2015-08-04 07:00:00 CEST
2015-08-04 07:00:05 CEST
REGULATED INFORMATION
Comptel - Interim report (Q1 and Q3)
INTERIM REPORT OF COMPTEL CORPORATION 1 JANUARY - 30 JUNE 2015
Stock exchange release
4th August 2015 at 8.00 am
INTERIM REPORT OF COMPTEL CORPORATION 1 JANUARY - 30 JUNE 2015
- Company delivers 10.6% of revenue growth in first half of 2015
- Significant increase in order intake, backlog increased 37.4%
Key figures for the second quarter of 2015:
-- Net sales EUR 21.7 million (Q2 2014: 20.6), growth 5.7%
-- Operating result EUR 0.6 million (1.2), change -52.2%
-- Net profit EUR 0.34 million (0.67), change -49.0%
-- Earnings per share EUR 0.00 (0.01)
-- Order backlog EUR 58.8 million (42.8), growth 37.4%
Key figures for the first half of 2015:
· Net sales EUR 42.7 million (H1 2014: 38.6), growth 10.6%
· Operating result EUR 2.1 million (2.1), change -3.7%
· Net profit EUR 0.63 (0.82), change -22.8%
· Earnings per share EUR 0.01 (0.01)
Outlook
We expect the 2015 net sales to grow compared to previous year and we expect
operating profit to be in the range of 8-12% of revenue, excluding one-time
charges.
Characteristically a significant part of Comptel's operating profit and net
sales is generated in the second half of the year.
Juhani Hintikka, President and CEO:
” Our overall revenue continued to grow in the second quarter. In the first
half of the year we made investments in our sales team and product portfolio
which impacted our profitability. The execution of our strategy is progressing
well and our targeted investments will position the company for long-termgrowth.
One of our significant orders during the quarter came from the Philippines,
which is defined in the strategy as one of the targeted growth markets.
We are pleased with the market traction and progress of our FlowOne solution in
2015. Our FlowOne solution continued to grow in the second quarter. In the
first half of the year, Service Orchestration business area grew by 21.9 per
cent compared to previous year, due to strong sales of FlowOne solution.
Intelligent Data unit grew in the second quarter, we received the first
strategic deal with our integrated analytics and mediation solution, Data
Fastermind. We also launched our new Monetizer (Policy control) solution in the
second quarter.
Our order intake was strong in the second quarter and our backlog continued to
be strong with a 37.1 per cent increase compared to the previous year.
During the second quarter, we secured 9 significant orders, valued over EUR 0.5
million each.
Business review of the Second Quarter and the First Half Year 2015
In the second quarter, Comptel's net sales increased by 5.7 per cent compared
to the previous year and were EUR 21.7 million (20.6).
In the first half, net sales increased by 10.6 per cent from the comparable
period last year and were EUR 42.7 million (38.6). The increase was due to the
FlowOne solution's strong growth.
In the second quarter, the operating result was EUR 0.6 million (1.2), which
corresponds to 2.6 per cent of net sales (5.7). Investments in the training of
sales force as well as in product development lowered profitability
temporarily.
The operating result for the first half was EUR 2.1 million (2.1), which
correspond to 4.8 per cent of net sales (5.5).
The Group's financial income/expenses were EUR -0.9 million, mainly due to the
US dollar long term strengthening.
In the first half of the year, profit before taxes was EUR 1.2 million (1.5)
and net profit was EUR 0.6 million (0.8). Earnings per share for the first half
of the year were EUR 0.01 (0.01).
In the second quarter, EUR 0.1 million were received as withholding tax refund
from Singapore tax authorities for withholding tax related to years 2004-2011.
Tax expense for the first half of the year was EUR 0.5 million (0.7), including
EUR 0.5 million (0.4) of withholding taxes.
The Group's order backlog increased from the previous year and was EUR 58.8
million (42.8) at the end of the period. In second quarter order intake was
strong and contributed to the increase of backlog.
Comptel strategy
Life is digital moments. Digital demand will be driven by “Generation Cloud”
customers and enterprises interacting with millions of digital applications.
The Internet of Things with billions of connected devices will further
accelerate the digital demand leading to exploding data volumes. Future mobile
and fixed networks will provide hyper speeds and undergo a transformation from
hardware to software. Network functions will be virtualised. Mounting
complexity will require orchestration of business flows and virtualised
resources.
Comptel mission is to perfect the digital moments and translate them into
business moments by connecting digital demand and supply.
The Comptel strategy focuses on providing solutions for digital and
communications service providers in two major areas - Intelligent Data and
Service Orchestration. The Intelligent Data business delivers solutions and
services to customers for monetising data and turning big data into intelligent
automated actions. The Service Orchestration business area provides solutions
and services for business flow orchestration and mastering the digital buying
experience.
Comptel's strategic target is to establish itself as a leading software vendor
for connecting digital demand and supply.
Strategy execution is based on six strategic objectives: solutions with unique
value, thought leadership, customer excellence, new markets, leverage by
partners and inspired people.
Comptel´s marketing strategy strives for industry thought leadership on
carefully selected themes and topics which are: Digital Buying Experience,
Monetising more with less time, Orchestration of service and order flows from
ground to cloud and intelligent fast data. The essence of Comptel's thought
leadership is captured in the book “Operation Nexterday” that was launched in
Barcelona's Mobile World Congress in March 2015.
Business areas
Net sales, 4-6 2015 4-6 Change % 1-6 2015 1-6 2014 Change 1-12
EUR million 2014 % 2014
--------------------------------------------------------------------------------
Europe 7.1 8.7 -18.4 16.3 15.5 5.2 35.4
--------------------------------------------------------------------------------
Asia Pacific 7.4 6.3 18.5 13.5 12.2 10.4 24.8
--------------------------------------------------------------------------------
Middle East and 4.1 3.8 9.0 7.4 6.9 7.3 16.8
Africa
--------------------------------------------------------------------------------
Americas 3.1 1.9 67.4 5.5 4.0 37.8 8.8
--------------------------------------------------------------------------------
Total 21.7 20.6 5.7 42.7 38.6 10.6 85.7
--------------------------------------------------------------------------------
Operating result,
EUR million
--------------------------------------------------------------------------------
Europe 3.9 4.4 -11.5 10.2 7.3 39.1 19.5
--------------------------------------------------------------------------------
Asia Pacific 3.9 3.8 4.9 7.1 7.6 -5.7 14.5
--------------------------------------------------------------------------------
Middle East and 1.2 1.5 -20.1 1.8 2.9 -38.9 7.3
Africa
--------------------------------------------------------------------------------
Americas 1.7 0.9 86.1 3.0 1.8 69.4 4.0
--------------------------------------------------------------------------------
Unallocated costs -10.2 -9.4 8.3 -20.1 -17.5 15.0 -37.0
--------------------------------------------------------------------------------
Total 0.6 1.2 -52.2 2.1 2.1 -3.7 8.3
--------------------------------------------------------------------------------
Operating result,
% of net sales
--------------------------------------------------------------------------------
Europe 55.3 51.0 - 62.7 47.1 - 55.3
--------------------------------------------------------------------------------
Asia Pacific 52.9 59.8 - 53.1 62.6 - 58.7
--------------------------------------------------------------------------------
Middle East and 29.3 40.0 - 23.9 42.0 - 43.2
Africa
--------------------------------------------------------------------------------
Americas 54.9 49.4 - 54.6 44.4 - 45.5
--------------------------------------------------------------------------------
Total 2.6 5.7 - 4.8 5.5 - 9.7
--------------------------------------------------------------------------------
In the second quarter, net sales grew in all regions except in Europe. The
decline in Europe was due to seasonality. The Latin America market is growing
again and existing customers, especially the global ones, are actively
investing in the market.
In the first half, net sales increased in all regions. The proportional
profitability declined in Asia Pacific and Middle East while improving in the
other two regions. Investments in sales force training reduced the regional
profitability.
In January - June, Comptel received 12 significant orders (H1 2014: 9): Service
Orchestration received eight orders(six for the FlowOne Fulfillment solution,
two for FlowOne Provisioning and Activation) and Intelligent Data received four
orders (two for Data Refinery, one for Fastermind and one for the Monetizer
solution). As significant orders Comptel reports sold projects and licenses
with a minimum value of EUR 500,000.
Net sales breakdown, 4-6 4-6 Change % 1-6 1-6 Change 1-12
EUR million 2015 2014 2015 2014 % 2014
------------------------------------------------------------------------------
Project & License business 13.2 12.3 7.4 25.3 21.4 18.2 52.1
------------------------------------------------------------------------------
Recurring business 8.5 8.3 3.2 17.4 17.2 1.2 33.6
------------------------------------------------------------------------------
Total 21.7 20.6 5.7 42.7 38.6 10.6 85.7
------------------------------------------------------------------------------
New projects are currently the growth engine for Comptel. Recurring revenue is
on the same level as before.
Net sales breakdown, 4-6 4-6 Change, % 1-6 1-6 Change 1-12
EUR million 2015 2014 2015 2014 % 2014
----------------------------------------------------------------------
Intelligent Data 9.6 9.1 6.2 18.7 18.9 -1.1 39.7
----------------------------------------------------------------------
Service Orchestration 12.1 11.5 5.3 24.0 19.6 21.9 46.0
----------------------------------------------------------------------
Total 21.7 20.6 5.7 42.7 38.6 10.6 85.7
----------------------------------------------------------------------
The good sales of the FlowOne Fulfillment solution continued to boost the
growth of the Service Orchestration business area both in the second quarter
and in the first half of the year. The Intelligent Data business area grew also
in the second quarter, compared to the same period previous year. All solutions
in the business area grew in the second quarter.
Financial Position
EUR million 30 June 31 Dec Change 30 Jun Change
2015 2014 , 2014 ,
% %
--------------------------------------------------------------------------------
Statement of financial 64.4 77.6 -17.0 58.9 9.4
position total
--------------------------------------------------------------------------------
Liquid assets 4.6 9.4 -50.5 2.9 62.3
--------------------------------------------------------------------------------
Trade receivables, gross 22.6 28.9 -21.9 24.1 -6.2
--------------------------------------------------------------------------------
Bad debt provision -1.4 -1.2 16.0 -0.8 79.7
--------------------------------------------------------------------------------
Trade receivables, net 21.2 27.7 -23.5 23.3 -9.0
--------------------------------------------------------------------------------
Accrued income 11.8 10.9 8.2 7.6 54.8
--------------------------------------------------------------------------------
Deferred income related to 2.7 4.4 -38.6 2.9 -8.2
partial debiting
--------------------------------------------------------------------------------
Interest-bearing debt 4.4 7.6 -41.3 4.6 -4.0
--------------------------------------------------------------------------------
Equity ratio, per cent 65.3 52.4 24.6 60.7 7.6
--------------------------------------------------------------------------------
The statement of financial position on 30 June 2015 was EUR 64.4 million
(58.9), of which liquid assets amounted to EUR 4.6 million (2.9). The operating
cash flow was EUR 3.0 million (-3.8) in the second quarter and EUR 2.4 million
(3.4) in the first half of the year.
The trade receivables were EUR 21.2 million (23.3) at the end of the period.
The accrued income was EUR 11.8 million (7.6). The deferred income related to
partial debiting was EUR 2.7 million (2.9).
Comptel signed a new 3-year financing arrangement in June. This new arrangement
consists of a EUR 25 million credit facility, out of which EUR 20 million is a
revolving credit facility and EUR 5 million is an overdraft capacity on current
bank account. Out of this arrangement Comptel had EUR 4 million of the
revolving credit facility outstanding at the end of the period. The credit
agreement includes typical financial covenant terms. The credit facility is
valid until July 2018.
The equity ratio was 65.3 per cent (60.7) and the gearing ratio was -0.6 per
cent (6.1).
Research and Development (R&D)
EUR million 4-6 4-6 Change 1-6 1-6 Change 1-12
2015 2014 % 2015 2014 % 2014
--------------------------------------------------------------------------------
Direct R&D expenditure 4.3 3.8 14.4 8.7 7.7 12.3 16.8
--------------------------------------------------------------------------------
Capitalisation of R&D -1.3 -1.0 26.5 -2.4 -2.2 8.6 -4.7
expenditure according to IAS 38
--------------------------------------------------------------------------------
R&D depreciation and 1.3 1.6 -19.4 2.6 2.8 -7.1 4.9
impairment charges
--------------------------------------------------------------------------------
R&D expenditure, net 4.3 4.4 -0.9 8.9 8.3 6.8 17.0
--------------------------------------------------------------------------------
Direct R&D expenditure, % of 19,8 18.5 - 20.3 20.0 - 19.6
net sales
--------------------------------------------------------------------------------
Direct R&D expenditure represented 20,3 per cent (20,0) of net sales.
The focus of Comptel's R&D expenditure was in the further development of
solutions in the main product areas, Service Orchestration and Intelligent
Data. Development is targeted both to secure the recurring revenue with
competitive products and to win new markets by giving customers unique value
with new innovations. Service Orchstration's FlowOne Fulfillment solution is
developed as a suite of orchestration elements that manage the service and
business flows from ground to cloud. Intelligent Data's Data Refinery captures
data-in-motion and uses embedded intelligence to refine it for automated,
in-the-moment decisions and actions. Monetizer is the business policy and
charging tool that allows the rapid innovation and design of rich communication
and data service offers. Data Fastermind embeds artificial intelligence,
prediction and machine learning capabilities into all solutions.
In these areas Comptel seeks global thought leadership in solving the business
challenges of operators and digital communications service providers.
Additionally Comptel has started to invest in new products around the digital
buying experience.
During 2015, the company will further continue to develop its current offering.
In the first half eight major software releases were launched in these
respective product areas.
EUR million 4-6 4-6 Change 1-6 1-6 Change 1-12
2015 2014 % 2015 2014 % 2014
--------------------------------------------------------------------------------
Gross investments in property, 0.2 0.0 797.5 0.3 0.3 9.1 0.7
plant and equipment and
intangible assets
--------------------------------------------------------------------------------
Investments
The investments comprised of devices, software and furnishings. The investments
were funded through cash flow from operations.
Personnel
30 Jun 31 Dec Change 30 Jun Change
2015 2014 % 2014 %
--------------------------------------------------------------------------------
Number of employees at the end 746 660 13.0 661 12.9
of period
--------------------------------------------------------------------------------
4-6 1-12 Change 4-6 Change
2015 2014 % 2014 %
-------------------------------------------------------------------------------
Average number of personnel during the period 700 665 5.3 673 4.0
-------------------------------------------------------------------------------
The number of personnel changed due to investment in R&D and delivery capacity.
In the second quarter, the personnel expenses were 49.1 per cent of net sales
(48.8). In the first half of the year, the personnel expenses were 47.4 per
cent of net sales (48.7).
At the end of the period, 30.4 per cent (30.4) of the personnel were located in
Finland, 26.4 per cent (28.6) in Malaysia, 10.1 per cent (11.6) in Bulgaria,
10.7 per cent (7.1) in India, 2.9 per cent (3.3) in the United Arab Emirates,
and 19.5 per cent (19.0) in other countries where Comptel operates.
Comptel's share
The closing share price of the period was EUR 1.27 (0.62). Comptel's market
value at the end of the period was EUR 136.4 million (66.6).
Comptel share 4-6 4-6 Change 1-6 1-6 Change 1-12
2015 2014 % 2015 2014 % 2014
------------------------------------------------------------------------
Shares traded, million 11.5 3.6 219.4 17.7 16.9 4.7 27.8
------------------------------------------------------------------------
Shares traded, EUR million 13.9 2.2 531.8 19.7 9.2 114.1 16.5
------------------------------------------------------------------------
Highest price, EUR 1.49 0.70 112.9 1.49 0.70 112.9 1.00
------------------------------------------------------------------------
Lowest price, EUR 0.95 0.53 79.2 0.84 0.48 75.0 0.48
------------------------------------------------------------------------
Of Comptel's outstanding shares, 6.5 per cent (3.4) were nominee registered or
held by foreign shareholders at the end of the period.
At the end of the period the company held 118,507 of its own shares, which is
0.11 per cent of the total number of shares. The total counter-book value of
the shares held by the company was EUR 2,360.
20,000 share options were distributed during the review period based on Stock
Option Incentive plan 2014.
Dividend of EUR 0.02 per share was paid during the second quarter.
Corporate Governance
The Annual General Meeting (AGM), held on 9th of April 2015 re-elected Mr
Pertti Ervi, Mr Hannu Vaajoensuu, Ms Eriikka Söderström, Mr Antti Vasara and Mr
Heikki Mäkijärvi as members of the Board of Directors. In the meeting held
after the AGM, the Board of Directors elected Mr Pertti Ervi as chairman and Mr
Hannu Vaajoensuu as vice chairman of the Board of Directors. The Board decided
not to set up committees.
The AGM appointed Ernst & Young Oy as the company's auditor. Mr Mikko
Järventausta is acting as the principal auditor.
The AGM resolved that dividend of 0.02 EUR per share will be paid for 2014.
The AGM authorised the Board of Directors to decide on share issues amounting
to a maximum of 21,400,000 new shares and on 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 2016. 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 9th of April
2015.
Events after the reporting period
There were no significant events after the reporting period.
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 manner 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 and 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 a decicion 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. Due to latest decisions by the Finnish tax authorities this risk
impact on corporate effective tax rate is lower.
The risks and uncertainties of Comptel are described in more detail in the
company's financial statements and the Board of Directors' report for 2014
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 2014.
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 Apr - 1 Apr -
Income (EUR 1,000) - 30 Jun 30 Jun 30 Jun 30 Jun 2014 2015 2014
2015
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 42,695 38,595 21,739 20,572
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other operating income 16 306 13 -7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Materials and services -2,326 -2,099 -1,222 -1,021
--------------------------------------------------------------------------------
Employee benefits -20,34 -18,798 -10,765 -10,044
1
--------------------------------------------------------------------------------
Depreciation, amortisation and impairment -3,240 -3,162 -1,630 -1,658
charges
--------------------------------------------------------------------------------
Other operating expenses -14,74 -12,708 -7,572 -6,666
9
--------------------------------------------------------------------------------
-40,65 -36,767 -21,189 -19,389 6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit/loss 2,055 2,134 562 1,176
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial income 1,006 543 154 -58
--------------------------------------------------------------------------------
Financial expenses -1,904 -1,142 -353 -356
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss before income taxes 1,158 1,536 363 761
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -527 -720 -24 -96
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period 631 816 339 665
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive income:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive income to be
reclassified to profit or loss in
subsequent periods
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Translation differences 736 313 5 224
--------------------------------------------------------------------------------
Cash flow hedges 444 - 397 -
--------------------------------------------------------------------------------
Income tax relating to components of other -89 - -80 -
comprehensive income
--------------------------------------------------------------------------------
Total other comprehensive income 1,091 313 322 224
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive income for the period 1,722 1,129 661 889
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss attributable to:
--------------------------------------------------------------------------------
Equity holders of the parent company 631 816 339 665
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive income attributable to:
--------------------------------------------------------------------------------
Equity holders of the parent company 1,722 1,129 661 889
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders of the parent company:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR 0.01 0.01 0.0 0.01
--------------------------------------------------------------------------------
Earnings per share, diluted, EUR 0.01 0.01 0.0 0.01
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Consolidated Statement of Financial Position (EUR 30 Jun 2015 31 Dec 2014
1,000)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Assets
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Goodwill 2,646 2,646
--------------------------------------------------------------------------------
Other intangible assets 13,039 13,435
--------------------------------------------------------------------------------
Tangible assets 1,458 1,596
--------------------------------------------------------------------------------
Investments in associates 673 673
--------------------------------------------------------------------------------
Available-for-sale financial assets 87 87
--------------------------------------------------------------------------------
Deferred tax assets 7,101 5,880
--------------------------------------------------------------------------------
Other non-current receivables 651 613
--------------------------------------------------------------------------------
25,654 24,929
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Trade and other current receivables 33,622 43,043
--------------------------------------------------------------------------------
Current tax asset 515 315
--------------------------------------------------------------------------------
Cash and cash equivalents 4,627 9,352
--------------------------------------------------------------------------------
38,763 52,710
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total assets 64,418 77,638
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity and liabilities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity attributable to equity holders of the
parent company
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Share capital 2,141 2,141
--------------------------------------------------------------------------------
Fund of invested non-restricted equity 454 401
--------------------------------------------------------------------------------
Fair value reserve 174 -182
--------------------------------------------------------------------------------
Translation differences 30 -699
--------------------------------------------------------------------------------
Retained earnings 30,264 31,685
--------------------------------------------------------------------------------
Total equity 33,063 33,346
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Deferred tax liabilities 2,664 2,669
--------------------------------------------------------------------------------
Non-current financial liabilities 165 1,257
--------------------------------------------------------------------------------
2,830 3,926
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Provisions 1,261 1,325
--------------------------------------------------------------------------------
Current financial liabilities 4,274 6,305
--------------------------------------------------------------------------------
Trade and other current liabilities 22,989 32,737
--------------------------------------------------------------------------------
28,524 40,367
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total liabilities 31,354 44,292
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity and liabilities 64,418 77,638
--------------------------------------------------------------------------------
Consolidated Statement of Cash Flows 1 Jan - 30 1 Jan - 30
(EUR 1,000) Jun Jun
2015 2014
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from operating activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period 631 816
--------------------------------------------------------------------------------
Adjustments:
--------------------------------------------------------------------------------
Non-cash transactions or items that are not part of cash 4,405 3,012
flows from operating activities
--------------------------------------------------------------------------------
Interest and other financial expenses 173 486
--------------------------------------------------------------------------------
Interest income -49 -8
--------------------------------------------------------------------------------
Income taxes 925 740
--------------------------------------------------------------------------------
Change in working capital:
--------------------------------------------------------------------------------
Change in trade and other current receivables 9,415 4,736
--------------------------------------------------------------------------------
Change in trade and other current liabilities -10,445 -4,533
--------------------------------------------------------------------------------
Change in provisions -421 135
--------------------------------------------------------------------------------
Interest and other financial expenses paid -170 -123
--------------------------------------------------------------------------------
Interest received 45 4
--------------------------------------------------------------------------------
Income taxes paid and tax returns received -2,064 -1,907
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash from operating activities 2,445 3,358
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from investing activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Proceeds from sale of business operations - 200
--------------------------------------------------------------------------------
Investments in tangible assets -279 -255
--------------------------------------------------------------------------------
Investments in intangible assets - -
--------------------------------------------------------------------------------
Investments in development projects -2,368 -2,181
--------------------------------------------------------------------------------
Change in other non-current receivables 10 -5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash used in investing activities -2,637 -2,242
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from financing activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dividends paid -2,139 -1,073
--------------------------------------------------------------------------------
Shares issued 53 -
--------------------------------------------------------------------------------
Proceeds from borrowings 11,060 2,000
--------------------------------------------------------------------------------
Repayment of borrowings -14,053 -6,008
--------------------------------------------------------------------------------
Lease payments -131 -84
--------------------------------------------------------------------------------
Change in other non-current liabilities - -60
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash used in financing activities -5,210 -5,226
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash and cash equivalents -5,402 -4,108
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the period 9,352 6,542
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 4,627 2,850
--------------------------------------------------------------------------------
Change -4,725 -3,692
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Effects of changes in foreign exchange rates 677 923
--------------------------------------------------------------------------------
Consolidated Statement of Changes in Equity
--------------------------------------------------------------------------------
-
Equity attributable to equity holders of the parent company
--------------------------------------------------------------------------------
-
EUR 1,000 Share Other Translation Retained Total
capital reserves differences earnings
--------------------------------------------------------------------------------
Equity at 2,141 401 -1,219 27,600 28,924
31 Dec 2013
--------------------------------------------------------------------------------
Dividends -1,073 -1,073
--------------------------------------------------------------------------------
Share-based 134 134
compensation
--------------------------------------------------------------------------------
Prior year correction * -210 -210
--------------------------------------------------------------------------------
Other changes -10 -10
--------------------------------------------------------------------------------
Total comprehensive 315 816 1,130
income for the period
--------------------------------------------------------------------------------
Equity at 2,141 401 -905 27,258 28,895
31 Jun 2014
--------------------------------------------------------------------------------
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 2,141 401 -698 -182 31,684 33,346
31 Dec 2014
--------------------------------------------------------------------------------
Dividends -2,139 -2,139
--------------------------------------------------------------------------------
Shares issued 53 53
--------------------------------------------------------------------------------
Share-based 66 66
compensation
--------------------------------------------------------------------------------
Other changes 23 23
--------------------------------------------------------------------------------
Total comprehensive 728 356 631 1,715
income for the
period
--------------------------------------------------------------------------------
Equity at 2,141 454 30 174 30,264 33,063
31 Jun 2015
--------------------------------------------------------------------------------
*Difference in prior year receivables was corrected directly to Retained
Earnings during the quarter.
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 2015. 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 Apr - 1 Apr -
30 Jun 2015 30 Jun 2014 30 Jun 2015 30 Jun 2014
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Europe 16,268 15,458 7,066 8,664
--------------------------------------------------------------------------
Asia-Pacific 13,461 12,196 7,443 6,279
--------------------------------------------------------------------------
Middle East and Africa 7,418 6,913 4,089 3,753
--------------------------------------------------------------------------
Americas 5,548 4,027 3,140 1,876
--------------------------------------------------------------------------
Group total 42,695 38,595 21,739 20,572
--------------------------------------------------------------------------
Operating profit/loss by segment
EUR 1,000 1 Jan - 1 Jan - 1 Apr - 1 Apr -
30 Jun 30 Jun 30 Jun 30 Jun
2015 2014 2015 2014
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Europe 10,196 7,328 3,908 4,416
--------------------------------------------------------------------------------
Asia-Pacific 7,147 7,581 3,937 3,755
--------------------------------------------------------------------------------
Middle East and Africa 1,776 2,905 1,199 1,502
--------------------------------------------------------------------------------
Americas 3,031 1,789 1,725 926
--------------------------------------------------------------------------------
Group unallocated expenses -20,096 -17,469 -10,207 -9,424
--------------------------------------------------------------------------------
Group operating profit/loss 2,055 2,134 562 1,175
total
--------------------------------------------------------------------------------
Financial income and expenses -898 -598 -199 -414
--------------------------------------------------------------------------------
Group profit/loss before income 1,158 1,536 363 760
taxes
--------------------------------------------------------------------------------
3. Income tax
Income tax expense according to the statement of comprehensive income for the
period was EUR 527 thousand (EUR 720 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 462 thousand
in January - June (EUR 329 thousand).
4. Tangible assets
EUR 1,000 1 Jan - 1 Jan -
30 Jun 2015 30 Jun 2014
-----------------------------------
-----------------------------------
Additions 279 255
-----------------------------------
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 -
30 Jun 2015 30 Jun 2014
-----------------------------------------
-----------------------------------------
Associate
-----------------------------------------
Interest income 4 4
-----------------------------------------
EUR 1,000 30 Jun 2015 31 Dec 2014
-------------------------------------------------
-------------------------------------------------
Associate
-------------------------------------------------
Non-current receivables 117 108
-------------------------------------------------
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 - 30 Jun 1 Jan - 30 Jun
2015 2014
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Salaries and other short-term employee 786 712
benefits
--------------------------------------------------------------------------------
Share-based payments 224 183
--------------------------------------------------------------------------------
Total 1,010 895
--------------------------------------------------------------------------------
Guarantees and other commitments
EUR 1,000 30 Jun 2015 31 Dec 2014
------------------------------------
------------------------------------
Guarantees 7 7
------------------------------------
6. Commitments
Minimum lease payments on non-cancellable office facilities and other operating
leases are payable as follows:
EUR 1,000 30 Jun 2015 31 Dec 2014
----------------------------------------------------
----------------------------------------------------
Less than one year 2,275 2,439
----------------------------------------------------
Between one and five years 2,474 2,962
----------------------------------------------------
Total 4,749 5,401
----------------------------------------------------
The group had no material capital commitments for the purchase of tangible
assets at 30 June 2015 and 30 June 2014.
7. Contingent liabilities
EUR 1,000 30 Jun 2015 31 Dec 2014
---------------------------------------------
---------------------------------------------
Bank guarantees 3,998 2,881
---------------------------------------------
Corporate mortgages 200 200
---------------------------------------------
EUR 1,000 30 Jun 2015 31 Dec 2014
--------------------------------------------------------------------
--------------------------------------------------------------------
Contingent liabilities on behalf of others
--------------------------------------------------------------------
Guarantees 14 34
--------------------------------------------------------------------
8. Fair values of financial assets and liabilities
EUR 1,000 Book Fair Book Fair Book Fair
value value value value value value
30.6.2 30.6.2 30.6.2 30.6.2 31.12. 31.12.
015 015 014 014 2014 2014
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial assets
--------------------------------------------------------------------------------
Financial assets at fair value
through profit or loss
--------------------------------------------------------------------------------
Forward contracts (level 2) - - 58 58 25 25
--------------------------------------------------------------------------------
Available-for-sale financial 87 87 87 87 87 87
assets (level 3))
--------------------------------------------------------------------------------
Non-current trade receivables 1,541 1,541 998 998 1,466 1,466
--------------------------------------------------------------------------------
Current trade receivables 21,053 21,053 23,085 23,085 27,449 27,449
--------------------------------------------------------------------------------
Other current receivables 2,686 2,686 2,431 2,431 4,624 4,624
--------------------------------------------------------------------------------
Cash and cash equivalents 4,627 4,627 2,850 2,850 9,352 9,352
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial liabilities
--------------------------------------------------------------------------------
Financial liabilities at fair
value through profit or loss
--------------------------------------------------------------------------------
Forward contracts (level 2) 246 246 18 18 847 847
--------------------------------------------------------------------------------
Trade payables and other 23,335 23,335 21,036 21,036 32,713 32,713
liabilities
--------------------------------------------------------------------------------
Non-current loans from financial 56 56 2,100 2,107 1,078 1,081
institutions
--------------------------------------------------------------------------------
Non-current finance lease - - 215 215 179 179
liabilities
--------------------------------------------------------------------------------
Other non-current liabilities 110 110 31 31 - -
--------------------------------------------------------------------------------
Current loans from financial 4,044 4,063 2,044 2,064 5,984 6,095
institutions
--------------------------------------------------------------------------------
Current finance lease 199 199 211 211 259 259
liabilities
--------------------------------------------------------------------------------
Other current liabilities 31 31 70 70 63 63
--------------------------------------------------------------------------------
9. Key figures
Financial summary 1 Jan - 1 Jan - 1 Jan -
30 Jun 30 Jun 31 Dec
2015 2014 2014
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales, EUR 1,000 42,695 38,595 85,714
--------------------------------------------------------------------------------
Net sales, change % 10.6 -7.7 3.7
--------------------------------------------------------------------------------
Operating profit/loss, EUR 1,000 2,055 2,134 8,311
--------------------------------------------------------------------------------
Operating profit/loss, change % -3.7 8.3 13.7
--------------------------------------------------------------------------------
Operating profit/loss, as % of net sales 4.8 5.5 9.7
--------------------------------------------------------------------------------
Profit/loss before taxes, EUR 1,000 1,158 1,536 7,436
--------------------------------------------------------------------------------
Profit/loss before taxes, as % of net sales 2.7 4.0 8.7
--------------------------------------------------------------------------------
Return on equity, % - - 17.5
--------------------------------------------------------------------------------
Return on investment, % - - 19.5
--------------------------------------------------------------------------------
Equity ratio, % 65.3 60.7 52.4
--------------------------------------------------------------------------------
Gross investments in tangible and intangible 279 255 740
assets, EUR 1,0001)
--------------------------------------------------------------------------------
Gross investments in tangible and intangible 0.7 0.7 0.9
assets, as % of net sales
--------------------------------------------------------------------------------
Capitalisations according to IAS 38 to intangible 2,368 2,181 4,720
assets, EUR 1,000
--------------------------------------------------------------------------------
Research and development expenditure, EUR 1,000 8,653 7,703 16,791
--------------------------------------------------------------------------------
Research and development expenditure, 20.3 20.0 19.6
as % of net sales
--------------------------------------------------------------------------------
Order backlog, EUR 1,000 58,760 42,778 55,213
--------------------------------------------------------------------------------
Average number of employees during the period 700 673 665
--------------------------------------------------------------------------------
Interest-bearing net liabilities, EUR 1,000 -187 1,776 -1,789
--------------------------------------------------------------------------------
Gearing ratio, % -0.6 6.1 -5.4
--------------------------------------------------------------------------------
1) The figure does not include investments in development projects.
Per share data 1 Jan - 1 Jan - 1 Jan -
30 Jun 2015 30 Jun 2014 31 Dec 2014
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share (EPS), EUR 0.01 0.01 0.05
--------------------------------------------------------------------------------
EPS diluted, EUR 0.01 0.01 0.05
--------------------------------------------------------------------------------
Equity per share, EUR 0.31 0.27 0.31
--------------------------------------------------------------------------------
Dividend per share, EUR - - 0.02
--------------------------------------------------------------------------------
Dividend per earnings, % - - 39.5
--------------------------------------------------------------------------------
Effective dividend yield, % - - 2.0
--------------------------------------------------------------------------------
P/E ratio - - 19.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Adjusted number of shares at the end of 107,525,175 107,421,270 107,421,270
the period
--------------------------------------------------------------------------------
of which the number of treasury shares 118,507 239 464,739
--------------------------------------------------------------------------------
Outstanding shares 107,406,668 107,421,031 106,956,531
--------------------------------------------------------------------------------
Adjusted average number of shares during 107,074,788 107,421,270 107,284,900
the period
--------------------------------------------------------------------------------
Average number of shares, dilution 108,740,382 109,332,843 107,625,526
included
--------------------------------------------------------------------------------
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)
--------------------------------------------------------------------------------
Schedule for Comptel's interim reports in 2015:
January-September 20 October 2015
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
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