2014-03-05 09:00:00 CET
2014-03-05 09:00:05 CET
REGULATED INFORMATION
Panostaja Oyj - Company Announcement
PANOSTAJA GROUP INTERIM REPORT NOVEMBER 1, 2013–JANUARY 31, 2014 (3 months)
Panostaja Oyj Interim report, March 5, 2014
10:00 a.m.
-- Net sales for the first quarter increased by 12% to MEUR 42.4 (MEUR 38.0).
The MEUR 4.4 growth in net sales was mainly a result of organic growth and
the impact of corporate acquisitions carried out in the previous financial
period, the effect of which totaled MEUR 1.3. Net sales increased in six
segments.
-- EBIT improved and was MEUR 0.9 (MEUR -0.2), growth of MEUR 1.1. EBIT was
particularly improved by an improvement in profit in the Fittings, Safety,
and Heat Treatment segments.
-- Profit before taxes was MEUR -0.1 (MEUR -1.0).
-- Earnings per share (undiluted) were nearly at the same level at -4.0 cents
(-3.7 cents).
-- Operating cash flow improved and was MEUR 1.6 (MEUR 1.3).
-- On January 17, 2014, business restructuring proceedings began at Takoma Oyj
and Takoma Gears Oy. In the period under review, Tampereen Laatukoneistus
Oy, Hervannan Koneistus Oy and Takoma Systems Oy filed for bankruptcy. As a
result of these bankruptcies, the companies in question have been treated
as discontinued operations in the consolidated financial statements. They
incurred a combined loss of MEUR 1.3 in the period under review.
Result management
Panostaja specifies its result management with regard to net sales and
specifies the reference figures for net sales and EBIT. The Group's comparable
net sales in the 2014 financial period are expected to be greater than in 2013
(MEUR 167.0). It is expected that the Group's comparable EBIT (MEUR 3.3) will
improve in the 2014 financial period. The discontinued operations of the
Takoma segment and the divestment of the Supports segment from the Group have
been taken into account in result management.
The previous result management on December 13, 2013: The Group's comparable net
sales in the 2014 financial period are expected to be at the same level or
better than in 2013 (MEUR 176.2). It is expected that the Group's comparable
EBIT (MEUR -0.6) will improve in the 2014 financial period.
The divestment of the Supports segment from the Group has been taken into
account in result management.
CEO Juha Sarsama: In the first quarter, the profit development throughout the
Group was good, considering the fact that historically the first quarter has
usually been the weakest of the financial year. There was only one loss-making
business segment - Takoma Oyj - where it is assumed that restructuring
proceedings will yield results later in the financial year as an improvement in
profitability. Noteworthy is the fact that Takoma Oyj's comparable order book
of MEUR 3.9 is a clear improvement (MEUR 2.1) in the first quarter of the year.
Five segments achieved better operating profit than in the reference period.
The active development of the segments continued during the quarter:
shareholder strategies were reviewed and, on that basis, operating targets were
set. We also complemented the boards of the segments with new external members.
The overall economic situation seems to have improved, even though comparisons
between EU countries show that Finland's industrial structural challenges are
not yet over. The general economic situation and atmosphere remain challenging
especially in segments related to construction and the export industry. On the
corporate acquisition market, activity has clearly increased and this should
offer Panostaja opportunities both for new acquisitions and for divestments.
Finance is available for good projects, so we believe that the number of
corporate acquisitions will clearly increase. Our aim is to be an active player
on the market for target companies that are in accordance with our strategy.
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Key figures Panostaja Group 3 months 3 months 12 months
11/13-01/14 11/12-01/13 11/12-10/13
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Net sales (MEUR) 42.4 38.0 167.0
EBIT (MEUR) 0.9 -0.2 3.3
Profit before taxes (MEUR) -0.1 -1.0 0.4
Earnings per share, undiluted (EUR) -0.04 -0.04 -0.09
Equity per share (EUR) 0.54 0.50 0.59
Operating cash flow (MEUR) 1.6 1.3 7.8
The income statement for operations discontinued during the reference period
has been separated from the income statement for continuing operations and the
result for them is presented in accordance with the IFRS standards on row
‘Earnings from discontinued operations'. Prior to separating discontinued and
sold operations from retained operations in the income statement, the
consolidated net sales for the reference period were MEUR 43.4 and the EBIT was
MEUR -0.7.
Key figures by segment
Net sales, MEUR Operating profit, MEUR
3 months 3 months 12 3 3 months 12
months months months
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11/13-01 11/12-01 11/12-10 11/13-0 11/12-01 11/12-10 /14 /13 /13 1/14 /13 /13
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Digital Printing 13.6 10.9 50.8 1.0 1.0 6.4
Services
Safety 8.3 7.6 31.8 0.1 -0.2 1.6
Value-added Logistics 7.3 7.1 29.9 0.2 0.1 1.7
Takoma 3.5 3.1 14.1 -0.3 -0.5 -4.1
Ceiling Materials 2.7 3.0 12.8 0.1 0.2 0.9
Fittings 2.5 3.0 11.9 0.1 -0.2 -0.2
Spare Parts for Motor 2.6 2.5 10.3 0.2 0.2 0.8
Vehicles
Heat Treatment 2.0 1.1 5.7 0.2 -0.3 -1.5
Other 0.0 0.0 0.0 -0.7 -0.6 -2.3
Eliminations -0.1 -0.2 -0.4
Group in total 42.4 38.0 167.0 0.9 -0.2 3.3
PRESS CONFERENCE
Panostaja will hold a press conference for analysts, investors and the press on
March 5, 2014 from 11:30 am to 12:30 pm at Hotel Scandic Simonkenttä,
Bulsa-Freda 1-2, Simonkatu 9, Helsinki.
The interim report, presentations and other investor information are available
at : www.panostaja.fi.
Panostaja Oyj
Juha Sarsama
CEO
Further information:
CEO Juha Sarsama, Panostaja Oyj, +358 40 774 2099
Distribution: NASDAQ OMX Helsinki, key media, www.panostaja.fi.
PANOSTAJA GROUP INTERIM REPORT NOVEMBER 1, 2013-JANUARY 31, 2014 (3 months)
THE ECONOMIC DEVELOPMENT OF THE PANOSTAJA GROUP
NOVEMBER 2013-JANUARY 2014 3 months 3 months 12 months
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Key figures Panostaja Group 11/13-01/14 11/12-01/13 11/12-10/13
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Net sales (MEUR) 42.4 38.0 167.0
EBIT (MEUR) 0.9 -0.2 3.3
Profit before taxes (MEUR) -0.1 -1.0 0.4
Earnings per share, undiluted (EUR) -0.04 -0.04 -0.09
Equity per share (EUR) 0.54 0.50 0.59
Operating cash flow (MEUR) 1.6 1.3 7.8
Panostaja Group's net sales grew by 12% and were in the first quarter MEUR 42.4
(MEUR 38.0). Export amounted to MEUR 1.0, or 2.4%, (MEUR 2.3, or 6.0%) of net
sales. The corporate acquisitions made during the previous and current
financial period affected the MEUR 4.4 increase in net sales by MEUR 1.3.
The MEUR 4.4 increase in net sales was primarily the result of organic growth.
Of the Group's eight operational segments, six exceeded the net sales of the
reference year.
EBIT improved and totaled MEUR 0.9 (MEUR -0.2). The MEUR 1.1 increase in EBIT
was especially influenced by improved profit development in the Fittings,
Safety, and Heat Treatment segments. Five segments in total achieved better
operating profit than in the reference period.
Profit before taxes was MEUR -0.1 (MEUR -1.0) and earnings/share (undiluted)
was -4.0 cents (-3.7 cents). Equity per share was EUR 0.54 (EUR 0.50).
Finnish corporation tax was lowered from 24.5% to 20%. The impact of the change
in the tax rate on the taxes of the period under review will be approx. MEUR
-0.3.
Operating cash flow was MEUR 1.6 (MEUR 1,3).
The Annual General Meeting on January 29, 2014 approved the Board's proposal
and decided that no dividend or capital repayment be distributed of the
finished financial period.
SEGMENT REVIEW
Key figures by segment
Net sales, MEUR Operating profit, MEUR
3 months 3 months 12 3 3 months 12
months months months
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11/13-01 11/12-01 11/12-10 11/13-0 11/12-01 11/12-10
/14 /13 /13 1/14 /13 /13
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Digital Printing 13.6 10.9 50.8 1.0 1.0 6.4
Services
Safety 8.3 7.6 31.8 0.1 -0.2 1.6
Value-added Logistics 7.3 7.1 29.9 0.2 0.1 1.7
Takoma 3.5 3.1 14.1 -0.3 -0.5 -4.1
Ceiling Materials 2.7 3.0 12.8 0.1 0.2 0.9
Fittings 2.5 3.0 11.9 0.1 -0.2 -0.2
Spare Parts for Motor 2.6 2.5 10.3 0.2 0.2 0.8
Vehicles
Heat Treatment 2.0 1.1 5.7 0.2 -0.3 -1.5
Other 0.0 0.0 0.0 -0.7 -0.6 -2.3
Eliminations -0.1 -0.2 -0.4
Group in total 42.4 38.0 167.0 0.9 -0.2 3.3
The income statement for operations discontinued during the reference period
has been separated from the income statement for retained operations and the
result for them is presented in accordance with the IFRS standards on row
‘Earnings from discontinued operations'.
Panostaja Group's business operations for the period under review are reported
in nine segments: Digital Printing Services, Safety, Value-added Logistics,
Takoma, Ceiling Materials, Fittings, Spare Parts for Motor Vehicles, Heat
Treatment and Other (parent company and associated companies).
Net sales of Digital Printing Services increased from MEUR 10.9 to MEUR 13.6.
EBIT remained on the level of the previous year at MEUR 1.0 (MEUR 1.0). The
increase in net sales is attributable to the acquisition of DMP Group in
December 2012. In spite of the rapid fall in the market, the segment has been
able to grow and to increase its market share. After the review period, DMP
Group bought the printing business of Eriksen Oy.
Net sales in the Safety segment grew from MEUR 7.6 to MEUR 8.3 and EBIT
improved from MEUR -0.2 to MEUR 0.1. The growth in net sales was attributable
to organic growth in the segment and the acquisition of Lappeenrannan Lukko- ja
Varustepalvelu in May 2013. Flexim has launched the new-generation Flexim Safea
solution, which has been well received by customers. EBIT developed favorably,
even though depreciations from product development costs will encumber EBIT in
the coming periods.
Net sales in the Value Added Logistics segment grew from MEUR 7.1 to MEUR 7.3.
EBIT improved from MEUR 0.1 to MEUR 0.2. Despite the poor situation in the
export industry, net sales and EBIT developed favorably. The organic growth is
attributable to the new agreements concluded in 2013.
The structure of the Takoma segment changed significantly during the review
period. The only unit continuing to operate is Takoma Gears in Parkano. The
figures for discontinued operations are presented under 'Discontinued
Operations'. The net sales of continuing Takoma operations improved from MEUR
3.1 to MEUR 3.5. The segment's EBIT for continuing operations decreased from
MEUR -0.5 to MEUR -0.3. Orders received by the Parkano factory and its order
book are recovering as customer confidence returns.
Net sales in the Ceiling Materials segment decreased from MEUR 3.0 to MEUR 2.7.
Correspondingly, EBIT weakened from MEUR 0.2 to MEUR 0.1. Economic conditions
in construction are poor, customer companies have little work and what they do
have is fiercely contested. In spite of the poor economic situation, the
segment's result has remained positive.
Net sales in the Fittings segment decreased from MEUR 3.0 to MEUR 2.5. EBIT
improved from the previous year's MEUR -0.2 to MEUR 0.1. The market situation
in the segment is still poor, which is directly evident in weakened net sales.
The profitability of both operating companies has, however, clearly improved
over last year on a market that is still declining.
Net sales in the Spare Parts for Motor Vehicles segment grew slightly from MEUR
2.5 to MEUR 2.6. EBIT remained at the previous year's level at MEUR 0.2 (MEUR
0.2). The trade in winter products and repairs required because of sub-zero
temperatures have been low because of the mild winter weather. The segment
expanded in January when a new site was opened as planned in Turku.
Net sales in the Heat Treatment segment increased from MEUR 1.1 to MEUR 2.0.
EBIT improved clearly from MEUR -0.3 to MEUR 0.2. The market situation is
better than in the corresponding period the previous year. On the equipment
side, the furnace business is clearly more active.
There were no significant changes in the net sales of the Other segment. In the
review period, two associated companies, Ecosir Group Oy and Spectra Yhtiöt Oy,
issued reports to the parent company. The profit/loss of the reported
associated companies in the review period was MEUR -0.3 (MEUR -0.1), which is
presented on a separate row in the consolidated income statement.
Personnel
Jan 31, Jan 31, Change Oct 31,
2014 2013 2013
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Average number of employees 1,258 1,281 -2% 1,251
Employees at the end of the review 1;220 1,355 -10% 1,295
period
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Employees in each segment at the end of Jan 31, Jan 31, Change Oct 31,
the review period 2014 2013 2013
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Digital Printing Services 454 421 8% 451
Safety 214 215 0% 205
Takoma 95 191 -50% 163
Value-added Logistics 298 291 2% 299
Ceiling Materials 14 17 -18% 15
Spare Parts for Motor Vehicles 40 37 8% 39
Fittings 37 42 -12% 37
Heat Treatment 60 65 -8% 62
Carpentry Industry 0 30 0
Supports 0 16 16
Fasteners 0 21 0
Other 8 9 -11% 8
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Group in total 1,220 1,355 -10% 1,295
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Panostaja's personnel fell. At the end of the review period, Panostaja Group
employed a total of 1,220 persons, while the average number of personnel during
the period was 1,258. The number of personnel fell by 135 during the review
period, mainly as a result of Takoma's discontinued operations. During the
review period, Panostaja continued to develop its personnel in line with its
strategy.
INVESTMENTS AND FINANCE
Operating cash flow improved and was MEUR 1.6 (MEUR 1.3). Liquidity remained
good. The Group's liquid assets were MEUR 15.4 (MEUR 13.7) and interest-bearing
net liabilities MEUR 36.2 (MEUR 52.4). Gearing ratio decreased and was 81.2%
(115.2%). The Group's net financial expenses for the review period were MEUR
-0.7 (MEUR -0.7), or 1.7% (1.9%) of net sales.
Panostaja Oyj's convertible subordinated loan amounted to MEUR 15 of the net
liabilities (MEUR 15.0). The Group's equity ratio was 32.5% (30.0%). The return
on equity was -19.3% (-18.6%) and the return on investment 3.8% (-2.1%).
The Group's gross capital expenditure for the period ended was approximately
MEUR 0.8 (MEUR 17.1), or 1.9% (45.0%) of net sales. In the reference period,
investments were mainly targeted at corporate acquisitions.
In May 2013, Panostaja Oyj issued a domestic hybrid loan of MEUR 7.5 (equity
debenture loan). The loan was issued on May 27, 2013. It will strengthen the
company's solvency and financial position. The hybrid loan has been processed
in accordance with the IFRS standards as an equity loan and is shown on the
balance sheet in the equity group.
Financial position:
MEUR Jan 31, 2014 Jan 31, 2013 Oct 31,
2013
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Interest-bearing liabilities 56.4 69.8 60.1
Interest-bearing receivables 4.8 3.7 3.6
Cash and cash equivalents 15.4 13.7 16.4
Interest-bearing net liabilities 36.2 52.4 40.1
Equity (belonging to the parent company's 44.6 45.4 49.1
shareholders as well as minority
shareholders)
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Gearing ratio,% 81.2 115.2 82.6
Equity ratio,% 32.5 30.0 33.2
Return on equity,% -19.3 -18.6 -11.7
Return on investment,% 3.8 -2.1 0.5
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GROUP STRUCTURE CHANGES
Panostaja Oyj announced on December 3, 2013 that it had sold 80% of the share
capital of Kannake Oy, a company manufacturing and selling supports. As a
result of the transaction, Panostaja divested its Supports segment. Takoma
Oyj's subsidiary Tampereen Laatukoneistus Oy filed on December 9, 2013 a
business restructuring proceedings application at the District Court of
Pirkanmaa. In its meeting on January 14, 2014, the Board of Directors of
Tampereen Laatukoneistus Oy stated that, with the current volume, the company
cannot fulfil the obligations of the business restructuring proceedings and
that it is probable that the business restructuring proceedings cannot improve
the profitability of the company and decided to cancel Tampereen Laatukoneistus
Oy's business restructuring proceedings application and filed for bankruptcy.
On January 14, 2014, the Board of Directors of Hervannan Koneistus Oy, a
subsidiary of Takoma Oyj, decided to file for bankruptcy. The Board of
Directors of Takoma Systems Oy decided to file for bankruptcy on December 27,
2013.
Takoma Gears Oy, whose business operations have been profitable, remains in the
Takoma Group as an operative company. The key creditors expressed their support
for Takoma Oyj's and Takoma Gears Oy's business restructuring proceedings
applications.
SHARE PRICE DEVELOPMENT AND SHARE OWNERSHIP
Panostaja Oyj's share closing rate fluctuated between EUR 0.72 (lowest figure
recorded) and EUR 0.74 (highest figure recorded) during the first quarter.
During the period under review, a total of 2,725,541 shares were exchanged,
which amounts to 5.3% of the share capital. The January share closing rate was
EUR 0.74. The market value of the company's share capital at the end of January
2014 was MEUR 38.3. The company had 3,606 shareholders (3,802) at the end of
January 2014.
Development of share exchange 1Q/2014 1Q/2013
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Shares exchanged, 1,000 pcs 2,726 1,651
% of share capital 5.3 3.2
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Share Jan 31, 2014 Jan 31, 2013 Oct 31, 2013
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Shares in total, 1,000 pcs 51,733 51,733 51,733
Own shares, 1,000 pcs 474 540 491
Closing rate 0.74 0.8 0.76
Market value (MEUR) 38.3 41.4 41.4
Shareholders 3,606 3,743 3,780
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On December 16, 2013, Panostaja Oyj received a notification of change in
holding in the company pursuant to Section 2(9) of the Securities Market Act.
Matti Koskenkorva's share of Panostaja Oyj's total number of voting shares was
below 10%. Matti Koskenkorva's share on the record date was 4,300,000 shares,
8.31% of Panostaja Oyj's share capital and voting shares.
On December 16, 2013, Panostaja Oyj received a notification of change in
holding in the company pursuant to Section 2(9) of the Securities Markets Act.
Treindex Oy's share of Panostaja Oyj's total number of voting shares exceeded
10%. On the reporting date, Treindex's share was 5,192,200 shares, 10.04% of
Panostaja Oyj's share capital and voting shares.
ADMINISTRATION AND GENERAL MEETING
Panostaja Oyj's Annual General Meeting was held on January 29, 2014 in Tampere.
Jukka Ala-Mello, Mikko Koskenkorva, Eero Eriksson, Antero Virtanen and Jukka
Terhonen were re-elected to Panostaja Oyj's Board of Directors. Hannu Tarkkonen
was elected as new member of the Board. In the Board's organizing meeting held
immediately after the General Meeting, Jukka Ala-Mello was elected Chairman of
the Board and Eero Eriksson as Vice Chairman. Authorized Public Accountant
Markku Launis and Authorized Public Accountants PricewaterhouseCoopers Oy were
selected as general chartered accountants, with Authorized Public Accountant
Janne Rajalahti as the responsible public accountant.
The annual general meeting confirmed the financial statements presented and the
consolidated financial statements for the financial period November 1,
2012-October 31, 2013 and decided that no dividend or capital repayment be
distributed from the finite financial year.
In addition, the Annual Meeting authorized the Board to decide, at its
discretion, on the potential distribution of assets to shareholders, the
company's financial status permitting, as distribution of assets from the
invested unrestricted equity fund. The maximum distribution of assets performed
on the basis of this authorization totals EUR 5,200,000. The authorization
includes the right of the Board to decide on all other terms and conditions
relating to the said asset distribution. The authorization will remain valid
until the end of the next Annual General Meeting.
In addition, the General Meeting granted exemption from liability to the
members of the Board and to the CEO. It was decided at the General Meeting that
the Chairman of the Board be paid EUR 40,000 as an annual compensation for the
term that begins at the end of the Meeting and ends at the end of the 2015
Annual General Meeting, and that the other members of the Board be paid an
annual compensation of EUR 20,000. It was further resolved at the General
Meeting that approximately 40% of the compensation remitted to the members of
the Board be paid on the basis of the share issue authorization given to the
Board, by issuing company shares to each Board member if the Board member does
not own more than one percent of the company's shares on the date of the
General Meeting. If the holding of a Board member on the date of the General
Meeting is over one percent of all company shares, the compensation will be
paid in full in monetary form.
The General Meeting authorized the Board of Directors to decide on the
acquisition of the company's own shares, so that the shares will be acquired in
one or more installments and, based on this authorization, a maximum of
5,100,000 shares can be acquired, which corresponds to about 9.86% of all the
company's shares. By virtue of the authorization, the company's own shares may
be obtained using unrestricted equity only.
The company's own shares may be acquired at the price in public trade arranged
by NASDAQ OMX Helsinki Oy on the date of acquisition or otherwise at the
prevailing market price. The Board of Directors will decide how the company's
own shares are to be acquired. The company's own shares may be acquired not
following the proportion of ownership of the shareholders (directed
acquisition). The authorization remains valid until July 29, 2015.
The Board of Directors has not used the authorization granted by the Annual
Meeting to acquire the company's own shares during the review period.
SHARE CAPITAL AND THE COMPANY'S OWN SHARES
At the close of the review period, Panostaja Oyj's share capital was EUR
5,568,681.60. The total number of shares is 51,733,110.
The total number of shares held by the company at the end of the review period
was 474,517 individual shares (at the beginning of financial period: 490,956).
The number of the company's own shares corresponded to 0.9% of the number of
shares and votes at the end of the entire review period.
In accordance with the decisions by the General Meeting on January 29, 2013 and
by the Board, Panostaja Oyj relinquished a total of 16,439 individual shares as
meeting compensation to the members of the Board on December 16, 2013.
EQUITY CONVERTIBLE SUBORDINATED LOAN AND HYBRID LOAN
At the end of the review period, EUR 15,000,000 of the 2011 convertible
subordinated loan remained. The interest on the loan is 6.5% and the loan
period February 7, 2011-April 1, 2016. The original share exchange rate is EUR
2.20, and the loan shares may be exchanged for no more than 6,818,181 company
shares. The total number of loan shares is 300, and they are available for
public trade on the Nasdaq OMX Helsinki stock exchange. The share exchange rate
will be entered into the company's invested unrestricted equity fund.
On May 27, 2013, the Group issued an equity convertible subordinated loan to
the value of MEUR 7.5. The equity convertible subordinated loan has not
maturity date, but the Group is entitled, but not obliged, to redeem the loan
within four years. Based on the contract, the annual interest is 9.75%.
Interest is only paid if the company decides to distribute dividends. If
dividends are not distributed, the Group will decide separately on the payment
of interest. In the consolidated financial statements, the loan is classified
as equity and interest is presented as dividend.
EVENTS AFTER THE REVIEW PERIOD
Panostaja's subsidiary DMP-Digital Media Partners Oy (DMP) bought the printing
business of Eriksen Oy on February 11, 2014. The object of sale was Eriksen's
offset printing business, the effect of which on DMP's net sales is about MEUR
3.3.
Panostaja announced that Ari Virtanen, Managing Director of its subsidiary
Takoma Oyj, was relieved of his duties as of February 14, 2014. Ilkka
Miettinen, Takoma Oyj's CFO, was appointed the company's new Managing Director.
MARKET PROSPECTS
The general economic situation and atmosphere has remained challenging,
especially in the construction and export industry-related segments. The demand
for companies operating on the domestic market has evened out and remained at a
satisfactory level at least. The segments' position in their fields of
operation has improved and is expected to continue to do so. The situation on
the financial markets for the SME sector is improving and finance is available
for good projects. Caution in granting credit is, however, still a significant
risk to overall economic development. In terms of volumes, the corporate
acquisitions market remains at a lower level than normal, but activity has
increased.
MOST SIGNIFICANT NEAR-FUTURE BUSINESS RISKS AND RISK MANAGEMENT
Risk management is part of the Panostaja Group's management and monitoring
systems Panostaja aims to identify and monitor changes in the business
environment and general market situation of its segments, to react to them and
to utilize the business opportunities that they present. Risk is classified as
factors that may endanger or impede Panostaja or the business segments owned by
it from achieving strategic objectives, the development of profit or financial
position, or business continuity, or that may otherwise cause significant
consequences for Panostaja, its owners, segments, personnel or other
stakeholder groups. A more detailed report on Panostaja's risk management
policy and the most significant risks was published in the 2013 annual report.
Financial risks are discussed in greater detail in the Notes to the 2013
financial statements.
Market risks, general: General market risks are mainly tied to the uncertainty
resulting from Finland's economic situation, export industry competitiveness
and the change it has caused, as well as their potential impact on achieving
the goals set for the various segments. The weakening in financial market
liquidity and the tightening on credit issue may hamper the realization of
corporate acquisitions and the availability of finance for working capital.
Panostaja has prepared for a weak financial market situation in the SME sector
and for a continued quiet period in the corporate acquisitions market by taking
out a MEUR 7.5 hybrid loan in May 2013. This hybrid loan will enable Panostaja
to make, in line with the company's strategy and investment criteria, new
complementary acquisitions and to give more temporal room for maneuver for
possible divestments.
Market risks, operating fields of the segments: The instability of the overall
economic situation has led to a decline in customer demand as well as the
postponement of investments, particularly in segments serving the technology
sector, which may result in a need for consolidated goodwill write-downs.
Economic prospects in the fields of the existing segments are strongly tied to
the prospects of customer enterprises. Expectations for the financial situation
are still characterized by uncertainty and poor forecastability. In the
various segments of Panostaja Group, the prospects still vary from cautiously
positive to neutral. Panostaja regularly assesses the risks for each segment
and, based on the updated risk assessment, takes the necessary remedial action.
Strategic risks: Panostaja represents the Finnish SME sector extensively. Net
sales are divided into five different sectors, the cyclical nature of which
varies. The Group's business structure partially evens out economic
fluctuations. In spite of this, general and sector-specific market risks can,
however, affect the Group's result and financial development. In the business
segments, the estimated market situation is taken into account by adapting
production and costs to market demand and by safeguarding the financial
position. In changes in the global economy, Panostaja also sees opportunities
to improve its market position, for example through corporate acquisitions. The
crisis in Ukraine has no direct impact on Panostaja Group, as the Group
companies have no receivables from/projects ongoing in Ukraine.
Financial risks: As a consequence of its operations, the Group is exposed to
many financial risks. The aim of risk management is to limit the adverse
effects of changes on financial markets on the result and financial development
of the Group. The Group's revenue and operative cash flows are mainly
independent of fluctuations in market interest rates. The interest risk of the
Group mainly constitutes borrowing, which is spread over variable and
fixed-interest loans. Some of the business segments use interest rate swaps and
interest rate ceiling agreements. The Group mainly operates in the eurozone and
so is only exposed to foreign exchange risks resulting from changes in exchange
rates to a slight degree. In the current financial period, credit loss risks
continue to represent a significant uncertainty factor in some of the segments.
This risk is increased by the tightness of credit issue to SMEs.
Corporate acquisitions: Panostaja actively seeks SMEs and endeavors to increase
and create value, through organic growth, corporate acquisitions and
correctly-timed divestments. The market still provides sufficient opportunities
for corporate acquisitions, and Panostaja Group aims to implement its growth
strategy by means of controlled acquisitions in current segments, but new
potential segments are also being actively studied. Preparation for divestments
is being continued as part of the ownership strategies of segments. Risks
related to corporate acquisitions are managed by investing carefully according
to specific investment criteria, as well as through efficient integration
processes. Panostaja Group has specified harmonized guidelines and a corporate
acquisitions process for the preparation and implementation of corporate
acquisitions.
Non-life risks: Non-life risks are managed in Panostaja Group through insurance
and Group guidelines, which set policy for the different areas.
Operative risks: During the quarter, the management of operative risks has
particularly focused on business concerning Takoma. On January 17, 2014,
business restructuring proceedings began at Takoma Oyj and Takoma Gears Oy. In
the period under review, Tampereen Laatukoneistus Oy, Hervannan Koneistus Oy
and Takoma Systems Oy filed for bankruptcy. As a result of the bankruptcy, the
companies in question have been treated as discontinued operations in
Panostaja's consolidated financial statements. The restructuring proceedings of
Takoma Oyj and Takoma Gears Oy may have an impact on business, depending on the
reactions of customers and suppliers. In order to reduce the negative impact
and safeguard undisturbed operations, Takoma has been in contact with both
customers and suppliers and has discussed the situation of each company and the
reasons for it with different interest groups. According to customer and
supplier feedback received, confidence in Takoma's ability to supply is
returning. Takoma's interim report has been prepared on the assumption that
business will continue. This will require that admission to the business
restructuring process is granted, additional finance is acquired, loan periods
are extended, and the profitability of operations is improved. Changes
concerning Takoma may cause needs for one-time write-downs. Takoma's failure to
safeguard the continuity of operations is not expected to cause changes to
Panostaja Groups operating conditions.
OUTLOOK FOR THE 2014 FINANCIAL PERIOD
In accordance with its business strategy, Panostaja Group focuses on increasing
shareholder value in the segments owned by the Group. The development of
shareholder value will be constantly monitored as part of a changing operating
environment, and decisions on the development or divestment of business areas
will be made in order to maximize the shareholder value. Active development of
shareholder value, the effective allocation of capital and finance
opportunities create a solid foundation for operational expansion. The need for
ownership arrangements in SMEs enables both expansion into new segments and
growth in existing ones.
Economic prospects in the fields of the existing segments are strongly tied to
the prospects of customer enterprises. Expectations for the financial situation
are still characterized by uncertainty and poor forecastability. In the
various segments of Panostaja Group, the prospects still vary from cautiously
positive to neutral. The challenges in the forecastability of the technology
industry or weakening prospects may create a need for consolidated goodwill
write-downs. The prospects for new construction have remained weak and, during
the coming months in particular, demand may be weaker than expected.
The market still provides sufficient opportunities for corporate acquisitions,
and Panostaja Group aims to implement its growth strategy by means of
controlled acquisitions in current segments, but new potential segments are
also being actively studied. Preparation for divestments is being continued as
part of the ownership strategies of segments.
The continuation of operations of Takoma will require that the business
restructuring process is carried out, the restructuring program is confirmed,
loan periods are extended, and the profitability of operations is improved.
Takoma's failure to safeguard the continuity of operations does not cause
changes to Panostaja Group's operating conditions.
Panostaja specifies its result management with regard to net sales and
specifies the reference figure for net sales and EBIT: The Group's comparable
net sales in the 2014 financial period are expected to be greater than in 2013
(MEUR 167.0). It is expected that the Group's comparable EBIT (MEUR 3.3) will
improve in the 2014 financial period. The discontinued operations of the Takoma
segment and the divestment of the Supports segment from the Group have been
taken into account in result management.
The previous result management on December 13, 2013: The Group's comparable net
sales in the 2014 financial period are expected to be at the same level or
better than in 2013 (MEUR 176.2). It is expected that the Group's comparable
EBIT (MEUR -0.6) will improve in the 2014 financial period.
The divestment of the Supports segment from the Group has been taken into
account in result management.
Panostaja Oyj
Board of Directors
For further information, contact CEO Juha Sarsama: tel. +358 40 774 2099.
Panostaja Oyj
Juha Sarsama
CEO
All forecasts and assessments presented in this interim report bulletin are
based on the current outlook of the Group and the views of the management of
the various business areas with regard to the state of the economy and its
development. The results attained may be substantially different.
The information in the interim report has not been audited.
INCOME STATEMENT 11/12-01/14 11/11-01/13 2013
3 months 3 months 12 months
(EUR 1,000)
Net sales 42,405 38,008 166,951
Other operating income 230 180 1,281
Costs in total 40,257 37,078 155,757
Depreciations, amortizations and impairment 1,476 1,343 9,191
Operating profit 902 -233 3,284
Financial income and expenses -717 -714 -2,787
Share of associated company profits -300 -101 -110
Profit before taxes -115 -1,048 387
Income taxes -917 -499 -1,376
Profit/loss from continuing operations -1,031 -1,547 -989
Profit/loss from discontinued operations 37 64 740
Profit/loss from discontinued operations -1,267 -620 -5,271
Profit/loss for the financial period -2,261 -2,103 -5,520
Attributable to
shareholders of the parent company -2,043 -1,893 -4,628
minority shareholders -218 -210 -892
Earnings per share from continuing
operations
EUR, undiluted -0.025 -0.031 -0.040
Earnings per share from continuing
operations
EUR, diluted -0.025 -0.031 -0.040
Earnings per share from discontinued
operations
EUR, undiluted -0.015 -0.006 -0.050
Earnings per share from discontinued
operations EUR, diluted -0.015 -0.006 -0.050
Earnings per share on continuing and
discontinued
operations EUR, undiluted -0.040 -0.037 -0.090
Earnings per share on continuing and
discontinued
operations EUR, diluted -0.040 -0.037 -0.090
EXTENSIVE INCOME STATEMENT
Items of the extensive income statement -2,261 -2,103 -5,520
Translation differences -51 -9 103
Extensive income statement for the period -2,312 -2,112 -5,417
Attributable to
shareholders of the parent company -2,094 -1,902 -4,525
minority shareholders -218 -210 -892
BALANCE SHEET Jan 31, Jan 31, Oct 31,
2014 2013 2013
(EUR 1,000)
ASSETS
Non-current assets
Goodwill 41,951 46,877 41,929
Other intangible assets 8,970 6,755 8,079
Property, plant and equipment 12,620 19,913 15,153
Interests in associated companies 3,413 3,722 3,714
Other non-current assets 12,310 13,153 12,769
Non-current assets total 79,264 90,420 81,644
Current assets
Stocks 14,580 20,398 15,437
Trade receivables and other 28,112 28,113 30,834
non-interest-bearing receivables
Short-term investments 8,400 8,400
Cash and cash equivalents 7,029 13,722 7,970
Current assets total 58,121 62,233 62,641
Held-for-sale non-current asset items 64 4,348
Assets in total 137,449 152,653 148,633
EQUITY AND LIABILITIES
Equity attributable to parent company
shareholders
Share capital 5,569 5,569 5,569
Share premium account 4,646 4,646 4,646
Invested unrestricted equity fund 14,524 14,470 14,508
Equity convertible loan 7,390 7,390
Translation difference -124 -75 -73
Retained earnings -3,992 948 -1,979
Total 28,013 25,558 30,061
Minority interest 16,551 19,893 19,016
Equity total 44,564 45,451 49,077
Liabilities
Deferred tax liabilities 1,244 1,479 1,672
Equity convertible subordinated loan 14,590 14,456 14,556
Non-current liabilities 27,857 40,429 28,046
Current liabilities 49,194 50,838 55,282
Liabilities total 92,885 107,202 99,556
Equity and liabilities in total 137,449 152,653 148,633
CASH FLOW STATEMENT 01/2014 01/2013 2013
(EUR 1,000)
Operating net cash flow 1,573 1,315 7,780
Investment net cash flow 2,142 -11,301 -25,452
Loans drawn 1,713 16,494 33,077
Loans repaid -5,135 -4,026 -21,543
Share issue 5,102
Disposal of own shares 12 10 46
Dividends paid and capital repayments -1,467 -1,116 -3,156
Finance net cash flow -4,877 11,362 13,526
Change in cash flows -1,162 1,376 -4,146
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(EUR 1,000) Share Share Invested Transl Profit Equity Minorit Total
capit premi unrestr ation funds conve y
al um icted diffe rtible shareh
accou equity rences loan olders'
nt fund intere
st
Equity 5,569 4,646 16,523 -66 1,981 1,652 45,173
Nov 1, 2012
Profit for -1,893 -210 -2,103
the
financial
period
Profit and -1,893 -210 -2,103
costs
recorded
during the
financial
period,
total
Dividends -659 -659
paid
Repayment of -2,040 -2,040
capital
Share
subscription
Share issue
Disposal of 13 13
own shares
Reward scheme
Translation -9 -9
differences
Changes in 860 4,700 5,560
minority
interest
Other changes -2,053 -9 860 3,583 2,381
in equity,
total
Equity
Jan 31, 2013 5,569 4,646 14,470 -75 948 19,893 45,451
Equity
Nov 1, 2013 5,569 4,646 14,508 -73 -1,979 7,390 19,016 49,077
Profit for -2,043 -218 -2,261
the
financial
period
Profit and -2,043 -218 -2,261
costs
recorded
during the
financial
period,
total
Dividends -1,638 -1,638
paid
Repayment of
capital
Equity
convertible
loan
Disposal of 12 12
own shares
Reward scheme 4 4
Translation -51 30 -21
differences
Changes in -609 -609
minority
interest
Correction of
errors in
previous
financial
period
Other changes 16 -51 30 -2,247 -2,252
in equity,
total
Equity 5;569 4,646 14,524 -124 -3,992 7,390 16,551 44;564
Jan 31, 2014
KEY FIGURES
01/2014 01/2013 10/2013
Equity per share (EUR) 0.54 0.50 0.59
Earnings per share, diluted (EUR) -0.04 -0.04 -0.09
Earnings per share, undiluted (EUR) -0.04 -0.04 -0.09
Average number of shares during financial period, 51,195 51,187 51,211
1,000 pcs.
Number of shares at end of financial period, 1,000 51,733 51,733 51,733
pcs.
Share issues/CL exchanges during financial period, 0 0 0
1,000 pcs.
Number of shares, 1,000, diluted 58,014 58,005 58,029
Return on equity,% -19.3 -18.6 -11.7
Return on investment,% 3.8 -2.1 0.5
Gross capital expenditure
To permanent assets (MEUR) 0.8 17.1 21.2
% of net sales 1.9% 45.0 12.7
Interest-bearing liabilities 56.4 69.8 60.1
Equity ratio (%) 32.5 30.0 33.2
Average number of employees 1,258 1,281 1,251
GROUP DEVELOPMENT BY QUARTER
(MEUR) Q1/14 Q4/13 Q3/13 Q2/13 Q1/13 Q4/12 Q3/12
Net sales 42.4 46.8 40.6 41.6 38.0 39.8 36.7
Other operating income 0.2 0.6 0.2 0.2 0.2 0.5 0.2
Costs in total -40.1 -42.7 -36.7 -39.1 -37.1 -36.7 -34.4
Depreciations, amortizations -1.5 -2.0 -4.1 -1.7 -1.3 -3.6 -1.3
and impairment
EBIT 0.9 2.6 -0.1 1.0 -0.2 0.0 1.3
Finance items -0.7 -0.7 -0.6 -0.8 -0.7 -1.5 -0.8
Share of associated company -0.3 -0.2 0.2 0.0 -0.1 -0.1 0.1
profits
Profit before taxes 0.1 1.8 -0.5 0.2 -1.0 -1.6 0.6
Taxes -0.9 0.4 -0.8 -0.5 -0.5 -1.5 -0.3
Profit from continuing -1.0 2.1 -1.3 -0.3 -1.5 -3.2 0.3
operations
Profit/loss from discontinued 0.0 0.3 0.1 0.2 0.1 0.1 0.4
operations
Profit/loss from discontinued -1.3 -3.4 -0.7 -0.6 -0.6
operations
Profit for the financial period -2.3 -1.0 -1.8 -0.7 -2.1 -3.1 0.7
Minority interest -0.2 -0.6 -0.4 0.3 -0.2 -0.3 -0.2
Parent company shareholder -2.1 -0.4 -1.4 -1.0 -1.9 -2.8 1.0
interest
GUARANTEES GIVEN
(EUR 1,000) 01/2014 01/2013 2013
Guarantees given on behalf of Group companies
Enterprise mortgages 39,677 44,421 41,449
Pledges given 72,392 79,236 72,939
Other liabilities 2,753 778 2,950
Other rental agreements
In one year 7,876 9,350 9,227
In over one year but within five years maximum 13,940 20,088 16,854
In over five years 2,132 3,792 2,438
Total 23,948 33,230 28,519
SEGMENT INFORMATION
NET SALES 11/13-01/14 11/12-01/13 Change
(EUR 1,000)
Digital Printing Services 13,570 10,931 2,639
Safety 8,274 7,587 687
Value-added Logistics 7,340 7,077 263
Takoma 3,518 3,051 467
Ceiling Materials 2,667 2,975 -308
Fittings 2,532 2,996 -464
Spare Parts for Motor Vehicles 2,563 2,492 71
Heat Treatment 2,016 1,067 949
Other 0 25 -25
Eliminations -75 -193 118
----------------------------------------------------------------
Group in total 42,405 38,008 4,397
----------------------------------------------------------------
----------------------------------------------------------------
OPERATING PROFIT
(EUR 1,000)
Digital Printing Services 1,030 1,033 -2
Safety 144 -158 303
Value-added Logistics 207 87 120
Takoma -346 -472 126
Ceiling Materials 102 247 -145
Fittings 66 -216 282
Spare Parts for Motor Vehicles 155 158 -3
Heat Treatment 202 -293 494
Other -658 -618 -40
----------------------------------------------------------------
Group in total 902 -233 1,135
----------------------------------------------------------------
SEGMENT INFORMATION BY QUARTER
1Q/14 4Q/13 3Q/13 2Q/13 1Q/13 4Q/12 3Q/12
Digital Printing Services 13.6 14.2 12.3 13.4 10.9 9.5 8.3
Safety 8.3 9.5 7.0 7.8 7.6 8.0 6.4
Value-added Logistics 7.3 8.1 7.6 7.2 7.1 7.2 7.5
Takoma 3.5 4.0 3.6 3.5 3.1 7.0 6.7
Ceiling Materials 2.7 3.2 3.5 3.0 3.0 0.0 0.0
Fittings 2.5 3.0 2.8 3.1 3.0 2.5 2.3
Spare Parts for Motor Vehicles 2.6 2.7 2.6 2.5 2.5 2.9 2.6
Heat Treatment 2.0 2.1 1.3 1.2 1.1 1.8 1.8
Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Eliminations -0.1 0.0 -0.1 -0.1 -0.2 0.9 1.0
Group in total 42.4 46.8 40.6 41.6 38.0 39.8 36.7
Operating profit (MEUR) 1Q/14 4Q/13 3Q/13 2Q/13 1Q/13 4Q/12 3Q/12
Digital Printing Services 1.0 1.9 1.7 1.7 1.0 1.9 1.0
Safety 0.1 1.0 0.4 0.4 -0.2 0.5 0.0
Value-added Logistics 0.2 0.8 0.5 0.3 0.1 0.6 0.5
Takoma -0.3 -0.3 -2.9 -0.5 -0.5 -2.9 -0.5
Ceiling Materials 0.1 0.2 0.3 0.1 0.2 0.0 0.0
Fittings 0.1 0.0 0.2 -0.2 -0.2 0.1 0.1
Spare Parts for Motor Vehicles 0.2 0.2 0.3 0.1 0.2 0.5 0.3
Heat Treatment 0.2 -0.7 -0.1 -0.3 -0.3 0.2 0.2
Other -0.7 -0.5 -0.6 -0.6 -0.6 -0.8 -0.2
Group in total 0.9 2.6 -0.1 1.0 -0.2 0.0 1.3
Panostaja is an investment company developing Finnish SMEs in the role of an
active majority shareholder. The company aims to be the most sought-after
partner for business owners selling their companies as well as for the best
managers and investors. Together with its partners, Panostaja increases the
Group's shareholder value and creates Finnish success stories.
Panostaja has eight segments engaging in business operations. Flexim Security
Oy (Safety) is a specialist in security technology and services, locking, door
automation and access control products and solutions. Heatmasters Group (Heat
Treatment) offers thermal treatment services of metals in Finland and
internationally, and produces, develops and markets heat treatment technology.
KL-Varaosat (Spare Parts for Motor Vehicles) is an importer, wholesale dealer
and retailer of original spare parts and supplies for Mercedes Benz and BMW
cars. Kopijyvä Oy & DMP-Digital Media Partners Oy (Digital Printing Services)
form Finland's largest company offering digital printing services and
publication and production services. Suomen Helakeskus Oy (Fittings) is a major
wholesaler of construction and furniture fittings in Finland. Selog Oy (Ceiling
Materials) is a specialty supplier and wholesaler of ceiling materials. Takoma
Oyj (Takoma) is a listed machine shop group with an entrepreneur-driven
business model. Vindea Oy (Value-added Logistics) is an enterprise specialized
in value-added logistics services for the Finnish metal industry.
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