2014-04-24 08:00:00 CEST
2014-04-24 08:00:03 CEST
REGULATED INFORMATION
Solteq Oyj - Interim report (Q1 and Q3)
SOLTEQ PLC’S INTERIM REPORT 1.1.-31.3.2014 (IFRS)
Solteq Plc Stock Exchange Bulletin 24.4.2014 at 9.00 am.
- Revenue totalled 9,9 million euros (10,0 million euros).
- The operating result for the review period was 586 thousand euros (544
thousand euros).
- The company's operating margin was 5,9 % (5,5 %).
- Solteq Group's equity ratio was 42,3 per cent (35,9 %).
- Earnings per share was 0,03 euros (0,03 euros).
KEY FIGURES
Turnover by operation:
% 1-3/14 1-3/13 1-12/13
Softwareservices 65 67 66
Licences 26 27 27
Hardware 9 6 7
CEO Repe Harmanen:
For Solteq, this year has started in a positive way despite the general market
situation and some of the negative signs we predicted last autumn. Out turnover
was at the same levels as in 2013, and we also improved our profitability.
In the first quarter, targeted growth of the turnover did not materialize as
expected, but general demand improved from last year. Although we foresee the
year to continue much the same, we expect that demand for our new solution
assortment will pick up. We believe that we will reach the organic growth
targets set for the turnover in the course of this year.
As to the risk management of a large ongoing project that we reported on
earlier, the measures we took during the first quarter were successful and the
project will not burden the operating profit in the same way as it did in the
previous financial year.
The turnover from the service sector lags slightly behind our expectations, but
at the same time our new total solutions have reduced the gap in terms of the
turnover and result. The implementation of our strategy has helped us maintain
the positive development. We will continue cost monitoring and rationalization
programs, and we will also search for new solutions to convert our fixed cost
into variable costs for the years to come.
Market demand picked up from the previous year and last autumn, but there are
still delays and postponements in project launches. On the other hand, the
radical changes in the market will speed up the schedules of certain new
projects. We believe that there will be positive signs in demand in the second
half of the year.
Our strategy work has proceeded as planned, and the implementation of the
strategy has started at all levels. Our aim is that the first concrete steps
will be taken by the end of the year and that we will be able to make use of
the advantages from 2015 onwards.
The first quarter did not bring any major surprises or developments. We will
continue the steady development of our business operations.
I wish all our stakeholders and interest groups a pleasant spring season.
BUSINESS ENVIRONMENT AND BUSINESS DEVELOPMENT
Solteq is a leading retail and service industry software service company. We
offer long-term partnership and the markets' widest range of retail and service
industry software services, from the optimisation of the entire supply chain to
the management of consumer-customer information. Our technology-independent
solutions help our customers to guide their business operations as efficiently
and profitably as possible.
Solteq Plc's reported segments are Grocery and special retail, HoReCa;
Wholesale, Logistics and Services and Enterprise Asset & Service Business
Management.
The aim of the segmentation is to respond to customer demand as a field total
supplier and therefore to improve the availability of services and ease for our
customers.
Solteq's turnover totalled 9.865 thousand euros in which contains decrease of
1,2 per cent compared to corresponding period in 2013. Solteq's operating
result increased 7,7 per cent to 586 thousand euros from 544 thousand euros
that was the operating result in the corresponding period 2013.
The company's operating margin was 5,9 % (5,5 % in 2013).
Grocery and Special Retail, HoReCa
Solteq's Grocery and Special Retail Segment provides its clients with total
solutions that they can utilise to improve efficiency in terms of logistics,
store operations, customer service, point of sale operations, as well as loyal
customer management.
The grocery and special retail solutions help optimise the management of the
product selection, space, deliveries, logistics and customer satisfaction while
increasing sales and improving the result. The solutions speed up the basic
operations, improve delivery reliability, reduce storage value, increase stock
turnover and enhance predictability. The store always has the right products
in the right place, at the right time, and at the right price.
During the review period the revenue of the Grocery and Special Retail segment
totalled 5,1 million euros and the operating result was 0,3 million euros.
Wholesale, Logistics and Services
Solteq's Wholesale, Logistics and Services Segment provides its clients with
ERP and financial management systems, as well as optimisation, integration and
reporting solutions that support these systems.
Solteq's solutions help clients manage their operations and enhance purchases,
sales, stock management and reporting. The systems can be utilised to improve
delivery reliability, reduce storage value, increase stock turnover and enhance
predictability. Materials flow management ensures that the right goods reach
the right customers at the right time, packed in an optimal manner.
Solteq's wholesale, logistics and services systems improve the effectiveness of
operations and enable more flexible and versatile customer service. At the same
time, automated data management enhances the company's internal operations.
Solteq's solutions are used daily by a large number of clients representing
various industries and sectors, such as wholesale, retail and public
administration.
During the review period the revenue of the Wholesale, Logistics and Services
segment totalled 3,4 million euros and the operating result was 0,1 million
euros.
Enterprise Asset & Service Business Management
Solteq's Enterprise Asset & Service Business Management Segment provides its
clients with ERP and master data management solutions.
The enterprise resource planning solutions developed for the optimisation of
service processes help clients manage their operations in many ways, for
instance enhance production plant reliability, task and resources management,
field work, sales and customer service, partner network management and
materials management. The solutions are utilised by a large number of clients
representing various industries and sectors, such as energy production,
maintenance services, life cycle services, engineering and technical services
of cities and municipalities, property management services, and home and care
services.
The Enterprise Asset & Service Business Management Segment also provides client
companies with services and products related to business critical data (master
data) in the form of master data improvement projects, data maintenance
services outsourced to master data service centers, software technologies for
master data management, and consultation services. The aim of these services is
to ensure that the data in the systems that support the clients' enterprise
resource planning and decision making processes are of high quality, compatible
and up-to-date. Solteq's master data management solutions are used by clients
across industries and sectors.
During the review period the revenue of the Enterprise Asset & Service Business
Management segment totalled 1,3 million euros and the operating result was 0,2
million euros.
REVENUE AND RESULT
Revenue totalled 9.865 thousand euros (9.987 thousand euros 2013).
Revenue consists of several individual customerships. At the most, one client
corresponds to less than ten percentages of the revenue.
The operating result for the review period was 586 thousand euros (544 thousand
euros), result before taxes was 507 thousand euros (481 thousand euros) and
result for the review period 411 thousand euros (360 thousand euros).
Previously in the latest Financial Statements reported financial risks in a
single major project in Wholesale, Trade and Logistics segment, were limited
reasonable way in business operations during the first quarter of the year.
According to Solteq's view the project will no longer have negative impact on
result during this financial year.
BALANCE SHEET AND FINANCE
The total assets amounted to 26.246 thousand euros (27.522 thousand euros).
Liquid assets totalled 1.963 thousand euros (2.169 thousand euros). In addition
to liquid assets, the company has unused bank account limits amounting to a
total of 1.500 thousand euros in the end of the financial year.
The Group's interest-bearing liabilities were 5.101 thousand euros (6.333
thousand euros).
Solteq Group's equity ratio was 42,3 per cent (35,9 per cent).
INVESTMENTS, RESEARCH AND DEVELOPMENT
Gross investment during the review period was 150 thousand euros (420 thousand
euros). The investments of the review period and the corresponding period in
2013 are mainly replacement investments.
Research and development
Solteq's research and development costs consist mainly of personnel costs. When
developing basic products, it is Solteq's strategy to cooperate with global
actors such as SAP, Symphony EYC and Microsoft and utilize their resources and
distribution channels. Own development efforts are focused on added value
products and developing tailored service concepts.
During the review period product development costs were not amortized (none in
the corresponding review period, either).
PERSONNEL
The number of permanent employees at the end of the review period was 279
(290). The average number of personnel during the review period was 284 (289).
In the end of the review period the number of personnel could be divided as
follows: Grocery and special retail, HoReCa segment: 119 people; Wholesale,
Logistics and Services: 87 people; Enterprise Asset & Service Business
Management; 39 people and 34 people in shared functions.
RELATED PARTY TRANSACTIONS
Solteq's related parties include the board of directors, managing director, the
management team and the companies owned by the management.
SHARES, SHAREHOLDERS AND TREASURY SHARES
Solteq Plc's equity on 31.3.2014 was 1.009.154,17 euros which was represented
by 14.998.061 shares. The shares have no nominal value.
At the end of the review period, the amount of treasury shares in Solteq Plc
and the group companies Solteq Management Oy's and Solteq Management Team Oy's
possessions were 790.794 shares. The amount of treasury shares represented 5,3
% of the total amount of shares and votes at the end of the review period. The
equivalent value of acquired shares was 53.209 euros.
No flagging announcements were made during the review period.
Exchange and rate
During the review period, the exchange of Solteq's shares in the Helsinki Stock
Exchange was 0,3 million shares (0,3 million shares ) and 0,4 million euros
(0,5 million euros). Highest rate during the review period was 1,59 euros and
lowest rate 1,35 euros. Weighted average rate of the share was 1,44 euros and
end rate 1,41 euros. The market value of the company's shares in the end of the
review period totalled 21,1 million euros (21,9 million euros).
Ownership
In the end of the review period, Solteq had a total of 1.780 shareholders
(1.795 shareholders). Solteq's 10 largest shareholders owned 11.234 thousand
shares i.e. they owned 74,9 per cent of the company's shares and votes. Solteq
Plc's members of the board owned a total of 5.538 thousand shares which equals
36,9 per cent of the company's shares and votes.
ANNUAL GENERAL MEETING
At Solteq Plc's Annual General Meeting on 17 March 2014 the 2013 financial
statements were adopted and the members of the board and the managing director
were discharged from liability for the 2013 review period.
In the meeting was accepted the proposal by the board that for the financial
year 2013, there will be paid a dividend of 0.03 euros per each share on the
market. In addition to this, the annual general meeting authorized the board to
decide on a distribution of dividend, or other distribution of funds from the
equity trust, for an amount of maximum 0.05 euros. The board is also allowed to
decide on the timing and other details of this. The authorization is valid
until the beginning of the next Annual General Meeting.
The Annual General Meeting authorized the board to acquire or pledge the
company's own shares in such a way that the amount of own shares can be at any
time maximum 10 per cent of the whole amount of company shares. With this
authorization, shares can be acquired or pledged in order to develop the equity
structure; or to be used as part of the personnel incentive system; or as a
funding or for the realization of acquisitions of another company; or for other
business arrangements; or they can be disclosed or invalidated. These shares
can be acquired also in other ratios than the shareowners ownership ratio. The
shares should be acquired from the public stock exchange. The board can decide
on the other conditions for this procedure. This authorization is valid until
next annual general meeting.
The Annual General Meeting authorized the board to decide on an issue of shares
for a maximum amount of 3 000 000 new or existing shares, owned by the company,
in one or several lots. The issue of shares should be implemented as a directed
issue, on the contrary to shareowners subscription rights. With this
authorization the board decides on all other conditions for the share issue.
This authorization is valid until next Annual General Meeting.
BOARD OF DIRECTORS AND AUDITORS
Seven members were elected to the Board of Directors. Ali Saadetdin, Seppo
Aalto, Markku Pietilä, Sirpa Sara-aho, Jukka Sonninen and Matti Roininen
continued as members of the board. Olli Välimäki was elected as a new member of
the board. The Board elected Ali Saadetdin to act as the Chairman of the Board.
KPMG Oy Ab, Authorized Public Accountants, was re-elected as Solteq's
auditors. Lotta Nurminen, APA, acted as the chief auditor.
EVENTS AFTER THE REVIEW PERIOD
No events requiring reporting have taken place after the review period.
RISKS AND UNCERTAINTIES
The key uncertainties and risks in short term are related to the timing and
pricing of business deals that are the basis for revenue, changes in the level
of costs and the company's ability to manage extensive contract agreements and
deliveries.
The key business risks and uncertainties of the company are monitored
constantly as a part of the board of directors' and management team's duties.
The company has not organized a separate internal audit organization or
committee.
PROSPECTS
Both revenue and operating result are expected to grow compared to financial
year 2013.
Financial reporting
This Interim Report has been prepared in accordance with IAS 34 Interim
Financial Reporting -standard and using the same accounting policies as the
financial statements 2013.
The financial result is reported through three business areas. Grocery and
special retail, HoReCa segment, Wholesale, Logistics and Services and
Enterprise Asset & Service Business Management. The most essential product and
service types of the Solteq group of companies are software services, licenses
and hardware sales.
All forecasts and estimates presented in the bulletin are based on the current
views of management on the economic environment and outlook. Because of this,
the results can differ as a result of, among other factors, changes in economy,
markets and competitive conditions, changes in the regulatory environment and
other government actions.
The interim report is unaudited.
FINANCIAL INFORMATION
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(TEUR)
1.1.- 1.1.- 1.1.-
31.3.2014 31.3.2013 31.12.2013
REVENUE 9 865 9 987 38 124
Other income 0 4 50
Materials and
services -2 437 -2 185 -9 151
Employee benefit
expenses -4 861 -5 042 -19 386
Depreciation and impairments -317 -299 -1 228
Other expenses -1 664 -1 921 -6 268
OPERATING RESULT 586 544 2 141
Financial income and
expenses -79 -63 -214
RESULT BEFORE TAXES 507 481 1 927
Income tax expences -96 -121 -306
RESULT FOR THE PERIOD
411 360 1 621
OTHER COMPREHENSIVE INCOME TO BE RECLASSIFIED
TO PROFIT OR LOSS IN SUBSEQUENT PERIODS
Cash flow hedges 6 20 27
Taxes related to cash flow hedge -1 -5 -6
Other comprehensive income,
net of tax 5 15 21
TOTAL COMPREHENSIVE INCOME
416 375 1 642
Total profit for the period attributable to
owners of the parent 411 360 1 621
Total comprehensive income attributable to
owners of the parent 416 375 1 642
Earnings/share,
e(undiluted) 0,03 0,03 0,11
Earnings/share,
e(diluted) 0,03 0,03 0,11
Taxes corresponding to the result have been presented as taxes for the period.
CONSOLIDATED BALANCE 31.3.2014 31.3.2013 31.12.2013
SHEET (TEUR)
ASSETS
NON-CURRENT ASSETS
Tangible assets 1 380 1 276 1 399
Intangible assets
Goodwill 12 730 12 730 12 730
Other intangible rights 2 702 3 408 2 853
Available-for-sale
financial assets 548 546 546
Trade and other receivables 32 63 32
Total
non-current assets 17 393 18 023 17 560
CURRENT ASSETS
Inventories 144 101 156
Trade and other receivables 6 746 7 229 5 303
Cash and cash equivalents 1 963 2 169 2 367
Total
current assets 8 853 9 499 7 826
TOTAL ASSETS 26 246 27 522 25 386
EQUITY AND LIABILITIES
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE
PARENT
Share capital 1 009 1 009 1 009
Share premium reserve 75 75 75
Hedging reserve -23 -34 -28
Reserve for own shares -958 -933 -933
Distributable equity
reserve 6 392 6 392 6 392
Retained earnings 4 294 3 364 4 331
Total equity 10 789 9 873 10 846
Non-current liabilities
Deferred tax liabilities 570 1 196 593
Financial liabilities 3 180 4 562 3 695
Current liabilities 11 707 11 891 10 252
Total liabilities 15 457 17 649 14 540
TOTAL EQUITY
AND LIABILITIES 26 246 27 522 25 386
CASH FLOW STATEMENT (MEUR)
1-3/2014 1-3/2013 1-12/2013
Cash flow from
business operations 0,60 2,00 3,83
Cash flow from capital
expenditure -0,15 -0,46 -0,96
Cash flow from financing activities
Own shares -0,02 0,00 0,00
Dividend distribution -0,38 -0,52 -0,90
Loan agreements -0,45 -0,09 -0,85
Cash flow from financing
activities -0,85 -0,61 -1,75
Change in cash and cash equivalents -0,40 0,93 1,12
STATEMENT OF CHANGES IN GROUP EQUITY (TEUR)
A=Share capital
B=Reserve for own shares
C=Share premium account
D=Hedging reserve
E=Distributable equity reserve
F=Retained earnings
G=Total
A B C D E F G
EQUITY 1.1.2013 1 009 -933 75 -49 6 368 3 607 10 077
Total comprehensive income 15 360 375
Directed issue 24 24
Dividend distribution -599 -599
EQUITY 31.3.2013 1 009 -933 75 -34 6 392 3 364 9 873
EQUITY 1.1.2014 1 009 -933 75 -28 6 392 4 331 10 846
Total comprehensive income 5 411 416
Acquiring of own shares -25 -25
Dividend distribution -449 -449
EQUITY 31.3.2014 1 009 -958 75 -23 6 392 4 294 10 789
SEGMENT INFORMATION
Turnover by segment:
Me 1-3/14 1-3/13 Change
Grocery and special retail, HoReCa 5,1 4,7 0,4
Wholesale, Logistics and Services 3,4 3,9 -0,5
Enterprise Asset & Service Business
Management 1,3 1,4 -0,1
Total 9,9 10,0 -0,1
Operating result by segment:
Me 1-3/14 1-3/13 Change
Grocery and special retail, HoReCa 0,3 0,6 -0,3
Wholesale, Logistics and Services 0,1 -0,2 0,3
Enterprise Asset & Service Business
Management 0,2 0,2 0,0
Total 0,6 0,5 0,1
QUARTERLY KEY INDICATORS (MEUR)
2Q/12 3Q/12 4Q/12 1Q/13
Net turnover 10,40 8,52 11,21 9,99
Operating result 0,39 0,51 0,88 0,54
Result before taxes 0,32 0,44 0,84 0,48
2Q/13 3Q/13 4Q/13 1Q/14
Net turnover 9,73 8,59 9,82 9,87
Operating result 0,54 0,63 0,43 0,59
Result before taxes 0,49 0,60 0,36 0,51
TOTAL INVESTMENTS (TEUR)
1-3/2014 1-3/2013 1-12/2013
Continuing operations,
group total 150 420 957
LIABILITIES (MEUR) 31.3.2014 31.3.2013 31.12.2013
Business mortages 10,00 10,00 10,00
Other lease liabilities 3,32 3,97 3,53
RELATED PARTY TRANSACTIONS (TEUR) 31.3.2014 31.3.2013 31.12.2013
Renting arrangements 21 21 83
Outsourcing expenses 0 0 2
Transactions with the insiders have been done at market price and are
part of the company's normal software service
business.
FAIR VALUES OF FINANCIAL ASSETS AND FINANCIAL
LIABILITIES
The fair values of the financial assets and liabilities are mainly
the same as the book values. Hence they are not presented in
table form in the bulletin.
MAJOR SHAREHOLDERS 31.3.2014
Shares and votes
Number %
1. Saadetdin Ali 3 481 383 23,2
2. Keskinäinen Työeläkevakuutusyhtiö Elo 2 000 000 13,3
3. Profiz Business Solution Oyj 1 756 180 11,7
4. Aalto Seppo 1 662 206 11,1
5. Keskinäinen Työeläkevakuutusyhtiö Varma 644 917 4,3
6. Pirhonen Jalo 408 480 2,7
7. Solteq Management Oy 400 000 2,7
8. Roininen Matti 374 000 2,5
9. Solteq Management Team Oy 350 000 2,3
10. Saadetdin Katiye 156 600 1,0
10 largest shareholders total 11 233 766 74,9 %
Total of nominee-registered 125 887 0,8 %
Others 3 638 408 24,3 %
Total 14 998 061 100,0 %
FINANCIAL PERFORMANCE
INDICATORS (IFRS) 1-3/2014 1-3/2013 1-12/2013
Net turnover MEUR 9,9 10,0 38,1
Change in net turnover -1,2 % 12,9 % -2,3 %
Operating result MEUR 0,6 0,5 2,1
% of turnover 5,9 % 5,5 % 5,6 %
Result
before taxes MEUR 0,5 0,5 1,9
% of turnover 5,1 % 4,8 % 5,1 %
Equity ratio, % 42,3 35,9 43,5
Gearing, % 29,1 % 42,2 % 29,4 %
Gross investments in
non current assets MEUR 0,2 0,4 1,0
Return on equity, % 16,2 % 15,1 % 15,5 %
Return on investment, % 15,0 % 13,8 % 13,2 %
Personnel at the end of
period 279 290 277
Personnel average
for period 284 289 287
KEY INDICATORS PER SHARE
Earnings/share, e 0,03 0,03 0,11
Earnings/share,
e(diluted) 0,03 0,03 0,11
Equity/share, e 0,72 0,66 0,72
CALCULATION OF FINANCIAL
RATIOS
Solvency ratio, in
percentage:
equity
---------------------------------- x 100
balance sheet total - advances received
Gearing:
interest bearing liabilities - cash, bank balancies
and securities
------------------------------------------- X 100
equity
Return on equity (ROE)
in percentage:
profit or loss before taxation - taxes
---------------------------------------- x 100
equity
Profit from invested
equity in percentage:
profit or loss before taxation +
interest expenses and other financing expenses
---------------------------------------- x 100
balance sheet total- non-interest bearing
liabilities
Earnings per share:
pre-tax result - taxes +/- minority interest
------------------------------------
diluted average share issue
corrected number of shares
Diluted earnings per
share:
diluted profit before taxation - taxes -/+ minority
interest
-----------------------------------------------
diluted average share issue
corrected number of shares
Equity per share :
equity
-----------------------
number of shares
Financial reporting
Solteq Plc's financial information bulletins in 2014 have been scheduled as
follows:
- Interim Report 1-6/2014 on Thursday July 17, 2014 at 9 am
- Interim Report 1-9/2014 on Friday October 17, 2014 at 9 am
More investor information is available from Solteq's website at www.solteq.com
Additional information:
CEO Repe Harmanen,
Tel +358 400 467 717,
E-mail repe.harmanen@solteq.com
CFO Antti Kärkkäinen
Tel +358 40 8444 393,
E-mail antti.karkkainen@solteq.com
Distribution:
NASDAQ OMX Helsinki
Key media
www.solteq.com
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