2016-08-09 07:00:01 CEST
2016-08-09 07:00:01 CEST
REGLAMENTUOJAMA INFORMACIJA
Comptel - Half Year financial report
HALF YEAR RESULT OF COMPTEL CORPORATION 1 JANUARY - 30 JUNE 2016
Stock exchange release
9th August 2016 at 8.00 am
HALF YEAR RESULT OF COMPTEL CORPORATION 1 JANUARY - 30 JUNE 2016
Strong growth and significant profitability improvement.
Key figures for the second quarter of 2016:
· Net sales EUR 25.3 million (April - June 2015: 21.7), growth 16.4%
· Operating profit EUR 3.0 million (0.6), growth 428.5%
· Operating profit 11.7% of net sales (2.6)
· Net profit EUR 2.3 million (0.3), growth 581.7%
· Earnings per share EUR 0.02 (0.00)
· Order backlog EUR 64.2 million (58.8), growth 9.3%
Key figures for the first half of 2016:
· Net sales EUR 47.7 million (H1 2015: 42.7), growth 11.7%
· Operating profit EUR 4.7 million (2.1), growth 130.0%
· Operating profit 9.9% of net sales (4.8)
· Net profit EUR 3.1 million (0.6), growth 397.4%
· Earnings per share EUR 0.03 (0.01)Key figures for the second quarter of
2016:
Outlook (changed):
Specified guidance is:
“Comptel expects the 2016 net sales to continue to grow and operating profit to
be in the range of 9–14% of revenue.”
Previous guidance was:
“Comptel expects the 2016 net sales to continue to grow and operating profit to
be in the range of 8–14% of revenue.”
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:
“I’m very pleased with our progress in the second quarter. This was the 8th
consecutive quarter we produced year-on-year growth. Compared to the previous
year, our net sales grew 16.4 per cent in the second quarter and 11.7 per cent
in the first half of the year. Company’s strategy execution progressed well in
all areas and second quarter results improved significantly compared to
previous year.
We are also pleased that both of our business units were growing on a
year-over-year basis. In the second quarter, Intelligent Data grew by 8.9 per
cent and Service Orchestration by 22.2 per cent. Both business units have
currently a strong demand for their solutions.
Regionally net sales growth was strong in both APAC and EMEA, both regions
growing significantly in the second quarter and also compared to the previous
year. From a growth perspective, we currently see challenges in our South
Americas region.
Also our profitability is improving and our previously made investments are
yielding results. In the second quarter, our operating profit was 11.7 per cent
of net sales.
Our backlog continued to be strong and we managed to close several multi-year
deals in the second quarter. These will give us visibility and a good
foundation also for the coming years.
The FWD application continued to attract customer interest. We signed our first
large-scale FWD deployment in APAC. There are several customer negotiations
ongoing which creates a good foundation for growth in coming years.
In the second quarter, we received two favorable rulings from the Indian tax
authorities related to old withholding taxes. We are still investigating and
assessing the process of refunds. The outcome of these rulings has not been
reflected in the financials at this stage.
During the second quarter, we secured 13 significant orders (Q2 2015:9), valued
over EUR 0.5 million.”
Business Review of the Second Quarter and the First Half of 2016
Comptel’s net sales grew in the second quarter by 16.4 per cent compared to the
previous year, to EUR 25.3 million (21.7). Net sales growth continued due to
the increased order intake in the first half of the year and the strong backlog
in the beginning of the quarter. Comptel’s net sales grew by 19.7 per cent in
Asia-Pacific and by 20.7 per cent in EMEA.
In the first half of the year, Comptel’s net sales grew by 11.7 per cent
compared to previous year and was 47.7 million (42.7). Both business units grew
in the first half, Intelligent Data unit by 11.6 per cent and Service
Orchestration unit by 11.7 per cent.
The operating result for the second quarter was EUR 3.0 million (0.6), which
corresponds to 11.8 per cent of net sales (2.6). The improved profitability was
due to increased net sales and costs growing proportionally less.
In the first half, the operating result was EUR 4.7 million (2.1), which
corresponds to 9.9 per cent of net sales (4.8). Profitability improvement was
due to the net sales increase during the first half of the year.
In the second quarter, the result before taxes was EUR 3.3 million (0.4) and
net profit EUR 2.3 million (0.3). The net profit improved by 582 per cent
compared to the previous year. Earnings per share for the second quarter was
EUR 0.02 (0.00).
The result before taxes for the first half, was EUR 4.7 million (1.2) and net
profit EUR 3.1 million (0.6). The net profit improved by 397.4 per cent
compared to the previous year. Earnings per share for the first half was EUR
0.03 (0.01).
The tax expense for the second quarter was EUR 1.0 million (0.0), of which 0.2
million were withholding taxes, related to double taxation. In the first half
the tax expenses were EUR 1.6 million (0.5), of which 0.5 million were
withholding taxes, related to double taxation. During second quarter,
favourable tax ruling was obtained in India for past withholding taxes. The
outcome of these rulings has not been reflected in the financials at this
stage, as the probability of the tax returns are still under assessment.
In April-June, Comptel received 13 significant orders (Q2 2015: 2), of which
Intelligent Data unit received five (five Data Refinery solutions) and Service
Orchestration received five (five FlowOne solutions). Three orders were
multi-solution orders across the business units. As significant orders Comptel
reports sold projects and licenses with a minimum value of EUR 500,000.
The Group’s 12-month order backlog increased from the previous year and was EUR
64.2 million (58.8) at the end of the period. The Group’s total order backlog
exceeds EUR 90 million at the end of second quarter.
Business areas
------
Net sales, 4-6 4-6 Change, 1-6 1-6 Change 1-12
EUR million 2016 2015 % 2016 2015 % 2015
---------------------- ----------------------------------------
Intelligent Data 10.5 9.6 8.9 20.9 18.7 11.6 42.5
--------------------------------------------------------------------
Service Orchestration 14.8 12.1 22.2 26.8 24.0 11.7 55.2
--------------------------------------------------------------------
Other 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------
Total 25.3 21.7 16.4 47.7 42.7 11.7 97.7
--------------------------------------------------------------------
Operating result,
EUR million
--------------------------------------------------------------------
Intelligent Data 1.4 0.6 129.4 3.1 1.5 106.8 5.8
--------------------------------------------------------------------
Service Orchestration 2.5 0.5 392.4 3.2 1.6 99.2 5.1
--------------------------------------------------------------------
Other -0.8 -0.5 59.0 -1.5 -1.0 48.8 -2.5
--------------------------------------------------------------------
Total 3.0 0.6 428.5 4.7 2.1 130.0 8.5
--------------------------------------------------------------------
Operating result,
% of net sales
--------------------------------------------------------------------
Intelligent Data 12.9 6.1 14.7 7.9 13.7
--------------------------------------------------------------------
Service Orchestration 16.6 4.1 11.9 6.7 9.3
--------------------------------------------------------------------
Other 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------
Total 11.8 2.6 9.9 4.8 8.7
--------------------------------------------------------------------
In the second quarter, Service Orchestration’s net sales growth accelerated to
22.2 per cent compared to the previous year. Service Orchestration’s
profitability improvement was due to the increase in net sales. In the second
quarter, Intelligent Data unit grew by 8.9 per cent year-over-year.
In the first half, the net sales of both business units increased compared to
the previous year. Intelligent Data unit grew by 11.6 per cent and Service
Orchestration by 11.7 per cent. The profitability of both business units
improved due to the net sales growth.
Net sales breakdown, 4-6 4-6 Change, % 1-6 1-6 Change 1-12
EUR million 2016 2015 2016 2016 % 2015
-------------------------------------------------------------------------------
Project & License business 16.4 13.2 23.8 30.5 25.3 20.6 63.3
-------------------------------------------------------------------------------
Recurring business 8.9 8.5 4.8 17.1 17.4 -1.3 34.4
-------------------------------------------------------------------------------
Total 25.3 21.7 16.4 47.7 42.7 11.7 97.7
-------------------------------------------------------------------------------
Project and license business, with its 23.8 per cent growth rate, was the main
growth driver in the second quarter. Support and maintenance business grew by
4.8 per cent.
In the first half, Project and license business grew by 20.6 per cent. Support
and maintenance business declined by 1.3 per cent, due to low growth in the
first quarter.
Net sales Regional 4-6 4-6 Change, % 1-6 1-6 Change, % 1-12
breakdown, 2016 2015 2016 2015 2015
EUR million
--------------------------------------------------------------------------------
APAC 8.9 7.4 19.6 16.3 13.5 20.9 29.6
--------------------------------------------------------------------------------
EMEA 13.5 11.2 20.7 26.7 23.7 12.9 56.9
--------------------------------------------------------------------------------
AMERICAS 2.9 3.1 -6.6 4.7 5.5 -16.0 11.2
--------------------------------------------------------------------------------
Total 25.3 21.7 16.4 47.7 42.7 11.7 97.7
--------------------------------------------------------------------------------
Asia-Pacific’s net sales continued to grow significantly. In the second
quarter, Asia-Pacific’s net sales increased by 19.6 per cent compared to the
previous year. In the second quarter, also EMEA’s net sales grew significantly,
by 20.7 per cent. In the Americas region, net sales decreased by 6.6 per cent
compared to the previous year. This was mainly due to decline in sales in South
America.
In the first half, net sales in Asia-Pacific grew by 20.9 per cent compared to
the previous year. The growth was due to continued high demand and came across
the region. The EMEA region’s net sales grew by 12.9 per cent due to continued
investments from existing customers. Net sales in the Americas region decreased
by 16.0 per cent due to decline in sales in South America.
Financial Position
EUR million 30 Jun 30 Jun Change 31 Dec Change
2016 2015 , 2015 ,
% %
--------------------------------------------------------------------------------
Statement of financial position 74.6 64.4 15.8 86.4 -13.6
total
--------------------------------------------------------------------------------
Liquid assets 5.3 4.6 14.3 3.0 74.6
--------------------------------------------------------------------------------
Trade receivables, gross 28.9 22.6 27.9 42.1 -31.4
--------------------------------------------------------------------------------
Bad debt provision -1.7 -1.4 26.8 -1.6 5.9
--------------------------------------------------------------------------------
Trade receivables, net 27.1 21.2 27.9 40.5 -32.9
--------------------------------------------------------------------------------
Accrued income 14.3 11.8 20.9 10.0 43.3
--------------------------------------------------------------------------------
Deferred income related to partial 3.5 2.7 29.3 3.3 7.0
debiting
--------------------------------------------------------------------------------
Interest-bearing debt 5.3 4.4 18.5 7.2 -26.6
--------------------------------------------------------------------------------
Equity ratio, per cent 61.4 65.3 -6.1 52.4 17.1
--------------------------------------------------------------------------------
The statement of the financial position on 30 June 2016 was EUR 74.6 million
(64.4), of which liquid assets amounted to EUR 5.3 million (4.6). The operating
cash flow was EUR 1.1 million (3.0) in the second quarter and EUR 11.8 million
(2.4) in the first half of the year.
Trade receivables were EUR 27.1 million (21.2) at the end of the period. The
accrued income was EUR 14.3 million (11.8). The deferred income related to
partial debiting was EUR 3.5 million (2.7).
Comptel has a EUR 25 million credit facility arrangement consisting of a EUR 20
million revolving credit facility and a EUR 5 million overdraft capacity on
current bank account. Out of this arrangement, Comptel had EUR 5 million of the
revolving credit facility outstanding at the end of the period. The credit
facility is valid until July 2018.
The equity ratio was 61.4 per cent (65.3) and the gearing was -0.1 per cent
(-0.6).
Research and Development (R&D)
EUR million 4-6 4-6 Change 1-6 1-6 Change 1-12
2016 2015 % 2016 2015 % 2015
--------------------------------------------------------------------------------
Direct R&D expenditure 5.6 4.3 29.1 10.3 8.7 18.5 20.3
--------------------------------------------------------------------------------
Capitalisation of R&D -1.7 -1.3 26.9 -3.0 -2.4 27.1 -5.2
expenditure according to IAS 38
--------------------------------------------------------------------------------
R&D depreciation and 1.2 1.3 -4.9 2.6 2.6 1.0 5.5
impairment charges
--------------------------------------------------------------------------------
R&D expenditure, net 5.2 4.3 19.6 9.8 8.9 11.1 20.6
--------------------------------------------------------------------------------
Direct R&D expenditure, % of 22.2 20.0 - 21.5 20.3 20.8
net sales
--------------------------------------------------------------------------------
Direct R&D expenditure represented 21.5 per cent (20.3) of net sales.
The key focus of Comptel’s R&D expenditure was in the further development of
our existing solutions (Service Orchestration and Intelligent Data) and release
of the new FWD time-based mobile data marketing solution.
Development work was focused on securing recurring revenue with competitive
products, winning new markets by giving customers unique value, and by
improving margins with better deployment and scalability of our products.
The FlowOne Fulfillment solution has been developed as a suite of orchestration
elements that manage the life-cycle of digital services and business flows from
ground to cloud. Data Refinery captures data-in-motion and uses Softblade(TM)
technology with embedded intelligence to refine it for automated real-time
decision making. Monetizer is the business policy and charging solution that
sets the speed to money and allows the innovation and designing of rich
communication and data. Data Fastermind embeds artificial intelligence,
predictive analytics and machine learning capabilities into all solutions. In
all of these areas, Comptel seeks global thought leadership in solving the
business challenges of operators and digital communications service providers.
During 2016 the company will further continue to develop its current offering.
In the first half six major software releases were launched in the
above-mentioned product areas.
Investments
EUR million 4-6 4-6 Change 1-6 1-6 Change 1-12
2016 2015 % 2016 2015 % 2015
--------------------------------------------------------------------------------
Gross investments in property, 0.3 0.2 79.3 0.4 0.3 47.5 0.6
plant and equipment and
intangible assets
--------------------------------------------------------------------------------
The investments comprised of devices, software and furnishings. The investments
were funded through cash flow from operations.
Personnel
30 Jun 30 Jun Change, 31 Dec Change,
2016 2015 % 2015 %
--------------------------------------------------------------------------------
Number of employees at the end 790 746 5.9 742 6.5
of period
--------------------------------------------------------------------------------
4-6 4-6 Change, % 1-12 Change, %
2016 2015 2015
--------------------------------------------------------------------------------
Average number of personnel during the 758 700 8.3 723 4.8
period
--------------------------------------------------------------------------------
The number of employees increased compared to the previous year due to the
increase in investments during 2016. In the second quarter, the personnel
expenses were 48.4 per cent of net sales (49.1).
At the end of the period, 28.7 per cent (30.4) of the personnel were located in
Finland, 23.2 per cent (26.4) in Malaysia, 13.7 per cent (10.7) in India, 11.6
per cent (10.1) in Bulgaria, and 22.8 per cent (22.4) in other countries where
Comptel operates.
Comptel share
The closing share price of the period was EUR 1.79 (1.27). Comptel’s market
value at the end of the period was EUR 194.6 million (136.4).
Comptel share 4-6 4-6 Change % 1-6 1-6 Change % 1-12
2016 2015 2016 2015 2015
----------------------------------------------------------------------------
Shares traded, million 8.5 11.5 -26.1 23.2 17.7 31.4 41.2
----------------------------------------------------------------------------
Shares traded, EUR million 13.5 13.9 -2.7 35.2 19.7 79.0 52.9
----------------------------------------------------------------------------
Highest price, EUR 1.89 1.49 26.8 1.89 1.49 26.8 1.93
----------------------------------------------------------------------------
Lowest price, EUR 1.41 0.95 48.4 1.19 0.84 41.7 0.84
----------------------------------------------------------------------------
Of Comptel’s outstanding shares, 6.1 per cent (6.5) were nominee registered or
held by foreign shareholders at the end of the period.
At the end of the period the company held 117,129 of its own shares, which
represents 0.11 per cent of the total number of shares. The total counter-book
value of the shares held by the company was EUR 2,305.
Corporate Governance
Comptel Corporation’s Annual General Meeting (AGM) was held on 6 April 2016.
The AGM resolved the number of Board members to be five. Mr Pertti Ervi, Mr
Hannu Vaajoensuu, Ms Eriikka Söderström, and Mr Antti Vasara were re-elected as
members of the Board of Directors. Thomas Berlemann was elected as a new member
of the Board of Directors.
The AGM appointed Ernst & Young Oy as the company’s auditor. Mr. Mikko
Järventausta is acting as the principal auditor.
The AGM resolved that a dividend of 0.03 EUR per share was paid for the year
2015.
In its meeting held after the Annual General Meeting, the Board of Directors
elected Mr Pertti Ervi as chairman and Mr Hannu Vaajoensuu as vice chairman.
The Board of Directors decided to establish an audit committee to deal with the
preparation of matters relating to the company’s financial reporting and
control. The Board of Directors elected Ms Eriikka Söderström as the chairman
of the audit committee, and Mr Pertti Ervi and Mr Antti Vasara as the members
of the audit committee. All the members of the audit committee are independent
from the company and its significant shareholders.
The AGM authorised the Board of Directors to decide on share issues amounting
to a maximum of 21,400,000 new shares and on repurchase or conveying of the
company’s own shares up to a maximum number of 10,700,000 shares. The
authorisations are valid until 30 June 2017. However, the authorisation to
implement the company’s share-based incentive programs is valid five years from
the AGM resolution.
A separate stock exchange release about the authorisations given and other
decisions made by the Annual General Meeting was published on 6 April 2016.
Events after the Reporting Period
Near-term Risks and Uncertainties
Comptel develops dynamic end-to-end solutions for leading operators globally in
the telecom field. This requires Comptel to understand correctly the trends
taking place in its business environment and the needs of its customers and
resellers by each region. Failure to identify market conditions, address
customers’ needs and develop its products in a timely way may significantly
undermine the growth of Comptel’s business and its profitability.
Characteristics of Comptel’s field of industry are significant quarterly
variations of net sales and profit, which are related to customers’ purchasing
behaviour and the timing of major single deals.
Comptel’s business consists of deliveries of large productised IT systems, and
the value of a single project may be several million euros. Therefore, the
credit risk associated with a single project or an individual customer may be
significant. Furthermore, some of Comptel’s customers operate in countries
where the political or financial climate can be unstable which in part may
increase credit risk.
Comptel operates globally so it is exposed to risks arising from different
currency positions. Exchange rate changes between the Euro, which is the
company’s reporting currency, and the US Dollar, UK Pound Sterling and
Malaysian Ringgit affect the company’s net sales, expenses and net profit.
The application process to prevent Comptel’s double taxation is still pending
with the Ministry of Finance in Finland. However, the process between the
states is very slow and the timing of 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.
Comptel has also applications for return of withholding taxes in other
countries but they are subject to local legal processes, which take time to get
completed.
The risks and uncertainties of Comptel are described in more detail in the
company’s financial statements and the Board of Directors’ report for 2015.
Outlook (changed)
Specified guidance is:
“Comptel expects the 2016 net sales to continue to grow and operating profit to
be in the range of 9–14% of revenue.”
Previous guidance was:
“Comptel expects the 2016 net sales to continue to grow and operating profit to
be in the range of 8–14% of revenue.”
Characteristically a significant part of Comptel’s operating profit and net
sales is generated in the second half of the year.
Schedule for Comptel’s interim reports in 2016:
January-September 20 October 2016
COMPTEL CORPORATION
Board of Directors
Additional information:
Mr Juhani Hintikka, President and CEO, tel. +358 9 700 1131
Mr Tom Jansson, CFO, tel. +358 40 700 1849
TABLE PART
The interim financial statements have been prepared in accordance with IAS 34,
Interim Financial Reporting, as adopted by the EU. The accounting policies and
methods of computation adopted in the financial statements are consistent with
those of the annual financial statements for the year ended 2015.
All figures in the financial report have been rounded and consequently the sum
of the individual figures can deviate from the sum figure. The interim report
is unaudited.
Consolidated Statement of Comprehensive 1 Jan – 1 Jan – 1 Apr – 1 Jan –
Income (EUR 1,000) 30 Jun 30 Jun 30 Jun 30 Jun
2016 2015 2016 2015
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 47,687 42,695 25,295 21,739
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other operating income 13 16 10 13
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Materials and services -2,212 -2,326 -1,094 -1,222
--------------------------------------------------------------------------------
Employee benefits -22,433 -20,341 -12,240 -10,765
--------------------------------------------------------------------------------
Depreciation, amortisation and impairment -3,062 -3,240 -1,441 -1,630
charges
--------------------------------------------------------------------------------
Other operating expenses -15,265 -14,749 -7,557 -7,572
--------------------------------------------------------------------------------
-42,972 -40,656 -22,333 -21,189
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit/loss 4,727 2,055 2,973 562
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial income 1,497 1,006 593 154
--------------------------------------------------------------------------------
Financial expenses -1,507 -1,904 -269 -353
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss before income taxes 4,718 1,158 3,297 363
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -1,581 -527 -988 -24
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period 3,136 631 2,309 339
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive income:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive income to be
reclassified to profit or loss in
subsequent periods
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Translation differences -349 736 115 5
--------------------------------------------------------------------------------
Cash flow hedges -329 444 -965 397
--------------------------------------------------------------------------------
Income tax relating to components of other 113 -89 247 -80
comprehensive income
--------------------------------------------------------------------------------
Total other comprehensive income -564 1,091 -603 322
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive income for the period 2,572 1,722 1,706 661
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss attributable to:
--------------------------------------------------------------------------------
Equity holders of the parent company 3,136 631 2,309 339
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive income attributable to:
--------------------------------------------------------------------------------
Equity holders of the parent company 2,572 1,722 1,706 661
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders of the parent company:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR 0,03 0,01 0,02 0,0
--------------------------------------------------------------------------------
Earnings per share, diluted, EUR 0,03 0,01 0,02 0,0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Consolidated Statement of Financial Position 30 Jun 30 Jun 31 Dec
(EUR 1,000) 2016 2015 2015
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Assets
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Goodwill 2,646 2,646 2,646
--------------------------------------------------------------------------------
Other intangible assets 13,149 13,039 12,837
--------------------------------------------------------------------------------
Tangible assets 1,416 1,458 1,152
--------------------------------------------------------------------------------
Investments in associates 960 673 960
--------------------------------------------------------------------------------
Available-for-sale financial assets 87 87 87
--------------------------------------------------------------------------------
Deferred tax assets 7,857 7,101 7,685
--------------------------------------------------------------------------------
Other non-current receivables 700 651 646
--------------------------------------------------------------------------------
26,815 25,654 26,013
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Trade and other current receivables 42,202 33,622 56,930
--------------------------------------------------------------------------------
Current tax asset 289 515 403
--------------------------------------------------------------------------------
Cash and cash equivalents 5,289 4,627 3,030
--------------------------------------------------------------------------------
47,780 38,763 60,363
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total assets 74,595 64,418 86,376
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity and liabilities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity attributable to equity holders of the
parent company
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Share capital 2,141 2,141 2,141
--------------------------------------------------------------------------------
Fund of invested non-restricted equity 1,755 454 1,698
--------------------------------------------------------------------------------
Fair value reserve -89 174 -170
--------------------------------------------------------------------------------
Translation differences -1,322 30 -510
--------------------------------------------------------------------------------
Retained earnings 34,003 30,264 34,165
--------------------------------------------------------------------------------
Total equity 36,489 33,063 37,324
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Deferred tax liabilities 2,662 2,664 2,572
--------------------------------------------------------------------------------
Non-current financial liabilities 130 165 92
--------------------------------------------------------------------------------
2,792 2,830 2,664
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Provisions 167 1,261 1,090
--------------------------------------------------------------------------------
Current financial liabilities 5,273 4,274 7,075
--------------------------------------------------------------------------------
Trade and other current liabilities 29,874 22,989 38,223
--------------------------------------------------------------------------------
35,314 28,524 46,388
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total liabilities 38,105 31,354 49,052
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity and liabilities 74,595 64,418 86,376
--------------------------------------------------------------------------------
Consolidated Statement of Cash Flows 1 Jan – 30 1 Jan – 30
(EUR 1,000) Jun Jun
2016 2015
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from operating activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period 3,136 631
--------------------------------------------------------------------------------
Adjustments:
--------------------------------------------------------------------------------
Non-cash transactions or items that are not part of cash 3,271 4,405
flows from operating activities
--------------------------------------------------------------------------------
Interest and other financial expenses 101 173
--------------------------------------------------------------------------------
Interest income -9 -49
--------------------------------------------------------------------------------
Income taxes 1,501 925
--------------------------------------------------------------------------------
Change in working capital:
--------------------------------------------------------------------------------
Change in trade and other current receivables 14,763 9,415
--------------------------------------------------------------------------------
Change in trade and other current liabilities -8,507 -10,445
--------------------------------------------------------------------------------
Change in provisions -712 -421
--------------------------------------------------------------------------------
Interest and other financial expenses paid -101 -170
--------------------------------------------------------------------------------
Interest received 3 45
--------------------------------------------------------------------------------
Income taxes paid and tax returns received -1,614 -2,064
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash from operating activities 11,833 2,445
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from investing activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Investments in tangible assets -614 -279
--------------------------------------------------------------------------------
Investments in development projects -3,008 -2,368
--------------------------------------------------------------------------------
Change in other non-current receivables -93 10
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash used in investing activities -3,716 -2,637
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from financing activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dividends paid -3,248 -2,139
--------------------------------------------------------------------------------
Shares issued - 53
--------------------------------------------------------------------------------
Proceeds from borrowings 14,978 11,060
--------------------------------------------------------------------------------
Repayment of borrowings -16,979 -14,053
--------------------------------------------------------------------------------
Lease payments 232 -131
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash used in financing activities -5,020 -5,210
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash and cash equivalents 3,099 -5,402
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the period 3,030 9,352
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 5,289 4,627
--------------------------------------------------------------------------------
Change 2,259 -4,725
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Effects of changes in foreign exchange rates -840 677
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Consolidated Statement of Changes in Equity
-------------------------------------------------------------------------
Equity attributable to equity holders of the parent company
--------------------------------------------------------------------------------
EUR 1,000 Share Other Translation Fair Retained Total
capital reserve differences value earnings
s reserve
--------------------------------------------------------------------------------
Equity at 2,141 401 -698 -182 31,684 33,346
31 Dec 2014
--------------------------------------------------------------------------------
Dividends -2,139 -2,139
--------------------------------------------------------------------------------
Shares issued 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
30 Jun 2015
--------------------------------------------------------------------------------
Consolidated Statement of Changes in Equity
-------------------------------------------------------------------------
Equity attributable to equity holders of the parent company
-------------------------------------------------------------------------
EUR 1,000 Share Other Translation Fair value Retain Total
capital reserves differences reserve ed
earnin
gs
--------------------------------------------------------------------------------
Equity at 2,141 1,698 -510 -170 34,165 37,324
31 Dec 2015
--------------------------------------------------------------------------------
Dividends -3,248 -3,248
--------------------------------------------------------------------------------
Shares issued 57 57
--------------------------------------------------------------------------------
Share-based 233 233
compensation
--------------------------------------------------------------------------------
Prior year -283 -283
correction *
--------------------------------------------------------------------------------
Total comprehensive -813 82 3,136 2,405
income for the
period
--------------------------------------------------------------------------------
Equity at 2,141 1,755 -1,322 -89 34,003 36,488
30 Jun 2016
--------------------------------------------------------------------------------
*Prior year expenses were 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 2016. However those
have not had an impact on the consolidated financial statements.
2. Segment information
Net sales by segment
EUR 1,000 1 Jan – 1 Jan – 1 Apr – 1 Apr –
30 Jun 2016 30 Jun 2015 30 Jun 2016 30 Jun 2015
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Intelligent Data 20,917 18,735 10,478 9,622
-------------------------------------------------------------------------
Service Orchestration 26,757 23,960 14,811 12,117
-------------------------------------------------------------------------
Other 13 - 7
-------------------------------------------------------------------------
Group total 47,687 42,695 25,295 21,739
-------------------------------------------------------------------------
Operating profit/loss by segment
EUR 1,000 1 Jan – 1 Jan – 1 Apr – 1 Apr –
30 Jun 2016 30 Jun 2015 30 Jun 30 Jun 2015
2016
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Intelligent Data 3,071 1,485 1,354 590
--------------------------------------------------------------------------------
Service Orchestration 3,194 1,603 2,455 499
--------------------------------------------------------------------------------
Other -1,538 -1,034 -837 -526
--------------------------------------------------------------------------------
Group operating profit/loss 4,727 2,055 2,972 562
total
--------------------------------------------------------------------------------
3. Income tax
Income tax expense according to the statement of comprehensive income for the
period was EUR 1,581 thousand (EUR 527 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 517 thousand
in January - June (EUR 333 thousand).
4. Tangible assets
EUR 1,000 1 Jan – 1 Jan –
30 Jun 2016 30 Jun 2015
-----------------------------------
-----------------------------------
Additions 411 279
-----------------------------------
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 2016 30 Jun 2015
-----------------------------------------
-----------------------------------------
Associate
-----------------------------------------
Interest income 4 4
-----------------------------------------
EUR 1,000 30 Jun 2016 31 Dec 2015
-------------------------------------------------
-------------------------------------------------
Associate
-------------------------------------------------
Non-current receivables 124 117
-------------------------------------------------
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
2016 2015
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Salaries and other short-term employee 859 786
benefits
--------------------------------------------------------------------------------
Share-based payments 286 224
--------------------------------------------------------------------------------
Other compensation 35 -
--------------------------------------------------------------------------------
Total 1,181 1,010
--------------------------------------------------------------------------------
Guarantees and other commitments
EUR 1,000 30 Jun 2016 31 Dec 2015
------------------------------------
------------------------------------
Guarantees - 29
------------------------------------
6. Commitments
Minimum lease payments on non-cancellable office facilities and other operating
leases are payable as follows:
EUR 1,000 30 Jun 2016 31 Dec 2015
----------------------------------------------------
----------------------------------------------------
Less than one year 2,061 2,161
----------------------------------------------------
Between one and five years 5,192 1,218
----------------------------------------------------
More than five years 1,091 -
----------------------------------------------------
Total 8,344 3,379
----------------------------------------------------
The group had no material capital commitments for the purchase of tangible
assets at 30 June 2016 and 30 June 2015.
7. Contingent liabilities
EUR 1,000 30 Jun 2016 31 Dec 2015
---------------------------------------------
---------------------------------------------
Bank guarantees 2,297 2,727
---------------------------------------------
Corporate mortgages 200 200
---------------------------------------------
EUR 1,000 30 Jun 2016 31 Dec 2015
--------------------------------------------------------------------
--------------------------------------------------------------------
Contingent liabilities on behalf of others
--------------------------------------------------------------------
Guarantees 18 29
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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.
016 016 015 015 2015 2015
--------------------------------------------------------------------------------
Financial assets
--------------------------------------------------------------------------------
Financial assets at fair value
through profit or loss
--------------------------------------------------------------------------------
Forward contracts (level 2) 97 97 - - - -
--------------------------------------------------------------------------------
Available-for-sale financial 87 87 87 87 87 87
assets (level 3))
--------------------------------------------------------------------------------
Non-current trade receivables 2,195 2,195 1,541 1,541 1,872 1,872
--------------------------------------------------------------------------------
Current trade receivables 26,695 26,695 21,053 21,053 40,232 40,232
--------------------------------------------------------------------------------
Other current receivables 657 657 2,686 2,686 7,133 7,133
--------------------------------------------------------------------------------
Cash and cash equivalents 5,289 5,289 4,627 4,627 3,030 3,030
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial liabilities
--------------------------------------------------------------------------------
Financial liabilities at fair
value through profit or loss
--------------------------------------------------------------------------------
Forward contracts (level 2) 97 97 246 246 138 138
--------------------------------------------------------------------------------
Trade payables and other 29,265 29,265 23,335 23,335 38,020 38,020
liabilities
--------------------------------------------------------------------------------
Non-current loans from financial 11 11 56 56 33 33
institutions
--------------------------------------------------------------------------------
Non-current finance lease 119 119 - - 58 58
liabilities
--------------------------------------------------------------------------------
Other non-current liabilities - - 110 110 - -
--------------------------------------------------------------------------------
Current loans from financial 5,044 5,050 4,044 4,063 5,044 5,056
institutions
--------------------------------------------------------------------------------
Current bank overdraft facility - - - - 1,918 1,918
--------------------------------------------------------------------------------
Current finance lease 95 95 199 199 112 112
liabilities
--------------------------------------------------------------------------------
Other current liabilities - - 31 31 - -
--------------------------------------------------------------------------------
9. Key figures
Financial summary 1 Jan – 1 Jan – 1 Jan-
30 Jun 30 Jun 31 Dec
2016 2015 2015
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales, EUR 1,000 47,687 42,695 97,728
--------------------------------------------------------------------------------
Net sales, change % 11.7 10.6 14.0
--------------------------------------------------------------------------------
Operating profit/loss, EUR 1,000 4,727 2,055 8,474
--------------------------------------------------------------------------------
Operating profit/loss, change % 130.0 -3.7 2.0
--------------------------------------------------------------------------------
Operating profit/loss, as % of net sales 9.9 4.8 8.7
--------------------------------------------------------------------------------
Profit/loss before taxes, EUR 1,000 4,717 1,158 7,612
--------------------------------------------------------------------------------
Profit/loss before taxes, as % of net sales 9.9 2.7 7.8
--------------------------------------------------------------------------------
Return on equity, % - - 12.8
--------------------------------------------------------------------------------
Return on investment, % - - 18.3
--------------------------------------------------------------------------------
Equity ratio, % 61.4 65.3 52.4
--------------------------------------------------------------------------------
Gross investments in tangible and intangible 411 279 558
assets, EUR 1,0001)
--------------------------------------------------------------------------------
Gross investments in tangible and intangible 0,9 0.7 0.6
assets, as % of net sales
--------------------------------------------------------------------------------
Capitalisations according to IAS 38 to intangible 3,008 2,368 5,176
assets, EUR 1,000
--------------------------------------------------------------------------------
Research and development expenditure, EUR 1,000 10,251 8,653 20,299
--------------------------------------------------------------------------------
Research and development expenditure, 21.5 20.3 20.8
as % of net sales
--------------------------------------------------------------------------------
Order backlog, EUR 1,000 64,215 58,760 66,344
--------------------------------------------------------------------------------
Average number of employees during the period 758 700 723
--------------------------------------------------------------------------------
Interest-bearing net liabilities, EUR 1,000 -28 -187 4,137
--------------------------------------------------------------------------------
Gearing ratio, % -0.1 -0.6 11.1
--------------------------------------------------------------------------------
1) The figure does not include investments in development projects.
Per share data 1 Jan – 1 Jan – 1 Jan-
30 Jun 2016 30 Jun 2015 31 Dec
2015
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share (EPS), EUR 0.03 0.01 0.04
--------------------------------------------------------------------------------
EPS diluted, EUR 0.03 0.01 0.04
--------------------------------------------------------------------------------
Equity per share, EUR 0.33 0.31 0.34
--------------------------------------------------------------------------------
Dividend per share, EUR - - 0.03
--------------------------------------------------------------------------------
Dividend per earnings, % - - 72.7
--------------------------------------------------------------------------------
Effective dividend yield, % - - 1.6
--------------------------------------------------------------------------------
P/E ratio - - 43.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Adjusted number of shares at the end of 108,395,409 107,525,175 108,395,409
the period
--------------------------------------------------------------------------------
of which the number of treasury shares 117,129 118,507 118,507
--------------------------------------------------------------------------------
Outstanding shares 108,278,280 107,406,668 108,276,902
--------------------------------------------------------------------------------
Adjusted average number of shares during 108,202,657 107,084,788 107,370,551
the period
--------------------------------------------------------------------------------
Average number of shares, dilution 109,640,245 108,740,382 109,640,245
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)
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