2011-02-16 08:00:00 CET
2011-02-16 08:00:53 CET
REGULATED INFORMATION
Solteq Oyj - Financial Statement Release
SOLTEQ PLC'S FINANCIAL STATEMENTS BULLETIN 1.1.-31.12.2010
Solteq Plc Stock Exchange Bulletin 16.2.2011 at 9.00am
- Turnover decreased by 5,4 % and totalled 27,0 million euros (28,5 million
euros)
- Operating result totalled -4.315 thousand euros (1.464 thousand
- Operating result is burdened by termination benefits in the amount of 430
thousand euros
- Operating result includes 2.087 thousand euro goodwill write-down
- In 2011 the turnover is believed to be at the same level as in 2010, but the
operating result instead is believed to improve and to end up some 5 per cent
- Earnings per share was -0,32 euros (0,08 euros)
- The Board of Directors proposes to the annual general meeting that no dividend
will be paid from the financial period 2010
KEY FIGURES
Turnover by operation:
% 1-12/10 1-12/09
Softwareservices 65 65
Licences 27 26
Hardware 8 9
Managing Director Repe Harmanen:"The past year was the most difficult one in our company's history and the
weakest in profits. At the same time, however, we strengthened areas that will
continue to play a key role in our operations. Some of the economic challenges
during the year were related to new areas of operation, the profitability and
productivity of which did not reach the level of expectations. However, we
expect these solutions to develop positively and support our operations in the
future.
The year's poor economic performance is mainly due to the challenges facing two
major projects simultaneously. Underestimated challenges of implementation with
new technologies resulted in an excessive use of subcontracting and thus a
significant financial loss. We have improved our operative cost structure, and
we continually monitor and evaluate it on a daily basis. The year's results
were significantly affected by the write-downs of goodwill done in conjunction
with the financial statement. As a result of these measures, we will begin to
build our future, strengthened and made more wise though difficulties, with a
clear idea of where we will improve our operations in the coming years.
During the last quarter, we made necessary changes to our organisational
structure and management team, as well as renewed our strategy. A cornerstone of
our strategy is to offer and ensure future development paths to our existing
clients."
BUSINESS ENVIRONMENT AND BUSINESS DEVELOPMENT
Solteq offers operational and financial control services developed according to
plan to commercial, logistics, industrial and public administration actors. We
complement our core offering with solutions for specialized retail management,
maintenance and servicing management, as well as solutions for quality
improvement and the management of systems in which master data is contained.
With the help of our solutions developed using technology from the world's
leading companies, our clients guide their businesses more efficiently and
improve their profitability.
Starting from 1.1.2010 Solteq's operations was divided into four business areas
and the result of the company is monitored through these areas. Business areas
are: ERP (enterprise resource planning), EAM (enterprise asset management), Data
(data management, optimization and integration) and Store (retail solutions and
technology).
Solteq's turnover totalled 26.998 thousand euros in which contains decrease of
5,4 per cent compared to corresponding period in 2009.
Solteq's operating result for the fourth quarter decreased to -4.315 thousand
euros from 1.464 thousand euros that was the operating result in the
corresponding period 2009. Company's operating profit percentage was -16,0%
(5,1% in 2009).
During the first half of the year 2010 the result was strongly negative. In the
second half of the fiscal year, the company's operating income excluding non-
recurring goodwill impairment charges were stabilized at zero.
ERP
Solteq's business area ERP offers to its clientele enterprise resource planning
systems and supporting optimization and reporting solutions as well as a set of
other different added value solutions. These solutions help customers to lead
their operations and to intensify their operations e.g. purchases, sales and
warehouse management as well as reporting. Wide group of customers among others
in business branches trade, industry, auto trade and public sector are using
these solutions every day.
The revenue of business area ERP totalled 16,6 million euros. Business area's
operating result was -1,5 million euros
EAM
Solteq's EAM-solutions include systems for maintenance management, asset
management optimization, fieldwork management and maintenance. By means of these
solutions Solteq's customers are able to anticipate the need for service of
production lines and machines as well as they are able to monitor the
malfunction history and control the machinery maintenance related material flows
from purchasing to warehousing. The clientele consists of among others energy-
and production plants, companies in processing and engineering industries as
well as maintenance related service sector.
During the review period the revenue of business area EAM totalled 3,5 million
euros and operating result was -1,0 million euros.
Data
Solteq's business area Data is responsible for services and products relating to
the data (i.e. masterdata) that is crucial to the customers' businesses as well
as e-commerce and integration technologies. Solteq offers to its customers
masterdata related quality improvement projects, data maintenance services in
which the services are outsourced to masterdata service centers, software
technologies and consultancy services that can be utilized in masterdata
management. The aim of these services is to ensure that the data that is stored
in the programs, which support customers' enterprise resource planning and
decision-making, is high-quality, compatible and up to date.
During the review period the revenue of business area Data totalled 2,8 million
euros and operating result was -1,4 million euros
Store
The solutions of Solteq's business area Store intensify the purchases, sales and
customer relationship management of specialty stores and chained commerce. Every
day hundreds of retailers, entrepreneurs and salespersons are leading their
businesses and serving their customers in thousands of store locations by means
of these solutions.
The revenue of business area Store totalled 4,1 million euros and operating
result was -0,4 million euros during the review period.
TURNOVER AND RESULT
Turnover decreased by 5,4% compared to the previous year and totalled
26.998 thousand euros (previous financial year 28.550 thousand euros).
Turnover consists of several individual customerships. At the most, one client
corresponds to a less than ten percentages of the turnover.
The operating result for the financial year was -4.315 thousand euros (1.464
thousand euros), result before taxes was -4.487 thousand euros (1.329 thousand
euros) and result for the financial year -3.707 thousand euros (935 thousand
euros).
Operating result was burdened by termination benefits in the amount of 430
thousand euros.
For the fiscal year, expenses for onerous contracts were booked in accordance
with IFRS regulations at 797 thousand euros. These bookings result from
uncertainty regarding the receipt of payments on previously recognised revenues.
After the end of the fiscal period, Solteq's Board decided to make a 2,087
thousand euro goodwill write-down in fiscal year 2010 as a result of its
impairment testing. The write-downs were targeted by segment as follows: DATA
816,000 euros, EAM 541 thousand euros and ERP 730,000 euros.
Impairment loss for fixed assets of 287 thousand euros was booked during the
fiscal period. Impairment loss is related to capitalized development costs of
ERP business area. The estimate of possible recoverable amount has decreased due
to changed financial expectations.
BALANCE SHEET AND FINANCING
The total assets amounted to 17.211 thousand euros (21.130 thousand
euros). Liquid assets totalled 131 thousand euros (258 thousand euros).
Solteq Group's interest-bearing liabilities were 7.117 thousand euros (6.909
thousand euros).
Solteq Group's equity ratio was 30,6 per cent (47,2 %).
INVESTMENTS, RESEARCH AND DEVELOPMENT
Gross investments during the financial year were 153 thousand euros (651
thousand euros).
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 SAP 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 fiscal year, product
development costs were not amortized. The product development project
depreciation decided at the end of the previous fiscal year has started. In the
previous fiscal year, amortized product development costs were 424 thousand
euros.
PERSONNEL
The number of permanent employees at the end of the review period was 220 (235).
Average number of personnel during the financial year was 233 (240). In the end
of the financial year the number of personnel could be divided by 1.1.2010
reformed business segments as follows ERP 104 persons, EAM 38 persons, DATA 27
persons, STORE 24 persons and shared functions 27 persons.
RELATED PARTY TRANSACTIONS
Solteq's related parties include board of directors, managing director and the
management team. There have been no significant changes in the company's related
party transactions since the financial statements 2009.
SHARES, SHAREHOLDERS AND TREASURY SHARES
Solteq Plc's equity on 31.12.2010 was 1.009.154,17 euros which was represented
by 12.148.429 shares. The shares have no nominal value.
In the end of the financial year the amount of treasury shares in Solteq Plc's
possession was 500.669 shares. The amount of treasury shares represented 4,12 %
from the total amount of shares and votes in the end of the review period. The
equivalent value of acquired shares was 41.590 euros. The treasury shares were
acquired through the company's unrestricted shareholder equity at the prevailing
market price at the Helsinki Stock Exchange.
Exchange and rate
During the financial year, the exchange of Solteq's shares in the Helsinki Stock
Exchange was 1,3 million shares (0,5 million shares) and 1,5 million euros (0,7
million euros). Highest rate during the financial year was 1,56 euros and lowest
rate 1,01 euros. Weighted average rate of the share was 1,20 euros and end rate
1,04 euros. The market value of the company's shares in the end of the financial
year totalled 12,6 million euros (16,2 million euros).
Corporate Governance Statement
Solteq has issued its Corporate Governance Statement as a separate report. The
auditor of Solteq Plc has audited that the Corporate Governance Statement has
been issued and that the systems of internal control and risk management
relating to the reporting of financial results that are described in the report
are consistent with Solteq Plc's financial statements. Solteq Plc's Corporate
Governance Statement is available on company's website at
www.solteq.com/investors
Ownership
In the end of the financial year, Solteq had a total of 1.945 shareholders
(1.985 shareholders).Solteq's 10 largest shareholders owned 8.487 thousand
shares i.e. they owned 69,9 per cent of the company's shares and votes. Solteq
Plc's members of the board owned a total of 5.179 thousand shares which equals
42,6 per cent of the company's shares and votes.
ANNUAL GENERAL MEETING
Solteq Plc's annual general meeting on 26.3.2010 adopted the financial
statements for 2009 and the members of the board and the managing director were
discharged from liability for the financial year 2009. The annual general
meeting decided in accordance with the board's proposal to distribute a dividend
in the amount of 0,06 euros per share. The reconciliation date for the dividend
was 31.3.2010 and payment date 9.4.2010.
The annual general meeting decided to authorize the board of directors to decide
on acquiring the company's own shares so that the amount in the possession of
the company does not exceed 10 percent of the company's total shares at that
moment. The shares can be acquired in order to develop the company's capital
structure, finance and execute acquisitions or similar arrangements or used as
part of the incentive scheme of the personnel or convey otherwise or be
invalidated. The shares can be acquired in other proportion than the
shareholders' holdings. The shares are to be acquired through public trading.
The authorization is valid until the next annual general meeting.
General Meeting approved the proposal by the Board Section that 11 of the
Articles of Association be amended so that notice to the General Meeting shall
be issued no later than three weeks before the date of the General Meeting,
however at least nine days before the record date of the General Meeting.
Furthermore, the Articles of Association are proposed to be amended so that the
notice to the General Meeting can alternatively be delivered, in addition to the
current manners, by publishing the notice on the Company's website.
BOARD OF DIRECTORS AND AUDITORS
Six members were elected to the board of directors. Seppo Aalto, Veli-Pekka
Jokiniva, Ali Saadetdin, Jukka Sonninen and Markku Pietilä continued as members
of the board. Sirpa Sara-aho began as a new member of the board. The board
elected Ali Saadetdin to act as the chairman of the board.
KPMG Oy Ab, Authorized Public Accountants, were re-elected as Solteq's auditors.
Frans Kärki, APA, acts as the lead partner.
EVENTS AFTER THE REVIEW PERIOD
On 20 January 2011, Solteq published a stock exchange bulletin concerning a
2,087 thousand euro goodwill write-down based on the Board's impairment testing.
On 4 February 2011, Solteq published a stock exchange bulletin where Solteq
refined its strategy to the years 2011-2014.
RISKS AND UNCERTAINITIES
The key uncertainties and risks in short term are related to the timing and
pricing of the business deals that are the basis for the revenue, changes in the
level of costs and the company's ability to manage extensive contract agreements
and deliveries. An addition, as a result of the weak financial performance at
the end of the fiscal period, risk concerning the company's access to capital is
greater than before.
The key business risks and uncertainties of the company are monitored constantly
as a part of the board of directors' and management team's work. The company has
not organized a separate internal audit organization or committee.
PROSPECTS
Relating to year 2011 Solteq believes that the annual revenue will be at the
same level as in 2010. The operating result instead is believed to clearly
improve and to end up some 5 per cent.
PROPOSAL OF THE BOARD FOR DISTRIBUTION OF DIVIDEND
At the end of the financial period 2010, the distributable equity of the Group's
parent company is 3.800.639,68 euros. The board proposes that no dividend will
be paid from the financial period 2010.
Financial Reporting
This financial statements bulletin has been prepared in accordance with IAS 34
and the same accounting policies as in the annual financial statements 2009 have
been applied.
The financial result is reported through four business areas. The business area
ERP includes systems for finance and enterprise resource planning. Business area
EAM consist of asset management optimization, material management and
maintenance management systems. Data business area includes tools for data
collection, assurance of data's quality and accuracy as well as tools for data
integration between different systems. Business area Store includes point-of-
sale and store management systems. The most essential product and service types
of Solteq group of companies are software services, licenses and hardware sales.
All forecasts and estimates presented in the interim report are based on the
current views of the management on the economic environment and outlook. Results
can differ from those implied as a result of, among other factors, changes in
economy, markets and competitive conditions, changes in the regulatory
environment and other government actions.
The financial statements bulletin is audited. Balance sheet figures presented in
the bulleting are based on the company's audited financial statements. The
Auditor's Report was provided on 15/2/2011.
FINANCIAL INFORMATION
GROUP PROFIT AND LOSS ACCOUNT
(TEUR)
1.10.- 1.10.- 1.1.- 1.1.-
31.12.2010 31.12.2009 31.12.2010 31.12.2009
NET TURNOVER 7 491 8 226 26 998 28 550
Other operating
income 38 14 52 94
Raw materials and
services -2 034 -1 937 -7 394 -7 524
Staff expenses -3 999 -4 261 -15 688 -14 868
Depreciation -2 298 -183 -3 223 -710
Other operating
expenses -1 300 -1 073 -5 060 -4 078
OPERATING RESULT -2 102 786 -4 315 1 464
Financial income and
expenses -43 -39 -172 -135
RESULT BEFORE TAXES -2 145 747 -4 487 1 329
Income taxes 202 -213 780 -394
RESULT FOR THE PERIOD
-1 943 534 -3 707 935
OTHER ITEMS OF TOTAL COMPREHENSIVE INCOME
Cash flow hedging 13 -9 -18 -9
Other items of total comprehensive income
after taxes 10 -7 -13 -7
TOTAL COMPREHENSIVE INCOME
-1 933 527 -3 720 928
Total profit for the period attributable to
Owners of the parent -1 943 534 -3 707 935
Total comprehensive income attributable to
Owners of the parent -1 933 527 -3 720 928
Earnings / share,
e(undiluted) -0,17 0,04 -0,32 0,08
Earnings / share,
e(diluted) -0,17 0,04 -0,32 0,08
Taxes corresponding to the result have been presented as taxes
for the period.
GROUP BALANCE SHEET (TEUR) 31.12.2010 31.12.2009
ASSETS
NON-CURRENT ASSETS
Intangible assets
Intangible rights 2 093 2 755
Goodwill 6 199 8 286
Tangible assets 2 660 2 645
Investments
Other shares and similar
rights of ownership 93 93
Deferred tax
assets 654 0
Other receivables 87 0
Total non-current
assets 11 786 13 779
CURRENT ASSETS
Short-term debtors 5 294 7 093
Cash in hand and at banks 131 258
Total current
assets 5 425 7 351
TOTAL ASSETS 17 211 21 130
EQUITY AND LIABILITIES
CAPITAL AND RESERVES ATTRIBUTABLE TO THE SHAREHOLDERS
OF THE PARENT COMPANY
Share capital 1 009 1 009
Company's own shares -618 -337
Share premium account 75 75
Account for cash flow
hedging -20 -7
Unrestricted equity
fund 7 214 7 214
Retained earnings 1 306 1 084
Result for the
financial period -3 707 935
Total equity 5 259 9 973
Non-current liabilities
Deferred tax liabilities 0 125
Other non-current liabilities 3 016 4 337
Current liabilities 8 936 6 695
Total liabilities 11 952 11 157
TOTAL EQUITY AND
LIABILITIES 17 211 21 130
FINANCIAL PERFORMANCE
INDICATORS (IFRS) 2010 2009 2008 2007 2006
Net turnover MEUR 27,0 28,6 30,4 27,9 23,2
Change in net turnover -5,4 % -6,0 % 8,8 % 20,6 % 7,4 %
Operating result MEUR -4,3 1,5 1,5 1,3 -0,5
% of turnover -16,0 % 5,1 % 4,8 % 4,7 % -2,1 %
Result before taxes MEUR -4,5 1,3 1,1 1,1 -0,5
% of turnover -16,6 % 4,7 % 3,7 % 3,9 % -2,1 %
Equity ratio, % 30,6 47,2 43,6 44,1 47,7
Gearing, % 132,8 % 66,7 % 58,5 % 69,0 % 15,8 %
Gross investments in
non-current assets MEUR 0,2 0,7 0,9 1,8 7,7
Return on equity, % -48,7 % 9,6 % 9,0 % 11,5 % 1,2 %
Return on investment, % -29,3 % 9,1 % 9,0 % 8,7 % -2,4 %
Personnel at end of
period 220 235 268 259 234
Personnel average
for period 233 240 266 252 240
KEY INDICATORS PER SHARE
Earnings / share, e -0,32 0,08 0,07 0,09 0,01
Earnings / share,
e(diluted) -0,32 0,08 0,07 0,09 0,01
Equity / share, e 0,45 0,84 0,80 0,81 0,81
SEGMENT INFORMATION
Turnover by segment:
Me 1-12/10 1-12/09 Change
ERP 16,6 20,2 -3,6
EAM 3,5 4,0 -0,5
DATA 2,8 1,4 +1,4
STORE 4,1 3,0 +1,1
Total 27,0 28,6 -1,6Operating result by segment:
Me 1-12/10 1-12/09 Change
ERP -1,5 1,6 -3,1
EAM -1,0 0,0 -1,0
DATA -1,4 -0,8 -0,6
STORE -0,4 0,7 -1,1
Total -4,3 1,5 -5,8
Because of the change in organisation, the respective segment information of
2009 has been allocated from the bookkeeping retroactively.
QUARTERLY KEY INDICATORS (MEUR)
1Q/09 2Q/09 3Q/09 4Q/09
Net turnover 7,21 7,49 5,62 8,23
Operating result -0,19 0,41 0,46 0,78
Result before taxes -0,24 0,40 0,42 0,75
1Q/10 2Q/10 3Q/10 4Q/10
Net turnover 6,17 6,59 6,75 7,49
Operating result -1,02 -1,16 -0,04 -2,10
Result before taxes -1,07 -1,20 -0,08 -2,15
CASH FLOW STATEMENT (MEUR)
1-12/2010 1-12/2009
Cash flow from business
operations 0,82 0,18
Cash flow from capital
expenditure -0,15 -0,65
Cash flow from financing activities
Dividend distribution -0,71 -0,48
Own shares -0,28 -0,08
Loan agreement 0,19 0,59
Cash flow from financing
activities -0,80 0,03
Change in cash and cash
equivalents -0,13 -0,44
TOTAL INVESTMENTS (TEUR)
1-12/2010 1-12/2009
Continuing operations,
group total 153 651
LIABILITIES (MEUR) 31.12.2010 31.12.2009
Company quorantee for
credit limits 2,61 2,61Perfomance bonds 0,00 0,05
Lease contracts, machinery &
equipment 0,41 0,70
Lease liability,
premises 1,80 2,21
Pledged shares 1,59 1,59
DISTRIBUTION OF HOLDINGS BY SECTOR DECEMBER 31, 2010
Number of Shares and
holdings votes % Number
Private companies 84 21,6 % 2 618 010
Financial an insurance institutions 5 0,2 % 23 052
Public-sector organizations 1 0,1 % 11 300
Households 1 843 78,1 % 9 484 696
Non-profit organizations 6 0,0 % 5 981
Foreigners 6 0,0 % 5 390
Total 1 945 100,0 % 12 148 429
Total of Nominee-registered 4 0,2 % 20 646
DISTRIBUTION BY NUMBER OS SHARES DECEMBER 31,2010
Number of Shares and
Number of shares holdings votes % Number
1 - 100 329 0,2 % 26 480
101 - 1 000 1 075 4,3 % 524 480
1 001 - 10 000 468 12,4 % 1 509 950
10 001 - 100 000 63 13,2 % 1 600 548
100 001 - 1 000 000 7 16,1 % 1 958 559
1 000 000 - 3 53,7 % 6 528 412
Total 1 945 100,0 % 12 148 429
Total of nominee-registered 4 0,2 % 20 646
MAJOR SHAREHOLDERS DECEMBER 31, 2010
Shares and votes Number %
1. Saadetdin Ali 3 481 383 28,7
2. Aalto Seppo 1 662 206 13,7
3. Profiz Business Solution Oyj 1 384 823 11,4
4. TP-Yhtiöt Oy 513 380 4,2
5. Solteq Oyj 500 669 4,1
6. Roininen Matti 350 000 2,9
7. Hakamäki Jorma 228 430 1,9
8. Saadetdin Katiye 156 600 1,3
9. Halmet Jarmo 106 250 0,9
10. Aukia Timo 103 230 0,8
10 largest shareholders total 8 486 971 69,9
Total of nominee-registered 20 646 0,2
Others 3 640 812 30,0
Total 12 148 429 100,0
STATEMENT OF CHANGES IN GROUP EQUITY (TEUR)
A=Share capital
B=Company's own shares
C=Share premium account
D=Account for cash flow hedging
E=Unrestricted equity fund
F=Retained earnings
G=Total
A B C D E F G
EQUITY 1.1.2009 1 009 -255 75 0 7 213 1 560 9 602
Total comprehensive income -7 935 928
Acquiring of own shares -82 -82
dividend distribution -475 -475
EQUITY 31.12.2009 1 009 -337 75 -7 7 213 2 020 9 973
EQUITY 1.1.2010 1 009 -337 75 -7 7 213 2 020 9 973
Total comprehensive income -13 -3 707 -3 720
Acquiring of own shares -281 -281
dividend distribution -712 -712
EQUITY 31.12.2010 1 009 -618 75 -20 7 213 -2 400 5 259
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
+/- ownership share of the
non-controlling interest
------------------------------------
diluted average share issue
corrected number of shares
Diluted earnings per share
diluted profit before taxation -
taxes +/- ownership share of the non-controlling
interest
-----------------------------------------------
diluted average share issue
corrected number of shares
Equity per
share
equity
-----------------------
number of shares
Financial Reporting
Solteq's Annual Report including audited financial statements for the year 2010
were published in the company's web site on 16/2/2011. The company does not
publish a printed annual report.
Solteq Plc's financial information bulletins in 2011 have been scheduled as
follows:
Interim Report 1-3/2011 Thursday 28.04.2011
Interim Report 4-6/2011 Friday 22.07.2011
Interim Report 7-9/2011 Thursday 20.10.2011
More investor information on Solteq's website at www.solteq.com
Additional information:
CEO Repe Harmanen
Telephone +358 400 467 717
E-mail repe.harmanen@solteq.com
CFO Antti Kärkkäinen
Telephone +358 20 1444 393 or +358 40 8444 393
E-mail antti.karkkainen@solteq.com
Distribution:
NASDAQ OMX Helsinki
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