2011-02-02 07:30:00 CET
2011-02-02 07:30:08 CET
REGULATED INFORMATION
Tecnomen Lifetree Oyj - Financial Statement Release
TECNOTREE CORPORATION INTERIM REPORT 1 JANUARY - 31 DECEMBER 2010 (unaudited)
Tecnotree Corporation
INTERIM REPORT
2 February 2011 at 8.30 am
TECNOTREE CORPORATION INTERIM REPORT 1 JANUARY - 31 DECEMBER 2010 (unaudited)
Sales and profitability improve but results fall below target
Net sales in the third quarter of the year, EUR 14.0 million, were similar to
those in the corresponding period in the previous year (EUR 13.5 million). The
cash flow after investments was EUR 0.5 (-4.0**) million. Net sales for the
full 12 month period totalled EUR 60.7 (53.3) million and the adjusted
operating result*** was EUR -2.5 (-8.8) million. The cash flow after
investments was EUR -10.6 (-4.8**) million and the order book at the close of
the period stood at EUR 14.3 (11.7) million.
KEY FIGURES 10-12/2010 10-12/200 1-12/2010 1-12/2009
9
Net sales, MEUR 14.0 13.5 60.7 53.3
Adjusted operating result, MEUR*** -3.2 -2.0* -2.5 -8.8*
Operating result, MEUR -4.9 -8.5 -8.1 -15.0*
Result before taxes, MEUR -5.2 -8.6* -9.4 -15.4*
Result for the period -5.3 -7.2 -11.0 -16.2*
Earnings per share, basic, EUR -0.07 -0.10 -0.15 -0.24
Order book, MEUR 14.3 11.7
Cash flow after investments, MEUR 0.5 -4.0** -10.6 -4.8**
Change in cash and cash 2.5 -5.3 -9.8 -26.0
equivalents, MEUR
Cash and cash equivalents, MEUR 16.7 25.7
Equity ratio % 66.4 65.7*
Net gearing % 3.3 -10.8
Personnel at end of period 858 779
* The figures for the comparative periods have changed due to adjustments to
the purchase price calculation for Tecnotree India
** Before the EUR 14.7 million net payment for the acquisition of Tecnotree
India
*** Adjusted operating result = operating result before R & D capitalisation,
amortization of this and one-time costs. Details of these are given in the
section “Result analysis”.
Unless otherwise stated, all figures presented below are for the review period
1-12/2010 and the figures for comparison are for the corresponding period
1-12/2009. The figures for the period 1-12/2009 include the figures for
Tecnotree India (formerly Lifetree) for the period 6 May - 31 December 2009.
President and CEO Kaj Hagros:
”During 2010, developments in our sales were encouraging following the
challenging year we experienced in 2009. The structural improvements carried
out in 2009 resulted in improved profitability, although the full year was
still below break-even. In 2010 the company introduced new management and is
formulating a new strategy. Tecnotree will be repositioning as a provider of
broad-scale, business-critical IT solutions to communications service
providers. The company will disclose details of its new strategy in the near
future.
During the year, our net sales increased to EUR 60.7 (53.3) million. New order
intake was worth EUR 63.3 million, our order backlog at the end of the year
increased from EUR 11.7 million to EUR 14.3 million. Revenue from maintenance
services also improved to EUR 26.2 (23.6) million.
Tecnotree has implemented synergies of the Lifetree acquisition and delivered
new IT solutions to existing customers especially in Latin America, while
maintaining a healthy business level in the Middle East and Africa, where we
have established ourselves as a strong IT partner for operators.”
SALES AND NET SALES
Tecnotree's net sales in the review period increased 14.0 per cent to EUR 60.7
(53.3) million.
EUR 23.6 million of sales in the review period have been recognised by stage of
completion (IAS 11 Construction Contracts) and EUR 37.1 million on delivery
(IAS 18 Revenues).
NET SALES BY MARKET AREA 1-12/2010 1-12/2009 1-12/2010 1-12/2009
MEUR MEUR % %
Americas (North, Central and South 25.2 23.1 41.5 43.4
America)
Europe 6.7 5.2 11.1 9.8
MEA (Middle East and Africa) 23.7 21.3 39.0 40.0
APAC (Asia and Pacific) 5.1 3.6 8.3 6.8
TOTAL 60.7 53.3 100.0 100.0
CONSOLIDATED ORDER BOOK 31.12.2010 31.12.2009 31.12.2010 31.12.2009
MEUR MEUR % %
Americas (North, Central and 1.5 1.9 10.5 15.9
South America)
Europe 2.6 1.2 17.9 10.0
MEA (Middle East and Africa) 9.3 6.9 65.4 59.2
APAC (Asia and Pacific) 0.9 1.7 6.3 14.9
TOTAL 14.3 11.7 100.0 100.0
Maintenance and service sales totalled EUR 26.2 (23.6) million or 43.2 per cent
(44.3 %) of net sales.
RESULT ANALYSIS
Tecnotree's business operations are based on project sales. The income and
costs recorded for these vary considerably from one quarter to another. For
this reason it is important to base an examination of the profitability of the
company on the result for more than one quarter.
INCOME STATEMENT, KEY FIGURES, MEUR 1-12/2010 1-12/2009
Net sales 60.7 53,3
Other operating income 0.0 0.3
Operating costs excluding product 63.2 62.4
development capitalisation and
one-time costs
Adjusted operating result, MEUR -2.5 -8.8
Product development capitalisation 0.6 5.1
Product development amortisation -6.1 -4.2
One-time costs 0.0 -7.0
Operating result -8.1 -15.0
Result before taxes -9.4 -15.4
The adjusted result before R & D capitalisation showed an improvement of EUR
6.3 million from the previous year. This was due in particular to the increase
in net sales of EUR 7.4 million. Capitalisation of research and development
costs and amortisation of these had the net impact of weakening the result by
EUR 6.4 million compared to the corresponding period in the previous year.
Capitalisation was EUR 4.5 million less and amortization EUR 1.9 million more
than in the previous year.
Tecnotree Convergence Limited has been consolidated as from 6 May 2009, so the
figures for 2009 do not include the figures for India for the period 1 January
- 6 May 2009. These were: net sales EUR 5.0 million, operating costs EUR 4.9
million and operating profit EUR 0.1 million. Net sales in the review period
were EUR 2.4 million more than the corresponding 2009 figure when these omitted
net sales of EUR 5.0 million are included. Costs adjusted by the net impact of
R & D capitalisation and by one-time items totalled EUR 63.2 million in the
period, compared with a total of EUR 67.3 million in the previous year
including Tecnotree Convergence Limited's costs in the first part of the year.
So savings of EUR 4.1 million have been achieved. The savings would have been
EUR 3.1 million greater if the euro had not declined against the Indian and
Brazilian currencies in 2010.
Taxes for the period totalled EUR 1.6 (0.8) million, including the following
items:
TAXES IN INCOME STATEMENT, MEUR 1-12/2010 1-12/2009
Withholding tax expenses in parent company -1.7 -1.5
Income taxes on the results of Group companies -1.5 -1.4
Deferred tax asset based on tax allowances in India 0.8 0.6
Change in deferred tax liability based on:
- R&D capitalisation 1.1 2.2
- dividend tax in India -0.8 -0.6
Other items 0.5 -0.0
TAXES IN INCOME STATEMENT, TOTAL -1.6 -0.8
Earnings per share were EUR -0.15 (-0.24). Equity per share at the end of the
period was EUR 0.98 (EUR 1.05).
FINANCING AND INVESTMENTS
Tecnotree's liquid funds totalled EUR 16.7(25.7) million. The change in cash
and cash equivalents for the review period was EUR -9.8 million.
The balance sheet total on 31 December 2010 stood at EUR 109.7 (118.4) million.
Interest-bearing liabilities were EUR 19.7 (18.9) million. The net debt to
equity ratio (net gearing) was 3.3 per cent (-10.8 %). The balance sheet
structure remained strong and the equity ratio on 31 December 2010 was 66.4 per
cent (65.6 %).
Tecnotree's gross capital expenditure during the review period, excluding the
capitalisation of development costs, was EUR 1.2 (1.4) million or 2.1 per cent
(2.7 %) of net sales.
Financial income and expenses (net) during the review period totalled EUR -1.4
(-0.4) million. The change from the comparative period is due mainly to the
reduction in exchange rate gains and the increase in exchange rate losses due
to unfavourable developments in the exchange rates for the Group's main
currencies during the first half of the year.
FINANCIAL INCOME AND EXPENSES, MEUR 1-12/2010 1-12/2009
Interest income 0.2 0.3
Exchange rate gains 0.4 0.4
Other financial income 0.5 0.6
FINANCIAL INCOME, TOTAL 1.1 1.3
Interest expenses -0.8 -0.4
Exchange rate losses -1.7 -0.8
Other financial expenses 0.0 -0.6
FINANCIAL EXPENSES, TOTAL -2.4 -1.8
CHANGE IN WORKING CAPITAL, MEUR (increase -- / decrease +) 1-12/2010 1-12/2009
Change in trade receivables 2.1 1.5
Change in other short-term receivables -6.5 10.9
Change in inventories 0.3 -0.1
Change in trade payables 3.9 -1.5
Change in other current liabilities -7.6 3.3
CHANGE IN WORKING CAPITAL, TOTAL -7.7 14.1
The change in current liabilities had a negative impact of EUR 7.6 million on
the cash flow for the review period. This item includes payments made in 2010
from provisions for one-time costs made in the 2009 closing.
In the MEA region, there have been delays in the payments from one government
owned customer. Due to the situation, an impairment of EUR 0.9 million has been
booked in respect of trade receivables which totalled EUR 5.9 million.
SEGMENT INFORMATION
As from the beginning of 2010, the operating segments under IFRS 8 reported by
Tecnotree are the geographical areas, which are Americas (North, Central and
South America), Europe, MEA (Middle East and Africa), and APAC (Asia Pacific).
This is because their results are monitored separately in the company's
internal financial reporting. Tecnotree's chief operating decision maker, as
referred to in IFRS 8, is the Group's management board.
Net sales and the result for the operating segments are presented based on the
location of customers. The result for the operating segments includes the costs
that can be allocated to the segments on a reasonable basis. Common costs for
the whole Group as well as taxes and financial items are not allocated.
GEOGRAPHICAL AREAS
Tecnotree Group operates in the following geographical areas: Americas (North,
Central and South America), Europe, MEA (Middle East and Africa) and APAC (Asia
Pacific).
Americas (North, Central and South America)
Sales and the order book grew encouragingly in Latin America and Tecnotree
obtained major new customers and expansion projects in the region. Income
recognition made encouraging progress for the expansion projects and the new
products developed in India. Mobile phone operators in the region have
significantly increased their level of investment from the previous year.
Europe
The degree of completion of delivery projects in progress rose as planned.
European operators seem to be making slightly bigger investments than in the
previous year, especially in eastern Europe.
MEA (Middle East and Africa)
In the Middle East and Africa, sales and the order book grew. Sales of billing,
customer management and managed services solutions increased in particular.
Operators in the region continue to have heavy investment needs, which are
boosted by the growth in subscriber numbers.
APAC (Asia Pacific)
Also sales in the APAC region grew from the previous year. The willingness of
operators to make investments varies greatly from one country to another, but
overall seems to be better than in 2009.
RESEARCH AND DEVELOPMENT
Research and development costs during the review period totalled EUR 13.1
(14.5) million, corresponding to 21.7 per cent (27.2 %) of net sales. EUR 0.6
(5.1) million of development costs were capitalised. Once projects are
completed, their capitalised costs are amortised over 3-5 years from the start
of commercial use. R&D costs of EUR 6.1 (4.2) million were amortised during the
review period.
PERSONNEL
At the end of December 2010 Tecnotree employed 858 (779) persons, of whom 70
(83) worked in Finland and 788 (696) elsewhere. The company employed on average
797 (665) people during the review period. Personnel by country were as
follows:
2010 2009
Personnel, at end of period 858 779
Finland 70 83
Ireland 64 87
Brazil 47 49
India 625 507
Other countries 52 53
Personnel, average 797 665
Personnel expenses before R&D capitalisation (MEUR) 29.3 32.3
TECNOTREE SHARES AND SHARE CAPITAL
At the end of 2010 the shareholders' equity of Tecnotree Corporation stood at
EUR 72.1 (77.1) million and the share capital was EUR 4.7 million. The total
number of shares was 73,630,977. The company held 134,800 of these shares,
which represents 0.18 per cent of the company's total number of shares and
votes. Equity per share was EUR 0.98 (1.05).
A total of 16,629,837 Tecnotree shares (EUR 13,216,479) were traded on the
Helsinki Exchanges during the period 2 January - 31 December 2010, representing
22.6 per cent of the total number of shares.
The highest share price quoted in the period was EUR 1.00 and the lowest EUR
0.58. The average quoted price was EUR 0.79 and the closing price on 31
December 2010 was EUR 0.60. The market capitalisation of the share stock at the
end of the period was EUR 44,178,586.
CURRENT AUTHORISATIONS
The Annual General Meeting held on 25 March 2010 authorised the Board of
Directors to decide on the acquisition of a maximum of 7,360,000 of the
Company's own shares. Own shares may be acquired with unrestricted
shareholders' equity otherwise than in proportion to the holdings of the
shareholders through public trading of the securities on NASDAQ OMX Helsinki Oy
at the market price of the shares in public trading at the time of the
acquisition. Own shares may be acquired for the purpose of developing the
capital structure of the Company, carrying outcorporate acquisitions or other
business arrangements to develop the business of the Company,financing capital
expenditure, to be used as part of the Company's incentive schemes, or to be
otherwise retained in the possession of the Company, disposed of or nullified
in the extent and manner decided by the Board of Directors. The authorisation
is valid for one year from the decision of the Annual General Meeting. The
Board of Directors has not exercised this authorisation during the review
period.
Furthermore, the Annual General Meeting authorised the Board of Directors to
decide to issue and/or to convey a maximum of 17,800,000 new shares and/or the
Company's own shares either against payment or for free. New shares may be
issued and the Company's own shares may be conveyed to the Company's
shareholders in proportion to their current shareholdings in the Company or
waiving the shareholder's pre-emption right, through a directed share issue if
the Company has a weighty financial reason to do so.The Board of Directors may
also decide on a free share issue to the Company itself. The Board of Directors
is, within the authorization, authorized to grant the special rights referred
to in Chapter 10, Section 1 of the Companies Act. The authorisation is valid
for one year from the decision of the Annual General Meeting. The Board of
Directors has not exercised this authorisation during the review period.
STOCK OPTION PROGRAMMES
During the review period the company had in force the 2006 and 2009 stock
option programmes. The exercise period for the 2006A options ended on 30 April
2010.
The state of the options on 31 December 2010 was as follows:
Option series Maximum number of Number of options Exercise Exercise
options granted period price
2006B 173,000 173,000 1.4.2008-30.4 1.32
.2011
2006C 667,000 1.4.2009-30.4 0.98
.2012
Total 840,000 173,000
2009A 1,026,005 686,171 1.4.2009-31.3 0.86
.2011
2009B 2,394,013 1 096,207 1.4.2010-31.3 0.86
.2012
2009C 3,420,018 1 555,181 1.4.2011-31.3 0.86
.2013
Total 6,840,036 3 337,559
2006 and 2009 7,680,036 3,510,559
Total
Some of the 2009B and 2009C stock options become available to key personnel
based on a performance appraisal. The stock options are part of the incentive
and commitment scheme for key personnel.
Altogether 7,680,036 stock options remained on 31 December 2010 of all the
company's stock options in circulation. The shares that could be subscribed on
the basis of these stock options accounted for a maximum of9.45 % of the
Company's shares and the votes carried by the shares after any increase in
share capital. On 31 December 2010 the Company still held 4,169,477 of all the
current stock options. The issued stock options had a maximum diluting effect
on 31 December 2010 of4.55 %.
The company's Board of Directors may issue stock options such that their
maximum dilution shall not exceed 8.50 %.
PRESIDENT AND CEO
Tecnotree's Board of Directors appointed Kaj Hagros as president and CEO as
from 1 November 2010. Before joining Tecnotree, Kaj Hagros held positions as
managing director and chief operating officer within Fox Mobile Group, a
subsidiary of News Corporation (NASDAQ: NWS).
RISKS AND UNCERTAINTY FACTORS
The greatest risks in Tecnotree's operations are related to major customer and
partner relationships, to agreements made with these, and to the correct timing
of product development decisions.
Tecnotree's largest customers are much bigger businesses than the company
itself and the five largest customers account for more than half of net sales.
The relationship between the company and its major customers is one of
interdependence, which poses a potential risk but also offers significant new
business opportunities.
Certain commitments are associated with the project and maintenance agreements
made by the company, and unforeseen costs may arise in the future from these
agreements. The company aims to limit these liabilities with limitation of
liability clauses in customer contracts. In addition the company has a current
global liability insurance to cover any liabilities that may materialise in
connection with customer projects.
Project deliveries result in large accounts receivable. Most of Tecnotree's net
sales comes from developing countries and some of these contain political and
economic challenges. There is the risk of a considerable delay in the payment
of invoices in these countries and that Tecnotree will have to record credit
losses. The payment record of customers and the situation concerning trade
receivables are actively monitored and credit rating checks are made on new
customers before confirming an offer. An impairment of EUR 0.9 million has been
booked in respect of receivables totalling EUR 5.9 million.
Changes in exchange rates create risks especially in sales activities. A
significant part of the company's net sales is in US dollars. The company
hedges its currency denominated net position for a maximum period of 12 months,
using currency forward contracts and currency options. Liquid funds are
invested, avoiding credit and liquidity risks, in money-market deposits and
short-term interest funds with a good credit rating.
Carrying out projects creates risks. They are contained for example in projects
that require new product development, where creating new product features may
prove more difficult than anticipated. Another problem with project sales
arises from variations in net sales and profit during the different quarters of
the year. Forecasting these variations is often difficult.
Tecnotree operates in a rapidly changing sector. When making R&D decisions
there is the risk that the choice made may not bring the expected returns.
The acquisition of Tecnotree Convergence Limited opened up many new
opportunities for Tecnotree. Taking advantage of these requires various changes
in sales and R & D activities and in the organisation, and there are risks
relating to the success of these changes. The amount paid for the acquisition
and the resulting goodwill also involve risks. Tecnotree's risks and uncertainties in the near future relate to major projects
that are under negotiation and to their timing.
EVENTS AFTER THE END OF PERIOD
The Board of Directors of Tecnotree Corporation decided on 1st February 2011 to
dismiss Atul Chopra, the member of the Board of Directors, from his operative
duties as COO and President as well as the member of the Management Board
Tecnotree Corporation. The decisions took effect immediately.
Kaj Hagros, President and CEO of Tecnotree Corporation, took over the duties of
the COO and President.
The Board of Directors of Tecnotree Corporation decided to convene an
extraordinary general meeting in which the dismissal of Atul Chopra from the
membership of the Board of Directors will be considered in accordance with the
proposal of the Compensation and Nomination Committee.
The grounds for the dismissal are, inter alia, the lack of confidence and an
unspecified claim presented to the company on Atul Chopra's initiative for the
acquisition completed in May 2009 to be considered invalid, and disturbance to
the business of the group. The company denies all the presented allegations and
has initiated legal actions in order to protect its rights.
PROSPECTS 2011
Tecnotree is formulating its new strategy which will be communicated in the
near future. The prospects will be informed later on.
Variations between quarterly figures are expected to continue to be
considerable.
PROPOSAL CONCERNING THE RESULT
The Board of Directors proposes to the Annual General Meeting to be hold on 23
March 2011 that no dividend be paid for the financial year ended 31 December
2010, and that the parent company's loss for the financial year, EUR
10,389,877.77 be covered by non-restricted equity reserves.
FINANCIAL INFORMATION
Tecnotree is holding a conference for analysts and the media to announce its
results for the 2010 fiscal year at 10.00 am on 2 February 2011 in the Pavilion
conference room at the Scandic Hotel Simonkenttä, Simonkatu 9, Helsinki. The
interim review will be presented by CFO Tuomas Wegelius and the conference will
be held in Finnish. The material to be presented at the press conference will
be available at www.tecnotree.com.
TECNOTREE CORPORATION
Board of Directors
FURTHER INFORMATION
Mr Kaj Hagros, President and CEO, tel. +358 (0)50 535 4970
Mr Tuomas Wegelius, CFO, tel. +358 (0)400 433 228
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Main media
www.tecnotree.com
TABLE SECTION
The financial figures in the income statement, balance sheet and key indicators
are presented in million euros. The figures shown here have been calculated
using exact values.
CONSOLIDATED INCOME STATEMENT, MEUR Note 10-12/ 10-12/ 1-12/ 1-12/
2010 2009 2010 2009
NET SALES 2 14.0 13.5 60.7 53.3
Other operating income 0.0 0.0 0.0 0.3
Materials and services -2.4 -3.0 -10.1 -10.7
Employee benefit expenses -7.8 -10.1 -29.1 -29.2
Depreciation, amortisation and impairment -2.4 -1.7 -8.7 -6.9*
charges
Other operating expenses -6.2 -7.2 -20.8 -21.8
OPERATING RESULT 2 -4.9 -8.5 -8.1 -15.0*
Financial income 0.4 0.2 1.1 1.3
Financial expenses -0.6 -0.3 -2.4 -1.8
RESULT BEFORE TAXES 2 -5.2 -8.6* -9.4 -15.4*
Income taxes -0.1 1.3 -1.6 -0.8
RESULT FOR THE PERIOD -5.3 -7.2 -11.0 -16.2*
Allocated to:
Equity holders of parent -5.3 -7.1 -11.0 -16.2*
company
Non-controlling 0.0 -0.1 -0.0 0.0
interest
Earnings per share calculated from the
profit attributable to equity holders of
parent company:
Earnings per share, basic, EUR -0.07 -0.10 -0.15 -0.24
Earnings per share, diluted, EUR -0.07 -0.10 -0.15 -0.24
CONSOLIDATED STATEMENT OF COMPREHENSIVE 10-12/ 10-12/ 1-12/ 1-12/
INCOME, MEUR 2010 2009 2010 2009
RESULT FOR THE PERIOD -5.3 -7.2 -11.0 -16.2*
Other comprehensive income:
Translation differences from 1.4 1.8 5.7 0.4
foreign operations
Tax relating to components of -0.0 0.0 -0.1 0.0
other comprehensive income
Other comprehensive income, net of tax -4.0 -5.4 -0.1 0.4
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD -4.0 -5.4 -5.3 -15.8*
Allocated to:
Equity holders of parent -4.0 -5.3 -5.3 -15.8*
company
Non-controlling 0.0 -0.1 -0.0 0.0
interest
* The figures for the comparative periods have changed due to adjustments to
the purchase price calculation of Tecnotree India
CONSOLIDATED BALANCE SHEET Note 31.12.2010 31.12.2009
Assets
Goodwill 21.6 19.6*
Other intangible assets 3 18.0 24.0*
Tangible assets 4 6.8 7.3
Deferred tax assets 2.5 1.5
Other non-current trade and other 0.7 0.9
receivables
Current assets
Inventories 1.0 1.3
Trade receivables 17.3 19.3
Other receivables 24.2 17.2
Investments 0.6 1.6
Cash and cash equivalents 16.7 25.7
TOTAL ASSETS 109.7 118.4*
Shareholders' equity 72.1 77.1*
Non-current liabilities
Deferred tax liabilities 3.3 4.0*
Non-current interest-bearing 14.5 16.7
liabilities
Other non-current liabilities 0,4 0.3
Current liabilities
Current interest-bearing 5.2 2.3liabilities
Trade payables and other liabilities 14.2 18.1
EQUITY AND LIABILITIES, TOTAL 109.7 118.4*
* The figures for the comparative periods have changed due to adjustments to
the purchase price calculation of Tecnotree India
CALCULATION OF CHANGES IN SHAREHOLDERS' EQUITY, MEUR
A = Share capital
B = Share premium fund
C = Own shares
D = Translation differences
E = Invested non-restricted equity reserve
F = Other reserves
G = Retained earnings
H = Total equity attributable to equity holders of parent company
I = Non-controlling interest
J = Total shareholders' equity
MEUR A B C D E F G H I J
Shareholders' 4.7 0.8 -0.1 0.4 12.6 52.1 6.4 77.0 0.1 77.1
equity
1 Jan. 2010
Covering of loss -22.7 22.7 0.0
Share-based payments 0.3 0.3 0.3
Other adjustments 0.0 0.0 -0.1
Total comprehensive 5.7 -11.0 -5.2 -0.0 -5.3
income for the period
Shareholders' equity 4.7 0.8 -0.1 6.1 12.6 29.4 18.5 72.1 0.0 72.1
31 Dec. 2010
MEUR A B C D E F G H I J
Shareholders' 4.7 0.8 -0.1 -0.1 0.3 50.6 27.3 83.5 83.5
equity
1 Jan. 2009
Share issue 12.3 2.0 14.3 14.3
Dividend paid -0.5 -4.6 -5.1 -5.1
Share-based payments 0.2 0.2 0.2
Acquisitions 0.6 0.6
Total comprehensive 0.4 -16.2 -15.8 0.0 -15.8
income for the
period
Shareholders' equity 4.7 0.8 -0.1 0.4 12.6 52.1 6.4 77.0 0.1 77.1
31 Dec. 2009
In June 2009 a total dividend of EUR 5,097,325.52 was paid, or EUR 0.07 per
share on 72,818,936 shares.
CONSOLIDATED CONDENSED CASH FLOW STATEMENT, MEUR 1-9/2010 1-12/2009
Cash flow from operating activities
Result for the period -11.0 -16.2
Adjustments of the result 11.5 8.1
Changes in working capital -7.7 14.1
Interest paid -0.3 -1.2
Interest received 0.5 0.4
Income taxes paid -3.2 -3.2
Net cash flow from operating activities -10.2 2.0
Cash flow from investing activities
Acquisition of subsidiaries less -14.0
cash and cash equivalents at acq. date
Transactions with minority -0.7
Investments in intangible assets -0.8 -5.3
Investments in tangible assets -0.9 -1.2
Investments in other securities -0.8
Proceeds from disposal of other securities 0.9 0.3
Interest received from investments 0.0 0.1
Dividends received from investments 0.3 0.1
Net cash flow from investing activities -0.4 -21.5
Cash flow from financing activities
Borrowings received 3.0
Repayments of borrowings -2.2 -1.4
Dividend paid -5.1
Net cash flow from financing activities 0.8 -6.5
Increase (+) and decrease (--) in cash and cash equivalents -9.8 -26.0
Cash and cash equivalents at beg. of period 25.7 51.0
Impact of changes in exchange rates 1.1 0.4
Change in fair value of investments -0.3 0.2
Cash and cash equivalents at end of period 16.7 25.7
1. ACCOUNTING PRINCIPLES FOR THE INTERIM REPORT
This interim report has been prepared in accordance with the international
financial reporting standard IAS 34 Interim Financial Reporting. The formulas
for calculating the key figures presented and the accounting principles for the
interim report are the same as the principles published in the 2009 Annual
Report. The new and revised IFRS regulations that came into force on 1 January
2010 have not had a significant impact on the accounting principles and basis
for preparing the interim report.
As from the beginning of 2010, Tecnotree has changed the operating segments
under IFRS 8, so that these are now the geographical areas: Americas (North,
Central and South America), Europe, MEA (Middle East and Africa), and APAC
(Asia Pacific).
The purchase price calculation of Tecnotree India presented in the financial
statements 2009 was preliminary. In the final purchase price calculation, the
fair value of customer contracts and the related customer relationships was
assessed at EUR 0.5 million and the fair value of the order book at EUR 0.2
million. These values were included in goodwill in the preliminary calculation.
The amortization period for customer relationships is 5 years and for the order
book 5 months, beginning on the date of acquisition 6 May 2009. The figures for
the comparative period have been adjusted accordingly. The adjustments
affecting the result in the comparative period are in amortizations of other
intangible assets and deferred taxes relating to these.
2. SEGMENT INFORMATION
As from the beginning of 2010, the operating segments under IFRS 8 reported by
Tecnotree are the geographical areas, which are Americas (North, Central and
South America), Europe, MEA (Middle East and Africa), and APAC (Asia Pacific).
This is because their results are monitored separately in the company's
internal financial reporting. Tecnotree's chief operating decision maker, as
referred to in IFRS 8, is the Group's management board.
Net sales and the result for the operating segments are presented based on the
location of customers. The result of the operating segments includes costs that
can be allocated to the segments on a reasonable basis, such as sales, customer
service and delivery costs. Product management, product development and
administrative costs, depreciation, taxes and financial items are not
allocated.
As from 1 January 2010, reporting for the new operating segments is such that
the 2009 segment results are not presented in accordance with the new segment
structure, since the information is not available and the cost to develop it
would be excessive.
OPERATING SEGMENTS: 1-12/2010 1-12/2009
NET SALES, MEUR
Americas (North, Central and South America) 25.2 23.1
Europe 6.7 5.2
MEA (Middle East and Africa) 23.7 21.3
APAC (Asia Pacific) 5.1 3.6
TOTAL 60.7 53.3
RESULT, MEUR 1-12/20 1-12/20
10 09
Americas (North, Central and South America) 8.9
Europe 3.0
MEA (Middle East and Africa) 16.1
APAC (Asia Pacific) 1.9
SEGMENT RESULT 14.0
Non-allocated items -32.4
OPERATING RESULT BEFORE R&D CAPITALISATION & -2.5 -8.8
AMORTISATION AND ONE-TIME COSTS
Product development capitalisation 0.6 5.1
Product development amortisation -6.1 -4.2
One-time costs 0.0 -7.0
OPERATING RESULT -8.1 -15.0
Financial items -1.4 -0.5
RESULT BEFORE TAXES -9.4 -15.4
3. INTANGIBLE ASSETS
During the review period EUR 0.6 (5.1) million of development costs have been
capitalised and will be amortised over 3-5 years from the start of commercial
use. Research and development costs of EUR 6.1 (4.2) were amortised during the
review period.
4. TANGIBLE ASSETS
Acquisitions of tangible assets in the review period totalled EUR 0.9 (1.2)
million. Disposals during the review period were EUR 0.0 (0.0) million.
5. CONSOL 31.12.2010 31.12.2009
IDATED CONTINGENT LIABILITIES, MEUR
Pledges given 0.0 0.0
Guarantees
On own behalf 1.0 0.6
Other liabilities
Restriction related to real estate in 0.4 0.4
Ireland
OTHER OPERATING LEASES, MEUR 31.12.2010 31.12.2009
Minimum rents payable based on other leases that cannot
be cancelled:
Other operating leases
Less than one year 0.6 0.7
Between one and five years 0.5 0.5
6. CONSOLIDATED KEY FINANCIAL FIGURES 1-12/2010 1-12/2009
Return on investment, % -7.4 -13.7*
Return on equity, % -14.7 -20.2*
Equity ratio, % 66.4 65.6*
Net gearing, % 3.3 -10.8
Investments, MEUR 1.8 1.4
% of net sales 3.0 2.7
Research and development, MEUR 13.1 14.5
% of net sales 21.7 27.2
Order book, MEUR 14.3 11.7
Personnel, average 797 665
Personnel, at end of period 858 779
* The figures for the comparative periods have changed due to adjustments to
the purchase price calculation of Tecnotree India
CONSOLIDATED KEY FIGURES PER SHARE 1-12/2010 1-12/2009
Earnings per share, basic, EUR -0.15 -0.24
Earnings per share, diluted, EUR -0.15 -0.24
Equity per share, EUR 0.98 1.05
Number of shares at end of period, x 1,000 73,496 73,496
Number of shares on average, x 1,000 73,496 68,039
Share price, EUR
Average 0.79 1.00
Lowest 0.58 0.78
Highest 1.00 1.21
Share price at end of period, EUR 0.60 0.94
Market capitalisation of issued stock at end of period, 44.2 69.2
MEUR
Share turnover, million shares 16.6 22.6
Share turnover, % of total 22.6 30.7
Share turnover, MEUR 13.2 23.2
Price/earnings ratio (P/E) -4.0 -3.97
QUARTERLY KEY FIGURES 4Q/10 Q3/10 2Q/10 1Q/10 4Q/09 3Q/09
Net sales, MEUR 14.0 13.3 19.3 14.1 13.5 13.2
Net sales, change % 3.3 0.5 28.7 22.8 -37.7 -27.4
Adjusted operating result*** -3.2 -0.7 2,0 -0,6 -2.0 -2.1
% of net sales -22.7 -5.1 10.2 -4.2 -14.7 -15.6
Operating result, MEUR -4.9 -2.0 0.7 -1.9 -8.5 -3.2
% of net sales -35.1 -14.7 3.8 -13.7 -63.0 -23.9
Result before taxes, MEUR -5.2 -1.8 0.0 -2.5 -8.6 -3.6
Personnel at end of period 858 830 794 759 779 842
Earnings per share, basic, EUR -0.07 -0.03 -0.01 -0.04 -0.10 -0.06
Earnings per share, diluted, EUR -0.07 -0.03 -0.01 -0.04 -0.10 -0.06
Equity per share, EUR 0.98 1.03 1.11 1.08 1.05 1.12
Net interest-bearing liabilities, MEUR 2.4 2.2 -5.0 -9.1 -8.3 -11.3
Order book, MEUR 14.3 20.1 21.0 21.9 11.7 15.2
*** Adjusted result = operating result before R & D capitalisation,
amortization of this and one-time costs. Details of these are given in the
section “Result analysis”.
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