2013-10-16 07:00:00 CEST
2013-10-16 07:00:04 CEST
REGULATED INFORMATION
Comptel - Interim report (Q1 and Q3)
INTERIM REPORT OF COMPTEL CORPORATION
Stock Exchange Release 16 October 2013 at 8.00 am
Positive profit performance continued. Strong growth in Fulfillment business.
Key figures for the third quarter:
-- Net sales EUR 18.7 million (Q3 2012: 20.4), change -8.2%
-- Operating result EUR 1.3 million (0.4, 1.6 excluding one-off items), 6.8%
of net sales
-- Earnings per share EUR 0.01 (-0.00)
-- Order backlog EUR 35.5 million (44.5), change -20.2%
Key figures for January - September:
-- Net sales EUR 60.5 million (Q1 - Q3 2012: 60.5), change -0.1%
-- Operating result EUR 3.6 million (-15.3, -2.6 excluding one-off items),
6.0% of net sales
-- Earnings per share EUR 0.00 (-0.14)
As stated earlier, Comptel's net sales are estimated to grow from the previous
year in 2013. Operating profit is estimated to increase to 5 - 10 per cent of
net sales. Characteristically a significant part of Comptel's operating profit
and net sales is generated in the second half of the year.
Juhani Hintikka, President and CEO:
”We continued the successful execution of our main target for the year - the
improvement of profitability. Our cost base is now notably below last year´s
level which has significantly improved our ability to generate profit. We have
also maintained significant investment level in our two main areas for the
future which are the Fulfillment and Advanced Analytics.
We have received significant new orders from the Fulfillment area during this
year and the first next generation Fulfillment solutions have been taken into
production use by our customers. Overall our Fulfillment business has grown
much faster than the market during this year. In terms of the Analytics
solutions we continued the development activities as per our plans. The first
Analytics solutions delivered have generated significant enhancements to the
operator´s performance. We expect to secure new customers during the remaining
months of the year and we anticipate business to grow next year.
We secured two significant orders from our Fulfillment product area during the
third quarter of the year. We closed a deal valued at EUR 2.8 million in South
America in July and received an expansion order from a significant operator in
the Middle East during September. Our sales investments have been successful
both in South America and in the Middle East whereas the market situation in
Europe remains challenging.
During the third quarter of the year we received three significant orders
valued over EUR 0.5 million. We are negotiating several significant deals of
which the first ones are expected to close during the fourth quarter”
Business Review for the Third Quarter and January - September 2013
In the third quarter, Comptel's net sales decreased by -8.2 per cent from the
previous year and were EUR 18.7 million (20.4). Decrease in net sales was
mainly attributable to lower license sales compared to the previous year. In
January - September, net sales decreased by -0.1 per cent from the previous
year and were EUR 60.5 million (60.5).
In the third quarter, the operating result was EUR 1.3 million (0.4), which
corresponds to 6.8 per cent of net sales (2.0). The operating result for the
previous year was affected by one-off items amounting to EUR 1.2 million. The
comparable operating result decreased from the previous year as a result of
lower net sales. Simultaneously, the costs savings program carried out in 2012
lowered the operating expenses for the third quarter. The lower cost level was
also a result of decrease in the bad debt provision which had an impact of EUR
0.4 million in July - September.
The operating result for January - September was EUR 3.6 million (-15.3), which
corresponds to 6.0 per cent of net sales (-25.3). The operating result for the
previous year includes a goodwill impairment loss of EUR 10.2 million and
one-off items relating to the efficiency improvement measures amounting to EUR
2.5 million. Operating expenses excluding the one-off items decreased by EUR
6.2 million in January - September compared to the corresponding period in the
previous year as a result of the costs savings program materialising as
planned.
In January-September, profit before taxes was EUR 2.5 million (-15.9) and net
income was EUR 0.3 million (-15.0). Earnings per share for the period under
review were EUR 0.00 (-0.14).
Tax expense for the review period was EUR 2.2 million (-0.9), including EUR 1.3
million of withholding taxes. The cumulative amount of outstanding,
non-credited withholding taxes payment since 2004 is EUR 10.2 million.
The Group's order backlog decreased from the previous year and was EUR 35.5
million (44.5) at the end of the period. Maintenance agreements represent EUR
16.8 million (22.4) and other order backlog EUR 18.7 million (22.0) of the
total. Amount of new orders received during the review period was low.
Business areas
Net sales, 7-9 2013 7-9 2012 Change 1-9 2013 1-9 2012 Change 1-12
EUR million % % 2012
--------------------------------------------------------------------------------
Europe East 3.6 3.5 2.5 11.2 12.1 -6.7 16.3
--------------------------------------------------------------------------------
Europe West 4.0 5.5 -27.5 14.0 15.3 -8.5 21.0
--------------------------------------------------------------------------------
Asia Pacific 4.7 5.9 -20.2 16.0 16.7 -4.1 21.7
--------------------------------------------------------------------------------
Middle East and 3.5 3.4 3.1 10.7 10.2 5.1 14.5
Africa
--------------------------------------------------------------------------------
Americas 2.9 2.1 41.7 8.6 6.4 34.8 8.9
--------------------------------------------------------------------------------
Total 18.7 20.4 -8.2 60.5 60.5 -0.1 82.4
--------------------------------------------------------------------------------
Operating
result,
EUR million
--------------------------------------------------------------------------------
Europe East 1.8 1.2 53.2 5.5 4.5 22.4 6.3
--------------------------------------------------------------------------------
Europe West 1.8 2.7 -31.3 6.4 6.9 -6.9 9.7
--------------------------------------------------------------------------------
Asia Pacific 2.3 2.5 -7.4 7.6 7.6 -0.7 9.5
--------------------------------------------------------------------------------
Middle East and 1.6 0.8 106.9 3.7 1.6 133.1 3.0
Africa
--------------------------------------------------------------------------------
Americas 1.7 0.7 138.2 4.6 2.6 77.7 3.8
--------------------------------------------------------------------------------
Unallocated -8.0 -7.4 7.6 -24.1 -38.5 -37.2 -45.8
costs
--------------------------------------------------------------------------------
Total 1.3 0.4 212.6 3.6 -15.3 123.6 -13.5
--------------------------------------------------------------------------------
Operating
result,
% of net sales
--------------------------------------------------------------------------------
Europe East 50.0 33.4 - 49.0 37.3 - 38.6
--------------------------------------------------------------------------------
Europe West 45.7 48.3 - 45.9 45.1 - 46.3
--------------------------------------------------------------------------------
Asia Pacific 49.4 42.6 - 47.3 45.7 - 43.9
--------------------------------------------------------------------------------
Middle East and 46.6 23.2 - 34.2 15.4 - 20.4
Africa
--------------------------------------------------------------------------------
Americas 58.8 35.0 - 53.5 40.6 - 42.3
--------------------------------------------------------------------------------
Total 6.8 2.0 - 6.0 -25.3 - -16.4
--------------------------------------------------------------------------------
In the third quarter, net sales grew in the Americas and decreased in Europe
West and Asia Pacific. The proportional profitability improved in all business
areas in January - September.
In January - September, Comptel received 15 significant orders (Q1 - Q3 2012:
13), seven Policy Control & Charging, four Fulfillment and four Managed
Services orders. As significant orders, Comptel reports sold projects and
licenses with a value of EUR 0.5 million at the minimum.
Net sales 7-9 2013 7-9 2012 Change 1-9 2013 1-9 2012 Change 1-12
breakdown, % % 2012
EUR million
--------------------------------------------------------------------------------
Licenses 2.7 6.0 -54.2 10.7 13.4 -20.1 16.6
--------------------------------------------------------------------------------
Services 7.1 6.0 19.8 23.1 22.6 2.2 33.2
--------------------------------------------------------------------------------
Maintenance 8.8 8.4 4.9 26.7 24.5 8.8 32.6
--------------------------------------------------------------------------------
Total 18.7 20.4 -8.2 60.5 60.5 -0.1 82.4
--------------------------------------------------------------------------------
License sales were low during the third quarter of the year. Services sales
grew from the previous year. Maintenance revenue consists of maintenance and
support of the delivered systems.
Net sales by sales 7-9 2013 7-9 2012 Change 1-9 1-9 Change 1-12 2012
channel, EUR million % 2013 2012 %
--------------------------------------------------------------------------------
Direct sales 13.9 14.3 -2.8 45.8 44.9 2.0 62.1
--------------------------------------------------------------------------------
Partner sales 4.8 6.1 -20.7 14.7 15.7 -6.0 20.3
--------------------------------------------------------------------------------
Total 18.7 20.4 -8.2 60.5 60.5 -0.1 82.4
--------------------------------------------------------------------------------
There were no significant changes in the sales distribution between channels.
Financial Position
EUR million 30 Sep 31 Dec Change 30 Sep Change
2013 2012 % 2012 %
--------------------------------------------------------------------------------
Statement of financial position 63.4 68.5 -7.3 60.2 5.4
total
--------------------------------------------------------------------------------
Liquid assets 6.5 4.8 34.1 6.5 -1.3
--------------------------------------------------------------------------------
Trade receivables, gross 22.4 24.1 -7.3 20.4 9.6
--------------------------------------------------------------------------------
Bad debt provision -0.8 -1.3 -38.8 -1.1 -26.0
--------------------------------------------------------------------------------
Trade receivables, net 21.6 22.8 -5.5 19.3 11.6
--------------------------------------------------------------------------------
Accrued income 10.0 12.6 -20.6 12.9 -22.5
--------------------------------------------------------------------------------
Deferred income related to partial 1.9 2.8 -34.0 3.1 -39.5
debiting
--------------------------------------------------------------------------------
Interest-bearing debt 11.9 8.4 42.3 7.5 58.7
--------------------------------------------------------------------------------
Equity ratio, per cent 49.3 46.8 5.4 50.2 -1.8
--------------------------------------------------------------------------------
The statement of financial position total was EUR 63.4 million. Operating cash
flow was EUR 2.4 million (2.0) in the third quarter and EUR 3.7 million (1.7)
during January - September.
The trade receivables were EUR 21.6 million (19.3) at the end of the period.
The accrued income was EUR 10.0 million (12.9). The deferred income related to
partial debiting was EUR 1.9 million (3.1).
Comptel Corporation withdrew a loan of EUR 1.0 million during the third quarter
and EUR 3.0 million during January - September. Comptel has a loan facility
arrangement amounting to EUR 19 million. It includes a term-loan of EUR 6.0
million and a revolving credit facility of EUR 13.0 million. The term-loan of
EUR 6.0 million was withdrawn in full and EUR 5.0 million had been utilised
from the revolving credit facility. The loan facilities are valid until January
2016. The equity ratio was 49.3 per cent (50.2) and the gearing ratio was 20.1
per cent (3.8).
Research and Development (R&D)
EUR million 7-9 7-9 Change 1-9 1-9 Change 1-12
2013 2012 % 2013 2012 % 2012
--------------------------------------------------------------------------------
Direct R&D expenditure 4.3 4.1 4.4 12.9 14.1 -8.2 18.6
--------------------------------------------------------------------------------
Capitalisation of R&D -1.2 -1.5 -17.4 -4.0 -4.8 -16.6 -6.2
expenditure according to IAS 38
--------------------------------------------------------------------------------
R&D depreciation and 1.1 0.6 71.9 3.0 2.0 48.5 2.8
impairment charges
--------------------------------------------------------------------------------
R&D expenditure, net 4.2 3.3 27.4 11.9 11.3 5.6 15.3
--------------------------------------------------------------------------------
Direct R&D expenditure, % of 23.1 20.3 - 21.4 23.3 - 22.5
net sales
--------------------------------------------------------------------------------
Direct R&D expenditure represented 21.4 per cent (23.3) of net sales in the
period under review.
Comptel's R&D expenditure was mainly targeted at the service fulfillment
automation of telecom operators and to the management and real-time analysis of
rapidly increasing data traffic. Comptel seeks global market leadership in
these areas where key business challenges of operators and service providers
will be solved. In addition, the company is developing an integrated software
platform which will enable a cost-efficient and solution-based R&D.
In 2013, the company focuses on developing its offering within the Fulfillment
and advanced analytics product areas. In terms of advanced analytics,
integrating the acquired Xtract advanced analytics into the Comptel software
platform is a priority. With a combined offering including real-time analytics,
Comptel can help operators to improve customer loyalty as well as enable
individually targeted marketing. Five major software releases were launched in
these respective product areas during the review period.
Investments
EUR million 7-9 7-9 Change 1-9 1-9 Change 2012
2013 2012 % 2013 2012 %
--------------------------------------------------------------------------------
Gross investments in property, 0.2 0.3 -43.1 0.5 3.9 -87.6 4.5
plant and equipment and
intangible assets
--------------------------------------------------------------------------------
The investments comprised of devices, software and furnishings. The investments
were funded through liquid assets and cash flow from operations. The
acquisition of Xtract Oy is reflected in the 2012 figures.
Personnel
30 Sep 30 Sep Change 31 Dec
2013 2012 % 2012
--------------------------------------------------------------------------------
Number of employees at the end of 683 701 -2.6 679
period
--------------------------------------------------------------------------------
1-9 2013 1-9 2012 Change 1-12 2012
%
--------------------------------------------------------------------------------
Average number of personnel during the 683 706 -3.3 700
period
--------------------------------------------------------------------------------
The number of employees decreased following the cost savings program. In July -
September, personnel expenses were 49.2 per cent of net sales (55.3). In
January - September, the personnel expenses were 50.6 per cent of net sales
(55.9).
At the end of the period, 30.2 per cent (32.0) of the personnel were located in
Finland, 27.4 per cent (24.3) in Malaysia, 11.0 per cent (9.3) in Bulgaria, 8.1
per cent (7.4) in the United Arab Emirates, 6.3 per cent (7.8) in the United
Kingdom, 4.8 per cent (3.1) in India, 2.8 per cent (4.9) in Norway, and 9.4 per
cent (11.2) in other countries where Comptel operates.
Comptel share
Closing share price of the period was EUR 0.53 (0.40). Comptel's market value
at the end of the period was EUR 56.7 million (42.8).
Comptel share 7-9 2013 7-9 2012 Change 1-9 2013 1-9 2012 Change 1-12
% % 2012
--------------------------------------------------------------------------------
Shares traded, 4.4 3.4 32.3 12.1 19.2 -36.6 26.7
million
--------------------------------------------------------------------------------
Shares traded, EUR 2.2 1.3 70.5 5.5 10.4 -47.4 13.4
million
--------------------------------------------------------------------------------
Highest price, EUR 0.55 0.43 27.9 0.55 0.63 -12.7 0.63
--------------------------------------------------------------------------------
Lowest price, EUR 0.45 0.37 21.6 0.38 0.37 2.7 0.37
--------------------------------------------------------------------------------
Of Comptel's outstanding shares, 7.1 per cent (5.1) were nominee registered or
held by foreign shareholders at the end of the period.
During the period, Comptel Corporation allotted gratuitously 164,203 shares to
the members of the Board of Directors as part of their annual compensation and
50,000 shares to the President and CEO of the company according to the terms
and conditions of the 2011 share-based incentive plan.
The company held 161,219 of its own shares at the end of the period, which is
0.15 per cent of the total number of its shares. The total counter-book value
of the shares held by the company was EUR 3,224.
No share options were distributed during the review period.
Corporate Governance
The Annual General Meeting (AGM), held on 20 March 2013, re-elected Mr Pertti
Ervi, Mr Hannu Vaajoensuu, Mr Petteri Walldén, Ms Eriikka Söderström and Mr
Antti Vasara as members of the Board of Directors. In its meeting held after
the AGM, the Board of Directors elected Mr Pertti Ervi as chairman and Mr Hannu
Vaajoensuu as vice chairman. The Board decided not to set up committees.
The AGM appointed Ernst & Young Oy as the company's auditor. Mr Heikki Ilkka is
acting as the principal auditor.
The AGM resolved that no dividend payment will be made for 2012.
The AGM authorised the Board of Directors to decide on share issues amounting
to a maximum of 21,400,000 new shares and on repurchase or conveying of the
company's own shares up to a maximum number of 10,700,000 shares. The
authorisations are valid until 30 June 2014. However, the authorisation to
implement the company's share-based incentive programs is valid until five
years from the AGM resolution.
A separate stock exchange release about the authorisations given and other
decisions made by the Annual General Meeting was published on 20 March 2013.
Events after the Reporting Period
There were no significant events after the reporting period.
Near-term Risks and Uncertainties
Comptel develops dynamic end-to-end solutions for leading operators globally in
the telecom field. This requires Comptel to understand correctly the trends
taking place in its business environment and the needs of its customers and
resellers by each region. Failure to identify market conditions, address
customers' needs and develop its products in a timely way may significantly
undermine the growth of Comptel's business and its profitability.
Characteristics to Comptel's field of industry are significant quarterly
variations of net sales and profit, which are related to customers' purchasing
behaviour and the timing of major single deals.
Comptel's business consists of deliveries of large productised IT system and
the value of a single project may be several million euros. Therefore, the risk
or credit risk associated with a single project or an individual customer may
be significant. Furthermore, some of Comptel's customers operate in countries
which are going through political or economic instability which in part may
increase credit risk.
Comptel operates globally so it is exposed to risks arising from different
currency positions. Exchange rate changes between the Euro, which is the
company's reporting currency, and the US Dollar, UK Pound Sterling and
Malaysian Ringgit affect the company's net sales, expenses and net profit.
The application process to prevent Comptel's double taxation is still pending
with the Ministry of Finance in Finland. However, the process between the
states is very slow and the timing of a change is hard to forecast. The
interpretation of tax treaties may result in different views between the
countries in question. This could mean that the double taxation will prevail.
The risks and uncertainties of Comptel are described more in detail in the
company's financial statements and the Board of Directors' report for 2012.
Outlook
As stated earlier, Comptel's net sales are estimated to grow from the previous
year in 2013. Operating profit is estimated to increase to 5 - 10 per cent of
net sales.
Characteristically a significant part of Comptel's operating profit and net
sales is generated in the second half of the year.
TABLE PART
The interim financial statements have been prepared in accordance with IAS 34,
Interim Financial Reporting, as adopted by the EU. The accounting policies and
methods of computation adopted in the financial statements are consistent with
those of the annual financial statements for the year ended 2012 except for the
application of new or amended standards and interpretations as set forth in
note 1.
All figures in the financial report have been rounded and consequently the sum
of the individual figures can deviate from the sum figure. The interim report
is unaudited.
Consolidated Statement of Comprehensive 1 Jan - 1 Jan - 1 Jul - 1 Jul -
Income (EUR 1,000) 30 Sep 30 Sep 30 Sep 30 Sep
2013 2012 2013 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 60,496 60,539 18,693 20,353
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other operating income 8 2 5 1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Materials and services -2,830 -4,356 -704 -1,097
--------------------------------------------------------------------------------
Employee benefits -30,598 -33,864 -9,191 -11,256
--------------------------------------------------------------------------------
Depreciation, amortisation and impairment -4,212 -13,299 -1,497 -1,020
charges
--------------------------------------------------------------------------------
Other operating expenses -19,268 -24,326 -6,026 -6,571
--------------------------------------------------------------------------------
-56,898 -75,846 -17,418 -19,945
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit/loss 3,606 -15,305 1,279 409
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial income 210 977 11 263
--------------------------------------------------------------------------------
Financial expenses -1,343 -1,602 41 66
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss before income taxes 2,473 -15,930 1,331 738
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -2,179 923 -600 -915
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period 294 -15,006 731 -177
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive income to be
reclassified to profit or loss in
subsequent periods
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Translation differences -476 151 -157 32
--------------------------------------------------------------------------------
Cash flow hedges - 899 - 396
--------------------------------------------------------------------------------
Income tax relating to components of other - -222 - -99
comprehensive income
--------------------------------------------------------------------------------
Total other comprehensive income -476 828 -157 329
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive income for the period -181 -14,179 574 152
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss attributable to:
--------------------------------------------------------------------------------
Equity holders of the parent company 294 -15,006 731 -177
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive income attributable to:
--------------------------------------------------------------------------------
Equity holders of the parent company -181 -14,179 574 152
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders of the parent company:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR 0.00 -0.14 0.01 -0.00
--------------------------------------------------------------------------------
Earnings per share, diluted, EUR 0.00 -0.14 0.01 -0.00
--------------------------------------------------------------------------------
Consolidated Statement of Financial Position (EUR 30 Sep 2013 31 Dec 2012
1,000)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Assets
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Goodwill 2,646 2,646
--------------------------------------------------------------------------------
Other intangible assets 13,909 13,350
--------------------------------------------------------------------------------
Tangible assets 1,770 1,518
--------------------------------------------------------------------------------
Investments in associates 1,076 1,076
--------------------------------------------------------------------------------
Available-for sale financial assets 87 87
--------------------------------------------------------------------------------
Deferred tax assets 4,574 3,804
--------------------------------------------------------------------------------
Other non-current receivables 511 493
--------------------------------------------------------------------------------
24,573 22,974
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Trade and other current receivables 32,407 40,660
--------------------------------------------------------------------------------
Cash and cash equivalents 6,459 4,817
--------------------------------------------------------------------------------
38,866 45,476
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total assets 63,439 68,451
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity and liabilities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity attributable to equity holders of the parent
company
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Share capital 2,141 2,141
--------------------------------------------------------------------------------
Fund of invested non-restricted equity 243 243
--------------------------------------------------------------------------------
Translation differences -1,112 -636
--------------------------------------------------------------------------------
Retained earnings 25,684 25,208
--------------------------------------------------------------------------------
Total equity 26,957 26,956
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Deferred tax liabilities 3,450 3,302
--------------------------------------------------------------------------------
Provisions 190 787
--------------------------------------------------------------------------------
Non-current financial liabilities 4,588 5,275
--------------------------------------------------------------------------------
8,227 9,364
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Provisions 1,384 1,511
--------------------------------------------------------------------------------
Current financial liabilities 7,303 3,082
--------------------------------------------------------------------------------
Trade and other current liabilities 19,569 27,537
--------------------------------------------------------------------------------
28,256 32,130
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total liabilities 36,483 41,494
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity and liabilities 63,439 68,451
--------------------------------------------------------------------------------
Consolidated Statement of Cash Flows 1 Jan - 30 1 Jan - 30
(EUR 1,000) Sep 2013 Sep 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from operating activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period 294 -15,006
--------------------------------------------------------------------------------
Adjustments:
--------------------------------------------------------------------------------
Non-cash transactions or items that are not part of 5,370 14,199
cash flows from operating activities
--------------------------------------------------------------------------------
Interest and other financial expenses 344 173
--------------------------------------------------------------------------------
Interest income -12 -18
--------------------------------------------------------------------------------
Income taxes 2,179 -923
--------------------------------------------------------------------------------
Change in working capital:
--------------------------------------------------------------------------------
Change in trade and other current receivables 8,190 7,056
--------------------------------------------------------------------------------
Change in trade and other current liabilities -8,743 -1,035
--------------------------------------------------------------------------------
Change in provisions -724 320
--------------------------------------------------------------------------------
Interest and other financial expenses paid -239 -172
--------------------------------------------------------------------------------
Interest received 7 12
--------------------------------------------------------------------------------
Income taxes paid and tax returns received 2,940 -2,922
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash from operating activities 3,726 1,685
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from investing activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Acquisition of subsidiaries, net of cash acquired - -1,812
--------------------------------------------------------------------------------
Investments in tangible assets -413 -341
--------------------------------------------------------------------------------
Investments in intangible assets -66 -369
--------------------------------------------------------------------------------
Investments in development projects 4,042 -4,847
--------------------------------------------------------------------------------
Change in other non-current receivables -21 -37
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash used in investing activities -4,541 -7,406
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from financing activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dividends paid - -3,207
--------------------------------------------------------------------------------
Acquisition of Corporation's own shares -88 -
--------------------------------------------------------------------------------
Proceeds from borrowings 14,015 19,000
--------------------------------------------------------------------------------
Repayment of borrowings -11,043 -13,020
--------------------------------------------------------------------------------
Lease payments -87 -29
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash used in financing activities 2,797 2,744
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash and cash equivalents 1,986 -2,977
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the 4,817 9,401
period
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 6,459 6,546
--------------------------------------------------------------------------------
Change 1,642 -2,855
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Effects of changes in foreign exchange rates -340 121
--------------------------------------------------------------------------------
Consolidated Statement of Changes in Equity
--------------------------------------------------------------------------------
-
Equity attributable to equity holders of the parent company
--------------------------------------------------------------------------------
-
EUR 1,000 Share Other Translation Fair Retained Total
capital reserve differences value earnings
s reserve
--------------------------------------------------------------------------------
Equity at 2,141 178 -682 -589 40,758 41,805
31 Dec 2011
--------------------------------------------------------------------------------
Dividends -3,207 -3,207
--------------------------------------------------------------------------------
Transfer of 66 66
treasury shares
--------------------------------------------------------------------------------
Share-based 336 336
compensation
--------------------------------------------------------------------------------
Total comprehensive 151 677 -15,006 -14,179
income for the
period
--------------------------------------------------------------------------------
Equity at 2,141 243 -532 87 22,881 24,820
30 Sep 2012
--------------------------------------------------------------------------------
Consolidated Statement of Changes in Equity
--------------------------------------------------------------------------------
-
Equity attributable to equity holders of the parent company
--------------------------------------------------------------------------------
-
EUR 1,000 Share Other Translation Retained Total
capital reserves differences earnings
--------------------------------------------------------------------------------
Equity at 2,141 243 -636 25,207 26,956
31 Dec 2012
--------------------------------------------------------------------------------
Acquisition of -88 -88
Corporation's own
shares
--------------------------------------------------------------------------------
Transfer of treasury 66 66
shares
--------------------------------------------------------------------------------
Share-based 199 199
compensation
--------------------------------------------------------------------------------
Other changes 4 4
--------------------------------------------------------------------------------
Total comprehensive -476 294 -181
income for the period
--------------------------------------------------------------------------------
Equity at 2,141 243 -1,112 25 684 26,957
30 Sep 2013
--------------------------------------------------------------------------------
Notes
1. Application of new or amended standards and interpretations
On 1 January 2013 the Group adopted the following new and amended standards and
interpretations endorsed by the EU and that are applicable to Comptel:
Amendments to IAS 1 Presentation of Financial Statements. The major change is
the requirement to group items of other comprehensive income as to whether or
not they will be reclassified subsequently to profit or loss when specific
conditions are met.
The other new or amended standards in force as of 1 January 2013 did not have
an impact on the accounting policies and methods of computation.
2. Segment information
Net sales by segment
EUR 1,000 1 Jan - 1 Jan - 1 Jul - 1 Jul -
30 Sep 2013 30 Sep 2012 30 Sep 2013 30 Sep 2012
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Europe East 11,245 12,054 3,593 3,505
--------------------------------------------------------------------------
Europe West 13,960 15,261 4,002 5,520
--------------------------------------------------------------------------
Asia-Pacific 15,976 16,653 4,702 5,893
--------------------------------------------------------------------------
Middle East and Africa 10,698 10,179 3,491 3,385
--------------------------------------------------------------------------
Americas 8,617 6,392 2,905 2,050
--------------------------------------------------------------------------
Group total 60,496 60,539 18,693 20,353
--------------------------------------------------------------------------
Operating profit/loss by segment
EUR 1,000 1 Jan - 1 Jan - 1 Jul - 1 Jul -
30 Sep 30 Sep 30 Sep 30 Sep
2013 2012 2013 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Europe East 5,506 4,499 1,795 1,172
--------------------------------------------------------------------------------
Europe West 6,411 6,884 1,831 2,665
--------------------------------------------------------------------------------
Asia-Pacific 7,563 7,618 2,325 2,512
--------------------------------------------------------------------------------
Middle East and Africa 3,658 1,569 1,628 787
--------------------------------------------------------------------------------
Americas 4,613 2,596 1,707 717
--------------------------------------------------------------------------------
Group unallocated expenses -24,146 -38,470 -8,006 -7,444
--------------------------------------------------------------------------------
Group operating profit/loss 3,606 -15,305 1,279 409
total
--------------------------------------------------------------------------------
Financial income and expenses -1,113 -625 52 329
--------------------------------------------------------------------------------
Group profit/loss before income 2,473 -15,930 1,331 738
taxes
--------------------------------------------------------------------------------
3. Business combinations
On 9 February 2012, Comptel Corporation acquired all shares of Xtract Oy, a
Finnish software company specialising in analytics.
The total consideration (enterprise value) was EUR 3,100 thousand. The actual
purchase price was EUR 2,075 thousand.
4. Impairment loss on goodwill
Comptel changed the allocation method of goodwill during the first quarter of
the year 2012. Due to the change, an impairment testing was performed at the
new cash generating unit level which was lower level compared to the one used
during financial year 2011.
As a result of impairment testing Comptel recorded an impairment loss of EUR
10,179 thousand in the first quarter result in 2012.
5. Income tax
Income tax expense according to the statement of comprehensive income for the
period was EUR 2,179 thousand (EUR 923 thousand positive in 2012). A change of
EUR 2,494 thousand in deferred tax liabilities was booked in connection with
the impairment of goodwill in the first quarter of 2012.
In 2006, the Board of Adjustment of the Tax Office for Major Corporations
refused to accept the crediting of taxes withheld at source in taxation of 2004
and 2005.
The application process to prevent Comptel's double taxation is still pending
with the Ministry of Finance in Finland. However, the process between the
states is very slow and the timing of a change is hard to forecast. The
interpretation of tax treaties may result in different views between the
countries in question. This could mean that the double taxation will prevail.
According to the Board of Adjustment's decision currently in force, Comptel
Corporation has expensed taxes withheld at source amounting to EUR 915 thousand
in January - June (EUR 1,422 thousand).
6. Tangible assets
EUR 1,000 1 Jan - 30 Sep 2013 1 Jan - 30 Sep 2012
---------------------------------------------------
---------------------------------------------------
Additions 413 341
---------------------------------------------------
Disposals -96 -
---------------------------------------------------
7. Related party transactions
The Comptel Group have a related party relationship with its associate, the
Board of Directors, the Executive Board and also with people and companies
under Comptel management's influence.
Transactions which have been entered into with related parties are as follows:
EUR 1,000 1 Jan - 30 Sep 2013 1 Jan - 30 Sep 2012
----------------------------------------------------------------
----------------------------------------------------------------
Associate
----------------------------------------------------------------
Other operating income 4 1
----------------------------------------------------------------
Interest income 6 6
----------------------------------------------------------------
EUR 1,000 30 Sep 2013 31 Dec 2012
-------------------------------------------------
-------------------------------------------------
Associate
-------------------------------------------------
Non-current receivables 104 98
-------------------------------------------------
Trade receivables 1 1
-------------------------------------------------
Remuneration to key management
Key management personnel compensation includes the employee benefits of the
members of the Board of Directors and the Executive Board.
EUR 1,000 1 Jan - 30 Sep 1 Jan - 30 Sep
2013 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Salaries and other short-term employee 1,065 1,680
benefits
--------------------------------------------------------------------------------
Share-based payments 236 234
--------------------------------------------------------------------------------
Total 1,301 1,914
--------------------------------------------------------------------------------
Guarantees and other commitments
EUR 1,000 30 Sep 2013 31 Dec 2012
------------------------------------
------------------------------------
Guarantees 44 70
------------------------------------
8. Commitments
Minimum lease payments on non-cancellable office facilities and other operating
leases are payable as follows:
EUR 1,000 30 Sep 2013 31 Dec 2012
----------------------------------------------------
----------------------------------------------------
Less than one year 2,238 2,934
----------------------------------------------------
Between one and five years 4,882 6,087
----------------------------------------------------
Over five years 15 -
----------------------------------------------------
Total 7,135 9,021
----------------------------------------------------
The group had no material capital commitments for the purchase of tangible
assets at 30 September 2013 and 30 September 2012.
9. Contingent liabilities
EUR 1,000 30 Sep 2013 31 Dec 2012
---------------------------------------------
---------------------------------------------
Bank guarantees 2,151 2,969
---------------------------------------------
Corporate mortgages 200 200
---------------------------------------------
EUR 1,000 30 Sep 2013 31 Dec 2012
--------------------------------------------------------------------
--------------------------------------------------------------------
Contingent liabilities on behalf of others
--------------------------------------------------------------------
Guarantees 83 123
--------------------------------------------------------------------
10. Key figures
Financial summary 1 Jan - 1 Jan - 1 Jan -
30 Sep 30 Sep 31 Dec
2013 2012 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales, EUR 1,000 60,496 60,539 82,428
--------------------------------------------------------------------------------
Net sales, change % -0.1 13.2 7.4
--------------------------------------------------------------------------------
Operating profit/loss, EUR 1,000 3,606 -15,305 -13,517
--------------------------------------------------------------------------------
Operating profit/loss, change % 123.6 -266.0 -213.6
--------------------------------------------------------------------------------
Operating profit/loss, as % of net sales 6.0 -25.3 -16.4
--------------------------------------------------------------------------------
Profit/loss before taxes, EUR 1,000 2,473 -15,930 -13,955
--------------------------------------------------------------------------------
Profit/loss before taxes, as % of net sales 4.1 -26.3 -16.9
--------------------------------------------------------------------------------
Return on equity, % - - -37.2
--------------------------------------------------------------------------------
Return on investment, % - - -36.3
--------------------------------------------------------------------------------
Equity ratio, % 49.3 50.2 46.8
--------------------------------------------------------------------------------
Gross investments in tangible and intangible 479 3,871 4,484
assets, EUR 1,0001)
--------------------------------------------------------------------------------
Gross investments in tangible and intangible 0.8 6.4 5.4
assets, as % of net sales
--------------------------------------------------------------------------------
Capitalisations according to IAS 38 to intangible 4,042 4,847 6,170
assets, EUR 1,000
--------------------------------------------------------------------------------
Research and development expenditure, EUR 1,000 12,925 14,082 18,581
--------------------------------------------------------------------------------
Research and development expenditure, 21.4 23.3 22.5
as % of net sales
--------------------------------------------------------------------------------
Order backlog, EUR 1,000 35,489 44,469 48,368
--------------------------------------------------------------------------------
Average number of employees during the period 683 706 700
--------------------------------------------------------------------------------
Interest-bearing net liabilities, EUR 1,000 5,432 947 3,541
--------------------------------------------------------------------------------
Gearing ratio, % 20.1 3.8 13.1
--------------------------------------------------------------------------------
1) Includes the acquisition of Xtract in 2012. The gross capital investments
excluding the acquisition amounted to EUR 1,577 thousand, which is 1.9 per cent
of net sales. In January - June gross investments excluding the acquisition
were EUR 630 thousand, which amount to 1.6 per cent of net sales. The figure
does not include investments in development projects.
Per share data 1 Jan - 1 Jan - 1 Jan -
30 Sep 2013 30 Sep 2012 31 Dec 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share (EPS), EUR 0.00 -0.14 -0.12
--------------------------------------------------------------------------------
EPS diluted, EUR 0.00 -0.14 -0.12
--------------------------------------------------------------------------------
Equity per share, EUR 0.25 0.23 0.25
--------------------------------------------------------------------------------
Dividend per share, EUR - - 0.00
--------------------------------------------------------------------------------
Dividend per earnings, % - - -
--------------------------------------------------------------------------------
Effective dividend yield, % - - -
--------------------------------------------------------------------------------
P/E ratio - - -3.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Adjusted number of shares at the end of 107,054,810 107,054,810 107,054,810
the period
--------------------------------------------------------------------------------
of which the number of treasury shares 161,219 161,219 161,219
--------------------------------------------------------------------------------
Outstanding shares 106,893,591 106,893,591 106,893,591
--------------------------------------------------------------------------------
Adjusted average number of shares during 106,893,591 106,853,421 106,863,518
the period
--------------------------------------------------------------------------------
Average number of shares, dilution 106,893,591 106,853,421 107,650,327
included
--------------------------------------------------------------------------------
11. Definition of key figures
--------------------------------------------------------------------------------
Operating margin % = Operating profit/loss x100
------------------------------------ -----------------------------------------
------------------------------------
Net sales
------------------------------------ -----
------------------------------------ -----
Profit margin (before income taxes) = Profit/loss before taxes x100
%
------------------------------------ -----------------------------------------
------------------------------------
Net sales
------------------------------------ -----
------------------------------------ -----
Return on equity % (ROE) = Profit/loss x100
------------------------------------ -----------------------------------------
------------------------------------
Total equity (average during year)
------------------------------------ -----
------------------------------------ -----
Return on investment % (ROI) = Profit/loss before taxes + x100
financial expenses
------------------------------------ -----------------------------------------
------------------------------------
Total equity + interest bearing
liabilities (average during the
year)
------------------------------------ -----
------------------------------------ -----
Equity ratio % = Total equity x100
------------------------------------ -----------------------------------------
------------------------------------
Statement of financial position
total - advances received
------------------------------------ -----
------------------------------------ -----
Gross investments in tangible and = Gross investments in tangible and x100
intangible assets, as % of net intangible assets
sales
------------------------------------ -----------------------------------------
------------------------------------
Net sales
------------------------------------ -----
------------------------------------ -----
Research and development = Research and development x100
expenditure, as % of net sales expenditure
------------------------------------ -----------------------------------------
------------------------------------
Net sales
------------------------------------ -----
------------------------------------ -----
Gearing ratio % = Interest-bearing liabilities - x100
cash and cash equivalents
------------------------------------ -----------------------------------------
------------------------------------
Total equity
------------------------------------ -----
------------------------------------ -----
Earnings per share (EPS) = Profit/loss for the financial year
attributable to equity
shareholders
------------------------------------ -----------------------------------------
------------------------------------
Average number of outstanding
shares for the financial year
------------------------------------ -----
------------------------------------ -----
Equity per share = Equity attributable to the equity
holders of the parent company
------------------------------------ -----------------------------------------
------------------------------------
Adjusted number of shares at the
end of period
------------------------------------ -----
------------------------------------ -----
Dividend per share = Dividend
------------------------------------ -----------------------------------------
------------------------------------
Adjusted number of shares at the
end of period
------------------------------------ -----
------------------------------------ -----
Dividend per earnings % = Dividend per share x100
------------------------------------ -----------------------------------------
------------------------------------
Earnings per share (EPS)
------------------------------------ -----
------------------------------------ -----
Effective dividend yield % = Dividend per share x100
------------------------------------ -----------------------------------------
------------------------------------
Share closing price at end of
period
------------------------------------ -----
------------------------------------ -----
P/E ratio = Share closing price at end of
period
------------------------------------ -----------------------------------------
------------------------------------
Earnings per share (EPS)
------------------------------------ -----
--------------------------------------------------------------------------------
Comptel Corporation will announce its financial statements bulletin for 2013 on
13 February 2014.
COMPTEL CORPORATION
Board of Directors
Additional information:
Mr Juhani Hintikka, President and CEO, tel. +358 9 700 1131
Mr Petri Kärkkäinen, Interim CFO, tel. +358 9 700 1131
Distribution:
NASDAQ OMX Helsinki
Major media
www.comptel.com
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