2016-02-19 07:00:15 CET
2016-02-19 07:00:15 CET
REGULATED INFORMATION
Solteq Oyj - Financial Statement Release
FINANCIAL STATEMENTS BULLETIN 1.1.–31.12.2015 (IFRS)
Foundations of the new Solteq ready - full speed ahead
-During the reporting period, Solteq Plc realised the biggest acquisition in its
history by buying Descom Group Ltd.
-The acquisition has a significant impact on the scope of the company’s
business, its balance sheet structure as well as strategic direction.
– Revenue totalled 54,2 million euros (40,9 million euros)
-Operating profit before non-recurring items was 2.990 thousand euros (2.490
thousand euros). Non-recurring costs related to the acquisition 1.702 thousand
euros and the operating profit including the non-recurring costs was 1.288
thousand euros (2.490 thousand euros).
– Solteq Group’s equity ratio was 24,4 % (48,0 %). Decrease was due to the
company acquisition and the financing arrangements related to the acquisition.
– Earnings per share was 0,01 euros (0,13 euros).
– The Solteq Plc Board proposes to the Annual General Meeting that no dividend
will be paid from the financial period 2015.
Key figures
9-12/ 9-12/14 Change-% 1-12/15 1-12/14 Change-%
15
Revenue, TEUR 20 12 218 66,6 % 54 215 40 933 32,5 %
357
Operating profit before 1 143 909 +25,7 % 2 990 2 490 +20,1 %
non recurring items TEUR
Operating profit, TEUR 230 909 -74,7 % 1 288 2 490 -48,3 %
Profit for the financial -337 738 -145,7 % 102 1 893 -94,6 %
period, TEUR
Earnings/share, e -0,02 0,05 0,01 0,13
Operating profit-% 1,1 7,4 % 2,4 % 6,1 %
%
Equity ratio, % 24,4 % 48,0 %
Profit guidance 2016
Solteq Group’s turnover is expected to grow significantly compared to financial
year 2015. The operating result before non-recurring is expected to grow
compared to financial year 2015.
The expected growth of revenue and operating profit is mainly related to the
company acquisition completed in the middle of the review period. In addition
the cost synergies arising from the integration work are expected to be realized
during the first half year in 2016.
CEO Repe Harmanen:
SIGNIFICANT YEAR IN THE COMPANY’S HISTORY
For Solteq, the past year was highly successful and positive, marked with the
achievement of significant strategic objectives. At the beginning of 2015,
Solteq was a completely different company from what it is today. During 2015,
our client base, operations in Finland and abroad, solution offering and many
other things developed favourably. We succeed in implementing our plans in line
with our strategy, and we are extremely pleased with the outcome.
Some changes took place in the company’s ownership structure. A publicly listed
company is open to new owners every day. However, the changes, which included
the surrender of significant ownership in the company by two of its founding
members, represented milestones that could be compared to being listed on the
stock exchange.
The strategic development of Solteq into an international company that we
started in 2010 has been systematic, and this work will continue in the future.
In terms of business operations, the merger with Descom Group Oy strengthened
our development: we are a completely New Solteq and proud of it.
COMPETENT PEOPLE ARE OUR MOST IMPORTANT ASSET
We operate with our clients in areas that are practically always new and
significant, often of critical importance to our clients. Almost without
exception, the direct or indirect users of our services and solutions are the
customers of our clients. Meeting their varied needs and expectations requires
top expertise, innovation, new ways of thinking - and what the Finnish “sisu” is
made of, i.e. determination, perseverance and resilience. We have brought
together top class technical deep experts and talented customer relationship
analysts. We have orchestrators who know how to run the show and introduce
exceptional and unexpected innovations.
For Solteq, competent people are the company’s most important asset. It is the
highly competent, dialogue-oriented professionals with constructive ideas in
Finland, Sweden and Poland that take us forward and work for the good of our
clients and their customers.
Towards the end of 2015, we started building an academy of our own to give our
existing and new employees opportunities to develop into deep experts in their
competency areas or find completely new career paths. At Solteq, the employees
are given opportunities to continue their professional development in terms of
both tasks and competencies in Finland and abroad.
The construction of a New Solteq started in autumn 2015. In this process, the
focus has been on strengthening a new modern corporate culture and providing
solutions that meet the needs of our clients and the end customers. The New
Solteq is the result of a shared effort.
RECIPROCITY BETWEEN US AND OUR CLIENTS PROMOTES DEVELOPMENT
Our success is based on long-term, trusted client relationships. During the
merger process, we realised that the outcome would be a new entity that has
shared basic values. We believe that the understanding and appreciation of the
client needs, honesty and long-term collaboration in various areas will bring
the best benefits and profits. In the end, the pursuit for instant win is in
nobody’s interest.
Our clients help us and we help our clients. That is what partnership is made
of. We look for and implement ideas that may never have been realised or that
may have been tried many times without success before. The feedback that we
receive from our clients daily, monthly and yearly helps us develop our everyday
work and the solutions we provide. It also gives us ideas of what our shared
future will be like: where to go and how.
The Annual Report is like a milestone at which we stop on the New Year’s Eve and
look back at what we have achieved in the past year. It is also the time to
thank our clients for a year that has seen mutual collaboration, joy and sorrow
and shared solutions. We are much more knowledgeable and better informed than
the year before.
STRATEGY BECOMES REALITY BY DOING
People say that the implementation of a strategy is difficult. It may be so, but
thanks to our personnel and clients, we have progressed well and at a suitable
pace before and during 2015. Making right decisions at the right time has also
played an important role for us.
The process of defining a new strategy that we announced in autumn 2015 started
towards the end of the year. The new strategy is based on much the same
principles as the previous strategies. The core of our strategy is our
commitment to all forms of digital commerce and the support of its growth. Our
passion is to enable tasks, procedures and implementations related to digital
commerce and improve customer experiences throughout the supply chain and in the
various areas of commerce digitally or traditionally.
During the past few years, the role of international operations has strengthened
in our business sector. Our aim is to increase the share of international
operations significantly with both our current and future clients. Global
digital commerce has no borders. It creates new forms of doing business,
decentralises supply chains and makes them transparent.
During this spring, we will provide further information on the New Solteq’s
strategy, goals and next steps.
I would like to take this opportunity to thank all our stakeholders and interest
groups for the past year and for helping us make success happen. My special
thanks are due to the founding members of our company. Their work has made the
existence of Solteq and its development to the next level possible.
BUSINESS ENVIRONMENT AND BUSINESS DEVELOPMENT
Solteq is a visionary expert in omnichannel and digital commerce. We offer
partnership in supply management, store solutions and e-commerce. Solteq offers
its clients superior know-how in commerce, services and industry.
Solteq Plc’s reported segments until 31.12.2015 are:
·
Grocery and special retail, HoReCa;
·
Wholesale, Logistics and Services
·
Enterprise resource planning of services
· Descom.
As from January 1 2016 Solteq Group’s business is divided into two segments:
Customer Solutions and Digital Solutions. organisational restructuring and
reflects company’s growth to a service provider of the digital commerce. The new
business segment structure was adopted as part of the company’s
Solteq’s Digital Solutions Segment offers its clients the following:
·
Services and consultation related to digital commerce and supply chain
management
·
Digital marketing and analytics services
·
Customer experience planning and implementation services
·
Master data and master data integration services
· Customised continuous service packages
Solteq’s Customer Solutions Segment offers its clients the following:
·
Integrated total solutions related to logistics, store operations, restaurant
operations, customer service, payments and management of loyal customer
relationships to enhance business operations
·
ERP and financial management systems and related optimisation, integration and
application management services and reporting solutions
·
Due to the nature of its business, Enterprise Asset & Service Business
Management Segment , previously reported as its own segment, is now part of the
Customer Solutions segment
Solteq’s Grocery and Special Retail, HoReCa
Solteq’s Grocery and Special Retail Segment provides its clients with total
solutions that they can utilise to improve efficiency in terms of logistics,
store operations, customer service, point of sale operations, as well as loyal
customer management.
The grocery and special retail solutions help optimise the management of the
product selection, space, deliveries, logistics and customer satisfaction while
increasing sales and improving the result. The solutions speed up the basic
operations, improve delivery reliability, reduce storage value, increase stock
turnover and enhance predictability. The store always has the right products in
the right place, at the right time, and at the right price.
During the review period the revenue of the Grocery and Special Retail segment
totalled 19,3 million euros (20,5 million euros) and the operating result was
0,9 million euros (1,2 million euros).
The decrease in the net sales was mainly due to postponements in decision-making
schedules in the early part of the review period. Towards the end of the review
period, a large number of the projects were already underway. The result for the
review period is affected by delays in schedules of customer projects.
Wholesale, Logistics and Services
Solteq’s Wholesale, Logistics and Services Segment provides its clients with
ERP and financial management systems, as well as optimisation, integration and
reporting solutions that support these systems. Solteq’s solutions help clients
manage their operations and enhance purchases, sales, stock management and
reporting. The systems can be utilised to improve delivery reliability, reduce
storage value, increase stock turnover and enhance predictability. Materials
flow management ensures that the right goods reach the right customers at the
right time, packed in an optimal manner.
Solteq’s wholesale, logistics and services systems improve the effectiveness of
operations and enable more flexible and versatile customer service. At the same
time, automated data management enhances the company’s internal operations.
Solteq’s solutions are used daily by a large number of clients representing
various industries and sectors, such as wholesale, retail and public
administration.
During the review period the revenue of the Wholesale, Logistics and Services
segment totalled 12,0 million euros (15,4 million euros) and the operating
result was 0,8 million euros (0,6 million euros).
The development of the revenue was due to the slowness in decision making
related to trading of the significant customer projects. In addition the human
resources of the segment were focused on the completion of the projects
underway. The improvement in the operating result was mainly due to the
development of the cost structure and improved resource utilisation.
Enterprise Asset & Service Business Management Segment
Solteq’s Enterprise Asset & Service Business Management Segment provides its
clients with ERP and master data management solutions.
The enterprise resource planning solutions developed for the optimisation of
service processes help clients manage their operations in many ways, for
instance enhance production plant reliability, task and resources management,
field work, sales and customer service, partner network management and materials
management. The solutions are utilised by a large number of clients representing
various industries and sectors, such as energy production, maintenance
services, life cycle services, engineering and technical services of cities and
municipalities, property management services, and home and care services.
The Enterprise Asset & Service Business Management Segment also provides client
companies with services and products related to business critical data (master
data) in the form of master data improvement projects, data maintenance services
outsourced to master data service centers, software technologies for master
data management, and consultation services. The aim of these services is to
ensure that the data in the systems that support the clients’ enterprise
resource planning and decision making processes are of high quality, compatible
and up-to-date. Solteq’s master data management solutions are used by clients
across industries and sectors.
During the review period the revenue of the Enterprise Asset & Service Business
Management segment totalled 4,9 million euros (5,0 million euros) and the
operating result was 0,3 million euros (0,7 million euros).
Unlike other segments, the main business of the segment is based on the
development, supply and marketing of the segment’s own software products. Owing
to the nature of its business, the segment is, however, more dependable on the
new investments of the client industries than the other segments.
The growth and profitability of the operations will be improved by developing
products that meet the needs of the client segments better and by looking for
new markets and channels. The incorporation of the business of the segment at
the turn of the year allowed the development of a product area specific,
specialised strategy during 2015.
Descom
The segment includes the business of the Descom Group, acquired July 2, 2015.
Solteq Plc has issued three stock exchange releases regarding the acquisition
(17.6.2015, 22.6.2015 and 2.7.2015). The figures of the Descom Group have been
included in Solteq Plc’s figures as of 2.7.2015.
The main operations of the Descom segment focus on solutions for omnichannel
commerce and the improvement of clients’ digital marketing. Descom Group
consists of the parent group Descom Group Oy and the subsidiary, Descom Oy,
which includes the group’s business in Finland as well as foreign subsidiaries
in Sweden, Poland and Denmark.
In the omnichannel commerce area we provide omnichannel online and physical
store sales systems as well as order and product information management
solutions. The aim of omnichannel commerce is not only to combine brick-and
-mortar with digital channels, but to create a totally new business and
different ways to attend to the customer.
In the core Descom’s digital marketing services are search engine optimization
and marketing, conversion optimization as well as analytics and customer
experience. Our digital marketing services help clients improve the findability
of their website and gather and use customer data and analytics to make their
online shopping basket bigger, among other things.
In addition, Descom offers its clients applications development, integration and
maintenance services
The revenue of the Descom segment on the period of 2.7.-31.12.2015 was 18,1
million euros, of which 2,8 million was made in the Swedish subsidiary. The
operating profit of the segment was 1,1 million euros.
Integration
The integration work related to the acquisition of Descom was finished according
to the original plans. The operational merger was finished by the end of the
year and the implementation of the legal mergers were entered into Finnish Trade
register on 1 January 2016.
The integration work was targeting to annual cost savings of 2 million euros.
Savings were carried out by rationalizing the structures in administration,
manager and support organizations, by centralizing and accelerating the basic
purchases and by merging our office premises in Helsinki and Tampere during the
first half year in 2016. The co-operation negotiations related to personnel
changes were concluded on 20 November 2015 and all arrangements concerning the
personnel changes are concluded as well.
Strategic outlines of the new merged company
Solteq has announced the strategic outlines of the new merged company in the
interim report 1.1.-30.9.2015.
Preparing of strategy and strategy work has continued and will continue during
the ongoing winter. The company will publish a separate stock exchange bulletin
concerning the results of the strategy work in the spring 2016.
REVENUE AND RESULT
Turnover by operation:
% 1-12/15 1-12/14
Software services 72 62
Licences 25 26
Hardware 3 12
Revenue increased by 32,5 % compared to the previous year and totalled 54.215
thousand euros (previous review period 40.933 thousand euros).
Revenue consists of several individual customerships. At the most, one client
corresponds to less than ten percentages of the revenue.
The operating result for the review period decreased 48,3 % and was 1.288
thousand euros (2.490 thousand euros). Result before taxes was 305 thousand
euros (2.313 thousand euros) and result for the financial year was 102 thousand
euros (1.893 thousand euros).
The figures of the financial year include 820 thousand euros non-recurring
consulting and arrangement costs related to the acquisition of Descom Group Oy
and 882 thousand euros non-recurring costs related to the employments that
ended as a part of the integration process. Non-recurring costs are presented in
personnel expenses and in other expenses for the financial period.
BALANCE SHEET AND FINANCE
The total assets amounted to 64.251 thousand euros (25.038 thousand euros).
Liquid assets totalled 2.619 thousand euros (2.530 thousand euros). In addition
to liquid assets, the company has unused bank account limits amounting to a
total of 1.810 thousand euros in the end of the financial year and in addition
the company has an unused standby credit limit amounting to a total of 4.000
thousand euros.
The Group’s interest-bearing liabilities were 28.410 thousand euros (4.437
thousand euros).
Solteq Group’s equity ratio was 24,4 per cent (48,0 per cent).
The financing methods used in the acquisition of the subgroup Descom Group
(Descom) on 2 July 2015 changed significantly Solteq Group’s balance sheet and
financing structure. Information on the acquisition is presented in note
Business combinations.
On 1 July 2015 Solteq Plc (Solteq) issued an unsecured bond of 27 million euros
which was used as the cash contribution payable as part of the purchase price
for the entire share capital of Descom Group Oy (Descom) and the purchase of the
capital loans of Descom and to refinance of the existing bank loans and other
financial indebtedness of the groups of Solteq and Descom.
The bond carries a fixed annual interest of 6 per cent and its maturity is five
years. The financial covenants concerning the distribution of funds and
incurring financial indebtedness other than permitted in the terms of the Bond
(Incurrence Covenant) require that at any agreed review date, the Equity Ratio
exceeds 27.5 per cent, the Interest Coverage Ratio (EBITDA / net interest cost)
exceeds 3.00:1 and that the Group’s Net Interest Bearing Debt to EBITDA ratio
does not exceed 3.50:1.
Upon completion of purchase of share capital approx. 4.6 million euro of
purchase price of Descom Group was paid with Solteq’s new shares based on a
directed share issue to be paid by contribution in kind which was directed to
the shareholders of Descom Group. A total of 2,799,998 new shares of Solteq Plc
were issued at a subscription price of EUR 1,65 per share which was determined
based on volume-weighted average price of the shares during the period of 4 May
2015 – 3 June 2015.
More information on the acquisition of Descom and the financing arrangements
(e.g. prospectus, terms of the bond and the stock exchange bulletins concerning
the acquisition) are available on company’s website.
INVESTMENTS, RESEARCH AND DEVELOPEMENT
Gross investment during the review period was 23.259 thousand euros (958
thousand euros). 222 thousand euros of the gross investments of the financial
period are mainly replacement investments and 23.037 thousand euros were related
to the company acquisition. Investments in the reference year are mainly
replacement investments.
Research and development
Solteq’s research and development costs consist mainly of personnel costs. When
developing basic products, it is Solteq’s strategy to cooperate with global
actors such as IBM, SAP, Symphony EYC and Microsoft and utilize their resources
and distribution channels. Own development efforts are focused on added value
products and developing tailored service concepts.
During the review period product development costs were not amortized (none in
the reference period, either).
PERSONNEL
The number of permanent employees at the end of the review period was 500 (279).
In the end of the review period the number of personnel could be divided as
follows: Grocery and special retail, HoReCa segment: 97 people; Wholesale,
Logistics and Services: 76 people; Enterprise Asset & Service Business
Management: 41 people; Descom: 211 people and 75 people in shared functions.
The key figures for Group’s personnel:
+--------------------------------------------------------+------+------+------+
| | 2015| 2014| 2013|
+--------------------------------------------------------+------+------+------+
|Average number of the personnel during the review period| 391| 281| 287|
+--------------------------------------------------------+------+------+------+
|Employee benefit expenses (1 000 €) |21 484|15 234|15 850|
+--------------------------------------------------------+------+------+------+
RELATED PARTY TRANSACTIONS
Solteq’s related parties include the board of directors, managing director, the
management team.
Information on related party transactions and the amounts are presented in
tables presented in the end of this financial statement bulletin.
SHARES, SHAREHOLDERS AND TREASURY SHARES
Solteq Plc’s equity on 31.12.2015 was 1.009.154,17 euros which was represented
by 17.798.059 shares. The shares have no nominal value. All shares have an equal
entitlement to dividends and company assets. Shares are governed by a redemption
clause.
At the end of the review period, the amount of treasury shares in Solteq was
825.881 shares. The amount of treasury shares represented 4,6 % of the total
amount of shares and votes at the end of the review period. The equivalent value
of acquired shares was 46.828 euros.
During the review period, thirteen flagging announcements were made.
On March 19, 2015 Solteq Plc announced that the company would dissolve the share
-based incentive scheme by purchasing the capital stocks of the Management
Team’s holding companies. The arrangement was implemented on 13 April 2015 and
it led to a change in ownership, in which Solteq Plc and its subsidiaries hold
more than 5% of Solteq Plc shares and votes.
On June 18, 2015 Solteq Plc received a notification pursuant to Chapter 9,
Section 5 of the Securities Markets Act from Sentica Buyout III GP Oy ja Sentica
Buyout III Ky. According to the notification Sentica Buyout III Ky and Sentica
Buyout III Co-Investment Ky are parties to an agreement or other arrangement
which, if completed, would cause the direct holdings of Sentica Buyout III Ky of
the shares and voting rights in Solteq Plc to exceed the 5 per cent threshold.
According to the notification, Sentica Buyout III GP Oy’s indirect holding
through the above mentioned companies of the shares and voting rights in Solteq
Plc would at the same time exceed the 5 per cent threshold. The only general
partner of Sentica Buyout III Ky and Sentica Buyout III Co-Investment Ky is
Sentica Buyout III GP Oy. Sentica Buyout III GP Oy exercises the power of
decision in the companies. The investment management functions of both the funds
have been transferred to Sentica Partners Oy based on a separate investment
management agreement. The change in the holdings results from an issue of new
shares in Solteq Plc directed to Sentica Buyout III Ky and Sentica Buyout III Co
-Investment Ky where Descom Group’s shares will be transferred against the new
shares of Solteq Plc based on the share purchase agreement signed on June 17,
2015 by and between Solteq Plc and the shareholders of Descom Group Oy regarding
all the shares in Descom Group Oy. The arrangement was executed on July 2 2015
and Solteq Plc received a notification pursuant to Chapter 9, Section 5 of the
Securities Markets Act concerning the changes in ownership caused by the
arrangement on July 3 2015. According to the notification the direct holdings of
Sentica Buyout III Ky of the shares and voting rights in Solteq Plc to exceed
the 5 per cent threshold. According to the notification, Sentica Buyout III GP
Oy’s indirect holding through Sentica Buyout III Ky and Sentica Buyout III Co
-Investment Ky of the shares and voting rights in Solteq Plc exceeds the 5%
threshold.
On July 3, 2015 Solteq Plc received four notifications pursuant to Chapter 9,
Section 5 of the Securities Markets Act related to the registration of the
Solteq’s new shares to trade register on July 3 2015. Due to the arrangement Ali
U. Saadetdin’s holdings and proportion of voting rights of Solteq Plc has fallen
under the 20% threshold, Seppo Aalto’s holdings and proportion of voting rights
of Solteq Plc has fallen under the 10% threshold, Profiz Business Solution
Corp.’s (Company ID number 0830732- 2) holdings and proportion of voting rights
of Solteq Plc has fallen under the 10% threshold and the share of ownership of
holdings and proportion of voting rights of Solteq Plc controlled by the company
has fallen under the 5% threshold.
On July 6 Solteq Plc received three notifications pursuant to Chapter 9,
Section 5 of the Securities Markets Act. Due to disposal of shares on July 3
2015 Ali U. Saadetdin’s holdings and proportion of voting rights of Solteq Plc
has fallen under the 10% threshold. In addition due to disposal of shares on
July 3 2015 Seppo Aalto’s holdings and proportion of voting rights of Solteq Plc
has fallen under the 5% threshold. Due to the acquisition of shares on July 3
2015 Sentica Buyout III Ky’s share of ownership of shares and voting rights of
Solteq Plc exceeded the 25% threshold on 3 July 2015 due to acquisition of
shares and Sentica Buyout III GP Oy’s indirect holding through Sentica Buyout
III Ky and Sentica Buyout III Co-Investment Ky of the shares and voting rights
in Solteq Plc exceeded the 25% threshold due to the acquisition.
On November 12 2015 Solteq Plc received a notification pursuant to Chapter 9,
Section 5 of the Securities Markets Act from Keskinäinen Työeläkevakuutusyhtiö
Varma (Varma). According to the notification of major shareholding, Varma’s
holdings and proportion of voting rights of Solteq Plc has exceeded the 5%
threshold on 13 November 2015 due to acquisition of shares. Before the
acquisition Varma held 644.917 Solteq shares. After the acquisition Varma holds
1.050.697 Solteq shares which represent 5.90 per cent of all of the company’s
shares and votes.
On November 26 2015 Solteq Plc received a notification based on chapter 9
section 5 of the Securities Market Act from Profiz Business Solution Plc
(Profiz). According to the notification of major shareholding, Profiz’s
holdings and proportion of voting rights of Solteq Plc has exceeded the 10%
threshold on 26 November 2015 due to acquisition of shares. Before the
acquisition Profiz held 1.756.180 Solteq shares. After the acquisition Profiz
holds 1.781.790 Solteq shares which represent 10,01 per cent
Exchange and rate
During the financial year, the exchange of Solteq’s shares in the Helsinki Stock
Exchange was 5,0 million shares (0,8 million shares ) and 11,5 million euros
(1,2 million euros). Highest rate during the financial year was 1,97 euros and
lowest rate 1,32 euros. Weighted average rate of the share was 1,71 euros and
end rate 1,78 euros. The market value of the company’s shares in the end of the
financial year totalled 31,7 million euros (19,9 million euros).
Ownership
In the end of the financial year, Solteq had a total of 1.911 shareholders
(1.689 shareholders). Solteq’s 10 largest shareholders owned 13.377 thousand
shares i.e. they owned 75,2 per cent of the company’s shares and votes. Solteq
Plc’s members of the board own 15 thousand shares on 31 December 2015.
ANNUAL GENERAL MEETING
At Solteq Plc’s Annual General Meeting on 16 March 2015 the 2014 financial
statements were adopted and the members of the board and the managing director
were discharged from liability for the 2014 financial period.
In the meeting was accepted the proposal by the board that for the financial
year 2014, there will be paid a dividend of 0.03 euros per each share on the
market. In addition to this, the annual general meeting authorized the board to
decide, in accordance with the Finnish Companies Act 13 chapter 6§ 2 paragraph,
on a distribution of dividend, or other distribution of funds from the equity
trust, for an amount of maximum 0.05 euros. The board is also allowed to decide
on the timing and other details of this. The authorization is valid until the
beginning of the next Annual General Meeting.
The Annual General Meeting authorized the Board of Directors to decide on the
purchase of the Company’s own shares to improve the capital structure, to be
used as a part of remuneration of personnel, to finance and execute business
acquisitions and other business arrangements or to be further transferred or
cancelled. The proposal includes authorization to take company’s own shares as
a pledge. According to the proposal, the total number of the shares purchased
shall not exceed 10 percent of all shares of the Company and they can be
purchased otherwise than in proportion to the shareholdings of the shareholders.
The shares shall be purchased at a price formed in public trading. The
authorization includes that the Board of Directors may decide the terms and
other matters concerning the purchase of own shares. The authorization is
effective until the next Annual General Meeting.
The Annual General Meeting authorized the Board of Directors to give new shares
or convey company’s own shares. The authorization would be executed by one or
more share issues, maximum total amount being 5.000.000 shares. The
authorization includes a right to deviate from the shareholders’ pre-emptive
right of subscription. The authorization includes that the Board of Directors
may decide the terms and other matters concerning the share issue. The
authorization is effective until the next Annual General Meeting.
BOARD OF DIRECTORS AND AUDITORS
At Solteq Plc’s Annual General Meeting on 16 March 2015, seven members were
elected to the Board of Directors. Ali Saadetdin, Seppo Aalto, Markku Pietilä,
Sirpa Sara-aho, Jukka Sonninen, Matti Roininen and Olli Välimäki. The Board
elected Ali Saadetdin to act as the Chairman of the Board.
The General Meeting held on 19 October 2015 decided that The Board of Directors
includes six (6) members for the term of office that expires at the end of the
first Annual General Meeting of Shareholders. The General Meeting decided that
Aarne Aktan, Eeva Grannenfelt, Kirsi Harra-Vauhkonen, Markku Pietilä, Mika
Uotila and Olli Väätäinen are elected as Board members.
In the Board meeting, held after the Annual General Meeting, Mika Uotila was
elected as the Chairman of the Board.
KPMG Oy Ab, Authorized Public Accountants, was re-elected as Solteq’s auditors.
Lotta Nurminen, APA, acted as the chief auditor.
EVENTS AFTER THE REVIEW PERIOD
After the review period the implementation of the subsidiary mergers were
entered into Finnish Trade register on 1 January 2016. The mergers were executed
according to the merger plans announced on 8 September 2015. Descom Ltd, totally
owned by Descom Group Ltd merged with Descom Group Ltd and Descom Group Ltd,
totally owned by Solteq Plc, merged with Solteq Plc.
RISKS AND UNCERTAINTIES
The key uncertainties and risks in short term are related to the management of
changes in financing and balance sheet structures, the timing and pricing of
business deals that are the basis for revenue, changes in the level of costs and
the company’s ability to manage extensive contract agreements and deliveries.
The key business risks and uncertainties of the company are monitored constantly
as a part of the board of directors’ and management team’s duties. The company
has not organized a separate internal audit organization or committee.
PROPOSAL OF THE BOARD OF DIRECTORS ON THE DISPOSAL OF PROFIT FOR THE FINANCIAL
YEAR
At the end of the financial period 2015, the distributable equity of the Group’s
parent company is 12 824 317,24 euros.
The Solteq Plc Board proposes to the Annual General Meeting that no dividend
will be paid from the financial period 2015.
The Board considers that there are no proper economic conditions for dividend
distribution or other distribution of funds. According to the terms and
conditions of the bond and with current equity ratio, the distribution of funds
would lead to the realization of maturity conditions of the bond.
No essential changes have taken place in the company’s financial situation after
the end of the financial period.
Financial reporting
This Financial Statements Bulletin 1.1.-31.12.2015 has been prepared in
accordance with IAS 34 Interim Financial Reporting –standard. The financial
statement figures presented in the bulletin are based on the company’s audited
financial statements using the same accounting policies. The Auditor’s Report
was provided on 18/2/2016.
The financial result is reported through four business areas. Solteq Plc’s
reported segments are Grocery and special retail, HoReCa; Wholesale, Logistics
and Services and Enterprise resource planning of services. The totally owned
subsidiary Descom Group Ltd, acquired on 2 July 2015, is presented as one
segment. The most essential product and service types of the Solteq group of
companies are software services, licenses and hardware sales.
All forecasts and estimates presented in the bulletin are based on the current
views of management on the economic environment and outlook. Because of this,
the results can differ as a result of, among other factors, changes in economy,
markets and competitive conditions, changes in the regulatory environment and
other government actions.
FINANCIAL
INFORMATION
CONSOLIDATED
STATEMENT OF
COMPREHENSIVE
INCOMEONSERNIN
(TEUR)
1.10.- 1.10.- 1.1.- 1.1.-
31.12.2015 31.12.2014 31.12.2015 31.12.2014
REVENUE 20 357 12 218 54 215 40 933
Other income 109 0 125 0
Materials and
services -6 130 -4 668 -15 153 -12 508
Employee -10 037 -5 026 -26 374 -18 897
benefit
expenses
Depreciation -560 -344 -1 782 -1 320
and
impairments
Other expenses -3 510 -1 271 -9 744 -5 718
OPERATING 230 909 1 288 2 490
RESULT
Financial
income
and expenses -453 -49 -984 -177
RESULT BEFORE -223 860 305 2 313
TAXES
Income tax -115 -122 -203 -420
expenses
RESULT FOR THE
FINANCIAL
PERIOD
-337 738 102 1 893
OTHER
COMPREHENSIVE
INCOME TO BE
RECLASSIFIED
TO PROFIT OR
LOSS IN
SUBSEQUENT
PERIODS
Cash flow 0 0 29 6
hedges
Other
comprehensive
income,
net of tax 0 0 23 5
TOTAL
COMPREHENSIVE
INCOME
-337 738 125 1 898
Total profit
for the period
attributable
to
Owners of the -337 738 102 1 893
parent
Total
comprehensive
income
attributable
to
Owners of the -337 738 125 1 898
parent
Earnings /
share,
e(undiluted) -0,02 0,05 0,01 0,13
Earnings /
share,
e(diluted) -0,02 0,05 0,01 0,13
Taxes
corresponding
to the result
have been
presented as
taxes for the
period.
CONSOLIDATED BALANCE SHEET (TEUR) 31.12.2015 31.12.2014
ASSETS
NON-CURRENT ASSETS
Tangible assets 2 032 1 652
Intangible assets
Goodwill 35 235 12 730
Other intangible
rights 4 958 2 231
Available-for-sale
financial assets 987 555
Trade and other receivables 207 15
Total
non-current assets 43 419 17 183
CUNNRENT ASSETS
Inventories 23 35
Trade and other
receivables 18 190 5 290
Cash and cash equivalents 2 619 2 530
Total
current assets 20 832 7 855
TOTAL ASSETS 64 251 25 038
EQUITY AND LIABILITIES
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
Share capital 1 009 1 009
Share premium reserve 75 75
Hedging reserve 0 -23
Reserve for own shares -1 109 -1 069
Distributable equity
reserve 10 449 6 392
Retained earnings 4 983 5 328
Total equity 15 407 11 712
Non-current liabilities
Deferred liabilities 1 019 512
Financial liabilities 27 385 2 591
Current liabilities 20 440 10 223
Total liabilities 48 844 13 326
TOTAL EQUITY
AND LIABILITIES 64 251 25 038
CASH FLOW STATEMENT (MEUR)
1-12/2015 1-12/2014
Cash flow from business
operations 0,40 3,27
Cash flow from capital
expenditure -16,50 -0,24
Cash flow from financing activities
Own shares -0,43 -0,14
Dividend distribution -0,45 -0,90
Loan agreements 17,07 -1,82
Cash flow from financing
activities 16,19 -2,86
Change in cash and cash equivalents 0,09 0,16
STATEMENT OF
CHANGES IN
GROUP EQUITY
(TEUR)
A=Share
capital
B=Reserve for
own shares
C=Share premium
account
D=Hedging
reserve
E=Distributable
equity
reserve
F=Retained
earnings
G=Total
A B C D E F G
EQUITY 1.1.2014 1 009 -933 75 -28 6 392 4 331 10 846
Total 5 1 893 1 898
comprehensive
income
Transactions
with owners
Own shares -135 -135
acquired
Dividend -896 -896
distribution
Transactions -135 -896 -1 031
with owners
EQUITY 1 009 -1 069 75 -23 6 392 5 328 11 712
31.12.2014
EQUITY 1.1.2015 1 009 -1 069 75 -23 6 392 5 328 11 712
Total 23 102 125
comprehensive
income
Transactions
with owners
Own shares -40 -40
acquired
Directed issue 4 242 4 242
Fees for the 127 127
board members
in the form of
treasury shares
Dividend -447 -447
distribution
Management -312 -312
incentives
Transactions -40 4 057 -447 3 570
with owners
EQUITY 1 009 -1 109 75 0 10 449 4 983 15 407
31.12.2015
SEGMENT INFORMATION
Turnover by segment:
Me 1-12/15 1-12/1 Change
4
Grocery and special retail, 19,3 20,5 -1,2
HoReCa
Wholesale, Logistics and 12,0 15,4 -3,4
Services
Enterprise Asset & Service 4,9 5,0 -0,1
Business Management
Descom* 18,1 0,0 +18,1
Total 54,2 40,9 +13,3
Operating result by segment:
Me 1-12/15 1-12/1 Change
4
Grocery and special retail, 0,9 1,2 -0,3
HoReCa
Wholesale, Logistics and 0,8 0,6 +0,2
Services
Enterprise Asset & Service 0,3 0,7 -0,4
Business Management
Descom* 1,1 0,0 +1,1
Items unallocated to -1,8 0,0 -1,8
segments
Total 1,3 2,5 -1,2
*Descom Group is
consolidated to Solteq Group
from July 2 2015.
QUARTERLY KEY INDICATORS
(MEUR)
1Q/14 2Q/14 3Q/14 4Q/14
Net turnover 9,87 10,52 8,33 12,22
Operating result 0,59 0,55 0,44 0,91
Result before taxes 0,51 0,54 0,41 0,86
1Q/15 2Q/15 3Q/15 4Q/15
Net turnover 9,13 9,82 14,90 20,36
Operating result 0,46 0,66 -0,06 0,23
Result before taxes 0,44 0,64 -0,55 -0,22
TOTAL INVESTMENTS (TEUR)
1-12/2015 1-12/2014
Continuing operations,
group total 23 259 958
LIABILITIES (MEUR) 31.12.2015 31.12.2014
Business mortgages 10,00 10,00
Other lease liabilities 0,25 0,15
Lease liabilities for 6,20 4,90
premises
RELATED PARTY TRANSACTIONS 31.12.2015 31.12.2014
(TEUR)
Renting arrangements 80 85
Sales to group company 70 0
Outsourcing expenses 3 0
Purchasing the capital 383 0
stocks of the Management
companies
Transactions with the
insiders have been done at
market price and are part of
the company’s normal
software service business.
FAIR VALUES OF FINANCIAL
ASSETS AND FINANCIAL
LIABILITIES
The fair values of the
financial assets and
liabilities are mainly
the same as the book values
on both 31.12.2015 and
31.12.2014.
Hence they are not presented
in table form in the
bulletin.
DISTRIBUTION OF HOLDINGS BY SECTOR DECEMBER 31, 2015
Number of Shares and votes
holdings % number
Private companies 68 45,9 % 8 162 102
Financial and insurance institutions 7 1,7 % 300 237
Public-sector organizations 2 17,7 % 3 155 597
Households 1 826 34,7 % 6 173 447
Non-profit organizations 2 0,0 % 231
Foreigners 6 0,0 % 6 445
Total 1 911 100,0 % 17 798 059
Total of Nominee-registered 5 1,4 % 247 612
DISTRIBUTION BY NUMBER OF SHARES DECEMBER 31,2015
Number of Shares and votes
Number of shares holdings % number
1 - 100 383 0,2 % 27 348
101 - 1 000 1 066 2,8 % 499 549
1 001 - 10 000 373 6,5 % 1 154 526
10 001 - 100 000 73 11,7 % 2 083 564
100 001 - 1 000 000 11 17,3 % 3 074 888
1 000 000 - 5 61,6 % 10 958 184
Total 1 911 100,0 % 17 798 059
Total of Nominee-registered 5 1,4 % 247 612
MAJOR SHAREHOLDERS DECEMBER 31, 2015
Shares and votes
number %
1. Sentica Buyout III Ky 4 621 244 26,0
2. Keskinäinen Työeläkevakuutusyhtiö Elo 2 000 000 11,2
3. Profiz Business Solution Oyj 1 781 790 10,0
4. Saadetdin Ali 1 399 553 7,9
5. Keskinäinen Työeläkevakuutusyhtiö Varma 1 155 597 6,5
6. Solteq Plc 825 881 4,6
7. Aalto Seppo 671 882 3,8
8. Roininen Matti 420 000 2,4
9. Corpinghouse Oy 321 356 1,8
10. Sentica Buyout III Co-Investment 180 049 1,0
10 largest shareholders total 13 377 352 75,2
Total of nominee-registered 247 612 1,4
Others 4 173 095 23,4
Total 17 798 059 100,0
FINANCIAL PERFORMANCE INDICATORS (IFRS) 2015 2014 2013 2012 2011
Net turnover MEUR 54,2 40,9 38,1 39,0 27,1
Change in net turnover 32,5 % 7,4 % -2,3 % 43,7 % 0,5 %
Operating result MEUR 1,3 2,5 2,1 2,7 1,5
% of turnover 2,4 % 6,1 % 5,6 % 7,0 % 5,4 %
Result before taxes MEUR 0,3 2,3 1,9 2,4 1,3
% of turnover 0,6 % 5,7 % 5,1 % 6,2 % 4,7 %
Equity ratio, % 24,4 48,0 43,5 37,2 34,2
Gearing, % 167,4 % 16,3 % 29,4 % 51,5 % 65,4 %
Gross investments in
non-current assets MEUR 23,3 1,0 1,0 7,4 0,5
Return on equity, % 0,8 % 16,8 % 15,5 % 21,2 % 16,0 %
Return on investment, % 4,5 % 15,5 % 13,2 % 20,8 % 13,1 %
Personnel at end of
period 500 279 277 288 212
Personnel average
for period 391 281 287 270 211
KEY INDICATORS PER SHARE
Earnings / share, e 0,01 0,13 0,11 0,12 0,08
Earnings / share,
e(diluted) 0,01 0,13 0,11 0,12 0,08
Equity / share, e 0,91 0,79 0,72 0,67 0,52
CALCULATION
OF
FINANCIAL
RATIOS
Solvency
ratio, in
percentage:
equity
------------ x 100
------------
----------
balance
sheet total
– advances
received
Gearing:
interest
bearing
liabilities
– cash,
bank
balances and
securities
------------ X 100
------------
------------
-------
equity
Return on
Equity
(ROE) in
percentage:
profit or
loss before
taxation –
taxes
------------ x 100
------------
------------
----
equity
Profit from
invested
equity in
percentage:
profit or
loss before
taxation +
interest
expenses and
other
financing
expenses
------------ x 100
------------
------------
----
balance
sheet total
– non
-interest
bearing
liabilities
Earnings
per share:
pre-tax
result –
taxes +/
- minority
interest
------------
------------
------------
diluted
average
share
issue
corrected
number of
shares
Diluted
earnings
per share:
diluted
profit
before
taxation –
taxes +/-
minority
interest
------------
------------
------------
-----------
diluted
average
share
issue
corrected
number of
shares
Equity per
share:
equity
------------
-----------
number of
shares
ACQUISITIONS
Descom Group Oy
Description of the acquired company:
On July 2 2015, Solteq acquired the entire capital stock of Descom Group Oy at a
purchase price of approx 11.1 million euros and the capital loans at a purchase
price of approx. 11.9 million euros. As a result of the corporate acquisition,
Descom Group Oy became a subsidiary entirely owned by Solteq Plc.
Descom offers sales, marketing and customer service solutions for companies in
trade, industry and the service sector. Descom Group has about 240 employees in
Finland, Sweden and Poland. Descom Group is consolidated to Solteq Group from
July 2 2015. Descom Group Oy was merged to Solteq Plc on 1 January 2016.
Impact of the acquired company to Solteq
Group
Aggregate figures for the acquisition 2.7.2015
Thousand EUR
Consideration
Paid in cash 6 601
Directed issue 4 536
Total 11 137
Provisional values of the assets and
liabilities arising from the acquisition
Tangible fixed assets 992
Intangible assests, customerships* 3 520
Other intangible assets 164
Deferred tax assets 181
Available-for-sale financial assets 8
Trade and other receivables 7 850
Cash and cash equivalents 1 139
Total assets 13 854
Capital loans -11 950
Trade payables and other liabilities -5 399
Loans -6 949
Provisions -187
Deferred tax liabilities -738
Total liabilities -25 223
The goodwill value from the acquisition 22 506
Cash flow from the acquisition
Consideration paid in cash and the purchase 18 501
of capital loans
Cash and cash equivalents of the acquired 1 139
company 2.7.2015
Total cash flow from the acquisition 17 362
* Depreciations of the intangible rights
during the reporting period are 220
thousand euros (customerships).
Goodwill consists of assets that cannot be
separated like synergy benefits, competent
personnel, market share and entrance new
markets. Adjustments of the fair value to
the other intangible assets reflect the
value of Descom Group’s customerships.
Expenses related to the acquisition
Other expenses 820
Transaction costs of the Bond (allocated to 360
financial expenses during the loan period)
Distributable quity reserve 294
Total expenses related to the acquisition 1 474
Impact on the Solteq Group’s number of 240
personnel
Impact on the Solteq Group's comprehensive 7-12/2015
income statement
Revenue** 18 090
Operating profit** 1 104
*The amount of the revenue and the operating profit from acquisition date to the
end of the reporting period. The acquired company is consolidated into the
Solteq Group as of 2.7.2015. The revenue and the operating profit of the
acquired company as the acquisition had taken place at the first day of the
reporting period are not presented, because many significant pre-acquisition
arrangements were performed in June 2015.
The Group did not have any acquisitions of business during the financial year
2014.
Financial reporting
Solteq’s audited financial statements for the year 2015 is published in the
company’s web site on February 19, 2016. Additional information on 2015 is also
available on our website from February 19, 2016. We will not publish printed
Annual Report.
Solteq Plc’s financial information bulletins in 2016 have been scheduled as
follows:
– Interim Report 1-3/2016 on Thursday April 21, 2016 at 8 am
– Interim Report 1-6/2016 on Friday July 15, 2016 at 8 am
– Interim Report 1-9/2016 on Tuesday October 25, 2016 at 8 am
More investor information is available from Solteq’s website at www.solteq.com
Additional information:
CEO, Repe Harmanen
Tel +358 400 467 717
E-mail repe.harmanen@solteq.com
CFO, Antti Kärkkäinen
Tel +358 40 8444 393
E-mail antti.karkkainen@solteq.com
Distribution:
NASDAQ OMX Helsinki
Key media
www.solteq.com
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