2014-07-31 07:30:00 CEST
2014-07-31 07:30:38 CEST
REGULATED INFORMATION
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Incap - Osavuosikatsaus (Q1 and Q3)
INCAP-KONSERNIN OSAVUOSIKATSAUS TAMMI-KESÄKUULTA 2014
Incap Corporation
Stock Exchange Release 31 July 2014 at 8.30
a.m.
INCAP GROUP INTERIM REPORT JANUARY-JUNE 2014
The accounting principles for the interim report
This interim report has been prepared in accordance with international financial
reporting standards (IFRS) - IAS 34 Interim Financial Reporting standard. When
preparing the release, the same preparation principles have been used as in the
2013 financial statements. Unless otherwise stated, the comparison figures refer
to the same period in the previous year. The information in this interim report
is unaudited.
Revenue developed as predicted towards the summer. Operating result and net
profit improved compared to the previous years as a result of the Turnaround
programme measures. Operations were stabilised successfully after significant
organisational reforms.
January-June 2014 in brief:
* The Group's revenue was EUR 11.3 million, down approximately 45% year-on-
year (January-June 2013: EUR 20.5 million). The drop in revenue compared to
the comparison period was caused by the decreased manufacturing volumes in
the company's factories in Europe.The revenue for the first half of 2014 was
in line with the estimates.
* The operating result (EBIT) improved significantly compared to 2013 and was
EUR -0.08 million (EUR -1.8 million). The improvement was in particular due
to measures to improve cost efficiency in spite of a decrease in revenue.
* Operations have developed according to the estimates. Fixed costs have been
strongly cut and the organisation adapted to the new operating model
enabling efficient operation in the future as well.
* Ville Vuori was appointed to President & CEO of Incap Corporation as from
23rd June 2014 on
* During the review period the covenants related to the loan payments, credit
lines and factoring credit lines were changed. Covenants were met on the
first review date on 30th June 2014.
* Based on the cash flow projection prepared for the interim report, the
financial situation of the company's European units has remained challenging
during the review period. On the basis of the cash flow projection at the
time of the publication of this interim report, which doesn't take into
consideration any short or long term customer prospects, Incap's working
capital will not cover the requirement for the next 12 months. However, the
working capital will be sufficient for the next 12 months if the
repatriation of profits from India to the parent company will succeed as
planned and/or if European units are able to win projects according to the
quotation base.
* Based on the reporting completed in April 2014, the parent company's (Incap
Corporation) shareholders' equity has fallen below 50% of the share capital.
Therefore, the company's Board of Directors has launched measures pursuant
to the Limited Liability Companies Act.
Ville Vuori, President and CEO of Incap Group:"The first half of 2014 has focused on completing the measures implemented as
part of the Turnaround programme launched in late 2013 and stabilising
operations after the significant reforms. The measures have been necessary and
they have yielded good results: operational efficiency has improved in the
production as well as support functions, and the organisation has been able to
focus on the essential: serving customers appropriately. The efficiency and
increased stability have been noted in the markets and we have managed to get
new customers during the review period.
The favourable and estimated development of revenue and profitability towards
the end of the first half of the year also gives reason for positive
expectations for the rest of the year. The profitability and revenue of the
Indian unit met our goals and it is operating on the solid ground. The Indian
unit is also well prepared for further growth. The Estonian and Finnish
organisations have been trimmed, and the operating methods pursuant to the new
structure have become established on schedule. In spite of the heavy personnel
cuts made in late 2013 and early 2014, the strategic intent of the organisation
is good. This can be seen in the rapid development of key performance indicators
in production. As a result of the efficiency improvement programmes, the
profitability of the Finnish and Estonian operations has improved on the
comparison period in spite of decreasing revenue.
Our delivery reliability, quality assurance capability and cost efficiency are
very competitive as a result of focusing on our core business. The commitment
continues towards our suppliers and we haven't missed any payments during the
review period. We are ready to show the market our best expertise and will
continue to develop our operations to be increasingly customer-oriented, thereby
improving our financial position in the long as well as short term.
I will assume the position of President and CEO of Incap Group with great
enthusiasm. My predecessor, Fredrik Berghel, did a great job in stabilising the
company's situation and developing it after a prolonged challenging financial
situation. We have achieved positive results on a broad front, and it is time to
go forward at full speed, learning from the past, yet looking into the future."
Incap Group's revenue and earnings in January-June 2014
Revenue for the first half of the year amounted to EUR 11.3 million, down
approximately 45% year-on-year. Revenue decreased as a result of decreasing
production volumes at the European plants in Estonia and Finland in particular.
In addition, an arrangement whereby some customers purchase the materials,
adopted already in 2013 as part of the reorganisation of financing, also
contributed to the decrease in revenue. Materials purchased by customers were
no longer included in revenue on the review period. The global prolonged
recession also slowed down the development of revenue, which, however, met the
forecasts.
The operating result (EBIT) for January-June was approximately EUR -0.08 million
(EUR -1.8 million). The result improved on the comparison period due to measures
that considerably improved cost efficiency, such as significant personnel cuts
in the company's Estonian and Finnish functions, closing down of offices as well
as trimming of other costs. The provision for the rearrangements has been
annulled by EUR 0.5 million.
Variable personnel expenses decreased by approximately 35% year-on-year. Fixed
costs were reduced by approximately 48% from the comparison period. The value of
inventories decreased year-on-year by EUR 2.3 million and remained on a par with
the end of 2013.
Net financial expenses amounted to EUR 0.5 million (EUR 1.0 million) and
depreciation to EUR 0.2 million (EUR 0.9 million). The financial expenses
include EUR 0,1 million impairment related to Cleantech Invest shares. EUR 0.4
million of depreciation in the comparison period arose from to the impairment
loss for the Vuokatti property.
Net profit/loss for the period was EUR -0.6 million (EUR -3.1 million). Earnings
per share amounted to EUR -0.01 (EUR -0.14).
Comparison by review period 1-6/ 1-6/ Change, % 1-12/
(EUR thousands) 2014 2013 % 2013
------------------------------------------------------------
Revenue 11,332 20,537 -45 36,757
Operating profit/loss (EBIT) -79 -1,847 96 -5,859
Net profit/loss -572 -3,056 81 -8,527
Earnings per share, EUR -0.01 -0.14 96 -0.14
Capital expenditure
Capital expenditure for the period totalled EUR 0.01 million (EUR 0.1 million).
Quality assurance and environmental issues
All of Incap Group's plants have environmental management and quality assurance
systems certified by Det Norske Veritas. The systems are used as tools for
continuous improvement. Incap's environmental management system complies with
ISO 14001:2004, and its quality assurance system complies with ISO 9001:2008. In
addition, the Kuressaare plant has ISO 13485:2003 quality certification for the
manufacture of medical devices.
Balance sheet, financing and cash flow
The balance sheet total stood at EUR 13.8 million (EUR 22.8 million). The
Group's equity at the close of the review period was positive, EUR 0.09 million
(EUR -5.9 million). The parent company's equity totalled EUR 9.4 million,
representing 46% of the share capital (EUR 6.7 million, 33%). The parent
company's equity will be described in more detail in the section "The parent
company's equity: Measures pursuant to the Limited Liability Companies Act
20:23 §". The Group's equity ratio was negative, 0.6 % (-25.8%).
Liabilities amounted to EUR 13.8 million (EUR 28.7 million), of which EUR 9.2
million (EUR 18.2 million) were interest-bearing liabilities.
Interest-bearing net liabilities decreased from the comparison period and were
EUR 8.1 million (EUR 15.7 million), and the gearing ratio was 9.831% (-266%).
-------------------------------------------------------------------------------
Interest-bearing liabilities (EUR thousands) 30 June 2014 30 June 2013
Non-current financial liabilities measured at
amortised cost
Capital loans 0 1,050
Convertible loan 0 1,890
Finance lease liabilities 0 0
Other liabilities 2,058 0
2,058 2,940
Current financial liabilities measured at amortised
cost
Bank loans 6,855 11,377
Other liabilities 0 1,899
Convertible loans 239 1,959
Finance lease liabilities 16 61
7,110 15,295
Interest-bearing liabilities, total 9,168 18,234
Approximately EUR 2.7 million of current financial liabilities concerns the
Indian subsidiary. Factoring financing used by the parent company in Finland and
Estonia is part of current liabilities. Other bank loans are included in current
financial liabilities on the basis of the loan period or due to the breach of
covenants.
Of the loans from credit institutions, EUR 6.0 million was granted by a Finnish
bank as bank loans and lines of credit in use. Of the Finnish bank's credit line
and factoring credit line, EUR 2.0 million was in use and EUR 7.5 million was
unused on 30 June 2014. For operations in India and Estonia, the balances of
bank loans and credit line totalled EUR 2.8 million, which includes Finnfund's
EUR 1.9 million investment in Incap's operations in India.
The amount of the convertible loan of 2007 at the end of the period was EUR 0.2
million and it will mature on 30 June 2015.
On 30 June 2014, EUR 6.8 million of the loans were guaranteed, and the rest were
unguaranteed. The securities for these loans are the EUR 12.1 million mortgages
on company assets and a EUR 2.2 mortgage on the production facilities in India.
On 30 June 2014, the loans, credit line and factoring credit line granted by
Incap's Finnish bank involved the following covenants: EBITDA for the previous
six months. At the first review on 30 June 2014, the company met the conditions
of the covenant EUR 66,000. The next review will take place on 31 December 2014
with the conditions of the covenant EUR 613,000. The company estimates that it
will meet the conditions of the covenant also then if the revenue develops as
estimated.
Incap has reached an agreement with the Finnish Tax Administration on the
payment arrangement related to overdue value-added taxes, withholding taxes and
social security contributions. On 30 June 2014, the total amount of tax
liabilities within the scope of this arrangement is EUR 0.2 million, and
according to the agreement, the last payment will take place in August 2014.
According to the provisions of the agreement, if an instalment is late, the
Finnish Tax Administration has the right to terminate the agreement with
immediate effect.
Instalments and interests of loans (EUR thousands)
Instalment Interest Total
Less than 6 months -3,209 -259 -3,469
6-12 months -896 -319 -1,215
1-5 years -5,064 -409 -5,473
more than 5 years
-9,169 -988 -10,157
The Group's quick ratio was 0.5 (0.5), and the current ratio was 0.9 (0.7).
Cash flow from operations was positive: EUR 0.02 million (EUR 2.3 million). On
30 June 2014, the Group's cash and cash equivalents totalled EUR 1.0 million
(EUR 2.6 million). The change in cash and cash equivalents showed an increase of
EUR 0.5 million (an increase of EUR 1.8 million).
Management and organisation
Until 22 June 2014, the duties of CEO of Incap were carried out by Fredrik
Berghel, who was appointed on 20 September 2013. B.Sc. (Eng.), eMBA Ville Vuori
(born 1973) was appointed as the new President and CEO as of 23 June 2014. Ville
Vuori has previously been employed by Kumera Drives Oy and Skyhow Ltd. as
Managing Director and ABB Group in several managerial positions. Fredrik Berghel
will continue as a member of the Board of Directors.
At the end of June 2014, Incap Group had a payroll of 451 employees (583). 72%
(57%) of the personnel worked in India, 11% (27%) in Estonia and 16% (15%) in
Finland.
During the review period, the company was engaged in statutory employer-employeecooperation negotiations at the Vaasa plant to improve operational efficiency
and profitability. As a result of the negotiations, the employment relationships
of fewer than ten employees will be terminated during summer 2014. Furthermore,
the company may use temporary lay-offs (effective for time being) to adjust the
capacity according to demand.
Annual General Meeting
The Annual General Meeting (AGM) of Incap Corporation was held in Helsinki on
Thursday, 10 April 2014. A total of 21 shareholders participated in the meeting,
representing a total of 60.99% of all shares and votes.
The AGM adopted the financial statements for the financial period ended 31
December 2013. In accordance with the proposal of the Board of Directors, the
AGM decided that no dividend be distributed for the financial period and that
the loss for the financial period (EUR 6,979,595.95) be recognised in equity.
The Annual General Meeting discharged the members of the Board of Directors and
the President and CEO from liability.
The AGM resolved to amend the paragraph of Articles of Association regarding the
number of the Board members as follows:"Article 5 Board of Directors
The Company shall have a Board of Directors with a minimum of three (3) and a
maximum of seven (7) members. The Board of Directors elects amongst its number a
Chairman. The term of office for the Board of Directors shall expire at the
close of the next Annual General Meeting to take place after its election."
The Annual General Meeting decided that the fees for the members of the Board of
Directors will be as follows: the annual fee to be paid for Chairman of the
Board is EUR 25,000 and for the Board members EUR 17,500. Moreover, EUR 200 will
be paid for each meeting for those who have been present. Eventual travel
expenses are compensated according to the travel regulations of the company. The
auditor is paid against an invoice.
Shareholders who represented over 40% of the shares and votes changed their
proposal regarding the number of members of the Board of Directors and proposed
that five (5) members be elected to the Board of Directors. The amended proposal
was supported by shareholders who represented circa 56% of all shares and votes
and circa 92% of shares and votes present at the meeting.
The Annual General Meeting decided that five (5) members will be elected to the
Board of Directors.
Shareholders who represented over 40% of the shares and votes changed their
proposal regarding the members of the Board of Directors and proposed that in
addition to earlier mentioned Lassi Noponen, Susanna Miekk-oja and Olle
Hulteberg also Fredrik Berghel and Raimo Helasmäki would be elected as the
members of the Board of Directors. The amended proposal was supported by
shareholders who represented circa 56% of all shares and votes and circa 92% of
shares and votes present at the meeting.
Fredrik Berghel and Raimo Helasmäki gave their consent to the re-election at the
meeting. Lassi Noponen, Susanna Miekk-oja and Olle Hulteberg had given their
consent earlier.
Raimo Helasmäki, Susanna Miekk-oja, Lassi Noponen, Olle Hulteberg and Fredrik
Berghel were re-elected to the Board of Directors. Four members of the Board of
Directors are independent of the company and three members are independent of
its major shareholders. The firm of independent accountants Ernst & Young Oy was
re-elected as the company's auditor, with Jari Karppinen, Authorised Public
Accountant, as the principal auditor.
In addition to above mentioned decisions, the authorisation of the Board of
Directors to decide on the issuance of shares as well as the issuance of other
special rights entitling to shares was processed as follows:
Shareholders representing circa 56% of all shares and votes and circa 92% of
shares and votes present at the meeting informed that they will oppose the
proposal to authorise the Board of Directors to decide on the issuance of shares
as well as the issuance of other special rights entitling to shares. Due to
this, the Board of directors withdraw their proposal and the item was not
discussed any further at the meeting.
The new Board of Directors held a meeting after the Annual General Meeting and
elected Lassi Noponen as the Chairman of the Board.
Followed by the nomination of new President & CEO on 23rd June 2014 the Board of
directors has five members independent of the company and three members
independent of its major shareholders.
Shares and shareholders
Incap Corporation has one series of shares, and the number of shares at the end
of the period was 109,114,035, out of which 22,659,425 were traded, representing
20.8% (17.7%) of all shares. During the period, the share price varied between
EUR 0.04 and 0.09 (EUR 0.10 and 0.25). The closing price for the period was EUR
0.06 (EUR 0.16).
At the end of the review period, Incap had 1,697 shareholders (1,253). Nominee-
registered or foreign owners held 30.62% (0.6%) of all shares. The company's
market capitalisation on 30 June 2014 was EUR 6.55 million (EUR 3.6 million).
The company does not hold any of its own shares.
The largest shareholders on 30 June 2014:
No. of Share of ownership,
shares %
Inission Ab 28,529,763 26.1
Oy Etra Invest Ab 16,934,547 15.52
Ilmarinen 8,307,692 7.61
Varma 7,684,615 7.04
Onvest Oy 5,197,286 4.76
Finnvera 4,618,579 4.23
Nordea Bank Finland Plc 3,761,400 3.45
Laurila Kalevi Henrik 2,735,429 2.51
Jmc Finance Oy 2,402,286 2,2
Mandatum Life 1,800,000 1.65
Announcements in accordance with Section 10 of Chapter 9 of the Securities
Market Act on a change in holdings
On 24 January 2014, Finnvera plc's holding in Incap shares decreased to
5,434,045 shares, or 4.98% of the total number of shares and votes.
Short-term risks and factors of uncertainty concerning operations
General risks related to the company's business operations and sector include
the development of customer demand, price competition in contract manufacturing,
successful acquisition of new customers, availability and price development of
raw material and components, sufficiency of funding, liquidity and exchange rate
fluctuations. Of these, the most significant risks at the moment are the
development of revenue and sufficiency of funding.
To assess its liquidity, Incap has prepared a 12-month cash flow projection for
the Group, based on its performance forecast for 2014 and the actual turnover of
its sales receivables, accounts payable, and inventories. On the basis of this
cash flow projection, Incap's working capital will not cover the requirement for
the next 12 months at the time of the publication of this interim report.
According to the company's estimate, approximately EUR 1.5-2 million of
additional working capital is needed. The need for working capital concerns the
company's European functions. However, the working capital will be sufficient
for the next 12 months if the following criteria are met:
* Repatriation of profits from India to the parent company succeeds as planned
and/or
* the company succeeds in acquiring new customers andthe company's cash flow
from operations develops positively and/or
* the company succeeds in negotiating on the amount and schedule of
instalments as well as other financing arrangements with financiers.
Incap's management is confident that the cash flow from operations will develop
so that the company will be able to fulfil its obligations.
The measures to stabiles the company's financial position will be described in
more detail in the section "Measures to stabilise the company's financial
position".
The parent company's equity: measures pursuant to the Limited Liability
Companies Act 20:23 §
Based on the reporting completed in April 2014, the parent company's (Incap
Corporation) shareholders' equity has fallen below 50% of the share capital.
Therefore, the company's Board of Directors has launched measures pursuant to
the Limited Liability Companies Act: The company's Board of Directors launches
the preparation of financial statements and the report of the Board of Directors
without delay. If the balance sheet indicates that shareholders' equity is less
than one half of the share capital, the Board of Directors will immediately
convene a general meeting of shareholders to decide on measures to restore the
company's financial position to a sound basis. The general meeting will be held
within three months of the completion of the financial statements.
In the end of the review period on 30th June 2014 the relation between equity
and share capital has not improved to the sufficient level. The preparation of
financial statements and the report has been started in June 2014 and they are
estimated to be finalized in August - September 2014. If the balance sheet
indicates that shareholders' equity is less than one half of the share capital,
the Board of Directors will immediately convene a general meeting of
shareholders to decide on measures to restore the company's financial position
to a sound basis.
Measures to stabilise the company's financial position
The company launched the Turnaround programme to stabilise its financial
position at the end of 2013. When assessing the efficiency of the measures of
the programme, the company's Board of Directors stated that the main targets of
the programme were reached during the spring 2014: delivery reliability improved
significantly, the efficiency of operations improved in manufacturing units as
well as support functions, the group organisation was streamlined to cover only
the essential functions and production capacity was adjusted to the actual
demand. The organisational structure was revised, and the manufacturing units
now functions as their own separate cost centres with overall responsibility for
their operations and sales.
After the finalisation of the actual Turnaround programme the company has been
focusing on stabilising its operations and financial position. From operative
point of view the company has focused on further development of production key
areas such as delivery accuracy and quality related issues. The company also
constantly discuss with the financing parties to improve the financing
situation. Incap Corporation renegotiated the financing arrangement related to
loan repayments and related covenants with a Finnish bank. The negotiations were
completed in April 2014. The renegotiated repayment schedule decreased the
instalments by 50% compared to the previous plan during the second half of
2014. The covenants related to the loan repayments were alleviated and they only
include EBITDA for the previous six months. The target level for 30 June 2014
was EBITDA of EUR 66,000, which was met. The target level for 31 December 2014
is EBITDA of EUR 613,000. According to the company's estimate the covenants will
be met also on test date 31st December if the revenue develops according to the
estimates.
Improving profitability and ensuring the financing as well as the sufficiency of
working capital and ensuring the liquidity will continue to be the key targets
for 2014. The personnel cuts made during the Turnaround programme and other cost
cuts have been the most significant reason for the improved profitability of
operations during the first six months of the year. The final effects of the
programme are expected to be visible towards the end of 2014 when the
obligations to pay wages due to long periods of notice cease to burden the
company's cash flow.
The company is constantly discussing the options to ensure the financing and the
sufficiency of working capital as well as ensuring the liquidity with the
financing parties. Also the repatriation of profits from India to the parent
company according to the plan is an essential factor in ensuring the sufficiency
of working capital in Europe operations. The company has also started active
measures led by the new CEO to acquire new customers to ensure the positive
development of operative cash flow.
Strategic development of the company
During the past few years, Incap has implemented its strategy by becoming more
international and by streamlining its operations. Production has been
centralised in low-cost regions, and the number of business locations has been
reduced. In Europe, electronics production has been centralised in Kuressaare
and mechanical production in Vaasa. In India, production capacity has been
developed and operations have been returned to profitability. Materials
management is coordinated from Hong Kong, near the sources of components in
Asia.
At the same time, the company's financial situation has been weakened by earlier
investments, structural changes that have burdened operations and the market
situation. The company has negotiated on funding and carried out directed issues
and other arrangements to rectify the situation, but they have succeeded in
improving the situation only in the short term.
During 2014, the company has focused on stabilising its position and
streamlining its organisation. With the reforms, the company's strategy is to
focus on its core operations, i.e. manufacturing and customer deliveries. The
manufacturing units now function as their own separate cost centres with overall
responsibility for their operations and sales.
The possibility of a merger between Incap Group and Inission AB, proposed in
late 2013, did not materialise according to the original plan. Even though
Inission AB did not exercise its option on merging the functions of Incap and
Inission by the end of 2013, it has announced that it is still interested in the
merger. Given this situation, Incap's Board of Directors has begun to assess the
strategic options to further develop the company's business operations. Incap's
Board of Directors is using an investment bank as an advisor for assessing
potential strategic alliances.
Outlook for 2014
Incap's estimates for future business development are based both on its
customers' forecasts and on the company's own assessments. The business
environment will continue to be challenging in Europe. High-quality service to
existing customers and acquisition of new customers are very important for
reaching the objectives for 2014. Due to the improvement of operational
efficiency achieved with the Turnaround programme, the company's profitability
is expected to improve in 2014, and the full effect of the programme is
estimated to be visible in the second half of the year.
The company does not revise its forecast for 2014: The Group's revenue in 2014
is estimated be clearly lower than in 2013, when it was EUR 36.8 million. The
company estimates that its full-year operating result (EBIT) will be positive in
2014. The operating result in 2013 was negative (EUR -5.9 million).
Publication of the management's interim statement for 1 January-13 November 2014
The interim review of Incap Group's management for 1 January-13 November 2014
will be published on Thursday, 13 November 2014.
Helsinki, 31 July 2014
INCAP CORPORATION
Board of Directors
For additional information, please contact:
Ville Vuori, President and CEO, tel. +358 400 369438
Kirsti Parvi, CFO, tel. +358 50 517 4569
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Principal media
The company's home page www.incap.fi
ANNEXES
1 Consolidated Statement of Comprehensive Income
2 Consolidated Balance Sheet
3 Consolidated Cash Flow Statement
4 Consolidated Statement of Changes in Equity
5 Group Key Figures and Contingent Liabilities
6 Quarterly Key Figures
7 Calculation of Key Figures
INCAP IN BRIEF
Incap Corporation is an international contract manufacturer whose comprehensive
services cover the entire life cycle of electromechanical products from design
and manufacture to maintenance services. Incap's customers include industry-
leading high-tech equipment suppliers, for which the company produces
competitiveness as a strategic partner. Incap has operations in Finland,
Estonia, India and China. The Group's revenue in 2013 amounted to approximately
EUR 36.8 million, and the company currently employs approximately 470 people.
Incap's share is listed on NASDAQ OMX Helsinki Ltd. Additional information:
www.incap.fi.
Annex 1
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
+------------------------------+--------+--------+---------+---------+---------+
| | | | | | |
+------------------------------+--------+--------+---------+---------+---------+
|(EUR thousands, unaudited) |1-6/2014|1-6/2013|Change, %|7-12/2013|1-12/2013|
+------------------------------+--------+--------+---------+---------+---------+
| | | | | | |
+------------------------------+--------+--------+---------+---------+---------+
|REVENUE | 11,332| 20,537| -45| 16,221| 36,757|
+------------------------------+--------+--------+---------+---------+---------+
|Work performed by the | | | | | |
|enterprise and capitalised | 0| 0| 0| 0| 0|
+------------------------------+--------+--------+---------+---------+---------+
|Change in inventories of | | | | | |
|finished goods | -24| -357| 93| -993| -1,349|
| | | | | | |
|and work in progress | | | | | |
+------------------------------+--------+--------+---------+---------+---------+
|Other operating income | 271| 40| 579| 23| 63|
+------------------------------+--------+--------+---------+---------+---------+
|Raw materials and consumables | | | | | |
|used | 6,683| 12,728| -47| 10,099| 22,828|
+------------------------------+--------+--------+---------+---------+---------+
|Personnel expenses | 3,109| 4,955| -37| 5,003| 9,957|
+------------------------------+--------+--------+---------+---------+---------+
|Depreciation, amortisation and| | | | | |
|impairment losses | 176| 855| -79| 210| 1,065|
+------------------------------+--------+--------+---------+---------+---------+
|Other operating expenses | 1,692| 3,528| -52| 3,951| 7,479|
+------------------------------+--------+--------+---------+---------+---------+
|OPERATING PROFIT/LOSS | -79| -1,847| 96| -4,012| -5,859|
+------------------------------+--------+--------+---------+---------+---------+
|Financing income and expenses | -493| -1,034| -52| -1,074| -2,108|
+------------------------------+--------+--------+---------+---------+---------+
|PROFIT/LOSS BEFORE TAX | -572| -2,880| 80| -5,086| -7,966|
+------------------------------+--------+--------+---------+---------+---------+
|Income tax | 0| -176| -100| -384| -560|
+------------------------------+--------+--------+---------+---------+---------+
|PROFIT/LOSS FOR THE PERIOD | -572| -3,056| 81| -5,471| -8,527|
+------------------------------+--------+--------+---------+---------+---------+
| | | | | | |
+------------------------------+--------+--------+---------+---------+---------+
|Earnings per share | -0.01| -0.14| 96| -0.06| -0.14|
+------------------------------+--------+--------+---------+---------+---------+
|Options have no dilutive | | | | | |
|effect | | | | | |
| | | | | | |
|in financial periods 2013 and | | | | |
|2014 | | | | |
+------------------------------+--------+--------+---------+-------------------+
+------------------------------+--------+--------+---------+---------+---------+
|OTHER COMPREHENSIVE INCOME |1-6/2014|1-6/2013|Change, %|7-12/2013|1-12/2013|
+------------------------------+--------+--------+---------+---------+---------+
| | | | | | |
+------------------------------+--------+--------+---------+---------+---------+
PROFIT/LOSS FOR THE PERIOD | -572| -3,056| 81| -5,471| -8,527|
+------------------------------+--------+--------+---------+---------+---------+
| | | | | | |
+------------------------------+--------+--------+---------+---------+---------+
|OTHER COMPREHENSIVE INCOME: | | | | | |
+------------------------------+--------+--------+---------+---------+---------+
|Items that may be recognised | | | | | |
|in profit or loss | | | | | |
| | | | | | |
|at a later date: | | | | | |
+------------------------------+--------+--------+---------+---------+---------+
|Translation differences from | | | | | |
|foreign units | 121| -194| 163| -147| -341|
+------------------------------+--------+--------+---------+---------+---------+
|Other comprehensive income, | | | | | |
|net | 121| -194| 163| -147| -341|
+------------------------------+--------+--------+---------+---------+---------+
| | | | | | |
+------------------------------+--------+--------+---------+---------+---------+
TOTAL COMPREHENSIVE INCOME | -451| -3,250| 86| -5,617| -8,867|
+------------------------------+--------+--------+---------+---------+---------+
| | | | | | |
+------------------------------+--------+--------+---------+---------+---------+
|Attributable to: | | | | | |
+------------------------------+--------+--------+---------+---------+---------+
|Shareholders of the parent | | | | | |
|company | -451| -3,250| -86| -5,617| -8,867|
+------------------------------+--------+--------+---------+---------+---------+
|Non-controlling interest | 0| 0| 0| 0| 0|
+------------------------------+--------+--------+---------+---------+---------+
Annex 2
+-------------------------+------------+------------+---------+----------------+
|CONSOLIDATED BALANCE | | | | |
|SHEET (IFRS) | | | | Revised |
+-------------------------+------------+------------+---------+----------------+
|(EUR thousands, | | | | |
|unaudited) |30 June 2014|30 June 2013|Change, %|31 December 2013|
+-------------------------+------------+------------+---------+----------------+
| | | | | |
+-------------------------+------------+------------+---------+----------------+
|ASSETS | | | | |
+-------------------------+------------+------------+---------+----------------+
| | | | | |
+-------------------------+------------+------------+---------+----------------+
|NON-CURRENT ASSETS | | | | |
+-------------------------+------------+------------+---------+----------------+
|Property, plant and | | | | |
|equipment | 1,699| 2,093| -19| 1,791|
+-------------------------+------------+------------+---------+----------------+
|Goodwill | 883| 905| -2| 866|
+-------------------------+------------+------------+---------+----------------+
|Other intangible assets | 71| 64| 12| 80|
+-------------------------+------------+------------+---------+----------------+
|Other financial assets | 1,029| 471| 118| 1,170|
+-------------------------+------------+------------+---------+----------------+
|Deferred tax assets | 0| 356| -100| 0|
+-------------------------+------------+------------+---------+----------------+
|TOTAL NON-CURRENT ASSETS | 3,682| 3,888| -5| 3,906|
+-------------------------+------------+------------+---------+----------------+
| | | | | |
+-------------------------+------------+------------+---------+----------------+
|CURRENT ASSETS | | | | |
+-------------------------+------------+------------+---------+----------------+
|Inventories | 4,351| 6,695| -35| 4,304|
+-------------------------+------------+------------+---------+----------------+
|Trade and other | | | | |
|receivables | 4,756| 9,705| -51| 6,065|
+-------------------------+------------+------------+---------+----------------+
|Cash and cash equivalents| 1,048| 2,551| -59| 1,507|
+-------------------------+------------+------------+---------+----------------+
|TOTAL CURRENT ASSETS | 10,154| 18,951| -46| 11,876|
+-------------------------+------------+------------+---------+----------------+
|Non-current assets held- | | | | |
|for-sale | 0| 0| 0| 0|
+-------------------------+------------+------------+---------+----------------+
|TOTAL ASSETS | 13,836| 22,838| -39| 15,782|
+-------------------------+------------+------------+---------+----------------+
| | | | | |
+-------------------------+------------+------------+---------+----------------+
| | | | | |
+-------------------------+------------+------------+---------+----------------+
|EQUITY ATTRIBUTABLE TO | | | | |
|EQUITY HOLDERS OF | | | | |
| | | | | |
|THE PARENT COMPANY | | | | |
+-------------------------+------------+------------+---------+----------------+
|Share capital | 20,487| 20,487| 0| 20,487|
+-------------------------+------------+------------+---------+----------------+
|Share premium account | 44| 44| 0| 44|
+-------------------------+------------+------------+---------+----------------+
|Reserve for invested | | | | |
|unrestricted equity | 17,471| 5,182| 237| 17,471|
+-------------------------+------------+------------+---------+----------------+
|Exchange differences | -1,136| -1,111| 2| -1,258|
+-------------------------+------------+------------+---------+----------------+
|Retained earnings | -36,783| -30,497| 21| -36,209|
+-------------------------+------------+------------+---------+----------------+
|TOTAL EQUITY | 83| -5,895| 101| 535|
+-------------------------+------------+------------+---------+----------------+
| | | | | |
+-------------------------+------------+------------+---------+----------------+
|NON-CURRENT LIABILITIES | | | | |
+-------------------------+------------+------------+---------+----------------+
|Deferred tax liabilities | 0| 0| 0| 0|
+-------------------------+------------+------------+---------+----------------+
|Interest-bearing loans | | | | |
|and borrowings | 2,058| 2,940| -30| 2,054|
+-------------------------+------------+------------+---------+----------------+
|NON-CURRENT LIABILITIES | 2,058| 2,940| -30| 2,054|
+-------------------------+------------+------------+---------+----------------+
| | | | | |
+-------------------------+------------+------------+---------+----------------+
|CURRENT LIABILITIES | | | | |
+-------------------------+------------+------------+---------+----------------+
|Trade and other payables | 4,585| 10,499| -56| 5,397|
+-------------------------+------------+------------+---------+----------------+
|Current interest-bearing | | | | |
|loans and borrowings | 7,111| 15,295| -54| 7,797|
+-------------------------+------------+------------+---------+----------------+
|CURRENT LIABILITIES | 11,695| 25,794| -55| 13,193|
+-------------------------+------------+------------+---------+----------------+
|Liabilities relating to | | | | |
|non-current assets | | | | |
| | | | | |
|held-for-sale | | 0| | |
+-------------------------+------------+------------+---------+----------------+
|TOTAL EQUITY AND | | | | |
|LIABILITIES | 13,836| 22,838| -39| 15,782|
+-------------------------+------------+------------+---------+----------------+
Annex 3
CONSOLIDATED CASH FLOW
STATEMENT
1 January-30 June 1 January-30 June 1 January-31
(EUR thousands) 2014 2013 December 2013
Cash flow from
operating activities
Operating profit/loss -79 -1,847 -5,858
Adjustments to
operating profit -203 931 3,581
Change in working
capital 686 3,719 3,157
Interest paid -387 -520 -1,195
Interest received 3 6 14
-------------------------------------------------------------------------------
Cash flow from
operating activities 20 2,289 -301
Cash flow from
investing activities
Capital expenditure on
tangible and
intangible assets -16 -134 -280
Proceeds from the sale
of tangible and
intangible assets 209 1,487 1,496
Other investments 0 0 0
Loans granted 0 -4 0
Sold shares of
subsidiary 0 0 0
Repayments of loan
assets 0 0 0
-------------------------------------------------------------------------------
Cash flow from
investing activities 193 1,349 1,216
Cash flow from
financing activities
Proceeds from share
issue 0 0 4,282
Drawdown of loans 0 1,648 2,044
Repayments of
borrowings -715 -3,474 -6,438
Repayments of
obligations under
finance leases -12 -38 -70
-------------------------------------------------------------------------------
Cash flow from
financing activities -727 -1,864 -182
Change in cash and
cash equivalents -549 1,774 733
Cash and cash
equivalents at
beginning of period 1,507 613 613
Effect of changes in
exchange rates 55 96 177
Changes in fair value
(cash and cash
equivalents) 35 68 -16
-------------------------------------------------------------------------------
Cash and cash
equivalents at end of
period 1,048 2,551 1,507
Annex 4
CONSOLIDATED
STATEMENT OF
CHANGES IN
EQUITY
(EUR
thousands,
unaudited)
Reserve for
Share invested
Share premium unrestricted Exchange Retained
capital account equity differences earnings Total
Equity as at
1 January 2013 20,487 44 4,818 -917 -27,440 -3,008
Directed share
issue 0 0 373 0 0 373
Transaction
costs for
equity 0 0 -10 0 0 -10
Change in
exchange
differences 0 0 0 -194 0 -194
Other changes 0 0 0 0 0 0
-------------------------------------------------------------------------------
Net income and
losses
recognised
directly in
equity 0 0 364 -194 0 170
Net
profit/loss 0 0 0 -3,056 -3,056
-------------------------------------------------------------------------------
Total income
and losses 0 0 364 -194 -3,056 -2,886
Equity as at
30 June 2013 20,487 44 5,182 -1,111 -30,497 -5,895
Equity as at
1 January 2014 20,487 44 17,471 -1,258 -36,057 687
Directed share
issue 0 0 0
Transaction
costs for
equity 0 0 0
Change in
exchange
differences 0 0 0 121 0 121
Other changes 0 0 0 -153 -153
-------------------------------------------------------------------------------
Net income and
losses
recognised
directly in
equity 0 0 0 0
Net
profit/loss 0 0 0 0 -572 -572
-------------------------------------------------------------------------------
Total income
and losses 0 0 0 0
Equity as at
30 June 2014 20,487 44 17,471 -1,136 -36,783 83
Annex 5 GROUP KEY FIGURES AND CONTINGENT
LIABILITIES (IFRS)
30 June 2014 30 June 2013 31 December 2013
-------------------------------------------------------------------------------
Revenue, EUR million 11.3 20.5 36.8
Operating profit, EUR million -0.1 -1.8 -5.9
% of revenue -0.7 -9.0 -16.0
Profit before taxes, EUR million -0.6 -2.9 -8.0
% of revenue -5.1 -14.0 -22.0
Return on investment (ROI), % 1) 7.91 -22.4 -31.5
Return on equity (ROE), % 2) -370.80 137.3 -701.8
Equity ratio, % 0.6 -25.8 3.4
Gearing, % 9,831.34 -266.1 1,560.30
Net debt, EUR million 7.9 16.5 7.7
Net interest-bearing debt, EUR 8.1 15.7
million 8.3
Quick ratio 0.5 0.5 0.6
Current ratio 0.9 0.7 0.9
Average number of shares during the
review 109,114,035 22,264,948 60,117,106
period, adjusted for share issues
Earnings per share (EPS), EUR -0.01 -0.14 -0.14
Equity per share, EUR 0.00 -0.26 0.00
P/E ratio -11.44 -1.2 -0.77
Trend in share price
Minimum price during the period, 0.04 0.10 0.10
EUR
Maximum price during the period, 0.09 0.25 0.25
EUR
Mean price during the period, EUR 0.06 0.14 0.14
Closing price at the end of the 0.06 0.16 0.11
period, EUR
Total market capitalisation, EUR 7 4 12
million
Trade volume, no. of shares 22,659,425 3,983,178 7,065,282
Trade volume, % 20.77 17.7 6.5
Investments, EUR million 0.0 0.1 0.3
% of revenue 0.1 0.7 0.8
Average number of employees 452 573 556
CONTINGENT LIABILITIES, EUR million
FOR OWN LIABILITIES
Mortgages and pledges 12.7 14.2 12.7
Off-balance sheet liabilities 5.0 5.4 3.8
Nominal value of currency options, 0 0 0
EUR thousands
Fair values of currency options, 0 0 0
EUR thousands
1) The Group's financing expenses
used in calculating the return on
investment for 2013 H2 include
financing expenses of a total of
EUR 3.2 million recognised in
connection with the conversion of
loans based on IFRIC19 and IAS
39/32
2) In the calculation of return on
equity, the numerator and
denominator are negative
3) The key figures from 2013 have been revised
with the change for the last accounting period's
profit
Annex 6
HALF-YEARLY KEY FIGURES (IFRS)
GROUP KEY FIGURES AND CONTINGENT LIABILITIES
(IFRS)
1-6/2014 1-6/2013 7-12/2013
----------------------------------------------
Revenue, EUR million 11.3 20.5 16.2
Operating profit, EUR million -0.1 -1.8 -4.0
% of revenue -0.7 -9.0 -24.7
Profit before taxes, EUR million -0.6 -2.9 -5.066
% of revenue -5.1 -14 -31.2
Return on investment (ROI), % 1) 7.9 -22.4 -12.82
Return on equity (ROE), % 2) -370.8 137.3 454.67
Equity ratio, % 0.6 -25.8 3.4
Gearing, % 9,831.3 -266.1 1,560.3
Net debt, EUR million 7.9 16.5 7.7
Net interest-bearing debt, EUR million 8.1 15.7 8.3
Average number of shares during the review
period, adjusted for share issues 109,114,035 22,264,948 97,352,110
Earnings per share (EPS), EUR -0.01 -0.14 -0.0578
Equity per share, EUR 0.00 -0.26 0.0049
Investments, EUR million 0.0160 0.134 0.146
% of revenue 0.14 0.65 0.90
Average number of employees 452 573 556
1) The Group's financing expenses used in
calculating the return on investment for
2013 H2 include financing expenses of a
total of EUR 3.2 million recognised in
connection with the conversion of loans
based on IFRIC19 and IAS 39/32
2) In the calculation of return on equity,
the numerator and denominator are negative
3) The key figures from 2013 have been revised with the
change for the last accounting period's profit
Annex 7
CALCULATION OF KEY FIGURES
100 x (profit/loss for the period +
Return on investment, % financial expenses)
------------------------------------------
equity + interest-bearing financing loans
Return on equity, % 100 x profit/loss for the period
------------------------------------------
average equity during the financial
period
Equity ratio, % 100 x equity
------------------------------------------
balance sheet total - advances received
100 x interest-bearing net financing
Gearing, % loans
------------------------------------------
equity
Net liabilities liabilities - current assets
Quick ratio current assets
------------------------------------------
short-term liabilities - short-term
advances received
Current ratio current assets + inventories
------------------------------------------
short-term liabilities
Earnings per share net profit/loss for the period
------------------------------------------
average number of shares during the
period, adjusted for share issues
Equity per share equity
------------------------------------------
number of shares at the end of the
period, adjusted for share issues
VAT-exclusive working capital
acquisitions, without deduction of
Capital expenditure investment subsidies
average of personnel numbers calculated
Average number of employees at the end of each month
closing price for the period x number of Total market capitalisation shares available for public trading
[HUG#1843570]
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