2017-02-17 07:00:01 CET
2017-02-17 07:00:01 CET
REGLAMENTUOJAMA INFORMACIJA
Comptel - Financial Statement Release
COMPTEL CORPORATION FINANCIAL STATEMENTS RELEASE FOR 2016
Stock exchange release 17 February 2017 at 8:00 am
-- Net sales and profit grew, earnings per share grew 154.4 %
Key figures for the Fourth Quarter of 2016:
-- Net sales EUR 29.9 million (Q4 2015: 32.6), change -8.2%
-- Operating profit EUR 5.0 million (5.6), change -10.2%
-- Operating profit 16.8% of net sales (17.2)
-- Profit EUR 8.0 million (4.0), growth 100.9%
-- Earnings per share EUR 0.07 (0.04), growth 96.3%
-- Order backlog EUR 65.7 million (66.3), change -0.9%
Key figures for Full Year of 2016:
-- Net sales EUR 100.0 million (2015: 97.7), growth 2.3%
-- Operating profit EUR 11.0 million (8.5), growth 29.8%
-- Operating profit 11.0% of net sales (8.7)
-- Comparable profit, excluding the India tax accounting, was EUR 7.1 million
(4.5), growth 57.3%
-- The reported profit EUR 11.7 million (4.5), growth 157.5%
-- Earnings per share EUR 0.11 (0.04), growth 154.4%
Dividend Proposal
The Board of Directors proposes to the Annual General Meeting that no dividend
be paid for the financial period ended on December 31st, 2016.
The Board of Directors proposes to the Annual General Meeting that the Annual
General Meeting authorizes the Board of Directors to decide on a dividend
payment of up to a maximum of EUR 0.04 per share in one tranche for the
financial period ended on December 31st, 2016 conditional upon the Transaction
Agreement entered into on 8 February 2017 by and between Nokia Corporation and
Comptel having been terminated for any reason other than consummation of said
tender offer, meaning that the authorization can be used only provided that
tender offer announced by Nokia Corporation on 9 February 2017 for all of the
issued and outstanding shares and option rights in Comptel Corporation is not
completed.
The authorization to decide on payment of dividend shall be valid until 31st,
December 2017. Based on this authorization, the Board of Directors is entitled
to decide on the dividend record date, dividend payment date and other matters
required by the matter. When deciding on the possible payment of dividend, the
Board of Directors shall assess the company's liquidity and financial position
as required by the Companies Act.
Outlook
We expect 2017 revenue to grow with double digit percentage and we expect
comparable EBIT to be between 10-15% of net sales.
Characteristically a significant part of Comptel’s operating profit and net
sales is generated in the second half of the year.
These statements for 2016 are based on the company's audited financial
statements. The Auditor's Report was issued 16 February, 2017.
Juhani Hintikka, President and CEO:
Both Business Units’ net sales grew slightly in the year 2016. Also, both
Business Unit’s profitability improved clearly in 2016.
We continued, as planned, to bring new solutions to the market and this can be
seen in the distribution of the net sales. The important FulFillment solution
net sales grew over 20 per cent compared to previous year. In Intelligent Data
business unit both our Fastermind solution as well as the Monetizer solution
grew significantly during 2016. Fastermind solution grew 50 per cent and
Monetizer 70 per cent compared to previous year. The net sales of traditional
products declined and therefore overall growth of the company was modest. We
expect in the future our new products growth to continue and impact more
significantly the overall company growth.
The FWD cloud solution got traction in 2016 and at the end of the year we had 4
signed contracts with customers. In addition, we have several ongoing
negotiations with new customers and expect the net sales to start showing in
2017 numbers.
Regionally, EMEA continued to grow with strong performance in 2016. In Europe
we received a significant reference, when one of the biggest operator chose
Comptel as a partner for developing jointly their future virtual solutions. In
APAC, we experienced some continued delays with our customers’ decision making
as well as increasing competition among vendors.
In Latin America, the year 2016 was challenging and we implemented changes in
the operational structure to better match the market conditions. Especially the
traditional solutions net sales declined in Latin America. We expect this
situation to improve during 2017. During 2016 we increased our investment in
the North American market and built a good foundation for future growth.
The company profitability developed positively and our EBIT for the year
improved from 8.7 per cent to 11.0, despite significant investments into R&D
and sales coverage. I’m especially pleased with the company’s profitability
development.
The full year profit increased significantly, being EUR 11.7 million and
earnings per share 0.11. We managed to complete the process concerning a large
part of our outstanding withholding taxes in India. This had a significant
impact on our net profit for the year.
During 2016, we secured 21 orders valued over EUR 1.0 million. In 2015, the
comparable number was 25. We also won 9 new customers during 2016.
In the beginning of 2017 our sales pipeline is significantly higher than a year
ago and we are confident that we will achieve double digit growth in 2017.”
Business review of 2016
In the fourth quarter, Comptel’s net sales declined by 8.2 percent compared to
previous year and were EUR 29.9 million (32.6). Both business unit net sales
declined in the fourth quarter, compared to previous year. In the fourth
quarter net sales continued to grow in the EMEA region while all other regions
net sales declined.
Full year net sales grew by 2.3 per cent compared to previous year and were EUR
100.0 million (97.7). The new solutions sales continued to grow significantly
while some of the traditional solutions sales declined compared to previous
year.
Operating profit for the year improved by 29.8 per cent and was EUR 11.0
million (8.5). Significant investments into R&D and the product portfolio
continued during the year 2016.
For the full year 2016 financial income/expenses were EUR 0.9 million (-1.1).
This includes EUR 1.1 million interest income that relates to withholding tax
refund from India. The other financial income/expenses were mainly due to
fluctuation in exchange rates between EUR and other currencies. Shares in
associated minority companies impacted results before taxes by EUR -0.2 million
(0.3).
Profit before taxes, for the full year, was EUR 11.7 million (7.6) and profit
for the reporting period was EUR 11.7 million (4.5). Earnings per share for the
year was EUR 0.11 (0.04).
The tax expenses for 2016 were EUR 0.1 million (3.1), including EUR -2.7
million of withholding taxes (1.2). The 2016 tax expenses include the India tax
refund that was received during the year. The EUR 4.5 million withholding tax
refund included EUR 3.4 million tax and EUR 1.1 million interest. At the end of
the year EUR 3.6 million has been paid in cash to the company.
In 2016, Comptel received 21 orders of which the value exceeded EUR one million
(25), of which Intelligent Data unit received five (four Data Refinary
solutions and one Monetizer) and Service Orchestration received 11 (11 FlowOne
solutions). Five orders were multi-solution orders across the business units.
Comptel reports orders for sold projects and licenses with a minimum value of
EUR 1,000,000.
The Company’s 12-month order backlog was EUR 65.7 million (66.3). This was due
to several significant orders were delayed to 2017. The total order backlog was
around EUR 90 million at the end of the year.
Business areas
-------
Net sales, 10-12 10-12 Change, 1-12 1-12 Change
EUR million 2016 2015 % 2016 2015 %
---------------------- ------------------------------------
Intelligent Data 13.1 14.6 -10.0 43.8 42.5 3.0
-----------------------------------------------------------------
Service Orchestration 16.8 18.0 -6.8 56.1 55.2 1.6
-----------------------------------------------------------------
Other 0.0 0.0 0.0 0.1 0.0 0.0
-----------------------------------------------------------------
Total 29.9 32.6 -8.2 100.0 97.7 2.3
-----------------------------------------------------------------
Operating result,
EUR million
-----------------------------------------------------------------
Intelligent Data 2.6 3.5 -26.4 6.8 5.8 16.6
-----------------------------------------------------------------
Service Orchestration 3.5 2.9 21.2 7.5 5.1 46.1
-----------------------------------------------------------------
Other -0.1 -0.7 -36.0 -3.3 -2.5 -32.3
-----------------------------------------------------------------
Total 5.0 5.6 -10.2 11.0 8.5 29.8
-----------------------------------------------------------------
Operating result,
% of net sales
-----------------------------------------------------------------
Intelligent Data 19.5 23.8 15.5 13.7
-----------------------------------------------------------------
Service Orchestration 20.8 16.0 13.4 9.3
-----------------------------------------------------------------
Other - - - -
-----------------------------------------------------------------
Total 16.8 17.2 11.0 8.7
-----------------------------------------------------------------
In the fourth quarter both business unit net sales declined compared to
previous year. The relative profitability of Intelligent Data unit decreased.
For Service Orchestration, in the fourth quarter, the relative profitability
improved compared to previous year.
For the full year 2016 both business unit’s net sales slightly grew. The
operating result for Intelligent Data unit grew by 16.6 per cent and for
Service Orchestration 46.1 per cent compared to the previous year. This growth
in operating result was also reflected in the relative profitability in both
business unit’s.
Net sales breakdown, 10-12 10-12 Change, % 1-12 1-12 Change
EUR million 2016 2015 2016 2015 %
----------------------------------------------------------------------------
Project & License business 21.0 24.0 -12.8 65.1 63.3 2.9
----------------------------------------------------------------------------
Recurring business 9.0 8.5 5.7 34.9 34.4 1.4
----------------------------------------------------------------------------
Total 29.9 32.6 -8.2 100.0 97.7 2.3
----------------------------------------------------------------------------
In the fourth quarter the net sales of project and license business declined by
12.8 per cent compared to previous year. The support and maintenance business
grew by 5.7 per cent.
For the full year 2016 the net sales of project and license business grew 2.9
per cent and support and maintenance business grew 1.4 per cent compared to
previous year.
Net sales Regional breakdown, 10-12 10-12 Change, % 1-12 1-12 Change, %
EUR million 2016 2015 2016 2015
------------------------------------------------------------------------------
APAC 6.6 8.9 -26.1 30.1 29.6 1.6
------------------------------------------------------------------------------
EMEA 21.6 20.5 5.2 61.6 56.9 8.3
------------------------------------------------------------------------------
AMERICAS 1.8 3.2 -44.6 8.3 11.2 -26.0
------------------------------------------------------------------------------
Total 29.9 32.6 -8.2 100.0 97.7 2.3
------------------------------------------------------------------------------
In the fourth quarter, the EMEA region net sales continued to grow by 5.2 per
cent compared to previous year and this was the 6th consecutive quarter that
the region grew. Both the APAC and Americas regions net sales declined in the
fourth quarter.
For the full year 2016 net sales grew in EMEA by 8.3 per cent compared to
previous year. In APAC the net sales grew 1.6 per cent compared to the previous
year. APAC net sales slowed down in the 2H of the year due to customer delays.
For the full year 2016 Americas net sales declined by 26 per cent compared to
the previous year.
Financial Position
EUR million 31 Dec 31 Dec 2015 Change,
2016 %
-------------------------------------------------------------------------
Statement of financial position total 94.9 86.4 9.8
-------------------------------------------------------------------------
Liquid assets 9.2 3.0 205.0
-------------------------------------------------------------------------
Trade receivables, gross 40.4 42.1 -4.1
-------------------------------------------------------------------------
Bad debt provision -1.9 -1.6 13.7
-------------------------------------------------------------------------
Trade receivables, net 38.5 40.5 -4.8
-------------------------------------------------------------------------
Accrued income 15.8 10.0 59.0
-------------------------------------------------------------------------
Deferred income related to partial debiting 4.8 3.3 47.2
-------------------------------------------------------------------------
Interest-bearing debt 9.5 7.5 32.3
-------------------------------------------------------------------------
Equity ratio, per cent 58.6 52.4 11.8
-------------------------------------------------------------------------
The statement of the financial position on 31 Dec 2016 was EUR 94.9 million
(86.4), of which liquid assets amounted to EUR 9.2 million (3.0). The operating
cash flow was EUR 15.6 million (0.6) in 2016.
Trade receivables were EUR 38.5 million (40.5) at the end of the period. The
accrued income was EUR 15.9 million (10.0). The deferred income related to
partial debiting was EUR 5.0 million (3.3).
Comptel has a EUR 25 million credit facility arrangement consisting of a EUR 20
million revolving credit facility and a EUR 5 million overdraft capacity on
current bank account. Out of this arrangement Comptel had EUR 8 million of the
revolving credit facility outstanding at the end of the period and EUR 0.8
million of the overdraft facility. The credit facility is valid until July
2018.
The equity ratio was 58.7 per cent (52.4) and the gearing 0.5 per cent (11.1).
Research and Development (R&D)
EUR million 10-12 10-12 Change 1-12 1-12 Change
2016 2015 % 2016 2015 %
--------------------------------------------------------------------------------
Direct R&D expenditure 5.8 7.5 -22.2 21.8 20.3 7.4
--------------------------------------------------------------------------------
Capitalisation of R&D expenditure -1.7 -1.5 16.8 -6.2 -5.2 19.5
according to IAS 38
--------------------------------------------------------------------------------
R&D depreciation and impairment 1.2 1.4 -17.6 4.9 5.5 -12.1
charges
--------------------------------------------------------------------------------
R&D expenditure, net 5.3 7.4 -28.9 20.5 20.6 -0.9
--------------------------------------------------------------------------------
Direct R&D expenditure, % of net 19.5 22.9 21.8 20.8
sales
--------------------------------------------------------------------------------
Direct R&D expenditure represented 21.8 per cent (20.8) of net sales.
The key focus of Comptel’s R&D expenditure was in the further development of
our existing solutions (Service Orchestration and Intelligent Data) and FWD
time-based mobile data marketing solution.
Development work was focused on securing recurring revenue with competitive
products, winning new markets by giving customers unique value, and by
improving margins with better deployment and scalability of our products.
The FlowOne Fulfillment solution ensures unified order and service delivery
flows for orchestrating services. FlowOne V is a design-led service
orchestration for virtual networks. Data Refinery captures data-in-motion,
turns raw data into immediate value and integrates into any data source.
Monetizer is the business policy and charging solution that sets the speed to
money and allows the innovation and designing of rich communication and data.
Fastermind offers artificial intelligence apps, predictive analytics and
machine learning capabilities for digital telcoes. In all of these areas,
Comptel seeks global thought leadership in solving the business challenges of
operators and digital communications service providers.
During 2016, the company continued to develop its current offering. In 2016 ten
major software releases were launched in the product areas mentioned above.
Investments
EUR million 10-12 10-12 Change 1-12 1-12 Change
2016 2015 % 2016 2015 %
--------------------------------------------------------------------------------
Gross investments in property, plant 0.2 0.2 46.3 1.5 0.6 177.6
and equipment and intangible assets
--------------------------------------------------------------------------------
The investments comprised of devices, software and furnishings. The investments
were funded through cash flow from operations.
Personnel
31 Dec 2016 31 Dec Change, %
2015
------------------------------------------------------------------------
Number of employees at the end of period 837 742 12.8
------------------------------------------------------------------------
1-12 1-12 Change, %
2016 2015
--------------------------------------------------------------------
Average number of personnel during the period 791 723 9.4
--------------------------------------------------------------------
The number of employees increased in 2016, compared to the previous year, due
to the increase in product investments and delivery capacity. In the fourth
quarter, the personnel expenses were 43.3 per cent of net sales (47.2). For the
full year, personnel expenses were 46.8 per cent of net sales (47.9).
At the end of the period, 28.1 per cent (29.5) of the personnel were located in
Finland, 22.7 per cent (25.5) in Malaysia, 15.5 per cent (11.3) in India, 12.2
per cent (10.2) in Bulgaria, and 21.5 per cent (23.5) in other countries where
Comptel operates.
Comptel share
The closing share price of the period was EUR 2.37 (1.83). Comptel’s market
value at the end of the period was EUR 258.7 million (198.1).
Comptel share 10-12 10-12 Change % 1-12 1-12 Change %
2016 2015 2016 2015
------------------------------------------------------------------------
Shares traded, million 10,4 16,6 -37,4 48,4 41,2 17,3
------------------------------------------------------------------------
Shares traded, EUR million 23,7 24,7 -3,9 92,4 52,9 74,8
------------------------------------------------------------------------
Highest price, EUR 2,56 1,93 32,6 2,65 1,93 37,3
------------------------------------------------------------------------
Lowest price, EUR 1,96 1,15 70,4 1,19 0,84 41,7
------------------------------------------------------------------------
Of Comptel’s outstanding shares, 5.1 per cent (6.0) were nominee registered or
held by foreign shareholders at the end of the period.
At the end of the period, the company held 117,129 of its own shares, which
represents 0.11 per cent of the total number of shares. The total counter-book
value of the shares held by the company was EUR 2,295.
Corporate Governance
Comptel Corporation’s Annual General Meeting (AGM) was held on 6 April 2016.
The AGM resolved the number of Board members to be five. Mr. Pertti Ervi, Mr.
Hannu Vaajoensuu, Ms. Eriikka Söderström, and Mr. Antti Vasara were re-elected
as members of the Board of Directors. Mr. Thomas Berlemann was elected as a new
member of the Board of Directors.
The AGM appointed Ernst & Young Oy as the company’s auditor. Mr. Mikko
Järventausta is acting as the principal auditor.
The AGM resolved that a dividend of EUR 0.03 per share was paid for the year
2015.
In its meeting held after the Annual General Meeting, the Board of Directors
elected Mr. Pertti Ervi as chairman and Mr. Hannu Vaajoensuu as vice chairman.
The Board of Directors decided to establish an audit committee to deal with the
preparation of matters relating to the company’s financial reporting and
control. The Board of Directors elected Ms. Eriikka Söderström as the
chairperson of the audit committee, and Mr. Pertti Ervi and Mr. Antti Vasara as
the members of the audit committee. All the members of the audit committee are
independent from the company and its significant shareholders.
The AGM authorised the Board of Directors to decide on share issues amounting
to a maximum of 21,400,000 new shares and on the repurchase or conveying of the
company’s own shares up to a maximum number of 10,700,000 shares. The
authorisations are valid until 30 June 2017. However, the authorisation to
implement the company’s share-based incentive programs is valid five years from
the AGM resolution.
A separate stock exchange release about the authorisations given and other
decisions made by the Annual General Meeting was published on 6 April 2016.
Events after the Reporting Period
On the 9th of February Nokia announced its intention to acquire Comptel to
advance its software strategy. Nokia made, recommended by the Comptel board, a
cash tender offer for all the shares and option rights in Comptel. The offer
price is EUR 3.04 in cash for each share in Comptel. A separate stock exchange
release on this has been published on 9 February 2016.
Near-term Risks and Uncertainties
Comptel develops dynamic end-to-end solutions for leading operators globally in
the telecom field. This requires Comptel to understand correctly the trends
taking place in its business environment and the needs of its customers and
resellers by each region. Failure to identify market conditions, address
customers’ needs and develop its products in a timely way may significantly
undermine the growth of Comptel’s business and its profitability.
Characteristics of Comptel’s field of industry are significant quarterly
variations of net sales and profit, which are related to customers’ purchasing
behaviour and the timing of major single deals.
Comptel’s business consists of deliveries of large productised IT systems, and
the value of a single project may be several million euros. Therefore, the
credit risk associated with a single project or an individual customer may be
significant. Furthermore, some of Comptel’s customers operate in countries
where the political or financial climate can be unstable which in part may
increase credit risk.
Comptel operates globally, so it is exposed to risks arising from different
currency positions. Exchange rate changes between the Euro, which is the
company’s reporting currency, and the US Dollar, UK Pound Sterling and
Malaysian Ringgit affect the company’s net sales, expenses and net profit.
The application process to prevent Comptel’s double taxation is still pending
with the Ministry of Finance in Finland. However, the process between the
states is very slow and the timing of change is hard to forecast. The
interpretation of tax treaties may result in different views between the
countries in question. This could mean that the double taxation will prevail.
Comptel has also applications for return of withholding taxes in other
countries but they are subject to local legal processes, which take time to get
completed.
The risks and uncertainties of Comptel are described in more detail in the
company’s financial statements and the Board of Directors’ report for 2016.
Business outlook and markets
Gartner forecasts operator investments will grow about 4 per cent during next
few years. For Comptel the most important trend is that new investments go more
to Cloud technology and software-based network solutions. This has been
evidenced during the last year when we have seen that all leading operators
have started building their next generation systems on software and cloud.
First of these implementations have been commissioned into trial use beside
traditional systems and proved that they yield considerable savings and ease
the promotion of new services for the digital society. However, the most
important impact is that software networks are essential for launching new
concepts like Internet of Things (IoT) and 5G.
We assume that this development is getting traction during the next years and
will improve Comptel’s position when the number of managed services and volume
of accumulated data will increase. We believe Comptel’s ability to successfully
manage hybrid networks where old and new systems are used in parallel is a
strong differentiator.
Another important trend is the huge growth in number of services and the aim to
make them more personal. Operators will face a problem when they are combining
the wide scope of services from large multinational giants (like Facebook,
Google and Apple) and new innovate service developers. This will require
improvements in network capacity, service management, scalability and
management of the huge amount of data to meet the expected level of customer
experience.
We see that Comptel’s role within the new network concept is to build user
services from available resources and create balance between user experience
and resource costs. This function is now strongly integrating with the
cloud-based business systems (like sales, customer relationships, charging) and
result is that we need to take a role as provider of real-time end-to-end data
and control function.
Outlook:
We expect 2017 revenue to grow with double digit percentage and we expect EBIT
to be between 10-15%.
Characteristically a significant part of Comptel’s operating profit and net
sales is generated in the second half of the year.
Board of Directors proposal for the Disposal of Profits
The Group parent company’s distributable equity on 31 December 2016 was EUR
13,002,143 (7,692,598)
The Board of Directors proposes to the Annual General Meeting that no dividend
be paid for the financial period ended on December 31st, 2016.
The Board of Directors proposes to the Annual General Meeting that the Annual
General Meeting authorizes the Board of Directors to decide on a dividend
payment of up to a maximum of EUR 0.04 per share in one tranche for the
financial period ended on December 31st, 2016. The Board of Directors proposes
that the authorization to decide on such dividend is conditional upon the
Transaction Agreement entered into on 8 February 2017 by and between Nokia
Corporation and Comptel Corporation (the “Transaction Agreement”) having been
terminated for any reason other than consummation of said tender offer pursuant
to the Transaction Agreement, meaning that the tender offer announced by Nokia
Corporation on 9 February 2017 for all of the issued and outstanding shares and
option rights in Comptel Corporation is unsuccessful.
The authorization to decide on payment of dividend shall be valid until the end
of December 31st, 2017. Based on this authorization, the Board of Directors is
entitled to decide on the dividend record date, dividend payment date and other
matters required by the matter. When deciding on the possible payment of
dividend, the Board of Directors shall assess the company's liquidity and
financial position as required by the Companies Act.
COMPTEL CORPORATION
Board of Directors
Additional information:
Mr Juhani Hintikka, President and CEO, tel. +358 9 700 1131
Mr Tom Jansson, CFO, tel. +358 40 700 1849
TABLE PART
The interim financial statements have been prepared in accordance with IAS 34,
Interim Financial Reporting, as adopted by the EU. The accounting policies and
methods of computation adopted in the financial statements are consistent with
those of the annual financial statements for the year ended 2015.
All figures in the financial report have been rounded and consequently the sum
of the individual figures can deviate from the sum figure. The interim report
is unaudited.
Consolidated Statement of Comprehensive 1 Jan – 1 Jan – 1 Oct – 1 Oct –
Income (EUR 1,000) 31 Dec 31 Dec 31 Dec 31 Dec
2016 2015 2016 2015
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 100,011 97,728 29,930 32,611
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other operating income 27 63 6 40
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Materials and services -4,141 -5,546 -897 -1,556
--------------------------------------------------------------------------------
Employee benefits -46,763 -46,764 -12,964 -15,383
--------------------------------------------------------------------------------
Depreciation, amortisation and impairment -5,817 -6,756 -1,451 -1,672
charges
--------------------------------------------------------------------------------
Other operating expenses -32,314 -30,251 -9,588 -8,432
--------------------------------------------------------------------------------
-89,036 -89,317 -24,899 -27,043
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit/loss 11,003 8,474 5,037 5,608
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial income 3,269 1,392 1,503 91
--------------------------------------------------------------------------------
Financial expenses -2,365 -2,541 -264 -65
--------------------------------------------------------------------------------
Share of results of associated companies -172 287 -171 287
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss before income taxes 11,735 7,612 6,105 5,921
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -77 -3,085 1,857 -1,958
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period 11,658 4,527 7,962 3,963
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive income:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive income to be
reclassified to profit or loss in
subsequent periods
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Translation differences -934 189 45 75
--------------------------------------------------------------------------------
Cash flow hedges -296 14 -479 -505
--------------------------------------------------------------------------------
Income tax relating to components of other 59 -3 95 101
comprehensive income
--------------------------------------------------------------------------------
Total other comprehensive income -1 170 200 -338 -329
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive income for the period 10,487 4,728 7,624 3,634
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss attributable to:
--------------------------------------------------------------------------------
Equity holders of the parent company 11,658 4,527 7,962 3,963
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive income attributable to:
--------------------------------------------------------------------------------
Equity holders of the parent company 10,487 4,728 7,624 3,634
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders of the parent company:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR 0.11 0.04 0.07 0,04
--------------------------------------------------------------------------------
Earnings per share, diluted, EUR 0.10 0.04 0.07 0,04
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Consolidated Statement of Financial Position (EUR 31 Dec 2016 31 Dec 2015
1,000)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Assets
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Goodwill 2,646 2,646
--------------------------------------------------------------------------------
Other intangible assets 14,095 12,837
--------------------------------------------------------------------------------
Tangible assets 1,707 1,152
--------------------------------------------------------------------------------
Investments in associates 788 960
--------------------------------------------------------------------------------
Available-for-sale financial assets 87 87
--------------------------------------------------------------------------------
Deferred tax assets 8,242 7,685
--------------------------------------------------------------------------------
Other non-current receivables 570 646
--------------------------------------------------------------------------------
28,135 26,013
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Trade and other current receivables 56,977 56,930
--------------------------------------------------------------------------------
Current tax asset 532 403
--------------------------------------------------------------------------------
Cash and cash equivalents 9,242 3,030
--------------------------------------------------------------------------------
66,751 60,363
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total assets 94,886 86,376
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity and liabilities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity attributable to equity holders of the parent
company
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Share capital 2,141 2,141
--------------------------------------------------------------------------------
Fund of invested non-restricted equity 1,975 1,698
--------------------------------------------------------------------------------
Fair value reserve -407 -170
--------------------------------------------------------------------------------
Translation differences -1,443 -510
--------------------------------------------------------------------------------
Retained earnings 42,783 34,165
--------------------------------------------------------------------------------
Total equity 45,049 37,324
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Deferred tax liabilities 2,805 2,572
--------------------------------------------------------------------------------
Non-current financial liabilities 491 92
--------------------------------------------------------------------------------
3,296 2,664
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Provisions 116 1,090
--------------------------------------------------------------------------------
Current financial liabilities 8,993 7,075
--------------------------------------------------------------------------------
Trade and other current liabilities 37,432 38,223
--------------------------------------------------------------------------------
46,541 46,388
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total liabilities 49,837 49,052
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity and liabilities 94,886 86,376
--------------------------------------------------------------------------------
Consolidated Statement of Cash Flows 1 Jan – 31 1 Jan – 31
(EUR 1,000) Dec Dec
2016 2015
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from operating activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period 11,658 4,527
--------------------------------------------------------------------------------
Adjustments:
--------------------------------------------------------------------------------
Non-cash transactions or items that are not part of cash 6,497 7,834
flows from operating activities
--------------------------------------------------------------------------------
Interest and other financial expenses 250 273
--------------------------------------------------------------------------------
Interest income -1,197 -88
--------------------------------------------------------------------------------
Income taxes 77 3,069
--------------------------------------------------------------------------------
Change in working capital:
--------------------------------------------------------------------------------
Change in trade and other current receivables -174 -14,240
--------------------------------------------------------------------------------
Change in trade and other current liabilities -1,500 5,031
--------------------------------------------------------------------------------
Change in provisions -664 -277
--------------------------------------------------------------------------------
Interest and other financial expenses paid -250 -273
--------------------------------------------------------------------------------
Interest received 1,197 12
--------------------------------------------------------------------------------
Income taxes paid and tax returns received -291 -5,245
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash from operating activities 15,603 623
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from investing activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Investments in tangible assets -1,417 -456
--------------------------------------------------------------------------------
Investments in intangible assets -132 -102
--------------------------------------------------------------------------------
Investments in development projects -6,185 -5,176
--------------------------------------------------------------------------------
Proceeds from the sale of tangible assets 95 7
--------------------------------------------------------------------------------
Change in other non-current receivables 29 -3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash used in investing activities -7,610 -5,730
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from financing activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dividends paid -3,248 -2,139
--------------------------------------------------------------------------------
Additional investment into equity 277 497
--------------------------------------------------------------------------------
Proceeds from share options - 800
--------------------------------------------------------------------------------
Proceeds from borrowings 33,715 27,935
--------------------------------------------------------------------------------
Repayment of borrowings -31,924 -28,063
--------------------------------------------------------------------------------
Change in lease liabilities 527 -243
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash used in financing activities -653 -1,213
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash and cash equivalents 7,339 -6,319
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the period 3,030 9,352
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 9,242 3,030
--------------------------------------------------------------------------------
Change 6,212 -6,322
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Effects of changes in foreign exchange rates -1,127 -2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Consolidated Statement of Changes in Equity
-------------------------------------------------------------------------
Equity attributable to equity holders of the parent company
--------------------------------------------------------------------------------
EUR 1,000 Share Other Translation Fair Retained Total
capital reserve differences value earnings
s reserve
--------------------------------------------------------------------------------
Equity at 2,141 401 -698 -182 31,684 33,346
31 Dec 2014
--------------------------------------------------------------------------------
Dividends -2,139 -2,139
--------------------------------------------------------------------------------
Shares issued 497 497
--------------------------------------------------------------------------------
Share-based 800 428 1,228
compensation
--------------------------------------------------------------------------------
Dissolution of a 7 7
subsidiary
--------------------------------------------------------------------------------
Prior year -342 -342
correction *
--------------------------------------------------------------------------------
Total comprehensive 188 12 4,527 4,727
income for the
period
--------------------------------------------------------------------------------
Equity at 2,141 1,698 -510 -170 -34,165 37,324
31 Dec 2015
--------------------------------------------------------------------------------
Consolidated Statement of Changes in Equity
-------------------------------------------------------------------------
Equity attributable to equity holders of the parent company
-------------------------------------------------------------------------
EUR 1,000 Share Other Translation Fair value Retain Total
capital reserves differences reserve ed
earnin
gs
--------------------------------------------------------------------------------
Equity at 2,141 1,698 -510 -170 34,165 37,324
31 Dec 2015
--------------------------------------------------------------------------------
Dividends -3,248 -3,248
--------------------------------------------------------------------------------
Shares issued 277 277
--------------------------------------------------------------------------------
Share-based 492 492
compensation
--------------------------------------------------------------------------------
Prior year -283 -283
correction *
--------------------------------------------------------------------------------
Total comprehensive -934 -237 11,658 10,487
income for the
period
--------------------------------------------------------------------------------
Equity at 2,141 1,975 -1,444 -407 42,784 45,049
3 Dec 2016
--------------------------------------------------------------------------------
*Prior year expenses were corrected directly to Retained Earnings during the
reporting periods.
Notes
1. Application of new or amended standards and interpretations
Comptel has adopted the new or amended standards and interpretations, effective
for the financial years beginning on or after 1 January 2016. However, those
have not had an impact on the consolidated financial statements.
2. Segment information
Net sales by segment
EUR 1,000 1 Jan – 1 Jan – 1 Oct – 1 Oct –
31 Dec 2016 31 Dec 2015 31 Dec 2016 31 Dec 2015
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Intelligent Data 43,791 42,503 13,126 14,587
-------------------------------------------------------------------------
Service Orchestration 56,085 55,225 16,797 18,024
-------------------------------------------------------------------------
Other 135 - 7 -
-------------------------------------------------------------------------
Group total 100,011 97,728 29,930 32,611
-------------------------------------------------------------------------
Operating profit/loss by segment
EUR 1,000 1 Jan – 1 Jan – 1 Oct – 1 Oct –
31 Dec 2016 31 Dec 2015 31 Dec 31 Dec 2015
2016
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Intelligent Data 6,769 5,808 2,554 3,469
--------------------------------------------------------------------------------
Service Orchestration 7,492 5,128 3,496 2,884
--------------------------------------------------------------------------------
Other -3,259 -2,462 -1,012 -745
--------------------------------------------------------------------------------
Group operating profit/loss 11,003 8,474 5,037 5,608
total
--------------------------------------------------------------------------------
3. Income tax
Income tax expense according to the statement of comprehensive income for the
period was EUR 77 thousand (EUR 3,085 thousand).
In 2006, the Board of Adjustment of the Tax Office for Major Corporations
refused to accept the crediting of taxes withheld at source in taxation of 2004
and 2005.
The application process to prevent Comptel’s double taxation is still pending
with the Ministry of Finance in Finland. However, the process between the
states is very slow and the timing of a change is hard to forecast. The
interpretation of tax treaties may result in different views between the
countries in question. This could mean that the double taxation will prevail.
According to the Board of Adjustment’s decision currently in force, Comptel
Corporation has expensed taxes withheld at source amounting to EUR -2,714
thousand in January – December (EUR 1,167 thousand).
4. Tangible assets
EUR 1,000 1 Jan – 1 Jan –
31 Dec 2016 31 Dec 2015
-----------------------------------
-----------------------------------
Additions 1,417 456
-----------------------------------
Decreases -446 -150
-----------------------------------
5. Related party transactions
The Comptel Group have a related party relationship with its associate, the
Board of Directors, the Executive Board and also with people and companies
under Comptel management’s influence.
Transactions which have been entered into with related parties are as follows:
EUR 1,000 1 Jan – 1 Jan –
31 Dec 2016 31 Dec 2015
------------------------------------------------
------------------------------------------------
Associate
------------------------------------------------
Other operating income 2 -
------------------------------------------------
Interest income 8 8
------------------------------------------------
EUR 1,000 31 Dec 2016 31 Dec 2015
-------------------------------------------------
-------------------------------------------------
Associate
-------------------------------------------------
Non-current receivables 128 121
-------------------------------------------------
Remuneration to key management
Key management personnel compensation includes the employee benefits of the
members of the Board of Directors and the Executive Board.
EUR 1,000 1 Jan – 31 Dec 1 Jan - 31 Dec
2016 2015
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Salaries and other short-term employee 1,798 2,169
benefits
--------------------------------------------------------------------------------
Share-based payments 295 725
--------------------------------------------------------------------------------
Total 2,093 2,894
--------------------------------------------------------------------------------
Guarantees and other commitments
EUR 1,000 31 Dec 2016 31 Dec 2015
------------------------------------
------------------------------------
Guarantees - 29
------------------------------------
6. Commitments
Minimum lease payments on non-cancellable office facilities and other operating
leases are payable as follows:
EUR 1,000 31 Dec 2016 31 Dec 2015
----------------------------------------------------
----------------------------------------------------
Less than one year 2,395 2,161
----------------------------------------------------
Between one and five years 5,722 1,218
----------------------------------------------------
More than five years 548 -
----------------------------------------------------
Total 8,665 3,379
----------------------------------------------------
The group had no material capital commitments for the purchase of tangible
assets at 31 December 2016 and 31 December 2015.
7. Contingent liabilities
EUR 1,000 31 Dec 2016 31 Dec 2015
---------------------------------------------
---------------------------------------------
Bank guarantees 4,136 2,727
---------------------------------------------
Corporate mortgages 200 200
---------------------------------------------
EUR 1,000 31 Dec 2016 31 Dec 2015
--------------------------------------------------------------------
--------------------------------------------------------------------
Contingent liabilities on behalf of others
--------------------------------------------------------------------
Guarantees - 29
--------------------------------------------------------------------
8. Fair values of financial assets and liabilities
EUR 1,000 Book Fair Book Fair
value value value value
31.12.20 31.12.20 31.12.20 31.12.20
16 16 15 15
--------------------------------------------------------------------------------
Financial assets
--------------------------------------------------------------------------------
Financial assets at fair value through
profit or loss
--------------------------------------------------------------------------------
Forward contracts (level 2) 160 160 - -
--------------------------------------------------------------------------------
Available-for-sale financial assets 87 87 87 87
(level 3))
--------------------------------------------------------------------------------
Non-current trade receivables 4,473 4,473 1,872 1,872
--------------------------------------------------------------------------------
Current trade receivables 35,908 35,908 40,232 40,232
--------------------------------------------------------------------------------
Other current receivables 3,115 3,115 7,133 7,133
--------------------------------------------------------------------------------
Cash and cash equivalents 9,242 9,242 3,030 3,030
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial liabilities
--------------------------------------------------------------------------------
Financial liabilities at fair value
through profit or loss
--------------------------------------------------------------------------------
Forward contracts (level 2) 588 588 138 138
--------------------------------------------------------------------------------
Trade payables and other liabilities 36,844 36,844 38,020 38,020
--------------------------------------------------------------------------------
Non-current loans from financial - - 33 33
institutions
--------------------------------------------------------------------------------
Non-current finance lease liabilities 491 491 58 58
--------------------------------------------------------------------------------
Current loans from financial 7,973 7,973 5,044 5,056
institutions
--------------------------------------------------------------------------------
Current bank overdraft facility 815 815 1,918 1,918
--------------------------------------------------------------------------------
Current finance lease liabilities 205 205 112 112
--------------------------------------------------------------------------------
9. Key figures
Financial summary 1 Jan – 1 Jan-
31 Dec 31 Dec
2016 2015
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales, EUR 1,000 100,011 97,728
--------------------------------------------------------------------------------
Net sales, change % 2.3 14.0
--------------------------------------------------------------------------------
Operating profit/loss, EUR 1,000 11,003 8,474
--------------------------------------------------------------------------------
Operating profit/loss, change % 29.8 2.0
--------------------------------------------------------------------------------
Operating profit/loss, as % of net sales 11.0 8.7
--------------------------------------------------------------------------------
Profit/loss before taxes, EUR 1,000 11,735 7,612
--------------------------------------------------------------------------------
Profit/loss before taxes, as % of net sales 11.7 7.8
--------------------------------------------------------------------------------
Return on equity, % 28.3 12.8
--------------------------------------------------------------------------------
Return on investment, % 23.9 18.3
--------------------------------------------------------------------------------
Equity ratio, % 58.7 52.4
--------------------------------------------------------------------------------
Gross investments in tangible and intangible assets, EUR 1,549 558
1,0001)
--------------------------------------------------------------------------------
Gross investments in tangible and intangible assets, as 1.5 0.6
% of net sales
--------------------------------------------------------------------------------
Capitalizations according to IAS 38 to intangible 6,185 5,176
assets, EUR 1,000
--------------------------------------------------------------------------------
Research and development expenditure, EUR 1,000 21,794 20,299
--------------------------------------------------------------------------------
Research and development expenditure, 21.8 20.8
as % of net sales
--------------------------------------------------------------------------------
Order backlog, EUR 1,000 65,717 66,344
--------------------------------------------------------------------------------
Average number of employees during the period 791 723
--------------------------------------------------------------------------------
Interest-bearing net liabilities, EUR 1,000 243 4,137
--------------------------------------------------------------------------------
Gearing ratio, % 0.5 11.1
--------------------------------------------------------------------------------
1) The figure does not include investments in development projects.
Per share data 1 Jan – 1 Jan-
31 Dec 2016 31 Dec 2015
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Earnings per share (EPS), EUR 0.11 0.04
------------------------------------------------------------------------------
EPS diluted, EUR 0.10 0.04
------------------------------------------------------------------------------
Equity per share, EUR 0.41 0.34
------------------------------------------------------------------------------
Dividend per share, EUR 0.04 0.03
------------------------------------------------------------------------------
Dividend per earnings, % 38,36 72.7
------------------------------------------------------------------------------
Effective dividend yield, % 1.7 1.6
------------------------------------------------------------------------------
P/E ratio 22.1 43.4
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Adjusted number of shares at the end of the period 109,271,496 108,395,409
------------------------------------------------------------------------------
of which the number of treasury shares 117,129 118,507
------------------------------------------------------------------------------
Outstanding shares 109,154,367 108,276,902
------------------------------------------------------------------------------
Adjusted average number of shares during the period 108,685,905 107,370,551
------------------------------------------------------------------------------
Average number of shares, dilution included 111,798,635 109,640,245
------------------------------------------------------------------------------
10. Definition of key figures
--------------------------------------------------------------------------------
Operating margin % = Operating profit/loss x100
------------------------------------
------------------------------------
Net sales
Profit margin (before income taxes) = Profit/loss before taxes x100
%
------------------------------------
------------------------------------
Net sales
Return on equity % (ROE) = Profit/loss x100
------------------------------------
------------------------------------
Total equity (average during year)
Return on investment % (ROI) = Profit/loss before taxes + x100
financial expenses
------------------------------------
------------------------------------
Total equity + interest bearing
liabilities (average during the
year)
Equity ratio % = Total equity x100
------------------------------------
------------------------------------
Statement of financial position
total – advances received
Gross investments in tangible and = Gross investments in tangible and x100
intangible assets, as % of net intangible assets
sales
------------------------------------
------------------------------------
Net sales
Research and development = Research and development x100
expenditure, as % of net sales expenditure
------------------------------------
------------------------------------
Net sales
Gearing ratio % = Interest-bearing liabilities – x100
cash and cash equivalents
------------------------------------
------------------------------------
Total equity
Earnings per share (EPS) = Profit/loss for the financial year
attributable to equity
shareholders
------------------------------------
------------------------------------
Average number of outstanding
shares for the financial year
Equity per share = Equity attributable to the equity
holders of the parent company
------------------------------------
------------------------------------
Adjusted number of shares at the
end of period
Dividend per share = Dividend
------------------------------------
------------------------------------
Adjusted number of shares at the
end of period
Dividend per earnings % = Dividend per share x100
------------------------------------
------------------------------------
Earnings per share (EPS)
Effective dividend yield % = Dividend per share x100
------------------------------------
------------------------------------
Share closing price at end of
period
P/E ratio = Share closing price at end of
period
------------------------------------
------------------------------------
Earnings per share (EPS)
--------------------------------------------------------------------------------
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