2014-10-30 07:30:00 CET
2014-10-30 07:30:06 CET
REGULATED INFORMATION
Teleste - Interim report (Q1 and Q3)
TELESTE CORPORATION INTERIM REPORT 1 JAN TO 30 SEP 2014: SUCCESSFUL THIRD QUARTER, FULL-YEAR OUTLOOK IMPROVED
Turku, Finland, 2014-10-30 07:30 CET (GLOBE NEWSWIRE) -- TELESTE
CORPORATIONINTERIM REPORT 30.10.2014 AT 08:30
TELESTE CORPORATION INTERIM REPORT 1 JAN TO 30 SEP 2014
SUCCESSFUL THIRD QUARTER, FULL-YEAR OUTLOOK IMPROVED
Third quarter of 2014
- Orders received totalled EUR 49.0 (51.1) million, a decrease of 4.1%
- Net sales amounted to EUR 50.4 (46.5) million, an increase of 8.4%
- Operating profit totalled EUR 4.9 (3.2) million, an increase of 55.0%
- Undiluted earnings were EUR 0.20 (0.12) per share, an increase of 72.8%
- Cash flow from operations was EUR 0.0 (3.0) million
New guidance for the 2014 outlook
We estimate that net sales for 2014 will reach 2013 level, while our operating
profit is likely to fall from the 2013 level.
Previous guidance for the 2014 outlook
We estimate that net sales and operating profit for the year 2014 will not
reach the 2013 level.
Comments on the third quarter of 2014 by President and CEO Jukka Rinnevaara:"Network investments by the European cable operators picked up following a
quiet early year and we achieved very good results in the third
quarter.Operating profit for the third quarter was one of the best in Teleste's
history.In our estimation we have been able to strengthen our position in the
cable network market, and the frame agreement signed in August with the Altice
Group provides a good example of this.
Demand for Video and Broadband Solutions remained at a good level.Operators are
planning to upgrade their networks utilizing the new Docsis 3.1
telecommunications standard.Teleste's new Docsis 3.1 products have proven to be
competitive, and we can bring them at the forefront of the market.Our good
ability to deliver enabled us to achieve excellent profitability in almost all
product areas.We grew strongly particularly in the sales of HFC access network
equipment.Our net sales increased most in the French, German and the UK
markets.We have managed to respond to the price competition by continued
streamlining of our supply chain.
Demand for Network Services remained stable.Profitability has developed
positively in Germany, and we achieved a good result in the Finnish, Belgian
and Swiss services businesses.Operating profit was weakened, however, by
investments aimed at expanding our business in the UK, where the offered new
services did not yet reach a positive result in the third quarter."
Group Operations in July-September 2014
Key figures (EUR million)
7-9/2014 7-9/2013 Change
Orders received 49.0 51.1 -4.1%
Net sales 50.4 46.5 +8.4%
EBIT 4.9 3.2 +55.0%
Operating profit margin 9.8% 6.9%
Profit for the period 3.6 2.0 +75.2%
Other important key figures
Earnings per share, € 0.20 0.12 +72.8%
Cash flow from operations -0.0 3.0 -100.1%
The Group's order intake for the third quarter decreased by 4.1% and totalled
EUR 49.0 (51.1) million.Highly successful equipment deliveries decreased the
order backlog to EUR 16.0 (17.4) million. Net sales increased by 8.4% to EUR
50.4 (46.5) million.Operating profit increased 55.0% and stood at EUR 4.9 (3.2)
million, representing 9.8% (6.9%) of net sales.
Operating profit was significantly improved by Video and Broadband Solutions,
which increased its net sales while slightly decreasing the relative share of
cost of materials.Personnel expenses increased by 7.2% and totalled EUR 13.7
(12.8) million.Personnel costs were pushed up by a higher number of employees
in Network Services.Use of subcontracting has been replaced to a degree by our
own personnel.
Undiluted earnings per share were EUR 0.20 (0.12).Exchange rate gains from
financial items improved the profit for the period. Operating cash flow stood
at EUR 0.0 (3.0) million.
Group Operations in January-September 2014
Key figures (EUR million)
1-9/2014 1-9/2013 Change % 1-12/2013
Orders received 146.3 138.7 +5.4% 188.9
Net sales 143.3 138.7 +3.3% 192.8
EBIT 7.6 7.5 +1.1% 11.0
Operating profit margin 5.3% 5.4% 5.7%
Profit for the period 5.4 5.1 5.8% 8.1
Other important key figures
Earnings per share, € 0.31 0.29 +4.3% 0.47
Cash flow from operations 1.8 7.3 -75.8% 10.0
Net gearing 19.6% 17.4% 13.8%
Equity ratio 52.6% 50.4% 52.7%
Personnel at period-end 1 318 1 283 2,7 % 1 261
Orders received increased 5.4% to EUR 146.3 (138.7) million.Net sales grew by
3.3% amounting to EUR 143.3 (138.7) million.Operating profit increased 1.1% and
stood at EUR 7.6 (7.5) million, representing 5.3% (5.4%) of net sales.
Personnel expenses amounted to EUR 43.1 (41.7) million. Net financing expenses
amounted to EUR 0.1 (0.4) million. Taxes for the Group amounted to EUR 2.1
(2.0) million while the Group's tax rate was 28.0% (28.3%). Undiluted earnings
per share were EUR 0.31 (0.29). Operating cash flow stood at EUR 1.8 (7.3)
million. Video and Broadband Solutions in July-September 2014
Key figures (1,000 €) 7-9/2014 7-9/2013 Change
Orders received 27,571 28,919 -4.7%
Net sales 28,909 24,258 +19.2%
EBIT 4,421 2,362 +87.2%
Operating profit margin 15.3% 9.7%
Orders received declined by 4.7% from the comparative period standing at EUR
27.6 (28.9) million. Highly successful product deliveries decreased the order
backlog to EUR 16.0 (17.4) million. Net sales increased 19.2% equalling EUR
28.9 (24.3) million. We managed to increase our net sales in almost all product
categories. Operating profit grew by 87.2% amounting to EUR 4.4 (2.4) million.
Operating profit margin was 15.3% (9.7%). This increase in the operating profit
was enabled, in particular, by good demand for, and delivery ability in, our
access network products.
Research and development expenses were EUR 2.1 (2.0) million, representing 7.4%
(8.4%) of the business area's net sales. Capitalized R&D expenses amounted to
EUR 0.1 (0.3) million. Product development projects focused on network products
complying with the Docsis 3.1 standard and on customer-specific projects.
Depreciation on R&D expenses amounted to EUR 0.3 (0.3) million.
Video and Broadband Solutions in January-September 2014
Key figures (1,000 €) 1-9/2014 1-9/2013 Change 1-12/2013
Orders received 80,365 73,688 +9.1% 97,815
Net sales 77,401 73,696 +5.0% 101,716
EBIT 7,057 7,106 -0.7% 9,460
Operating profit margin 9.1% 9.6% 9.3%
Orders received increased 9.1% to EUR 80.4 (73.7) million. Net sales grew by
5.0% amounting to EUR 77.4 (73.7) million. Thanks to the strong third quarter,
operating profit reached the previous year's level of EUR 7.1 (7.1) million.
Operating profit margin was 9.1% (9.6%).
Product development expenses equalled EUR 7.7 (7.1) million, in other words
10.0% (9.6%) of net sales. Capitalized R&D expenses amounted to EUR 0.7 (0.9)
million while depreciation on R&D expenditure totalled EUR 0.9 (1.5) million.
Product development projects focused on network products complying with Docsis
3.1 standard, network management system, distributed access architecture and
customer-specific projects.
Network Services in July-September 2014
Key figures (1,000 €) 7-9/2014 7-9/2013 Change
Orders received 21,455 22,220 -3.4%
Net sales 21,455 22,220 -3.4%
EBIT 516 823 -37.3%
Operating profit margin 2.4% 3.7%
Third-quarter net sales stood at EUR 21.5 (22.2) million, which is 3.4% less
than in the comparative period. Net sales declined mainly in Germany. Compared
to the same period in the previous year, operating profit decreased by 37.3%
standing at EUR 0.5 (0.8) million, which is 2.4% (3.7%) of net sales. This
decline in operating profit was primarily due to investments made in the UK
services business expansion, which has not yet achieved a positive operating
result.
Network Services in January-September 2014
Key figures (1,000 €) 1-9/2014 1-9/2013 Change 1-12/2013
Orders received 65,908 65,036 +1.3% 91,060
Net sales 65,908 65,036 +1.3% 91,060
EBIT 554 419 +32.2% 1,587
Operating profit margin 0.8% 0.6% 1.7%
Net sales grew by 1.3% amounting to EUR 65.9 (65.0) million. Operating profit
equalled EUR 0.6 (0.4) million. Operating profit has improved in Germany,
whereas investments in the expansion of our UK services business burden it.
Personnel and Organization in January-September 2014
In the period under review, the Group had an annual average of 1,292 people
(1324/2013, 1,326/2012), of whom 564 (562) were employed by Video and Broadband
Solutions, and 728 (762) by Network Services. At the end of the reporting
period, the Group employed 1,318 people (1,283/2013, 1,308/2012), of which 554
worked for Video and Broadband Solutions and 763 for Network Services. At the
end of the reporting period the share of those working abroad was 72%
(72%/2013, 73%/2012). 3% of the Group's employees worked outside of Europe.
Personnel expenses increased by 3.3% from the comparison period and totalled
EUR 43.1 (41.7 1-9/2013, 43.8 1-9/2012) million. This increase in personnel
costs was affected by growth in personnel in the UK and cost reduction measures
in Finland in 2013.
The ability to deliver of our Finnish production was improved, among others, by
using temporary workforce, particularly in the third quarter. At the end of
the period the number of temporary labour in the Finnish production was 25
people.
Investments and Product Development in January-September 2014
Investments by the Group for the period under review totalled EUR 2.9 (5.3)
million accounting for 2.0% (3.8%) of net sales. Investments in the comparative
period included acquisition of Asheridge. Investments in product development
equalled EUR 0.7 (0.9) million. Investments of EUR 0.3 (0.1) million were made
under financial lease arrangements.
Product development projects focused on network products complying with Docsis
3.1 standard, network management system, distributed access architecture and
customer-specific projects.
Financing and Capital Structure in January-September 2014
Operating cash flow stood at EUR 1.8 (7.3) million. This decrease in cash flows
from operating activities was primarily due to engagement of working capital to
trade receivables. At the end of the period under review, the amount of unused
binding credit facilities amounted to EUR 16.0 (15.0) million. Current
committed revolving credit facilities of EUR 40.0 million are in place until
August 2015.
The Group's equity ratio was 52.6% (50.4%) while net gearing equalled 19.6%
(17.4%). On 30 September 2014, the Group's interest-bearing debt stood at EUR
25.5 (26.3) million.
Essential Operational Risks of Business Areas
Founded in 1954, Teleste is a technology and services company consisting of two
business areas - Video and Broadband Solutions and Network Services. With
Europe as the main market area, our clients include European cable operators
and specified organizations in the public sector.
As to Video and Broadband Solutions, client-specific and integrated deliveries
of solutions create favourable conditions for growth, even if the involved
resource allocation and technical implementation pose a challenge involving,
therefore, also reasonable risks. Our customers' network investments vary based
on the relevant need for upgrading and their financial structure. Significant
part of Teleste's competition comes from the USA so the exchange rate of euro
up against the US dollar affects our competitiveness. The exchange rate
development of the Chinese renminbi to euro affects our material costs.
The company hedges against short-term currency exposure by means of forward
contracts. The situation in the European financial markets may slow down our
customers' investment plans. Furthermore, a weakening in the consumer
purchasing power in Europe could slow down the network investments by the cable
operators. Competition increased by the new service providers (OTT) may
undermine the cable operators' ability to invest. Availability of components is
subject to natural phenomena, such as floods and earthquakes. Severe weather
conditions have an impact on the business areas' ability to deliver products
and services. Correct technological choices and their timing are vital for our
success.
Net sales of Network Services comes, for the most part, from a small number of
large European customers, so a significant change in the demand for our
services by any one of them is reflected in the actual deliveries and
profitability. To ensure quality of services and cost-efficiency along with
efficient service process management, customer satisfaction and improvements in
productivity require innovative solutions in terms of processes, products and
logistics. Smooth operation of cable networks requires effective technical
management and functional hardware solutions in accordance with contractual
obligations. This, in turn, demands continuous and determined development of
skills and competences in Teleste's own personnel as well as those of our
subcontractors. In addition, Teleste's ability to deliver and compete may be
constrained by the adequacy of our sub-contractor network capacity. Tender
calculation and management of larger projects with overall responsibility are
complex and include risks.
It is important for our business areas to take into account any market
developments such as consolidations taking place among the clientele and
competition. The threats to information systems must be minimized to ensure
business continuity. The Board of Directors annually reviews any essential
risks related to the company operation and their management. Risk management is
an integral part of the strategic and operational activities of the business
areas. Risks are reported to the Board on a regular basis.
The company has covered any major risks of loss involving the business areas
through insurance policies. Insurance will also cover credit loss risks related
to sales receivables. In the period under review, no such legal proceedings or
judicial procedures were pending that would have had any essential significance
for the Group operation.
Group Structure
Parent company Teleste has branch offices in Australia, the Netherlands, and
Denmark with subsidiaries in 14 countries outside Finland. Teleste Management
Oy was merged with the parent company on 28 February 2014. Teleste Management
II Oy, founded in December 2011, has been consolidated in the Teleste Group
figures on account of financial arrangements.
Shares and Changes in Share Capital
On 30 September 2014, EM Group Oy was the largest single shareholder with a
holding of 23.2%.
In the period under review, the lowest company share price was EUR 4.25 (3.81)
and the highest was EUR 5.14 (4.42). Closing price on 30 September 2014 stood
at EUR 5.00 (4.12). According to Euroclear Finland Ltd the number of
shareholders at the end of the period under review was 4,931 (5,106). Foreign
ownership accounted for 4.9% (5.6%). The value of shares traded on the NASDAQ
Helsinki on 1 January to 30 September 2014 was EUR 7.6 (7.0) million. In the
period under review, 1.7 (1.7) million Teleste shares were traded on the stock
exchange.
At the end of September 2014, the Group held 1,189,654 of its own shares, of
which the parent company Teleste Corporation had 647,654 shares while the Group
and controlled companies had 542,000 shares, respectively. At the end of the
period, the Group's holding of the total amount of shares amounted to 6.3%
(6.3%).
The share subscription period for stock option rights 2007C began on 1 April
2012 and ended on 30 April 2014. Stock option rights 2007C enabled subscription
of 280,000 shares in total. Based on option rights 2007C, a total of 256,998
Teleste Corporation's new shares were subscribed. Those 2007C option rights
that were not used before the expiry of the subscription period, are null and
void.
On 30 September 2014, the registered share capital of Teleste stood at EUR
6,966,932.80 divided in 18,985,588 shares.
Decisions by the Annual General Meeting
The Annual General Meeting (AGM) of Teleste Corporation on 1 April 2014
confirmed the financial statements for 2013 and discharged the Board of
Directors and the CEO from liability for the financial period. The AGM
confirmed the dividend of EUR 0.19 per share proposed by the Board. The
dividend was paid out on 11 April 2014.
Ms. Marjo Miettinen, Mr. Pertti Ervi, Ms. Jannica Fagerholm, Mr. Esa Harju, Mr.
Kai Telanne and Mr. Petteri Walldén continue in Teleste's Board of Directors.
Ms. Marjo Miettinen was elected Chair of the Board in the organizational
meeting held immediately after the AGM.
Authorized Public Accountants KPMG Oy Ab continues as the auditor until the
next AGM. Mr. Esa Kailiala, accountant authorized by the Central Chamber of
Commerce of Finland, was chosen auditor-in-charge.
On 1 April 2014, the Annual General Meeting decided on the following
authorizations of the Board of Directors:
- Purchases of own shares: maximum of 1,200,000 shares. This authorization is
valid for 18 months from the date of the decision.
- Issue of new shares: maximum of 4,000,000 shares, valid for three years from
the date of the decision.
- Disposal of own shares in possession: maximum of 1,800,000 shares, valid for
three years from the date of the decision.
- Based on the special rights granted by the Company, the number of shares to
subscribe may not exceed 2,500,000 shares; these special rights are included in
the maximum warrants concerning new shares and the Group's own shares mentioned
above. This authorization will be valid for three years from the date of the
decision.
Events after the end of period
Teleste announced on 28 October 2014 having signed a three-year agreement with
SNCF (French National Railway Company) concerning the high-level maintenance of
its video surveillance system. The value of this agreement was over two million
euros.
Outlook for 2014
Video and Broadband Solutions aim at maintaining a strong market position in
Europe and expand into selected new markets. Network capacity will continue to
increase driven by the new broadband and video services provided by the
operators. New products in line with communication standard Docsis 3.1 will
enable network operators to activate their investments. Price erosion in the
market continues. The positive trend in the video surveillance market will
continue, but the public sector decisions to start projects may be delayed in
the current economic climate.
The business objective of Network Services is to develop the operational
efficiency and increase their services business requiring higher level of
competence. We estimate the demand for comprehensive network services in our
key target markets to continue at par with the comparative year.
New guidance for the 2014 outlook
We estimate that net sales for 2014 will reach 2013 level, while our operating
profit is likely to fall from the 2013 level.
Previous guidance for the 2014 outlook
We estimate that net sales and operating profit for the year 2014 will not
reach the 2013 level.
29 October 2014
Teleste Corporation Jukka Rinnevaara
Board of Directors President and CEO
This interim report has been compiled in compliance with IAS 34, as it is
accepted within EU, using the recognition and valuation principles with those
used in the Annual Report. Teleste has prepared this interim report applying
the same accounting principles as those described in detail in it's the
consolidated financial statements. The data stated in this report is unaudited.
The changes in IAS1, IFRS13 and IAS19 have been applied in this interim report
and they do not have any material impact on the financial reporting.
STATEMENT OF COMPREHENSIVE INCOME 7-9/2014 7-9/2013 Change % 1-12/2013
(tEUR)
Net Sales 50,365 46,478 8.4 % 192,775
Other operating income 281 347 -19.1 % 840
Materials and services -24,368 -23,350 4.4 % -94,456
Personnel expenses -13,743 -12,815 7.2 % -56,949
Other operating expenses -6,508 -6,390 1.8 % -26,536
Depreciation -1,089 -1,085 0.4 % -4,628
Operating profit 4,937 3,185 55.0 % 11,047
Financial income and expenses 90 -239 n/a -386
Profit after financial items 5,027 2,946 70.6 % 10,660
Profit before taxes 5,027 2,946 70.6 % 10,660
Taxes -1,462 -911 60.5 % -2,513
Net profit 3,565 2,035 75.2 % 8,147
Attributable to:
Equity holders of the parent 3,565 2,035 75.2 % 8,147
Earnings per share for result of the year attributable to the equity holders of
the parent
(expressed in € per share)
Basic 0.20 0.12 72.8 % 0.47
Diluted 0.20 0.11 75.6 % 0.46
Total comprehensive income for the
period (tEUR)
Net profit 3,565 2,035 75.2 % 8,147
Possible items with future net
profit effect
Translation differences -126 44 n/a -559
Fair value reserve -33 -19 73.7 % 16
Total comprehensive income for the 3,406 2,060 65.3 % 7,604
period
Attributable to:
Equity holders of the parent 3,406 2,060 65.3 % 7,604
STATEMENT OF COMPREHENSIVE INCOME 1-9/2014 1-9/2013 Change % 1-12/2013
(tEUR)
Net Sales 143,310 138,732 3.3 % 192,775
Other operating income 784 805 -2.6 % 840
Materials and services -70,631 -66,951 5.5 % -94,456
Personnel expenses -43,091 -41,705 3.3 % -56,949
Other operating expenses -19,647 -19,759 -0.6 % -26,536
Depreciation -3,114 -3,597 -13.4 % -4,628
Operating profit 7,611 7,525 1.1 % 11,047
Financial income and expenses -128 -424 -69.9 % -386
Profit after financial items 7,483 7,101 5.4 % 10,660
Profit before taxes 7,483 7,101 5.4 % 10,660
Taxes -2,094 -2,008 4.3 % -2,513
Net profit 5,389 5,093 5.8 % 8,147
Attributable to:
Equity holders of the parent 5,389 5,093 5.8 % 8,147
Earnings per share for result of the year attributable to the equity holders of
the parent (expressed in € per share)
Basic 0.31 0.29 4.3 % 0.47
Diluted 0.30 0.29 5.3 % 0.46
Total comprehensive income for the period (tEUR)
Net profit 5,389 5,093 5.8 % 8,147
Possible items with future net profit effect
Translation differences -175 -427 -59.0 % -559
Fair value reserve -32 32 n/a 16
Total comprehensive income for the 5,182 4,698 10.3 % 7,604
period
Attributable to:
Equity holders of the parent 5,182 4,698 10.3 % 7,604
STATEMENT OF FINANCIAL POSITION 30.09.2014 30.09.2013 Change % 31.12.2013
(tEUR)
Non-current assets
Property,plant,equipment 9,906 10,578 -6.4 % 10,499
Goodwill 33,444 33,376 0.2 % 33,252
Other intangible assets 3,843 4,352 -11.7 % 4,448
Deferred tax assets 1,966 2,206 -10.9 % 2,002
Available-for-sale investments 694 286 142.5 % 294
49,853 50,798 -1.9 % 50,494
Current assets
Inventories 21,629 21,307 1.5 % 19,762
Trade and other receivables 45,395 36,237 25.3 % 38,844
Cash and cash equivalents 12,000 15,450 -22.3 % 15,229
79,024 72,994 8.3 % 73,835
Total assets 128,877 123,791 4.1 % 124,329
Shareholder's equity and
liabilities
Share capital 6,967 6,967 0.0 % 6,967
Other equity 60,319 55,003 9.7 % 58,160
Non-controlling interest 483 425 13.5 % 425
67,769 62,396 8.6 % 65,552
Non-current liabilities
Provisions 598 783 -23.6 % 634
Deferred tax liabilities 1,143 1,902 -39.9 % 1,293
Non interest bearing 2,621 2,400 9.2 % 2,414
liabilities
Interest bearing liabilities 655 814 -19.5 % 470
5,017 5,899 -15.0 % 4,810
Current liabilities
Trade payables and other 29,743 28,858 3.1 % 28,130
liabilities
Current tax payable 648 267 142.7 % 1,206
Provisions 863 850 1.5 % 832
Interest bearing liabilities 24,838 25,521 -2.7 % 23,799
56,091 55,496 1.1 % 53,967
Total shareholder's equity and 128,877 123,791 4.1 % 124,329
liabilities
CONSOLIDATED CASH FLOW STATEMENT (tEUR) 1-9/20 1-9/20 Change 1-12/2
14 13 % 013
Cash flows from operating activities
Profit for the period 5,389 5,093 5.8 % 8,147
Adjustments 5,336 6,029 -11.5 % 7,608
Interest and other financial expenses and -128 -424 -69.9 % -403
incomes
Paid Taxes -2,652 -3,816 -30.5 % -3,402
Change in working capital -6,179 418 n/a -1,989
Cash flow from operating activities 1,766 7,300 -75.8 % 9,961
Cash flow from investing activities
A conditional supplementary contract price 0 -3,541 n/a -2,585
for prior subsidiary acquisitions
Purchases of property, plant and equipment -1,439 -977 47.3 % -1,180
(PPE)
Purchases of intangible assets -725 -897 -19.2 % -1,442
Acquisition of subsidiary, net of cash 0 0 n/a -965
acquired
Acquisition of assets available for sale -407 0 n/a 0
Net cash used in investing activities -2,571 -5,415 -52.5 % -6,172
Cash flow from financing activities
Proceeds from borrowings 1,000 5,000 -80.0 % 5,000
Payments of borrowings -284 -2,029 -86.0 % -4,178
Dividends paid -3,462 -2,962 16.9 % -2,962
Proceeds from issuance of ordinary shares 497 103 382.5 % 270
Net cash used in financing activities -2,249 112 n/a -1,870
Change in cash
Cash in the beginning 15,229 13,880 9.7 % 13,880
Change in cash during period -3,054 1,997 n/a 1,919
Effect of currency changes -175 -427 -59.0 % -571
Cash at the end 12,000 15,450 -22.3 % 15,229
KEY FIGURES 1-9/2014 1-9/201 Change 1-12/201
3 % 3
Earnings per share, EUR 0.31 0.29 6.9 % 0.47
Earnings per share fully diluted, EUR 0.30 0.29 4.2 % 0.46
Shareholders' equity per share, EUR 3.78 3.55 6.5 % 3.73
Return on equity 10.8 % 11.0 % -1.8 % 12.9 %
Return on capital employed 11.4 % 11.5 % -0.9 % 13.0 %
Equity ratio 52.6 % 50.4 % 4.4 % 52.7 %
Gearing 19.6 % 17.4 % 12.6 % 13.8 %
Investments, tEUR 2,875 5,273 -45.5 % 6,313
Investments % of net sales 2.0 % 3.8 % 3.3 %
Order backlog, tEUR 16,033 17,392 -7.8 % 13,100
Personnel, average 1,292 1,324 -2.4 % 1,306
Number of shares (thousands) 18,910 18,734 0.9 % 18,744
including own shares
Highest share price, EUR 5.14 4.42 16.3 % 4.47
Lowest share price, EUR 4.25 3.81 11.5 % 3.78
Average share price, EUR 4.53 4.12 10.0 % 4.17
Turnover, in million shares 1.7 1.7 -1.0 % 2.2
Turnover, in MEUR 7.6 7.0 9.0 % 9.2
Treasury shares
Number % of % of
of shares shares votes
Possession of company's own shares 1,189,654 6.27 % 6.27 %
30.9.2014
Contingent liabilities and pledged assets (tEUR)
Leasing and rent liabilities 6,179 6,907 -10.5 % 6,748
Derivative instruments (tEUR)
Value of underlying forward contracts 5,217 7,830 -33.4 % 7,633
Market value of forward contracts 34 -257 n/a -209
Interest rate swap 11,000 11,000 0.0 % 11,000
Market value of interest swap -38 10 n/a -6
Taxes are computed on the basis of the tax on the profit for the period.
OPERATING SEGMENTS (tEUR) 1-9/2014 1-9/2013 Change % 1-12/2013
Video and Broadband Solutions
Orders received 80,365 73,688 9.1 % 97,815
Net sales 77,401 73,696 5.0 % 101,716
EBIT 7,057 7,106 -0.7 % 9,460
EBIT% 9.1 % 9.6 % 9.3 %
Network Services
Orders received 65,908 65,036 1.3 % 91,060
Net sales 65,908 65,036 1.3 % 91,060
EBIT 554 419 32.2 % 1,587
EBIT% 0.8 % 0.6 % 1.7 %
Total
Orders received 146,273 138,724 5.4 % 188,875
Net sales 143,310 138,732 3.3 % 192,776
EBIT 7,611 7,525 1.1 % 11,047
EBIT% 5.3 % 5.4 % 5.7 %
Financial items -128 -424 -69.9 % -386
Operating segments net profit before 7,483 7,101 5.4 % 10,660
taxes
Information per quarter 7-9/14 4-6/14 1-3/14 10-12/13 7-9/13 10/2013-
(tEUR) 9/2014
Video and Broadband Solutions
Orders received 27,571 27,898 24,896 24,127 28,919 104,492
Net sales 28,909 27,007 21,485 28,020 24,258 105,421
EBIT 4,421 1,835 801 2,354 2,362 9,411
EBIT % 15.3 % 6.8 % 3.7 % 8.4 % 9.7 % 8.9 %
Network Services
Orders received 21,455 22,405 22,048 26,024 22,220 91,932
Net sales 21,455 22,405 22,048 26,024 22,220 91,932
EBIT 516 -452 490 1,168 823 1,722
EBIT % 2.4 % -2.0 % 2.2 % 4.5 % 3.7 % 1.9 %
Total
Orders received 49,026 50,303 46,944 50,151 51,139 196,424
Net sales 50,365 49,412 43,533 54,044 46,478 197,354
EBIT 4,937 1,383 1,291 3,522 3,185 11,133
EBIT % 9.8 % 2.8 % 3.0 % 6.5 % 6.9 % 5.6 %
Attributable to equity holders of the parent (tEUR)
A Share capital
B Share premium
C Translation differences
D Retained earnings
E Invested free capital
F Other funds
G Total
H Share of non-controlling interest
I Total equity
A B C D E F G H I
Shareholder's 6,967 1,504 126 53,079 3,457 -6 65,127 425 65,552
equity 1.1.2014
Total -175 5,389 0 -32 5,182 0 5,182
comprehensive
income for the
period
Used share options 497 497 0 497
Paid dividend -3,564 -3,564 102 -3,462
Interest, non 44 44 -44 0
controll party
Equity-settled 0 0 0 0
share-based
payments
Shareholder's 6,967 1,504 -49 54,948 3,954 -38 67,286 483 67,769
equity 30.9.2014
Shareholder's 6,967 1,504 685 48,007 2,737 -22 59,878 678 60,557
equity 1.1.2013
Total -427 5,093 32 4,698 0 4,698
comprehensive
income for the
period
Used share options 103 103 0 103
Paid dividend -3,119 -3,119 157 -2,962
Interest, non 43 43 -43 0
controll party
Equity-settled 367 367 -367 0
share-based
payments
Shareholder's 6,967 1,504 258 50,024 3,207 10 61,970 425 62,396
equity 30.9.2013
CALCULATION OF KEY FIGURES
Return on Profit/loss for the financial period
equity: ------------------------------ * 100
Shareholders' equity (average)
Return on Profit/loss for the period after financial items + financing
capital charges
employed: ------------------------------ * 100
Total assets - non-interest-bearing
liabilities (average)
Equity ratio: Shareholders' equity
----------------------------- * 100
Total assets - advances received
Gearing: Interest bearing liabilities - cash in hand and in bank -
interest bearing assets
----------------------------- * 100
Shareholders' equity
Earnings per Profit for the period attributable to equity holder of the
share: parent
----------------------------------------------
Weighted average number of ordinary shares outstanding during
the period
Earnings per Profit for the period attributable to equity holder of the
share, parent (diluted)
diluted: ----------------------------------------------- Average number
of shares - own shares + number of options at the period-end
Major shareholders 30.9.2014 Number of shares % of share capital
EM Group Oy 4,409,712 23.23
Mandatum Life Insurance Company Limited 1,679,200 8.84
Ilmarinen Mutual Pension Insurance Company 963,860 5.08
Kaleva Mutual Insurance Company 824,641 4.34
Teleste Oyj 647,654 3.41
OP-Finland Small Firms Fund 630,712 3.32
Teleste Management II Oy 542,000 2.85
Varma Mutual Pension Insurance Company 521,150 2.74
The State Pension Fund 500,000 2.63
FIM Fenno Equity Fund 271,288 1.43
Shareholders by sector Number of % of Number of Number of
30.9.2014 shareholders Owners shares shares %
Households 4,590 93.08 4,591,201 24.2
Public sector 3 0.06 1,985,010 10.5
institutions
Financial and insurance 18 0.37 3,804,286 20.0
institutions
Corporations 253 5.13 7,308,247 38.5
Non-profit institutions 29 0.59 368,742 1.9
Foreign and nominee 38 0.77 928,102 4.9
registered owners
Total 4,931 100.0 18,985,588 100.0
Number of shares Number of % of Number of % of
30.9.2014 shareholders shareholders shares shares
1 - 100 1,088 22.1 73,184 0.4
101 - 500 2,134 43.3 579,816 3.1
501 - 1,000 769 15.6 634,031 3.3
1,001 - 5,000 753 15.3 1,652,138 8.7
5,001 - 10,000 88 1.8 632,900 3.3
10,001 - 50,000 71 1.4 1,396,033 7.4
50,001 - 100,000 4 0.1 393,090 2.1
100,001 - 500,000 16 0.3 3,405,467 17.9
500,001 - 8 0.2 10,218,929 53.8
Total 4,931 100.0 18,985,588 100.0
of which nominee 732,685 3.9
registered
ADDITIONAL INFORMATION:
CEO Jukka Rinnevaara, phone +358 2 2605 866 or +358 400 747 488
DISTRIBUTION:
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