2015-08-06 07:30:01 CEST
2015-08-06 07:30:10 CEST
REGULATED INFORMATION
Teleste - Interim report (Q1 and Q3)
TELESTE CORPORATION INTERIM REPORT 1 JAN TO 30 JUNE 2015: SIGNIFICANT INCREASE IN NET SALES, PROFIT AND ORDERS RECEIVED
Turku, Finland, 2015-08-06 07:30 CEST (GLOBE NEWSWIRE) -- TELESTE CORPORTATION
INTERIM REPORT 6.8.2015 AT 08:30
TELESTE CORPORATION INTERIM REPORT 1 JAN TO 30 JUNE 2015
SIGNIFICANT INCREASE IN NET SALES, PROFIT AND ORDERS RECEIVED
April to June 2015
- Net sales amounted to EUR 59.7 (49.4) million, an increase of 20.9%
- Operating profit amounted to EUR 2.5 (1.4) million, an increase of 81.3%
- Undiluted earnings per share were EUR 0.10 (0.05), an increase of 86.3%
- Orders received totalled EUR 64.1 (50.3) million, an increase of 27.5%
- Operating cash flow was EUR -2.2 (0.3) million
January to June 2015
- Net sales amounted to EUR 113.2 (92.9) million, an increase of 21.8%
- Operating profit amounted to EUR 5.1 (2.7) million, an increase of 91.0%
- Undiluted earnings per share were EUR 0.22 (0.10), an increase of 111.5%
- Orders received totalled EUR 121.0 (97.2) million, an increase of 24.5%
- Operating cash flow was EUR -3.4 (1.8) million
Outlook for 2015
We estimate that net sales and operating profit for 2015 will exceed the 2014
level.
Comments on second quarter of 2015 by CEO Jukka Rinnevaara:
”The demand for Teleste's products continued to be strong during the second
quarter. Orders received in the quarter reached EUR 64.1 million, the highest
level in Teleste's history. As a result of increased product deliveries,
operating profit and earnings per share also improved clearly over the
comparative period.
Demand for Video and Broadband Solutions was good while orders received
increased the order backlog to the record high level of EUR 46.7 million. The
demand for products complying with the DOCSIS 3.1 standard was particularly
good. Net sales of the business area rose to EUR 36.5 million, which is the
highest ever net sales in a single quarter. Net sales grew particularly owing
to the Mitron acquisition, but also in the access network products. Growing
market areas included particularly Poland, Norway, and Israel. The operating
result was especially boosted by the delivery volumes in access network
products and the improved profitability of the video headend products.
For Network Services the second quarter was a disappointment. In Germany, the
need for services of our largest customer failed to increase according to
forecasts, resulting in an unbalanced resource allocation and a negative
result. In the UK, the investment designed to expand the business was
continued. Launching of new customerships has progressed, but the new projects
have not yet reached the volume required for profitability. In other countries,
the result of the services business has evolved better than we predicted.”
Teleste Group in April to June 2015
Key figures (M€) 4-6/2015 4-6/2014 Change %
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Orders received 64.1 50.3 +27.5%
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Net sales 59.7 49.4 +20.9%
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EBIT 2.5 1.4 +81.3%
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EBIT % 4.2% 2.8%
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Profit for the period 1.7 0.9 +89.9%
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Earnings per share, EUR 0.10 0.05 +86.3%
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Cash flow from operations -2.2 0.3
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In the second quarter, orders received by the Group amounted to EUR 64.1 (50.3)
million, up 27.5% over last year's comparative period. Order backlog grew by
169% to EUR 46.7 (17.4) million.
Net sales grew by 20.9% amounting to EUR 59.7 (49.4) million. Compared to the
same period in the previous year, operating profit increased by 81.3% standing
at EUR 2.5 (1.4) million, which is 4.2% (2.8%) of the net sales. Operating
profit of Video and Broadband Solutions increased, whereas that of Network
Services was in the red. Personnel expenses amounted to EUR 18.4 (15.4)
million. Personnel expenses increased as a result of both organic growth and an
acquisition. Undiluted earnings per share stood at EUR 0.10 (EUR 0.05).
Operating cash flow stood at EUR -2.2 (0.3) million. Increased accounts
receivable and inventories tied more working capital than in the comparative
period, which resulted in negative cash flow.
Teleste Group in January to June 2015
Key figures (M€) 1-6/2015 1-6/2014 Change % 1-12/2014
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Orders received 121.0 97.2 +24.5% 199.3
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Net sales 113.2 92.9 +21.8% 197.2
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EBIT 5.1 2.7 +91.0% 11.1
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EBIT % 4.5% 2.9% 5.6%
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Profit for the period 3.9 1.8 +115.0% 8.5
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Earnings per share, EUR 0.22 0.10 +111.5% 0.48
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Cash flow from operations -3.4 1.8 9.2
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Net gearing, % 35.3% 18.2% 9.5%
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Equity ratio, % 44.3% 52.0% 53.4%
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Personnel at period-end 1,517 1,303 +16.4% 1,343
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Orders received by the Group improved by 24.5 % standing at EUR 121.0 (97.2)
million. Net sales increased 21.8% equalling EUR 113.2 (92.9) million.
Operating profit grew by 91.0% standing at EUR 5.1 (2.7) million. Personnel
expenses amounted to EUR 35.3 (29.3) million. Financial items totalled EUR 0.2
(-0.2) million. Taxes for the Group amounted to EUR 1.4 (0.6) million while the
Group's tax rate equalled 26.0% (25.7%). Undiluted result per share increased
by 112 % to EUR 0.22 (0.10). Operating cash flow stood at EUR -3.4 (1.8)
million.
Video and Broadband Solutions in April to June 2015
Key figures (1,000 €) 4-6/2015 4-6/2014 Change %
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Orders received 40,926 27,898 +46.7%
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Net sales 36,519 27,007 +35.2%
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EBIT 2,999 1,835 +63.4%
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EBIT % 8.2% 6.8%
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Orders received totalled EUR 40.9 (27.9) million, an increase of 46.7% from the
comparative period. Orders received were record high even without the impact of
the Mitron acquisition. Order backlog totalled EUR 46.7 (17.4) million. Net
sales grew by 35.2% amounting to EUR 36.5 (27.0) million. Deliveries of access
network products and the Mitron acquisition increased net sales significantly
higher than that of the comparative period. Operating profit increased by 63.4%
to EUR 3.0 (1.8) million, representing 8.2% (6.8%) of the net sales. The
operating profit was boosted primarily by the growth in the sales volume of the
access network products. Mitron, too, made a positive operating profit.
R&D expenses for the business area amounted to EUR 2.9 (3.0) million making
8.0% (11.0%) of the net sales. Product development projects focused on network
products in compliance with the Docsis 3.1 standard and customer-specific
projects. Capitalized R&D expenses amounted to EUR 0.2 (0.3) million.
Depreciation on capitalized R&D expenses equalled EUR 0.3 (0.3) million.
Video and Broadband Solutions in January to June 2015
Key figures (1,000 €) 1-6/2015 1-6/2014 Change % 1-12/2014
--------------------------------------------------------------
Orders received 74,916 52,794 +41.9% 109,007
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Net sales 67,052 48,492 +38.3% 106,901
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EBIT 5,002 2,635 +89.8% 9,673
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EBIT % 7.5% 5.4% 9.0%
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Orders received totalled EUR 74.9 (52.8) million, an increase of 41.9% from the
comparative period. Net sales grew by 38.3% amounting to EUR 67.1 (48.5)
million. Operating profit increased 89.8% equalling EUR 5.0 (2.6) million. The
operating profit was particularly improved by access network products, higher
sales volumes and higher profitability of the video headend products. Product
development expenses equalled EUR 5.8 (5.6), in other words 8.7% (11.5%) of the
net sales.
Network Services in April to June 2015
Key figures (1,000 €) 4-6/2015 4-6/2014 Change %
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Orders received 23,211 22,405 +3.6%
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Net sales 23,211 22,405 +3.6%
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EBIT -492 -452
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EBIT % -2.1% -2.0%
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Net sales for the second quarter stood at EUR 23.2 (22.4) million, which is
3.6% higher than in the comparison period. This increase in net sales was
achieved mainly in Switzerland. Operating profit was a loss standing at EUR
-0.5 (-0.5) million, or -2.1% (-2.0%) of the net sales. This loss stemmed from
the UK and Germany. In the UK, the investment designed to expand the business
was continued. Launching of new customerships has progressed, but the new
projects have not yet reached the volume required for profitability. In
Germany, the need for services of our largest customer failed to increase
according to the forecasts, resulting in a loss caused by unbalanced resource
allocation. Profitability has developed positively in Switzerland.
Network Services in January to June 2015
Key figures (1,000 €) 1-6/2015 1-6/2014 Change % 1-12/2014
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Orders received 46,122 44,453 +3.8% 90,275
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Net sales 46,122 44,453 +3.8% 90,275
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EBIT 103 38 +170.1% 1,463
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EBIT % 0.2% 0.1% 1.6%
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The year-on-year net sales grew by 3.8% amounting to EUR 46.1 (44.5) million.
Operating profit equalled EUR 0.1 (0.0) million. In the UK, profit for the
beginning of the year was still burdened by the investments designed to expand
the business. The new services business was loss-making throughout the first
half of the year. In Germany, fluctuations in the demand for services in the
second quarter pushed the business into the red.
Personnel and Organization in January to June 2015
In the period under review, the Group had an annual average of 1,477 people
(1,275/2014, 1,336/2013), of whom 682 (562) were employed by Video and
Broadband Solutions, and 795 (713) by Network Services. At the end of the
review period, the Group employed 1,517 people (1,303/2014, 1,325/2013) of whom
66% (69%/2014, 74%/2014) were stationed abroad. About 3% of the Group's
employees were working outside Europe.
Personnel costs amounted to EUR 35.3 million (29.3/2014, 28.9/2013). This
increase in personnel expenses was due to the acquisition of Mitron, as well as
the increased number of employees working for Network Services.
Investments and Product Development in January to June 2015
Investments by the Group in the period under review totalled EUR 13.5 (1.5)
million accounting for 11.9% (1.7%) of the net sales. EUR 11.5 million of these
investments involved the acquisition of Mitron. Product development investments
amounted to EUR 0.6 (0.6) million while other investments equalled EUR 0.8
(0.8) million.
Product development projects focused on network products complying with the
Docsis 3.1 standard, network management system, distributed access architecture
and customer-specific projects.
Financing and Capital Structure in January to June 2015
Operating cash flow stood at EUR -3.4 (1.8) million. This decline in the
operating cash flow over the comparative period was caused by increased working
capital. Growth in trade receivables and inventories increased working capital
proportionally more than the net sales increased.
In January, Teleste Corporation signed new overdraft and revolving credit
facilities with a total value of EUR 45.0 million. These new agreements
replaced the corresponding previous funding agreements. At the end of the
reporting period, the amount of unused binding stand-by credit facilities at
the Group's disposal equalled EUR 8.1 (17.0) million. These credit limits are
valid until the end of March 2018. On 30 June 2015, the Group's interest
bearing debt stood at EUR 40.1 (24.1) million.
The Group's equity ratio equalled 44.3% (52.0%) and net gearing 35.3% (18.2%).
Key Risks Faced by the Business Areas
Founded in 1954, Teleste is a technology and services company consisting of two
business areas: Video and Broadband Solutions and Network Services. With Europe
as the main market area, our clients include European cable operators and
specified organizations in the public sector.
As to Video and Broadband Solutions, client-specific and integrated deliveries
of solutions create favourable conditions for growth, even if the concerned
resource allocation and technical implementation pose a challenge involving,
therefore, also reasonable risks. In particular, deliveries of integrated
security and information systems for the rail transport segment may be large in
size, setting high demands for the project quotation calculation and management
and, consequently, there are risks involved. Our customers' network investments
vary based on the relevant need for upgrading and their financial structure.
Significant part of Teleste's competition comes from the USA so the exchange
rate of euro up against the US dollar affects our competitiveness. The exchange
rate development of the US dollar and the Chinese renminbi to the euro affects
our product costs.
The company hedges against short-term currency exposure by means of forward
exchange contracts. The situation in the European financial markets may slow
down our customers' investment plans. Furthermore, a weakening in the consumer
purchasing power in Europe could slow down the network investments by the cable
operators. Competition increased by the new service providers (OTT) may
undermine the cable operators' ability to invest. Availability of components is
subject to natural phenomena, such as floods and earthquakes. Correct
technological choices and their timing are vital for our success. Regardless of
careful planning and quality assurance, complex products may fail in the
customer's network and lead to expensive repair obligations.
Net sales of Network Services comes, for the most part, from a small number of
large European customers, so a significant change in the demand for our
services by any one of them is reflected in the actual deliveries and
profitability. Improvements in customer satisfaction and productivity require
efficient control of service process management as well as innovative solutions
in processes, products and logistics to ensure the quality of services and cost
effectiveness. Smooth operation of cable networks necessitates efficient
technical management of the networks and functional solutions for devices in
accordance with contractual obligations. This, in turn, demands continuous and
determined development of skills and competences in Teleste's own personnel as
well as those of our subcontractors. In addition, Teleste's ability to deliver
and compete may be constrained by the adequacy of our own personnel and our
sub-contractor network capacity. Tender calculation and management of larger
projects with overall responsibility are complex and risky. Severe weather
conditions may affect the supply conditions of our products and services.
Teleste's strategy involves risks and uncertainties: new business opportunities
may fail to be identified or they cannot be acted upon successfully. The
business areas will have to keep an eye on market movements, such as
consolidations among the customers and competitors. Intensifying competition
may decrease the prices of products and solutions faster than we manage to
reduce our products' manufacturing and delivery costs. Various information
systems are critical to the development, manufacturing and supply of products
to our customers. Maintenance of information systems and deployment of new
systems involve risks that may affect our ability to deliver products and
services. Information systems may also be subject to external threats, from
which we aim to protect ourselves. Acquisition of skilled personnel and
maintenance of their competence require encouragement, development and
recruitment, which can fail.
The Board of Directors annually reviews any essential risks related to the
company operation and the management thereof. Risk management constitutes an
integral part of the strategic and operative practices of our business areas.
Risks are reported to the Board on a regular basis.
The company has covered any major risks of loss related to the business areas
through insurance policies. Insurance will also cover credit loss risks related
to sales receivables. In the period under review, no such legal proceedings or
judicial procedures were pending that would have had any essential significance
for the Group operation.
Group Structure
Parent company Teleste has branch offices in Australia, the Netherlands, and
Denmark with subsidiaries in 14 countries outside Finland. On 7 January 2015,
the parent company acquired the entire share capital of Mitron Group Oy Ltd. On
15 May 2015, the parent company bought the entire share capital of Teleste
Management II Oy to acquire its holding of Teleste Corporation's shares.
Shares and Changes in Share Capital
On 30 June 2015, EM Group Oy was the largest single shareholder with a holding
of 23.2%.
In the period under review, the lowest company share price was EUR 5.32 (4.25)
while the highest was EUR 7.79 (4.86). Closing price on 30 June 2015 stood at
EUR 7.30 (4.55). According to Euroclear Finland Ltd the number of shareholders
at the end of the period under review was 5,028 (5,052). Foreign ownership
accounted for 4.81% (4.81 %). From 1 January to 30 June 2015, trading with
Teleste share at NASDAQ OMX Helsinki amounted to EUR 13.3 (5.9) million. In the
period under review, 2.0 (1.3) million Teleste shares were traded on the stock
exchange.
At the end of June 2015, the Group held 863,953 of its own shares, of which the
parent company Teleste Corporation had 321,953 shares and the Group companies
had 542,000 shares, respectively. At the end of the period, the Group's holding
of the total amount of shares amounted to 4.6% (6.3%).
In January, the Company transferred 56,924 shares as part of the purchase price
in the context of the acquisition of the entire share capital of Mitron Group
Oy Ltd by Teleste Corporation. In February, the Company transferred 73,644
shares in a directed free share issue constituting part of Teleste
Corporation's 2012 long-term incentive plan. In May, the Company transferred
195,133 shares when purchasing the entire share capital of Teleste Management
II Oy.
On 30 June 2015, the registered share capital of Teleste stood at EUR
6,966,932.80 divided in 18,985,588 shares.
Valid authorizations at the end of the review period:
- Purchases of own shares: maximum 1,200,000 of the Company's own shares, valid
until 8 October 2016.
- Issue of new shares: maximum 4,000,000 shares, valid until 31 March 2017.
- Disposal of own shares in possession: maximum 1,800,000 shares, valid until
31 March 2017.
- Based on the special rights granted by the Company, the number of shares to
subscribe may not exceed 2,500,000 shares; these special rights are included in
the maximum warrants concerning new shares and the Group's own shares mentioned
above. This authorization is valid until 31 March 2017.
Decisions by the Annual General Meeting
The Annual General Meeting (AGM) of Teleste Corporation on 9 April 2015
confirmed the financial statements for 2014 and discharged the Board of
Directors and the CEO from liability for the financial period. The AGM
confirmed the dividend of EUR 0.20 per share as proposed by the Board. The
dividend was paid out on 20 April 2015.
The AGM decided that the Board of Directors consists of six members. Mr. Pertti
Ervi, Ms. Jannica Fagerholm, Mr. Esa Harju, Ms. Marjo Miettinen, Mr. Kai
Telanne and Mr. Petteri Walldén were re-elected as members of Teleste
Corporation's Board of Directors. Ms. Marjo Miettinen was elected Chair of the
Board in the organizational meeting held immediately after the AGM.
Authorized Public Accountants KPMG Oy Ab continue as the auditor until the next
AGM. Mr. Esa Kailiala, accountant authorized by the Central Chamber of Commerce
of Finland, was chosen auditor-in-charge.
The Annual General Meeting decided to authorize the Board of Directors to
decide on repurchasing the Company's own shares as proposed by the Board. Based
on this authorization, the Board of Directors may repurchase a maximum of
1,200,000 own shares of the Company otherwise than in proportion to the
holdings of the shareholders by using the non-restricted equity through
regulated market on NASDAQ OMX Helsinki Ltd at the market price prevailing at
the time of acquisition. This authorization of purchasing is valid for 18
months from the date of the decision.
Outlook for 2015
The business objective of Video and Broadband Solutions is to maintain its
strong market position in Europe and to strengthen this market position in
selected new markets outside Europe. Network capacity will continue to increase
driven by the new broadband and video services provided by the operators. Our
new products in line with the Docsis 3.1 communication standard allow the cable
operators to increase their network capacity competitively. Price erosion in
the market continues. Changes in the value of the euro, particularly against
the US dollar and the Chinese renminbi, affect Teleste's competitiveness, on
the one hand, and product manufacturing costs, on the other. The positive trend
in the video security and passenger information markets will continue, but the
public sector decisions concerning initiation of projects may be delayed by the
current economic situation. In addition to organic growth, we estimate the
Mitron acquisition to increase our net sales by more than EUR 22 million and
its impact on our operating profit to be positive.
As to Network Services, our business objective is to further develop the
operational efficiency and increase the share of those services that provide
our customers with higher value. In line with this objective, we will continue
to expand the new services business in the UK. We estimate the demand for
all-inclusive network services in our key target markets to continue at least
at the previous year level.
We estimate that net sales and operating profit for 2015 will exceed the 2014
level.
5 August 2015
Teleste Corporation Jukka Rinnevaara
Board of Directors President and CEO
This interim report has been compiled in compliance with IAS 34, as it is
accepted within EU, using the recognition and valuation principles with those
used in the Annual Report.Teleste has prepared this interim report applying the
same accounting principles as those described in detail in its the consolidated
financial statements. The data stated in this report is unaudited.
STATEMENT OF COMPREHENSIVE INCOME 4-6/ 4-6/ Change % 1-12/
(tEUR) 2015 2014 2014
Net Sales 59,730 49,412 20.9 % 197,176
Other operating income 1,269 317 300.4 % 2,536
Materials and services -30,904 -25,261 22.3 % -97,561
Personnel expenses -18,371 -15,363 19.6 % -59,497
Other operating expenses -8,021 -6,721 19.3 % -27,309
Depreciation -1,196 -1,001 19.5 % -4,211
Operating profit 2,507 1,383 81.3 % 11,135
Financial income and expenses -114 -125 -8.6 % -301
Profit after financial items 2,393 1,258 90.2 % 10,835
Profit before taxes 2,393 1,258 90.2 % 10,835
Taxes -678 -355 91.0 % -2,353
Net profit 1,715 903 89.9 % 8,482
Attributable to:
Equity holders of the parent 1,715 903 89.9 % 8,482
Earnings per share for result of the year attributable to
the equity holders of the parent
(expressed in € per share)
Basic 0.10 0.05 86.3 % 0.48
Diluted 0.10 0.05 87.6 % 0.48
Total comprehensive income for the period (tEUR)
Net profit 1,715 903 89.9 % 8,482
Possible items with future net profit effect
Translation differences -69 -141 -51.1 % -465
Fair value reserve 8 8 0.0 % -25
Total comprehensive income for the 1,654 770 114.8 % 7,992
period
Attributable to:
Equity holders of the parent 1,654 770 114.8 % 7,992
STATEMENT OF COMPREHENSIVE INCOME 1-6/ 1-6/ Change % 1-12/
(tEUR) 2015 2014 2014
Net Sales 113,173 92,945 21.8 % 197,176
Other operating income 1,716 503 241.1 % 2,536
Materials and services -56,441 -46,263 22.0 % -97,561
Personnel expenses -35,347 -29,348 20.4 % -59,497
Other operating expenses -15,590 -13,139 18.7 % -27,309
Depreciation -2,405 -2,025 18.8 % -4,211
Operating profit 5,105 2,673 91.0 % 11,135
Financial income and expenses 192 -217 n/a -301
Profit after financial items 5,297 2,456 115.7 % 10,835
Profit before taxes 5,297 2,456 115.7 % 10,835
Taxes -1,376 -632 117.7 % -2,353
Net profit 3,921 1,824 115.0 % 8,482
Attributable to:
Equity holders of the parent 3,921 1,824 115.0 % 8,482
Earnings per share for result of the year attributable to the equity holders of
the parent
(expressed in € per share)
Basic 0.22 0.10 111.5 % 0.48
Diluted 0.22 0.10 113.7 % 0.48
Total comprehensive income for the
period (tEUR)
Net profit 3,921 1,824 115.0 % 8,482
Possible items with future net profit effect
Translation differences 329 -49 n/a -465
Fair value reserve 12 1 n/a -25
Total comprehensive income for the 4,262 1,776 140.0 % 7,992
period
Attributable to:
Equity holders of the parent 4,262 1,776 140.0 % 7,992
STATEMENT OF FINANCIAL POSITION (tEUR) 30/06/ 30/06/ Change % 31/12/
2015 2014 2014
Non-current assets
Property,plant,equipment 10,332 10,333 0.0 % 9,627
Goodwill 38,572 33,250 16.0 % 33,121
Other intangible assets 6,601 4,191 57.5 % 3,891
Deferred tax assets 1,681 1,900 -11.5 % 1,698
Available-for-sale investments 694 422 64.3 % 701
57,879 50,096 15.5 % 49,037
Current assets
Inventories 30,639 20,115 52.3 % 20,483
Trade and other receivables 58,552 41,381 41.5 % 45,276
Cash and cash equivalents 15,236 12,242 24.5 % 17,672
104,427 73,738 41.6 % 83,430
Total assets 162,306 123,833 31.1 % 132,467
Shareholder's equity and liabilities
Share capital 6,967 6,967 0.0 % 6,967
Other equity 63,467 56,906 11.5 % 63,227
Non-controlling interest 0 488 n/a 487
70,434 64,361 9.4 % 70,682
Non-current liabilities
Provisions 1,294 596 117.0 % 1,238
Deferred tax liabilities 1,794 1,171 53.2 % 1,327
Non interest bearing liabilities 3,519 2,509 40.2 % 31
Interest bearing liabilities 39,399 360 n/a 595
46,006 4,636 892.4 % 3,192
Current liabilities
Trade payables and other liabilities 43,452 29,800 45.8 % 33,536
Current tax payable 993 423 134.6 % 793
Provisions 671 837 -19.8 % 480
Interest bearing liabilities 750 23,776 -96.8 % 23,784
45,866 54,836 -16.4 % 58,593
Total shareholder's equity and liabilities 162,306 123,833 31.1 % 132,467
CONSOLIDATED CASH FLOW STATEMENT (tEUR) 1-6/ 1-6/ Change % 1-12/
2015 2014 2014
Cash flows from operating activities
Profit for the period 3,921 1,824 115.0 % 8,482
Adjustments 3,589 2,874 24.9 % 4,211
Interest and other financial expenses and 192 -217 n/a -301
incomes
Paid Taxes -1,176 -1,415 -16.9 % -2,717
Change in working capital -9,894 -1,296 663.4 % -448
Cash flow from operating activities -3,369 1,770 n/a 9,227
Cash flow from investing activities
Purchases of property, plant and equipment -689 -816 -15.6 % -1,782
(PPE)
Proceeds from sales of PPE 0 0 n/a 64
Purchases of intangible assets -569 -614 -7.3 % -1,077
Acquisition of subsidiary, net of cash -6,826 0 n/a 0
acquired
Acquisition of assest available for sale 0 -136 n/a -407
Net cash used in investing activities -8,084 -1,566 416.2 % -3,202
Cash flow from financing activities
Proceeds from borrowings 27,300 0 n/a 1,000
Payments of borrowings -13,536 -177 n/a -1,255
Dividends paid -3,694 -3,462 6.7 % -3,360
Purchases of own shares -1,382 0 n/a 0
Net cash used in financing activities 8,688 -3,142 n/a -3,118
Change in cash
Cash in the beginning 17,672 15,229 16.0 % 15,229
Change in cash during period -2,765 -2,938 -5.9 % 2,907
Effect of currency changes 329 -49 n/a -465
Cash at the end 15,236 12,242 24.5 % 17,672
KEY FIGURES 1-6/ 1-6/ Change % 1-12/
2015 2014 2014
Earnings per share, EUR 0.22 0.10 111.5 % 0.48
Earnings per share fully diluted, EUR 0.22 0.10 113.7 % 0.48
Shareholders' equity per share, EUR 3.89 3.59 8.4 % 3.94
Return on equity 11.1 % 5.6 % 97.9 % 12.5 %
Return on capital employed 11.0 % 6.0 % 83.1 % 12.2 %
Equity ratio 44.3 % 52.0 % -14.7 % 53.4 %
Gearing 35.3 % 18.2 % 94.1 % 9.5 %
Investments, tEUR 13,468 1,549 769.5 % 3,676
Investments % of net sales 11.9 % 1.7 % 1.9 %
Order backlog, tEUR 46,749 17,402 169.4 % 15,206
Personnel, average 1,477 1,275 15.8 % 1,302
Number of shares (thousands) 18,986 18,897 0.5 % 18,918
including own shares
Highest share price, EUR 7.79 4.86 60.3 % 5.29
Lowest share price, EUR 5.32 4.25 25.2 % 4.25
Average share price, EUR 6.75 4.52 49.3 % 4.67
Turnover, in million shares 2.0 1.3 50.5 % 2.3
Turnover, in MEUR 13.3 5.9 125.9 % 10.9
Treasury shares
Number % of % of
of shares shares votes
Possession of company's own shares 863,953 4.55 % 4.55 %
30.6.2015
Contingent liabilities and pledged assets (tEUR)
Leasing and rent liabilities 5,587 5,711 -2.2 % 5,559
Derivative instruments (tEUR)
Value of underlying forward contracts 28,032 6,748 315.4 % 13,141
Market value of forward contracts -288 -159 81.1 % 65
Interest rate swap 11,000 11,000 0.0 % 11,000
Market value of interest swap -19 -5 280.0 % -31
Taxes are computed on the basis of the tax on the profit for the period.
OPERATING SEGMENTS (tEUR) 1-6/ 1-6/ Change % 1-12/
2015 2014 2014
Video and Broadband Solutions
Orders received 74,916 52,794 41.9 % 109,007
Net sales 67,052 48,492 38.3 % 106,901
EBIT 5,002 2,635 89.8 % 9,673
EBIT% 7.5 % 5.4 % 9.0 %
Network Services
Orders received 46,122 44,453 3.8 % 90,275
Net sales 46,122 44,453 3.8 % 90,275
EBIT 103 38 170.1 % 1,463
EBIT% 0.2 % 0.1 % 1.6 %
Total
Orders received 121,038 97,247 24.5 % 199,282
Net sales 113,173 92,945 21.8 % 197,176
EBIT 5,105 2,673 91.0 % 11,135
EBIT% 4.5 % 2.9 % 5.6 %
Financial items 192 -217 n/a -301
Operating segments net profit before 5,297 2,456 115.7 % 10,835
taxes
Information per quarter 4-6/15 1-3/15 10-12/14 7-9/14 4-6/14 7/2014-
(tEUR) 6/2015
Video and Broadband Solutions
Orders received 40,926 33,990 28,642 27,571 27,898 131,129
Net sales 36,519 30,532 29,500 28,909 27,007 125,461
EBIT 2,999 2,003 2,616 4,421 1,835 12,039
EBIT % 8.2 % 6.6 % 8.9 % 15.3 % 6.8 % 9.6 %
Network Services
Orders received 23,211 22,911 24,367 21,455 22,405 91,944
Net sales 23,211 22,911 24,367 21,455 22,405 91,944
EBIT -492 595 909 516 -452 1,527
EBIT % -2.1 % 2.6 % 3.7 % 2.4 % -2.0 % 1.7 %
Total
Orders received 64,137 56,901 53,009 49,026 50,303 223,073
Net sales 59,730 53,443 53,867 50,365 49,412 217,404
EBIT 2,507 2,598 3,525 4,937 1,383 13,566
EBIT % 4.2 % 4.9 % 6.5 % 9.8 % 2.8 % 6.2 %
Attributable to equity holders of the parent (tEUR)
A Share capital
B Share premium
C Translation differences
D Retained earnings
E Invested free capital
F Other funds
G Total
H Share of non-controlling interest
I Total equity
A B C D E F G H I
Shareholder's 6,967 1,504 -339 58,139 3,954 -31 70,194 487 70,681
equity 1.1.2015
Total 329 3,921 0 12 4,262 0 4,262
comprehensive
income for the
period
Purchase of own -814 -814 0 -814
shares
Paid dividend -3,802 0 0 -3,802 108 -3,694
Interest, non 10 0 0 10 -10 0
controll party
Equity-settled 585 0 0 585 -585 0
share-based
payments
Shareholder's 6,967 1,504 -10 58,853 3,140 -19 70,435 0 70,434
equity 30.6.2015
Shareholder's 6,967 1,504 126 53,079 3,457 -6 65,127 425 65,552
equity 1.1.2014
Total 0 0 -49 1,824 0 1 1,776 0 1,776
comprehensive
income for the
period
Used options 0 0 0 0 497 0 497 0 497
Paid dividend 0 0 0 -3,564 0 0 -3,564 102 -3,462
Interest, non 0 0 0 39 0 0 39 -39 0
controll party
Shareholder's 6,967 1,504 77 51,378 3,954 -5 63,875 488 64,361
equity 30.6.2014
CALCULATION OF KEY FIGURES
Return on Profit/loss for the financial period
equity: ------------------------------ * 100
Shareholders' equity (average)
Return on Profit/loss for the period after financial items + financing
capital charges
employed: ------------------------------ * 100
Total assets - non-interest-bearing
liabilities (average)
Equity ratio: Shareholders' equity
----------------------------- * 100
Total assets - advances received
Gearing: Interest bearing liabilities - cash in hand and in bank -
interest bearing assets
----------------------------- * 100
Shareholders' equity
Earnings per Profit for the period attributable to equity holder of the
share: parent
----------------------------------------------
Weighted average number of ordinary shares outstanding during
the period
Earnings per Profit for the period attributable to equity holder of the
share, parent (diluted)
diluted: ----------------------------------------------- Average number
of shares - own shares + number of options at the period-end
Major shareholders Number of shares % of share capital
EM Group Oy 4,409,712 23.23
Mandatum Life Insurance Company Limited 1,679,200 8.84
Ilmarinen Mutual Pension Insurance Company 963,860 5.08
Kaleva Mutual Insurance Company 824,641 4.34
Teleste Management II Oy 542,000 2.85
Varma Mutual Pension Insurance Company 521,150 2.74
The State Pension Fund 500,000 2.63
OP-Finland Small Firms Fund 430,784 2.27
FIM Fenno Equity fund 324,279 1.71
Teleste Oyj 321,953 1.70
Shareholders by sector Number of % of Number of Number of
shareholders Owners shares shares %
Households 4,706 93.60 4,758,225 25.10
Public sector 3 0.06 1,985,010 10.50
institutions
Financial and insurance 17 0.34 3,673,060 19.30
institutions
Corporations 239 4.75 6,996,941 36.90
Non-profit institutions 29 0.58 424,329 2.20
Foreign and nominee 34 0.68 1,148,023 6.00
registered owners
Total 5,028 100.00 18,985,588 100.00
Number of shares Number of % of Number of % of
shareholders shareholders shares shares
1 - 100 1,131 22.5 75,240 0.4
101 - 500 2,199 43.7 599,717 3.2
501 - 1 000 767 15.3 632,167 3.3
1 001 - 5 000 747 14.9 1,648,308 8.7
5 001 - 10 000 81 1.6 573,275 3.0
10 001 - 50 000 73 1.5 1,532,321 8.1
50 001 - 100 000 5 0.1 391,206 2.1
100 001 - 500 000 18 0.4 4,055,113 21.4
500 001 - 7 0.1 9,478,241 49.9
Total 5,028 100.0 18,985,588 100.0
of which nominee 927,266 4.9
registered
The following assets are liabilities were preliminary recognised in the
acquisition of Mitron:
1 000 € Recognised fair values on
acquisition
Fair values used in consolidation
Trade marks (inc. in intangible assets) 746
Customer relationship (inc. in intangible 585
assets)
Technology (inc. in intangible assets) 1,362
Inventories 4,983
Trade receivables 8,514
Book values used in consolidation
Tangible assets 944
Intangible assets 537
Shares and immaterial rights 29
Accrued income 1,315
Other receivables 425
Cash and cash equivalents 874
Total assets 20,314
Book values used in consolidation
Interest-bearing liabilities 1,174
Trade payables 5,672
Deferred tax liabilities 539
Advances received 2,984
Other liabilities 3,300
Total liabilities 13,669
Net identifiable assets and liabilities 6,645
Total consideration 11,500
Goodwill on acquisition 4,855
Consideration paid in cash -7,700
Cash and cash equivalents in acquired 874
subsidiary
Total net cash outflow on the acquisition -6,826
ADDITIONAL INFORMATION:
CEO Jukka Rinnevaara, phone +358 2 2605 866 or +358 400 747 488
DISTRIBUTION:
Nasdaq Helsinki
Main Media
www.teleste.com
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