2010-05-06 11:50:00 CEST
2010-05-06 11:50:03 CEST
SÄÄNNELTY TIETO
Neomarkka - Interim report (Q1 and Q3)
Neomarkka Q1 2010 Interim Review - First quarter result was weak but better than expected
NEOMARKKA PLC STOCK EXCHANGE RELEASE May 6,2010 at 12.50 INTERIM REPORT 1 JANUARY - 31 MARCH 2010 First quarter result was weak but better than expected KEY FIGURES -------------------------------------------------------------------------------- | | 1-3 /2010 | 1-3 /2009 | -------------------------------------------------------------------------------- | Turnover, EUR million, of which | 16.6 | 17.0 | -------------------------------------------------------------------------------- | - Cable business | 16.6 | 17.0 | -------------------------------------------------------------------------------- | - Other operations | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Operating result, EUR million, of which | -2.3 | 0.2 | -------------------------------------------------------------------------------- | - Cable business | -2.0 | 0.4 | -------------------------------------------------------------------------------- | - Other operations | -0.3 | -0.2 | -------------------------------------------------------------------------------- | Profit or loss for the period, EUR million | -2.2 | -0.5 | -------------------------------------------------------------------------------- | Earnings per share, EUR | -0.37 | -0.08 | -------------------------------------------------------------------------------- Return on investment (ROI) for the period was -2.5% (0.0%). Equity ratio was 47.5% (51.0%). The weak general economic situation has continued to slow down the development of Neomarkka's financial result in the first quarter. Turnover was EUR 0.4 million below the 2009 level and the operating result weakened by EUR 1.7 million. Full year result is still expected to be better than in 2009. The work to improve the profitability in cable business has continued both in production and sales, as well as in marketing. Neomarkka has also focused on finding and acquiring new investment objects in line with its strategy and in April the company invested in a 30% share of Finndomo Oy, a producer of prefabricated wooden houses. TURNOVER Neomarkka group's turnover in January - March was EUR 16.6 million (EUR 17.0 million) which is 2% lower than in the previous year. FINANCIAL RESULT, BALANCE SHEET AND FINANCING This report has been drawn up in accordance with IAS 34 requirements for interim reports. The same principles have been followed as in the financial statement for 2009 except for changes in IAS and IFRS standards in effect for financial periods beginning 1 January 2010. The interim report is unaudited. Of new amendments the most significant one in the first quarter was in IAS 27, according to which a minority share is recognized on the result from January 1, 2010 onwards regardless of the subsidiary's shareholder's equity situation. The effects of exchange rate changes on long-term intra-group loans are handled as translation differences in the Consolidated Statement of Comprehensive Income and in the Statement of Shareholders' Equity in accordance with IAS 1. Financial Result The operating loss in the period was EUR -2.3 million (profit EUR 0.2 million), of which the operating loss of the cable business was EUR -2.0 million (operating profit EUR 0.4 million). net result of the review period was EUR -2.2 million(EUR -0.5 million). Earnings per share were EUR -0.37 (EUR -0.08). Consolidated Blance Sheet and fnancing In the consolidated balance sheet, total assets at the end of the period were EUR 94.3 million (EUR 100.4 million). At the end of the period, net assets per share were EUR 7.31 (EUR 8.31) and the equity ratio was 47.5% (51.0%). For financing of working capital, Reka Cables has revolving bank credit of EUR 6.0 million and factoring credit of EUR 7.5 million. On 31 March 2010, the company's overdraft facility was nearly in full use. Some EUR 4 million of the factoring limit remained unused. MAJOR EVENTS DURING THE REVIEW PERIOD Industrial Investments: Cable Business The turnover of the cable business in the first quarter was EUR 16.6 million (EUR 17.0 million). In the marketing area outside the EU the business' turnover nearly tripled compared to last year's first quarter, but in the EU marketing area turnover decreased by 13%. Demand development has still been slowed down by low amounts of industrial investments and an unusually harsh winter, which has postponed installation of underground electricity networks further into spring. The operating result in the first quarter was EUR 2.4 million weaker than last year. Metal prices have doubled from last year but the price increase has not been successfully transferred to the product prices due to continued tight competition. Even though the number of building starts has increased, the demand for cables did not increase in the first quarter. The first quarter result of the cable business is also depressed by a EUR 0.6 million non-recurring item caused by the transfer of production machinery needed in copper wire production at the Keuruu factory. The expansion of the Keuruu factory and machine transfers were completed during the first quarter. Sales in Russia has increased compared to the previous year. Thanks to slightly improved demand, production has been running throughout the review period. The operating loss from cable business' Russian operations decreased to half of last year's level. Cost savings to improve profitability have continued and lay-offs have been ongoing throughout the quarter. Fixed costs have been pruned further and excluding the above mentioned EUR 0.6 million non-recurring cost, the costs in the first quarter decreased by 15% compared to the corresponding period last year. Nestor Cables Ltd has suffered from postponed deliveries due to an exceptionally harsh winter. On the other hand, demand for interior installation products has been higher than last year and deliveries to building projects in public administration have continued on a stable level. In export projects the first deliveries have been made to e.g. Sweden and Russia. In terms of industrial products demand recovery is expected to remain slow. The company's result for the review period was negative. Other operations Neomarkka's other investments apart from industrial investments are mainly investing cash funds. Holdings in unlisted companies have remained unchanged but their share of total investments is relatively low. The company has invested in direct corporate loans and bonds and as well as bonds with credit risk swaps. The credit risk swaps are valid for under a year and concern financially sound companies. The company has continued to acquire its own shares based on an authorization by the Annual General Meeting on June 10, 2009. On the review period Neomarkka acquired total of 2,080 Neomarkka B series shares. MAJOR EVENTS AFTER THE REVIEW PERIOD Industrial Investments: Cable Business On 6 April 2010 Reka Cables informed that the company will start co-determination negotiations involving all employees in company's Finnish factories. The objective is to adjust the company's operations to the changes in the cable markets with lay-offs and dismissals. Estimated need for dismissals is 25 employees. Finndomo Ltd On April 20, 2010, Neomarkka announced that it is investing in a 30% share in Finndomo Ltd. Finndomo is a leading producer of prefabricated wooden houses in the Nordic countries, with the Nordic countries, the Baltic countries and Russia as its main market areas. The company's sales in 2009 was EUR 94 million. Finndomo fits well into Neomarkka's strategy with its operations and main market areas. Neomarkka already has established business through Reka Cable's operations in the Nordic countries, Baltic countries and Russia, the areas in which Finndomo operates as well. Neomarkka believes in Finndomo's profitable growth as the small house manufacturing business seems to have recovered from the worst downturn and the sales of prefabricated small houses has grown. The market situation for prefabricated houses both in Finland and Sweden has been good in the first quarter of 2010. Finndomo Group's order intake was more than 50% higher compared to the same period last year. The Group's turnover and operating result clearly exceeded last year's level as well. In order to ensure profitable growth, Finndomo Group strengthened its shareholders' equity by arranging a EUR 11 million directed share issue. In the issue, Neomarkka subscribed for Group shares with EUR 6 million. In addition to Neomarkka, Finndomo's old shareholders, the largest being Ilkka Brotherus' family company Erkyte Oy as well as new key persons participated in the directed issue. In addition to strengthening its shareholders' equity, Finndomo has negotiated a new financing package with the bank which will further improve cash flow and support growth. The investment will create a new segment in Neomarkka, which will be visible in the company's financial reporting from the second quarter of 2010. SHARES AND SHARE CAPITAL Neomarkka Plc's share capital is divided into A- and B-shares. The total share capital including all shares stood at EUR 24,802,000 at the end of the review period and the total number of shares was 6,020,360. The number of shares includes 63,487 B-shares held by Neomarkka Group. The holding corresponds with 1.0% of the company's share capital and 0.7% of votes. Neomarkka Plc's B-share is quoted on the main list of NASDAQ OMX Helsinki Ltd. The closing price on March 31, 2010 was EUR 7.45 (EUR 5.15) and the average share price for the period was EUR 6.85. The share turnover in the review period was 65,128 shares (90,391), which was 1.1% (1.5%) of listed B-shares. The lowest quotation during the period was EUR 5.91 (EUR 5.00) and the highest quotation was EUR 8.20 (EUR 5.48). On 31 March 2010 the market capitalisation of the company was EUR 44.3 million (EUR 31.0 million). ACQUISITION OF OWN SHARES The Board of Directors has used the authorization granted by the AGM on June 10, 2009 and acquired 2,080 Neomarkka Plc's B-shares during the review period for EUR 14,484. The value of the shares on March 31, 2010 calculated using the closing price was EUR 15,496. The holding corresponds with 1.0% of the company's share capital and 0.7% of votes. INVESTMENTS Investments made in the review period were in the cable business and totalled EUR 0.3 million (EUR 1.9 million). Long-term leases have been recognised as fixed assets in line with IFRS. ANNUAL GENERAL MEETING AND CORPORATE GOVERNANCE Neomarkka Plc's Annual General Meeting will be held on June 9, 2010 at 2 pm at Hyvinkää. Neomarkka's Board of Directors proposes that EUR 0.25 (EUR 0.25) per share will be paid as dividend for 2009. The following persons have formed the Board of Directors of Neomarkka Plc since 10 June 2009: Matti Lainema (chairman), Pekka Soini (vice chairman), Ilpo Helander, Taisto Riski, Risto Kyhälä and Matti Lappalainen. The company's authorised public accountants are Ernst & Young Ltd. The responsible auditor is Heikki Ilkka. The Board has appointed its members Taisto Riski, Pekka Soini and Ilpo Helander as members of its audit committee. The managing director of Neomarkka Plc is Markku E. Rentto. PERSONNELL The Group employed an average 512 people (511). On 31 March 2010 Group personnel numbered 515, of whom 512 were in the cable business. GROUP STRUCTURE AND SHAREHOLDERS Neomarkka Plc is the parent company in a Group consisting of Neomarkka's fully owned subsidiaries Novalis Plc and Alnus Ltd and their subsidiaries and associated companies. The domicile of the parent company is Hyvinkää. On March 31, 2010, Neomarkka Plc had 12,553 (12,706) shareholders. The company's largest shareholder, Reka Ltd had a 50.76% holding of shares and 60.77% of votes at the end of the review period. Thus Neomarkka Plc is part of Reka Group. Reka Ltd is domiciled in Hyvinkää. At the end of the year, the combined holding of the ten largest shareholders was 61.4% of shares (60.6%) and 73.1% of votes (72.5%). NEAR-TERM RISKS AND HEDGING MEASURES Neomarkka's main financial risks are currency, interest rate, commodity, liquidity, credit and investment market-risks. The financial risks and their hedging measures are described in more details in the notes to the Consolidated Financial Statements 2009. The company's future risk factors are tied to the development of business operations of the invested companies. The most significant risks in the cable business relate to changes in market conditions, fluctuating raw material prices and exchange rate movements. Reka Cables has 2007 carried out extensive risk analysis to chart these risks and hedge them. In 2009, Audit Committee was focusing on risks on business operations in Russia by initiating a risk assessment. The results of the assessment will be utilized in 2010 internal audit. The company believes that the Russian cable market will grow and develop, and has made substantial investments to exploit business opportunities there. The investments contain the risk that growth in Russia will not live up to expectations. NEAR TERM OUTLOOK The near term outlook for the cable business is difficult to predict. The electricity network projects postponed by the snow rich winter are expected to accelerate during summer, which is expected to increase cable demand. On the other hand, even though the level of construction has increased, its effect on cable demand growth is not expected to materialize until the second half of the year at the earliest. A clearer pick-up in industrial investments that have been nearly at a standstill is still expected but the exact timing is difficult to predict. The signs anticipated in the financial statement on a recovery in investments in Russia have strengthened. The full year operating result of the cable business is expected to be better than in 2009. In terms of the associated company Finndomo, we expect that the market for prefabricated houses will continue growing in the second quarter both in Finland and in Sweden. The enormous growth seen in order intake in the first quarter is, however, probably stabilizing as the market recovery has continued since last summer. Market growth may also be slowed down by the increase in VAT in the summer of 2010 and possible tighter housing loan terms by increasing the share of own financing in the second half of 2010. The good order book and cost cutting measures that have been completed give good preconditions for a better result than in 2009. SUMMARISED FINANCIAL STATEMENT AND NOTES CONSOLIDATED INCOME STATEMENT (IFRS) -------------------------------------------------------------------------------- | EUR 1,000 | 1.1. - 31.3.2010 | 1.1. - 31.3.2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Turnover | 16,603 | 16,994 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Change in inventories of finished | -732 | 87 | | products and production in progress | | | -------------------------------------------------------------------------------- | Production for own use | 37 | 4 | -------------------------------------------------------------------------------- | Materials and services | -10,663 | -8,732 | -------------------------------------------------------------------------------- | Personnel expenses | -3,163 | -3,978 | -------------------------------------------------------------------------------- | Depreciation and impairment | -1,215 | -1,205 | -------------------------------------------------------------------------------- | Other operating income and expenses | -3,124 | -3,014 | -------------------------------------------------------------------------------- | | -18,860 | -16,838 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Operating profit or loss | -2,257 | 156 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Financial income | 407 | 245 | -------------------------------------------------------------------------------- | Financial expenses | -295 | -561 | -------------------------------------------------------------------------------- | Share of the result of associates | 0 | -202 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Profit or loss before taxes | -2,146 | -362 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Taxes | -98 | -169 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Profit or loss for the period | -2,244 | -531 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Profit or loss attributable to | | | -------------------------------------------------------------------------------- | Equity holders of the parent | -2,180 | -502 | -------------------------------------------------------------------------------- | Minority interests | -64 | -29 | -------------------------------------------------------------------------------- | | -2,244 | -531 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Earnings per share attributable to the shareholders of | | | the parent (EUR) | | -------------------------------------------------------------------------------- | before and after dilution, EUR | -0.37 | -0.08 | -------------------------------------------------------------------------------- | Number of shares | 5,956,873 | 6,016,906 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (IFRS) | | -------------------------------------------------------------------------------- | Profit or loss | -2,244 | -531 | -------------------------------------------------------------------------------- | Other comprehensive items | | | -------------------------------------------------------------------------------- | Translation differences related to | 1,751 | 387 | | foreign units | | | -------------------------------------------------------------------------------- | Total | 1,751 | 387 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Total comprehensive income | -494 | -144 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Total comprehensive income | | | | attributable to | | | -------------------------------------------------------------------------------- | Equity holders of the parent | -531 | -115 | -------------------------------------------------------------------------------- | Minority interest | 37 | -29 | -------------------------------------------------------------------------------- | | -494 | -144 | -------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEET (IFRS) --------------------------------------------------------------------------------| EUR 1,000 | 31.3.2010 | 31.12.2009 | -------------------------------------------------------------------------------- | ASSETS | | | -------------------------------------------------------------------------------- | Non-current assets | | | -------------------------------------------------------------------------------- | Goodwill | 3,536 | 3,520 | -------------------------------------------------------------------------------- | Other intangible assets | 7,935 | 6,794 | -------------------------------------------------------------------------------- | Tangible assets | 32,702 | 32,978 | -------------------------------------------------------------------------------- | Receivables | 123 | 0 | -------------------------------------------------------------------------------- | Derivative contracts | 0 | 55 | -------------------------------------------------------------------------------- | Deferred tax assets | 918 | 909 | -------------------------------------------------------------------------------- | Total non-current assets | 45,215 | 44,257 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Current assets | | | -------------------------------------------------------------------------------- | Inventories | 19,258 | 21,085 | -------------------------------------------------------------------------------- | Available-for-sale financial assets | 3,733 | 3,733 | -------------------------------------------------------------------------------- | Sales receivables and other | 16,234 | 15,431 | | receivables | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Tax receivables from the profit | 132 | 131 | -------------------------------------------------------------------------------- | Derivative contracts | 1,167 | 1,170 | -------------------------------------------------------------------------------- | Other financial assets | 7,551 | 7,016 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 1,020 | 3,000 | -------------------------------------------------------------------------------- | Total current assets | 49,095 | 51,566 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Total Assets | 94,310 | 95,823 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | SHAREHOLDERS' EQUITY AND LIBILITIES | | | -------------------------------------------------------------------------------- | Shareholder's equity | | | -------------------------------------------------------------------------------- | Share capital | 24,082 | 24,082 | -------------------------------------------------------------------------------- | Premium fund | 67 | 66 | -------------------------------------------------------------------------------- | Reserve fund | 1,221 | 1,221 | -------------------------------------------------------------------------------- | Own shares | -403 | -381 | -------------------------------------------------------------------------------- | Translation differences | -263 | -2,013 | -------------------------------------------------------------------------------- | Retained profit | -2,471 | -309 | -------------------------------------------------------------------------------- | Other unrestricted equity | 21,327 | 21,327 | -------------------------------------------------------------------------------- | Equity attributable to sharehoders of | 43,560 | 43,992 | | the parent | | | -------------------------------------------------------------------------------- | Minority interest | 1,263 | 1,445 | -------------------------------------------------------------------------------- | Total shareholders´ equity | 44,823 | 45,437 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Non-current liabilities | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 4,090 | 4,012 | -------------------------------------------------------------------------------- | Provisions | 652 | 650 | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 18,278 | 18,472 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Current liabilities | | | -------------------------------------------------------------------------------- | Tax liabilities from the profit | 153 | 46 | -------------------------------------------------------------------------------- | Reserves | 176 | 176 | -------------------------------------------------------------------------------- | Short-term interest-bearing | 11,447 | 10,432 | | liabilities | | | -------------------------------------------------------------------------------- | Derivative contracts | 7 | 32 | -------------------------------------------------------------------------------- | Accounts payable and other | 14,684 | 16,568 | | liabilities | | | -------------------------------------------------------------------------------- | Total liabilities | 49,487 | 50,386 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Shareholders´ equity and liabilities | 94,310 | 95,823 | -------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS´ EQUITY (IFRS) -------------------------------------------------------------------------------- | EUR | Share | Pre | Re | Tran | Other | Retai | Total | Mino | Total | | 1,000 | capit | miu | ser | s | unres | ned | | rity | share | | | al | m | ve | lati | trict | profi | | intres | holders | | | | fun | fun | on | ed | t | | t | equity | | | | d | d | diff | equit | | | | | | | | | | e | y | | | | | | | | | | renc | | | | | | | | | | | es | | | | | | -------------------------------------------------------------------------------- | Share | 24,08 | 66 | 1,2 | -1,6 | 21,32 | 5,100 | 50,11 | 131 | 50,244 | | holde | 2 | | 21 | 83 | 7 | | 3 | | | | rs' | | | | | | | | | | | equit | | | | | | | | | | | y | | | | | | | | | | | 31.12 | | | | | | | | | | | . | | | | | | | | | | | 2008 | | | | | | | | | | -------------------------------------------------------------------------------- | Trans | | | | 387 | | 0 | 387 | 1,101 | 1,488 | | latio | | | | | | | | | | | n | | | | | | | | | | | diffe | | | | | | | | | | | rence | | | | | | | | | | | s | | | | | | | | | | -------------------------------------------------------------------------------- | Profi | | | | | | -502 | -502 | | -502 | | t/ | | | | | | | | | | | loss | | | | | | | | | | | for | | | | | | | | | | | the | | | | | | | | | | | perio | | | | | | | | | | | d | | | | | | | | | | -------------------------------------------------------------------------------- | Divi | | | | | | 0 | 0 | | 0 | | dends | | | | | | | | | | | paid | | | | | | | | | | -------------------------------------------------------------------------------- | Min | | | | | | | 0 | -29 | -29 | | ority | | | | | | | | | | | intre | | | | | | | | | | | st | | | | | | | | | | -------------------------------------------------------------------------------- | Share | 24,08 | 66 | 1,2 | -1,2 | 21,32 | 4,598 | 49,99 | 1,203 | 51,201 | | holde | 2 | | 21 | 96 | 7 | | 8 | | | | rs' | | | | | | | | | | | equit | | | | | | | | | | | y | | | | | | | | | | | 31.3. | | | | | | | | | | | 2009 | | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR | Share | Pre | Re | Tran | Other | Retai | Total | Mino | Total | | 1,000 | capit | miu | ser | s | unres | ned | | rity | share | | | al | m | ve | lati | trict | profi | | intres | holders | | | | fun | fun | on | ed | t | | t | equity | | | | d | d | diff | equit | | | | | | | | | | e | y | | | | | | | | | | renc | | | | | | | | | | | es | | | | | | -------------------------------------------------------------------------------- | Share | 24,08 | 66 | 1,2 | -2,0 | 21,32 | -690 | 43,99 | 1,445 | 45,437 | | holde | 2 | | 21 | 13 | 7 | | 3 | | | | rs' | | | | | | | | | | | equit | | | | | | | | | | | y | | | | | | | | | | | 31.12 | | | | | | | | | | | . | | | | | | | | | | | 2009 | | | | | | | | | | -------------------------------------------------------------------------------- | Trans | | | | 0 | | | 0 | | 0 | | latio | | | | | | | | | | | n | | | | | | | | | | | diffe | | | | | | | | | | | rence | | | | | | | | | | | s | | | | | | | | | | -------------------------------------------------------------------------------- | Profi | | 1 | | 1,75 | | -2,28 | -530 | 37 | -493 | | t/ | | | | 1 | | 2 | | | | | loss | | | | | | | | | | | for | | | | | | | | | | | the | | | | | | | | | | | perio | | | | | | | | | | | d | | | | | | | | | | -------------------------------------------------------------------------------- | Divi | | | | | | 0 | 0 | | 0 | | dends | | | | | | | | | | | paid | | | | | | | | | | -------------------------------------------------------------------------------- | Acqui | | | | | | -22 | -22 | | -22 | | sitio | | | | | | | | | | | n | | | | | | | | | | | of | | | | | | | | | | | own | | | | | | | | | | | share | | | | | | | | | | | s | | | | | | | | | | -------------------------------------------------------------------------------- | Minor | | | | | | 120 | 120 | -219 | -99 | | ity | | | | | | | | | | | intre | | | | | | | | | | | st | | | | | | | | | | -------------------------------------------------------------------------------- | Share | 24,08 | 67 | 1,2 | -263 | 21,32 | -2,87 | 43,56 | 1,263 | 44,823 | | holde | 2 | | 21 | | 7 | 4 | 0 | | | | rs' | | | | | | | | | | | equit | | | | | | | | | | | y | | | | | | | | | | | 31.3. | | | | | | | | | | | 2010 | | | | | | | | | | -------------------------------------------------------------------------------- STATEMENT OF CASH FLOWS (IFRS) -------------------------------------------------------------------------------- | EUR 1,000 | 1.1. - 31.3.2010 | 1.1. - 31.3.2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flows from operating activities | | | -------------------------------------------------------------------------------- | Payments received from operating | 12,327 | 17,867 | | activities | | | -------------------------------------------------------------------------------- | Payments paid on operating activities | -14,580 | -18,601 | -------------------------------------------------------------------------------- | Paid interests and other financial | 97 | -500 | | expenses | | | -------------------------------------------------------------------------------- | Interests received and other | 23 | 86 | | financial incomes | | | -------------------------------------------------------------------------------- | Direct taxes paid | -44 | 981 | -------------------------------------------------------------------------------- | Net cash provided by operating | -2,176 | -168 | | activities | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Cash flows from investing activities | | | -------------------------------------------------------------------------------- | Acquisition of subsidiaries and new | 0 | -308 | | business | | | -------------------------------------------------------------------------------- | Investments in tangible assets | -249 | -649 | -------------------------------------------------------------------------------- | Sales of tangible assets | 0 | 68 | -------------------------------------------------------------------------------- | Investments in intangible assets | -4 | -60 | -------------------------------------------------------------------------------- | Loans granted | -250 | -234 | -------------------------------------------------------------------------------- | Net cash provided by investing | -503 | -1,183 | | activities | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Cash flows from financing activities | | | -------------------------------------------------------------------------------- | Acquisition of own shares | -21 | -18 | -------------------------------------------------------------------------------- | Increase in loans | 1,109 | 0 | -------------------------------------------------------------------------------- | Decrease in loans | -102 | -1,941 | -------------------------------------------------------------------------------- | Payments of finance lease activities | -187 | -187 | -------------------------------------------------------------------------------- | Dividends paid | 0 | -1 | -------------------------------------------------------------------------------- | Net cash provided by financing | 799 | -2,147 | | activities | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Change in cash and cash equivalents | -1,880 | -3,498 | -------------------------------------------------------------------------------- | Cash and cash equivalents at | 2,797 | 6,570 | | beginning of the period | | | -------------------------------------------------------------------------------- | Exchange rate differences | 103 | -72 | -------------------------------------------------------------------------------- | Change in cash and cash equivalents | 1,020 | 3,000 | | at the end of the period | | | -------------------------------------------------------------------------------- NOTES This report has been drawn up in accordance with IAS 34 requirements for interim reports. PRINCIPLES USED The interim report applies the same principles as in the financial statement for 2009 except for changes in IAS and IFRS standards in effect for financial periods beginning 1 January 2010 and later. Of new amendments the most significant one in the first quarter was in IAS 27, according to which a minority share is recognized on the result from January 1, 2010 onwards regardless of the subsidiary's shareholder's equity situation. SEGMENT INFORMATION -------------------------------------------------------------------------------- | 31 March 2010 | Industrial | Other | Elimi | Group | | EUR 1,000 | Investment; | operation | nations | total | | | Cable | s | and | | | | business | | balancin | | | | | | g | | -------------------------------------------------------------------------------- | Turnover | 16,603 | 0 | 0 | 16,603 | -------------------------------------------------------------------------------- | Segment's operating profit | -1,958 | 0 | | -1,958 | -------------------------------------------------------------------------------- | Unallocated items | 0 | -299 | | -299 | -------------------------------------------------------------------------------- | Operating profit | -1,958 | -299 | | -2,257 | -------------------------------------------------------------------------------- | Share of the result of | | | | 0 | | associates | | | | | -------------------------------------------------------------------------------- | Unallocated items | | | 13 | 13 | -------------------------------------------------------------------------------- | Profit or loss for the | | | | -2,244 | | period | | | | | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Assets | | | | | -------------------------------------------------------------------------------- | Segment's assets | 80,601 | | 0 | 80,601 | -------------------------------------------------------------------------------- | Unallocated items | | 14,696 | -987 | 13,709 | -------------------------------------------------------------------------------- | Total assets | 80,601 | 14,696 | -987 | 94,310 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Liabilities | | | | | -------------------------------------------------------------------------------- | Segment's liabilities | 55,519 | 400 | | 55,919 | -------------------------------------------------------------------------------- | Unallocated items | | 11,816 | -18,248 | -6,432 | -------------------------------------------------------------------------------- | Total liabilities | 55,519 | 12,216 | -18,248 | 49,487 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Assets - liabilities | 25,082 | 2,479 | 17,261 | 44,823 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Investments | 257 | 3 | 0 | 260 | -------------------------------------------------------------------------------- | Depreciations | -1,223 | 0 | 0 | -1,223 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 31 March 2009 | Industrial | Other | Elimi | Group | | EUR 1,000 | Investment; | operation | nations | total | | | Cable | s | and | | | | business | | balancing | | -------------------------------------------------------------------------------- | Turnover | 16,994 | 0 | | 16,994 | -------------------------------------------------------------------------------- | Segment's operating profit | 394 | | | 394 | -------------------------------------------------------------------------------- | Unallocated items | | -238 | 0 | 0 | -------------------------------------------------------------------------------- | Operating profit | 394 | -238 | | 156 | -------------------------------------------------------------------------------- | Share of the result of | -202 | | | -202 | | associates | | | | | -------------------------------------------------------------------------------- | Unallocated items | | | -485 | -485 | -------------------------------------------------------------------------------- | Profit or loss for the | | | | -531 | | period | | | | | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Segment's assets | 80,442 | | 0 | 80,442 | -------------------------------------------------------------------------------- | Unallocated items | | 20,704 | -712 | 19,992 | -------------------------------------------------------------------------------- | Total assets | 80,442 | 20,704 | -712 | 100,434 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Segment's liabilities | 50,684 | | | 50,684 | -------------------------------------------------------------------------------- | Unallocated items | | 12,639 | -14,090 | -1,450 | -------------------------------------------------------------------------------- | Total liabilities | 50,684 | 12,639 | -14,090 | 49,233 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Assets - liabilities | 29,759 | 8,065 | 13,378 | 51,201 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Investments | 1,954 | -36 | 0 | 1,918 | -------------------------------------------------------------------------------- | Depreciations | -1,104 | -82 | 0 | -1,186 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cable business turnover per product group | 1-3/2010 | 1-3/2009 | -------------------------------------------------------------------------------- | LV energy | 7.0 | 7.0 | -------------------------------------------------------------------------------- | Power cable | 9.6 | 10.0 | -------------------------------------------------------------------------------- | Total | 16.6 | 17.0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cable business turnover per sales area | 1-3/2010 | 1-3/2009 | -------------------------------------------------------------------------------- | EU-countries | 13.2 | 15.5 | -------------------------------------------------------------------------------- | Non-EU-countries | 3.4 | 1.5 | -------------------------------------------------------------------------------- | Total | 16.6 | 17.0 | -------------------------------------------------------------------------------- The three largest customer groups for cable are Onninen, Rexel and Sonepar, each of which accounts for more than 10% of turnover. CHANGE IN NON-CURRENT ASSETS -------------------------------------------------------------------------------- | EUR 1,000 | 1-3/2010 | 1-12/2009 | -------------------------------------------------------------------------------- | Book value at the beginning of the period | 32,978 | 34,686 | -------------------------------------------------------------------------------- | Investment | 136 | 3,235 | -------------------------------------------------------------------------------- | Increase through company acquisition | 0 | 0 | -------------------------------------------------------------------------------- | Decrease | -15 | -1,244 | -------------------------------------------------------------------------------- | Depreciations | -1,075 | -4,067 | -------------------------------------------------------------------------------- | Impairments | 0 | 0 | -------------------------------------------------------------------------------- | Translation differences | 678 | 368 | -------------------------------------------------------------------------------- | Book value at the end of the period | 32,702 | 32,978 | -------------------------------------------------------------------------------- CONTINGENT LIABILITIES -------------------------------------------------------------------------------- | 1 000 EUR | 31.3.2010 | 31.12.2009 | -------------------------------------------------------------------------------- | Debts with corporate mortgages | | | -------------------------------------------------------------------------------- | Loans from financial institutions | 7,599 | 6,489 | -------------------------------------------------------------------------------- | Granted corporate mortgages | 15,000 | 15,000 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Debts with securities or guarantees | | | -------------------------------------------------------------------------------- | Loans from financial institutions | 10,767 | 10,767 | -------------------------------------------------------------------------------- | Book value of pledged securities | 25,787 | 25,787 | -------------------------------------------------------------------------------- | Granted guarantees | 10,767 | 10,767 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other collaterals | | | -------------------------------------------------------------------------------- | Gaurantees and payment commitments | 1,058 | 1,058 | -------------------------------------------------------------------------------- Sales receivables, which were EUR 3.7 million on 31.3.2010 (EUR 3.6 million on 31.12.2008), are surety for factoring credit, which was EUR 3.1 million on 31.3.2010 (EUR 3.2 million on 31.12.2009). Investment commitments Investment commitments on tangible non-current assets were EUR 0.1 million on 31.3.2010 (EUR 0.4 million on 31.3.2009). DERIVATIVE CONTRACTS -------------------------------------------------------------------------------- | EUR 1,000 | Positive | Negative | Current | Current | Nominal | Nominal | | | current | current | net | net | values | values | | | values | values | values | values | 31 March | 31 Dec | | | | | 31 March | 31 Dec | 2010 | 2009 | | | | | 2010 | 2009 | | | -------------------------------------------------------------------------------- | Interest rate derivatives | -------------------------------------------------------------------------------- | Interest | | | 0 | 0 | 9,800 | 9,800 | | rate | | | | | | | | ceiling | | | | | | | | options | | | | | | | -------------------------------------------------------------------------------- | Currency derivatives | -------------------------------------------------------------------------------- | Forward | | -7 | -7 | -32 | 1,533 | 1,500 | | exchange | | | | | | | | agreements | | | | | | | -------------------------------------------------------------------------------- | Credit derivatives | -------------------------------------------------------------------------------- | Credit | 40 | | 40 | 78 | 10,000 | 10,000 | | risk swaps | | | | | | | -------------------------------------------------------------------------------- | Raw material options | -------------------------------------------------------------------------------- | Metal | 1127 | | 1,127 | 1,147 | | 3,406 | | derivative | | | | | | | | s | | | | | | | -------------------------------------------------------------------------------- | Total | 1167 | -7 | | | | | | derivative | | | | | | | | s | | | | | | | -------------------------------------------------------------------------------- | | | | | | | | -------------------------------------------------------------------------------- | Long term derivatives deducted | -------------------------------------------------------------------------------- | Metal | 62 | | | | | | | derivative | | | | | | | | s | | | | | | | -------------------------------------------------------------------------------- | Short-term | 1105 | | | | | | | share | | | | | | | -------------------------------------------------------------------------------- Derivatives have been valued using market capitalisation reports published by hierarchy level 2 third parties. Interest rate ceiling options will expire in June 2010. RELATED PARTY EVENTS (REKA GROUP) -------------------------------------------------------------------------------- | EUR 1,000 | | | 1-3/2010 | 1-3/2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Sales to Reka Group | | | 4 | 10 | -------------------------------------------------------------------------------- | Other purchases from Reka | | | -349 | -293 | | Group | | | | | -------------------------------------------------------------------------------- | Sales receivables and other receivables at end | 1,344 | 321 | | of the period | | | -------------------------------------------------------------------------------- | Finance leases (activated on the balance sheet) | -8,301 | -9,050 | -------------------------------------------------------------------------------- | Other debts at end of the | | | -52 | -8 | | period | | | | | -------------------------------------------------------------------------------- AVAILABLE-FOR-SALE FINANCIAL ASSETS -------------------------------------------------------------------------------- | | Book value | Book value | -------------------------------------------------------------------------------- | | 31 March 2010 | 31 Dec 2009 | -------------------------------------------------------------------------------- | Private equity | | | -------------------------------------------------------------------------------- | Oulun Puhelin Holding Plc | 2,813 | 2,813 | -------------------------------------------------------------------------------- | Finda Ltd | 920 | 920 | -------------------------------------------------------------------------------- | Total available-for-sale financial | 3,733 | 3,733 | | assets | | | -------------------------------------------------------------------------------- CALCULATION OF KEY FIGURES Return on investment (ROI) % (Profit before taxes + interest and other financial expenses/ [Balance sheet total - obligatory provisions and non-interest bearing liabilities] (average)) x 100 Equity ratio, % (Shareholders' equity + minority interest minus deferred tax liabilities/ Balance sheet total - advances received) x 100 Earnings per share (EPS), EUR Profit for the period belonging to equity holders of the parent/ Number of shares adjusted for share issues (average) Equity/share, EUR Shareholders´ equity-minority interest minus deferred tax liabilities/ Number of shares adjusted for share issues at the end of the financial period Helsinki 6.5.2010 Neomarkka Plc Board of Directors psta Sari Tulander talousjohtaja FURTHER INFORMATION: Markku E. Rentto, Managing Director, tel. +358 207 209 191 Sari Tulander, CFO, tel. +358 207 209 192 Comments made in this report that do not refer to actual facts that have already taken place are future estimates. Such estimates include expectations concerning market trends, growth and profitability, and statements that include the terms ‘believe', ‘assume', ‘will be', or a similar expression. Since these estimates are based on current plans and estimates, they involve risks and uncertainty factors which may lead to results differing substantially from current statements. Such factors include 1) operating conditions, e.g. continued success in production and consequent efficiency benefits, availability and cost of production inputs, demand for new products, changing circumstances in respect of the acquisition of capital under acceptable conditions; 2) circumstances in the sector such as the intensity of demand for products, the competition, current and future market prices for the Group's products and related pricing pressures, the financial situation of the Group's customers and competitors, competitors' possible new competing products and 3) the general economic situation such as economic growth in the Group's main geographical market areas or changes in exchange rates and interest rates. www.neomarkka.fi Neomarkka Plc strategy is to invest mainly in industrial companies with similar synergic benefits. The aim of investments is with active ownership to develop the purchased companies and establish additional value. Returns are sought both through dividend flow and an increase in value. Neomarkka's B shares are listed on the NASDAQ OMX Helsinki main market.
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