital expenditure for the period 15 1,350 1,940 20 3,325

  

Information per quarter, 1000 euros  10-12/13  7-9/13  4-6/13  1-3/13  10-12/12  1-12/2013
 
Video and Broadband Solutions
Order intake 24,127 28,919 23,350 21,419 27,830 97,815
Net sales 28,020 24,258 25,625 23,813 24,659 101,716
EBIT 2,354 2,362 2,308 2,436 2,002 9,460
EBIT % 8.4 % 9.7 % 9.0 % 10.2 % 8.1 % 9.3 %
 
Network Services
Order intake 26,024 22,220 20,870 21,946 22,995 91,060
Net sales 26,024 22,220 20,870 21,946 22,809 91,060
EBIT 1,168 823 -570 166 706 1,587
EBIT % 4.5 % 3.7 % -2.7 % 0.8 % 3.1 % 1.7 %
Total
Order intake 50,151 51,139 44,220 43,365 50,825 188,875
Net sales 54,043 46,478 46,495 45,759 47,468 192,775
EBIT 3,521 3,185 1,738 2,602 2,708 11,047
EBIT % 6.5 % 6.9 % 3.7 % 5.7 % 5.7 % 5.7 %

 

 

Commitments and contingencies, 1000 euros 2013 2012 Change %
Rental liabilities 2,626 2,656 -1.1 %
Lease liabilities 4,122 5,872 -29.8 %
Value of underlying forward contracts 7,633 5,936 28.6 %
Market value of forward contracts -209 -109 91.9 %
Interest rate swap 11,000 9,000 22.2 %
Market value of interest swap -6 -22 -72.7 %
       
The number of employees broken down by following categories 31.12. 2013 2012 Change %
Research and development 109 117 -6.8 %
Production and material management 928 1,003 -7.5 %
Sales and marketing 170 150 13.3 %
Administration 54 55 -1.8 %
Total 1,261 1,325 -4.8 %

 

  

  IFRS IFRS IFRS IFRS IFRS
Key figures 2013 2012 2011 2010 2009
Profit and loss account, balance sheet
Net sales, Meur 192.8 193.9 183.6 167.8 141.7
Change % -0.6 % 5.6 % 8.6 % 18.5 % 30.3 %
Sales outside Finland, % 93.2 % 93.4 % 94.1 % 93.3 % 91.8 %
Operating profit, Meur 11.0 10.9 9.4 7.4 2.5
% of net sales 5.7 % 5.6 % 5.1 % 4.4 % 1.8 %
Profit after financial items, Meur 10.7 10.1 8.8 6.7 1.4
% of net sales 5.5 % 5.2 % 4.8 % 4.0 % 1.0 %
Profit before taxes, Meur 10.7 10.1 8.8 6.7 1.4
% of net sales 5.5 % 5.2 % 4.8 % 4.0 % 1.0 %
Profit for the financial period, Meur 8.1 6.7 6.3 4.8 0.4
 % of net sales 4.2 % 3.5 % 3.4 % 2.9 % 0.3 %
R&D expenditure, Meur 10.0 11.2 11.6 10.3 10.8
% of net sales 5.2 % 5.8 % 6.3 % 6.1 % 7.6 %
Gross investments, Meur 6.3 3.3 5.2 3.8 25.2
% of net sales 3.3 % 1.7 % 2.9 % 2.2 % 17.8 %
Interest bearing liabilities, Meur 24.3 22.1 33.2 28.1 22.8
Shareholder's equity, Meur 65.6 60.6 55.3 50.4 46.7
Total assets, Meur 124.3 120.2 133.2 116.2 110.1
           
Personnel and orders          
Average personnel 1,306 1,326 1,297 1,215 1,103
Order backlog at year end, Meur 13.1 17.0 21.2 17.0 33.1
Orders received, Meur 188.9 189.7 188.1 167.2 151.0
           
Key metrics          
Return on equity, % 12.9 % 11.6 % 11.9 % 9.9 % 0.9 %
Return on capital employed, % 13.0 % 13.0 % 11.5 % 10.2 % 3.3 %
Equity ratio, % 52.7 % 50.5 % 41.6 % 43.6 % 43.6 %
Net gearing, % 13.8 % 13.7 % 32.2 % 25.5 % 22.0 %
Earnings per share, euro 0.47 0.38 0.36 0.27 0.02
Earnings per share fully diluted, euro 0.46 0.38 0.36 0.27 0.02
Shareholders’ equity per share, euro 3.73 3.48 3.17 2.90 2.68
           
Teleste share          
Highest price, euro 4.47 4.44 4.82 5.33 4.30
Lowest price, euro 3.78 3.04 2.50 3.64 2.25
Closing price, euro 4.25 4.17 3.00 4.41 3.72
Average price, euro 4.17 3.98 3.64 4.49 3.62
Price per earnings 9.1 10.8 8.3 16.3 154.1
Market capitalization, Meur 79.6 78.1 56.2 80.2 66.2
Stock turnover, Meur 9.2 10.8 6.2 14.2 28.5
Turnover, number in millions 2.2 2.7 1.7 3.2 7.8
Turnover, % of share capital 11.7 % 14.4 % 9.1 % 17.4 % 44.0 %
Average number of shares 18,743,507 18,728,590 18,189,560 18,093,689 17,805,590
Number of shares at the year-end 18,816,691 18,728,590 18,728,590 18,186,590 17,805,590
Average number of shares, diluted w/o own shares 17,513,799 17,688,527 17,425,605 17,693,605 17,229,154
Number of shares at the year-end, diluted w/o own shares 17,838,599 17,709,672 17,425,605 17,693,605 17,425,605
Paid dividend, Meur 3.3 * 3.0 2.4 2.1 1.4
Dividend per share, euro 0,19 * 0.17 0.14 0.12 0,08
Dividend per net result, % 40.8 % 44.5 % 38.9 % 43.7 % 331.3 %
Effective dividend yield, % 4.5 % 4.1 % 4.7 % 2.7 % 2.2 %
* The Board's proposal to the AGM
Treasury shares Number of shares % of shares % of votes
       
Teleste companies own shares 31.12.2013 1,189,654 6.32% 6.32%

 

CALCULATION OF KEY FIGURES            

 

 

Return on equity: Profit/loss for the financial period
------------------------------   * 100
Shareholders’ equity (average)
 
Return on capital employed: Profit/loss for the period after financial items + financing charges
------------------------------   * 100
Total assets - non-interest-bearing
liabilities (average)

 
Equity ratio: Shareholders' equity
-----------------------------   * 100
Total assets - advances received
 
Gearing: Interest bearing liabilities - cash in hand and in bank - interest bearing assets
-----------------------------   * 100
Shareholders' equity
 
Earnings per share: Profit for the period attributable to equity holder of the parent
----------------------------------------------
Weighted average number of ordinary shares outstanding during the period
 
Earnings per share, diluted: Profit for the period attributable to equity holder of the parent (diluted)
-----------------------------------------------
Average number of shares - own shares + number of options at the period-end
 

 

 

Major shareholders 31.12.2013 Number of shares % of share capital
     
EM Group Oy 4,409,712 23.44
Mandatum Life Insurance Company Limited 1,679,200 8.92
Ilmarinen Mutual Pension Insurance Company 953,854 5.07
Kaleva Mutual Insurance Company 824,641 4.38
OP-Finland Small Firms Fund 630,712 3.35
Teleste Management II Oy 542,000 2.88
Varma Mutual Pension Insurance Company 521,150 2.77
The State Pension Fund 500,000 2.66
Teleste Management Oy 381,000 2.02
FIM Fenno Equity fund 271,242 1.44

 

 

Shareholders by sector 31.12.2013 Number of shareholders % of Owners Number of shares Number of shares %
         
Households 4,716 92.71 4,730,405 25.1
Public sector institutions 4 0.08 2,000,004 10.6
Financial and insurance institutions 13 0.26 3,418,717 18.2
Corporations 283 5.56 7,326,868 38.9
Non-profit institutions 32 0.63 376,067 2.0
Foreign and nominee registered owners 39 0.77 964,630 5.1
Total 5,087 100.00 18,816,691 100.0

 

 

Number of shares 31.12.2013 Number of shareholders % of shareholders Number of shares % of shares
         
1 - 100 1,116 21.9 76,028 0.4
101 - 500 2,192 43.1 602,910 3.2
501 – 1,000 787 15.5 649,796 3.5
1,001 – 5,000 802 15.8 1,781,323 9.5
5,001 – 10,000 91 1.8 650,230 3.5
10,001 – 50,000 72 1.4 1,420,206 7.5
50,001 – 100,000 5 0.1 461,558 2.5
100,001 – 500,000 15 0.3 3,613,371 19.2
500,001 - 7 0.1 9,561,269 50.8
Total 5,087 100 18,816,691 100
of which nominee registered     798,417 4.2

 

 

The following assets and liabilities were recognised in the acquisition of Asheridge:
1 000 € Recognised fair values on acquisition
Fair values used in consolidation  
Trade marks (inc. in intangible assets) 0
Customer relationship  (inc. in intangible assets) 730
Technology  (inc. in intangible assets) 533
Inventories 727
Trade receivables 1,126
Book values used in consolidation  
Tangible asstes 731
Other receivables 81
Cash and cash equivalents 219
Total assets 4,147
   
Book values used in consolidation  
Interest-bearing liabilities 1,209
Trade payables 1,084
Deferred tax liabilites 315
Other liabilities 242
Total liabilities 2,850
   
Net identifiable assets and liabilities 1,297
   
Total consideration 3,553
Goodwill on acquisition 2,257
   
Consideration paid in cash -1,184
Cash and cash equivalents in acquired subsidiary 219
Total net cash outflow on the acquisition -965

 

ADDITIONAL INFORMATION:
CEO Jukka Rinnevaara, phone +358 2 2605 866 or +358 400 747 488


DISTRIBUTION:
NASDAQ OMX Helsinki
Main Media

www.teleste.com