2014-02-25 07:30:00 CET
2014-02-25 07:30:41 CET
REGULATED INFORMATION
Incap - Financial Statement Release
INCAP GROUP'S FINANCIAL STATEMENTS RELEASE FOR 2013 (UNAUDITED)
Incap Corporation Stock Exchange Release 25 February 2014 at 8:30
a.m. (EET)
INCAP GROUP'S FINANCIAL STATEMENTS RELEASE FOR 2013 (UNAUDITED)
Incap Group's revenue decreased due to flat general demand and because materials
used in production were not included in revenue. Actions of extensive Turnaround
program succeeded as expected but some customers had already decided to transfer
the manufacture of their products to other suppliers. Comprehensive financing
arrangement enhanced the financials of the company.
January-December 2013 in brief:
* the Group's revenue in 2013 was EUR 36.8 million, down approximately 43%
year-on-year (2012: EUR 64.1 million)
* the Group's operating result (EBIT) declined year-on-year and was EUR -5.9
million (EUR -0.7 million)
* the unit in India turned to the biggest one in the Group revenue-wise and
its operating result was at good level
* Board of Directors will propose to the Annual General Meeting that no
dividend be paid
* Incap estimates that the Group's revenue in 2014 will be significantly lower
than in 2013 and that the full-year operating result (EBIT) is positive
October-December 2013 in brief:
* revenue for the fourth quarter amounted to EUR 8.0 million being on the same
level than on the preceding quarter yet clearly lower than the corresponding
period last year (October-December 2012: EUR 14.5 million)
* the operating result (EBIT) amounted to EUR -3.7 million (EUR -0.6 million)
* the fourth quarter's result includes costs of EUR 2.7 million due to write-
offs of inventory and credit losses as well as to provisions for rents and
adaptation of personnel structure
The accounting principles for the interim report
This financial statement report has been prepared in accordance with
international financial reporting standards (IFRS) - IAS 34 Interim Financial
Reporting standard. When preparing the release, the same principles have been
used as in the 2012 financial statements and in the interim reports in 2013.
Unless otherwise stated, the comparison figures refer to the same period in the
previous year. The information in this financial statement report is unaudited.
Fredrik Berghel, President and CEO of Incap Group:"Year 2013 was a turning point to Incap. The extensive financing package which
was negotiated in summer secured the continuity of our operations. The actual
core of our business, the contract manufacturing, was set to the focal point of
our activities. The organisation structure was streamlined in the way that the
factories gained more responsibility for the business and profitability while
the group functions were reduced to the most essential tasks.
Our revenue in 2013 showed a clear decrease compared with previous year. This
was partly due to the general flat market development, but the main reason was
the challenges in our own operations. The long-lasting weak financing position
of us hampered the availability of materials and thereby also the deliveries to
customers. Irregular material flow impeded the production management, and for
this reason variable expenses could not be adjusted to meet with the actual
revenue with adequate efficiency. To secure the deliveries our customers started
buying materials for the production, and this decreased the revenue volumes
further.
After having solved the financing issues in summer 2013 we started focusing our
strengths on the basics, i.e. on securing the deliveries to customers and on
maintaining customer relationships. With the special Turnaround program launched
in October we examined and enhanced all our operations. Productivity and
delivery accuracy showed a favourable trend and also other main objectives of
the program were met. However, for some customers these actions took place too
late, and based on their sourcing strategy they decided to transfer the
manufacture of their products to other suppliers.
Improving the profitability was our principal objective, on which we focused in
every level. We implemented substantial structural changes, the most remarkable
one being the streamlining of organisation and the shrinking of corporate
functions. We also renegotiated service contracts in order to cut costs. Of
these actions only a part was reflected in the result for 2013 as their
influence will become visible gradually. Out of the full-year operating loss
approximately EUR 2.7 million were write-offs for inventory and credit losses as
well as provisions connected with the structural change. Further extraordinary
costs emerged from the arrangements in connection with the financing package.
We are now over the hump and fully able to recreate Incap to be the best
manufacturing partner. Our shareholders and investors can rely on our continuous
efforts in regaining and ensuring the profitability. We expect that the actions
of the Turnaround program will show full effects in profitability during the
second half of 2014. All in all we are able to make a positive result in 2014
even with remarkably lower volumes than in 2013. In the near future our most
important task is to regain and strengthen the confidence of our customers and
to increase the business with them further."
Business environment in 2013
The business environment of Incap Group was challenging. The continued
uncertainty of general economy decreased the demand, and the competition in
declining markets was fierce. Due to the global recession in investment
activities also the demand for energy efficiency products like rotor components
and inverters decreased clearly.
There were no elementary changes in general cost level in countries where Incap
has operations. The component market worldwide in 2013 was fairly steady. There
has been some price pressure in materials and prices overall were slightly down
over the year. Availability of materials was good in general with some
exceptions from temporary shortages of certain components.
Incap Group's revenue and earnings in October-December 2013
Revenue for the last quarter of 2013 amounted to EUR 8.0 million, down
approximately 45% year-on-year and down approximately 2% from preceding quarter
July-September 2013. The decrease in revenue was mainly due to the fact that
several products were withdrawn from the production program.
The operating result of the last quarter weakened clearly when compared with the
corresponding period last year. The development was affected by the decrease in
revenue and the write-offs and provisions recorded in the result. With the
actions of the Turnaround program productivity and delivery accuracy were
improved and cost savings were implemented but their effect will become visible
in the result only with a delay.
Quarterly comparison |10-12/| 7-9/| 4-6/| 1-3/|10-12/| 7-9/| 4-6/| 1-3/
(EUR thousands) | 2013| 2013| 2013| 2013| 2012| 2012| 2012| 2012
-----------------------+------+------+------+------+------+------+------+------
Revenue | 8,014| 8,206| 9,883|10,654|14,498|15,701|18,378|15,564
-----------------------+------+------+------+------+------+------+------+------
Operating profit/loss |-3,682| -331| -415|-1,432| -628| 280| 13| -345
(EBIT) | | | | | | | |
-----------------------+------+------+------+------+------+------+------+------
Net profit/loss |-3,990|-1,481|-1,172|-1,885|-4,616| 44| 352| -711
-----------------------+------+------+------+------+------+------+------+------
Earnings per share, | -0,06| -0.03| -0.05| -0.09| -0.23| 0.00| 0.02| -0.04
EUR | | | | | | | |
Incap Group's revenue and earnings in 2013
Revenue for the financial year amounted to EUR 36.8 million, down approximately
43% year-on-year. Main reason for the decline was the decreased customer demand
especially during the latter half of the year. Due to the previous difficult
financial position of Incap some customers transferred the manufacture of their
products to other suppliers in line with their supply chain risk management.
This development affected especially the volumes of Incap's factory in Estonia.
The revenue was further decreased due to the transfer of material purchases to
customers. Following the weak cash position of Incap the customers took the
responsibility for the material purchase in the beginning of the year and
accordingly, the materials were no more included in the Group's revenue. The
situation continued unchanged until the end of the year, because the material
responsibility could not be transferred back to Incap from all of the customers.
In order to restore the normal practice Incap continues respective discussions
with both customers and suppliers.
The weakening of the Indian rupee was also lowering the revenue volume
calculated in euros.
The revenue from the operations in India amounted to approximately EUR 17
million and the Indian unit became revenue-wise the biggest one in the Group.
Even though the revenue was approximately EUR 2 million lower than in 2012, the
operating result (EBIT) was on a good level at approximately EUR 1.9 million.
Incap Group's full-year operating result (EBIT) was approximately EUR -5.9
million (EUR -0.7 million). The result was impaired first and foremost by the
decline in revenue and by the overhead costs which were high in respect of
revenue.
The result was also weakened by the write-offs and provisions amounting to
approximately EUR 2.7 million. Write-off of inventory amounted to approximately
EUR 0.7 million and the write-off of credit losses of sales receivable was
approximately EUR 0.4 million. Provisions related to operational restructuring
were recorded for personnel costs (EUR 0.5 million) and rental costs of the
factory in Estonia (EUR 0.5 million).
The company sold its Vuokatti plant property in June 2013 to a price of EUR 1.7
million which equalled the book value of the property. Based on the impairment
recorded for the property, a loss of approximately EUR 0.4 million was
recognised for the sale.
The personnel expensed in the financial period decreased by approximately EUR
1.1 million year-on-year. The value of inventories decreased by approximately
EUR 5 million from the end of the year 2012, out of which approximately EUR 1.5
million came from the write-off of inventories.
Net financial expenses amounted to EUR 2.1 million (EUR 0.8 million). As a
consequence of the share issues arranged during the financial period, a
financing expense amounting to EUR 3.2 million was recorded in other financing
expenses in the consolidated income statement in line with the IAS 32 and 39
standards and IFRIC 19. Out of the financing income, EUR 2.5 million refers to
the impairment of values of loans, interests and payables to suppliers in the
composition arrangement in connection with the extensive financing solution in
summer 2013. In the comparison period in 2012, net financing expenses included a
non-recurring financing income item of approximately EUR 1.0 million due to the
impairment of redemption value of a convertible loan.
Depreciation and impairment losses amounted to a total of EUR 1.1 million (EUR
1.5 million), out of which the depreciation counted for EUR 0.6 million and the
impairment of the Vuokatti plant for EUR 0.4 million.
Net profit/loss for the financial period was EUR -8.5 million (EUR -4.9
million). Earnings per share amounted to EUR -0.14 (EUR -0.02).
Comparison by review period (EUR thousands)| 1-12/|Change, %| 1-12/
| 2013| | 2012
--------------------------------------------+------+---------+------
Revenue |36,757| -43|64,141
--------------------------------------------+------+---------+------
Operating profit/loss (EBIT) |-5,859| -760| -681
--------------------------------------------+------+---------+------
Net profit/loss |-8,527| -73|-4,930
--------------------------------------------+------+---------+------
Earnings per share, EUR | -0.14| -| -0.25
Turnaround to restore profitability
In the Turnaround program which was launched in October 2013 and concluded in
January 2014 the overall strategy was to focus on core business, i.e.
manufacturing and deliveries to customers. The customer relationships were
strengthened by special attention to the improvement of delivery accuracy in
terms of On-Time-Delivery and to the enhancement of efficiency both in
production and supporting functions.
Target of the program was to restore the profitability of operations and to
reach total annual savings of approximately EUR 2.9 million in overhead costs
and of approximately EUR 1.8 million in factory costs. The respective actions
were estimated to cause one-time costs of approximately EUR 1.6 million, and
accordingly, the total net savings would be approximately EUR 3.1 million. The
impact of the actions was evaluated at the end of January 2014, when they were
noted to have affected as expected. Full effects of realised actions is
estimated to become visible during the second half of the year.
The focus of Incap's business is on the manufacturing units that are producing
value added to customers. The factories in Finland, Estonia and India operate as
self-sufficient profit centres while the corporate functions are kept as small
as possible. The number of the personnel in Finland and in Estonia was decreased
by 145 during the financial year.
The target is to reduce the number of locations. The office in Bangalore moved
to smaller premises at the end of 2013. To reduce the costs the company
continues negotiations on the rental contracts both in Tallinn and inKuressaare, Estonia.
Capital expenditure
Capital expenditure in 2013 totalled EUR 0.3 million (EUR 0.1 million).
Investments were replacements in connection with the development of production.
Incap estimates that a remarkable increase of business is possible with the
present production capacity, without any big new investments.
Quality assurance and environmental issues
All of Incap Group's plants have environmental management and quality assurance
systems certified by Det Norske Veritas. The systems are used as tools for
continuous improvement. Incap's environmental management system complies with
ISO 14001:2004, and its quality assurance system complies with ISO 9001:2008. In
addition, the Kuressaare plant has an ISO 13485:2003 quality certification for
the manufacture of medical devices.
Financing arrangement
Negotiations to solve the company's difficult financing situation were started
during 2012 and continued soon in the beginning of the year 2013.
In January 2013 a part of the convertible loan which was launched in 2007, i.e.
approx. EUR 0.4 million was converted to the company's new shares in a directed
share issue. One holder of the convertible loan was given, as compensation for
the holder's loan units, altogether 1,697,286 new shares in the company to an
imputed subscription price of EUR 0.22 per share. Furthermore, a part of loan
units were paid in cash (approximately EUR 1.0 million). In June 2013, further
cash payment of approximately EUR 0.5 million was settled. At the end of
financial year 2013, the remainder of the convertible loan amounts to
approximately EUR 0.5 million, which is due for payment on 30 June 2014.
In July 2013 Incap completed financing negotiations resulting in a comprehensive
arrangement that enhanced the company's financial position improving the equity
ratio and liquidity. The arrangement included a directed share issue for raising
additional capital and converting debt to the company's new shares. In addition,
terms and conditions of the company's convertible loan issued in 2012 were
amended and the loan units were converted to the company's new shares.
The financing arrangement included a directed share issue and the related
conversion of debt. A total of 64,137,000 new shares were issued, and out of
these 45,212,000 shares were subscribed against cash payment and 18,925,000
shares were subscribed in the conversion against loans. Furthermore, in the
conversion of the convertible loan 2012, a total of 22,430,769 new shares were
subscribed. After the registration of all the new shares, the company has a
total of 109,114,035 shares, each having one vote.
Deviating from shareholders' pre-emptive subscription rights, the share issue
was directed at the company's major shareholders, an industrial investor, the
company's Finnish financiers and the company's other creditors and senior
management. The subscription price per share was EUR 0.10, based on the
agreement between the company and the subscribers. The subscription price in the
conversion in connection with the convertible loan issued in 2012 was
approximately EUR 0.13 per share.
The shares subscribed in the share issue and in loan conversions granted
dividend rights and other shareholders' rights as of 29 July 2013, when the new
shares were entered in the Trade Register. The trade with the new shares at
NASDAQ OMX Helsinki Ltd's main list started on 18 October 2013 at equal value to
the company's other shares, and for this purpose, the company published a
prospectus on 16 October 2013.
The holders of the company's capital loan and the company's Finnish financiers
converted their loan receivables to new shares in connection with the above
mentioned directed share issue. At the same time, loan contracts and interest
repayment schedules were renegotiated. In addition, the company's other
creditors - suppliers of materials and services - supported the financing
arrangement by participating in the composition arrangement, with a total effect
of EUR 1.5 million.
For the financing arrangement, a financing expense amounting to EUR 3.2 million
was recorded in line with the IAS 32 and 39 standards and IFRIC 19. The related
financing income, EUR 2.5 million, refers to the impairment of values of loans,
interests and payables to suppliers in the composition arrangement.
The immediate cash effect of the comprehensive arrangement was approximately EUR
6 million. The subscription price paid in cash, i.e. approximately EUR 4.5
million, was recorded in the reserve for invested unrestricted equity.
Furthermore, the bank released the collateral arrangement connected with the
sales price of the Vuokatti property transaction amounting to EUR 1.5 million.
The financing arrangement lowered the company's interest-bearing liabilities by
approximately EUR 7.5 million. Out of this approximately EUR 1 million was
capital loan, approximately EUR 2.9 million was convertible loan issued in
2012, approximately EUR 0.5 million was convertible loan issued in 2007 and
approximately EUR 3 million was bank loans.
Eventual merger of Incap and Inission
Following the financing arrangement and the directed share issue related to that
arrangement in July, the Swedish contract manufacturer Inission AB became the
company's largest shareholder. After registration of the new shares subscribed
in the directed share issue, Inission AB holds 28,500,000 shares in Incap
Corporation, corresponding to approximately 26% of the total share capital.
The comprehensive arrangement agreed between Inission AB and Incap Corporation
included an option for Inission AB to combine and unite Inission AB's business
operations with Incap Corporation. The use of this option was due to be notified
by Inission AB by the end of the year 2013. If the option was used, the uniting
of Incap and Inission would be carried out by Incap Corporation acquiring
Inission AB's subsidiaries' shares and business operations. The purchase price
was based on the actual result of Inission AB for the years 2011 and 2012 and
for January-June 2013.
In accordance with the agreement conditions, Incap would pay the purchase price
by directing a new share issue to Inission in two phases. In the first phase,
the value of the new shares issued would correspond to 70% of the total purchase
price with the new shares being issued in connection with the consummation of
the agreement. The remaining 30% of the purchase price would be paid through a
second directed share issue two weeks after Incap has published its financial
statements for 2013.
As Inission AB's share of ownership in Incap Corporation would have exceed the
limit set for the obligation to make a takeover bid in case the transaction is
consummated, Inission applied the Financial Supervisory Authority for an
exemption from the obligation to bid. The Financial Supervisory Authority
granted the exemption on 6 August 2013.
Incap Corporation's Extraordinary General Meeting held on 21 August 2013
resolved to approve the transaction to combine the companies' operations.
Inission AB did not exercise its option to combine Inission AB's business
operations with Incap Corporation by the end of the year 2013. It has, however,
after the end of the financial year 2013 indicated its continued interest in the
merger. For this reason the Board of Directors of Incap is currently evaluating
the strategic alternatives to develop the company's business further.
Balance sheet, financing and cash flow
The balance sheet total stood at EUR 15.9 million (EUR 29.3 million). The
Group's equity at the close of the financial period was EUR 0.7 million (EUR
-3.0 million). The parent company's equity strengthened to EUR 10.8 million,
representing 51% of the share capital (EUR 8.1 million, 39%). The Group's equity
ratio improved to 4.3% (-10.3%).
For the value of the shares in the Estonian subsidiary, an impairment of EUR
4.0 million was recorded in the financial statements based on the cash flow
forecasts prepared in the impairment testing of shares in subsidiaries.
Liabilities were halved from previous year and amounted to EUR 15.0 million (EUR
32.3 million), out of which EUR 9.7 million (EUR 20.5 million) were interest-
bearing liabilities.
Interest-bearing net liabilities decreased from the comparison period and were
EUR 8.2 million (EUR 19.8 million), and the gearing ratio was 1,215% (-659%).
| |
Interest-bearing liabilities (EUR thousands) |31 DEC 2013|31 DEC 2012
-------------------------------------------------------+-----------+-----------
Non-current financial liabilities measured at | |
amortised cost | |
-------------------------------------------------------+-----------+-----------
Capital loans | 0| 600
-------------------------------------------------------+-----------+-----------
Convertible loan | 0| 1,886
-------------------------------------------------------+-----------+-----------
Other liabilities | 1,944| 0
-------------------------------------------------------+-----------+-----------
Finance lease liabilities | 0| 5
-------------------------------------------------------+-----------+-----------
| 1,944| 2,491
-------------------------------------------------------+-----------+-----------
Current financial liabilities measured at amortised | |
cost | |
-------------------------------------------------------+-----------+-----------
Bank loans | 7,290| 12,558
-------------------------------------------------------+-----------+-----------
Convertible loans | 479| 3,405
-------------------------------------------------------+-----------+-----------
Other liabilities | 0| 1,899
-------------------------------------------------------+-----------+-----------
Finance lease liabilities | 28| 97
-------------------------------------------------------+-----------+-----------
| 7,797| 17,959
-------------------------------------------------------+-----------+-----------
| |
-------------------------------------------------------+-----------+-----------
Interest-bearing liabilities, total | 9,741| 20,450
-------------------------------------------------------+-----------+-----------
| |
Approximately EUR 2.9 million of current financial liabilities concerns the
Indian subsidiary. Factoring financing used by the parent company in Finland and
Estonia is part of current liabilities. Other bank loans are included in current
financial liabilities on the basis of the loan period or due to the breach of
covenants.
From the loans from credit institutions, EUR 6.3 million is granted by the
Finnish bank as bank loans and lines of credit in use. Of the Finnish bank's
credit line and factoring credit line, EUR 2.3 million was in use and EUR 7.2
million was unused on 31 December 2013. For operations in India and Estonia, the
balances of bank loans and credit line totalled EUR 2.9 million, which includes
Finnfund's investment of EUR 1.9 million in Incap's operations in India.
The amount of the convertible loan of 2007 at the end of the financial year was
EUR 0.5 million and it will mature on 30 June 2014.
On 31 December 2013, EUR 7.3 million of the loans were guaranteed, and the rest
were unguaranteed. The securities for these loans are the EUR 12.1 million
mortgages on company assets and a EUR 0.6 million mortgage on the production
facilities in India. According to the financing arrangement made in July 2013,
the bank released the collateral arrangement connected with the sales price of
the Vuokatti plant property.
On 31 December 2013, the loans, credit line and factoring credit line granted by
Incap's Finnish bank involved the following covenants: equity ratio of at least
15% and net IBD/EBITDA up to 5. The covenants were not met on 31 December 2013,
when the equity of the company was 4.3% and net IBD/EBITDA -1.41. The bank has
the right to terminate the agreements to expire after 60 days if any covenant is
not met on the testing date. On 10 February 2014, the company received a written
confirmation from the bank that the bank will not exercise its right to
terminate the loans even though the covenants were not met on 31 December 2013.
The covenants will be tested next on 30 June 2014 and after that every six
months.
According to the estimate prepared on 24 February 2014 the above covenants are
not met in the next testing date on 30 June 2014. The company continues the
negotiations with the bank, which were started in November 2013 for mitigation
of covenants. In case the covenants are not met and the negotiations with the
bank do not result in an agreement on new covenant levels, and if the bank would
make use of its right to terminate the loans, the company would most probably
not be able to meet its commitments but should initiate negotiations on the
rearrangement of funding.
There are no covenants involved with the investment of Finnfund made in 2009 or
with other foreign debt. However, a standby letter-of-credit as a guarantee of a
foreign bank loan involves covenants.
Incap has agreed with the Finnish Tax Administration on the payment arrangement
related to overdue value-added taxes, withholding taxes and social security
contributions. On 31 December 2013, the total amount of tax liabilities within
the scope of this arrangement is EUR 0.6 million, and according to the
agreement, the last payment will take place on 22 August 2014. According to the
provisions of the agreement, if an instalment is late, the Finnish Tax
Administration has the right to terminate the agreement with immediate effect.
INSTALMENTS AND INTERESTS OF LOANS (EUR THOUSANDS)
-------------------+-----------+---------+-----------
|Instalments|Interests|31 Dec 2013
-------------------+-----------+---------+-----------
Less than 6 months| 3,769| 311| 4,080
-------------------+-----------+---------+-----------
6-12 months | 711| 1| 712
-------------------+-----------+---------+-----------
1-5 years | 5,370| 308| 5,678
-------------------+-----------+---------+-----------
More than 5 years | 0| 0| 0
-------------------+-----------+---------+-----------
| 9,850| 620| 10,470
During the review period, approximately EUR 0.6 million of deferred tax assets
have been utilised from the consolidated balance sheet on the basis of the
taxable income accumulated by the Indian subsidiary. On 31 December 2013,
confirmed tax losses for which no deferred tax asset was recognised amounted to
EUR 8.5 million.
Incap was successful in decreasing the value of inventory and release capital
from inventories. The inventory decreased during the financial year from EUR
9.4 million in the beginning of the year to EUR 4.3 million at the end of the
period. EUR 1.5 million of the decrease came from the write-off of inventory
book value.
The Group's quick ratio was 0.6 (0.5), and the current ratio was 0.9 (0.8).
Cash flow from operating activities was negative EUR 0.3 million (positive EUR
2.4 million). On 31 December 2013, the Group's cash and cash equivalents
totalled EUR 1.5 million (EUR 0.6 million). The change in cash and cash
equivalents showed an increase of EUR 0.7 million (an increase of EUR 0.2
million).
Aspects related to the Group's cash flow, financing and liquidity are also
described in the section "Short-term risks and factors of uncertainty concerning
operations".
Personnel
At the end of the year 2013, the Incap Group had a payroll of 469 employees
(614). Some 66% (55%) of the personnel worked in India, 15% (28%) in Estonia and
19% (17%) in Finland. Number of personnel was decreased most in Estonia (by 103
persons).
At the end of the year, 105 of Incap's employees were women and 364 were men.
Permanently employed staff totalled 279, and the number of fixed-term employees
was 190. The company had one part-time employment contracts at the end of the
year. The average age of the personnel was 33 years.
Incap was running negotiations according to the Co-operation Act during the
financial period in Finland and in Estonia both with white-collars and blue-
collars. As a result of the negotiations personnel in Vaasa and Kuressaare
factories were laid off both permanently and temporarily. In connection with the
adjustment of corporate services job contracts of 37 persons were terminated,
and by 13 of them, the period of notice will continue until the spring of 2014.
Management and organisation
Sami Mykkänen, B.Sc. (Eng.), acted as the CEO of Incap Group until 20 September
2013, when Fredrik Berghel, M.Sc. (Eng.), born 1967, was appointed to the new
acting CEO. Berghel is one of the two shareholders of Inission AB and he was
elected to the Board of Directors of Incap in the Extraordinary General Meeting
on 21 August 2013. Berghel has long experience in different technology companies
and today he acts as the CEO of Inission.
As a part of its Turnaround program Incap renewed the Group's management
structure. The factories gained an increased role in business operations having
full responsibility for plant-specific sales, sourcing, financial controlling
and quality. At the same time, functions in corporate level were downsized to a
minimum. The role of unit managers is emphasised in the new structure. Mr Murthy
Munipalli continued to act as the head of the Tumkur factory and the operations
in India. Mrs Siret Kegel, who had previously acted as Quality Director of the
Group, took full responsibility for the Kuressaare factory. Mr Vesa Tammela
continued as the head of the Vaasa factory. In the corporate level, Ms Kirsti
Parvi continued to act as the CFO, Mrs Susanna Pyykkö as the HR Manager and Mr
Priit Kadastik as the IT Manager. The Group's Management Team includes besides
the above mentioned persons also the Group's CEO Fredrik Berghel, who is the
Chairman of the Management Team.
Annual General Meeting 2013
The Annual General Meeting of Incap Corporation was held on 10 April 2013 in
Helsinki. The General Meeting adopted the financial statements for the financial
period that ended on 31 December 2012. In accordance with the proposal of the
Board of Directors, the General Meeting decided that no dividend be distributed
for the financial period and that the loss for the financial period (EUR
5,505,693.92) be recognised in equity.
Extraordinary General Meeting
The Extraordinary General Meeting of Incap Corporation was held on Wednesday,
21 August 2013 in Helsinki. The Extraordinary General Meeting elected Fredrik
Berghel and Olle Hulteberg as new members to the Board of Directors. Of the
previous members of the Board Raimo Helasmäki, Susanna Miekk-oja and Lassi
Noponen were re-elected.
The Extraordinary General Meeting resolved to approve, in line with the Board's
proposal, the conditional transaction between Incap Corporation and Inission AB,
in which the uniting of Incap and Inission would be carried out by Incap
Corporation acquiring Inission AB's subsidiaries' shares and business
operations. The realisation of the transaction was conditional to the exercising
of the related option by Inission AB. The Extraordinary General Meeting further
approved the consulting agreement arrangement between Incap Corporation and
Inission AB and authorised the Board of Directors to negotiate and decide on
further details of the agreement.
The new Board of Directors held a meeting after the Extraordinary General
Meeting and elected Lassi Noponen as the Chairman of the Board.
Authorisation of the Board of Directors
The Annual General Meeting held on 10 April 2013 authorised the Board of
Directors to decide during one year after the Annual General Meeting to issue a
maximum of 300,000,000 new shares either against payment or without payment.
The Board of Directors exercised a total of 79,455,574 shares out of the
authorisation during 2013. At the end of the financial period, the Board of
Directors' unused authorisation covered a total of 220,544,426 shares.
Board of Directors and Auditor
The Annual General Meeting held on 10 April 2013 re-elected Raimo Helasmäki,
Matti Jaakola, Susanna Miekk-oja and Lassi Noponen as members of the Board of
Directors and elected Janne Laurila as a new member. From among its members, the
Board elected Lassi Noponen to Chair and Matti Jaakola to Vice-Chair. The
secretary of the Board was Anu Kaskinen, LL.M.
The Extraordinary General Meeting held on 21 August 2013 elected Fredrik Berghel
and Olle Hulteberg as new Board members and re-elected Raimo Helasmäki, Susanna
Miekk-oja and Lassi Noponen. The Board elected from among its members Lassi
Noponen to act as the Chairman of the Board.
The Board convened 32 times in 2013 and the average attendance rate was 95.3%.
The auditor was auditing firm Ernst & Young Oy with Jari Karppinen, Authorised
Public Accountant, as the principal auditor.
Report on Corporate Governance
Incap will release a report on the company's corporate governance in compliance
with the Securities Market Act as a separate document, in connection with the
publication of the report of the Board of Directors and the annual report during
week 12.
Shares and shareholders
Incap Corporation has one series of shares, and the number of shares at the end
of the period was 109,114,035 (20,848,980).
During the financial period, the share price varied between EUR 0.10 and 0.25
(EUR 0.15 and 0.65). The closing price for the period was EUR 0.11 (EUR 0.19).
The trading volume was 7,065,282 shares, or 6.5% of outstanding shares
(2,952,411, or 14.2%). The market capitalisation on 31 December 2013 was EUR
12.0 million (4.0). At the end of financial period, Incap had 1,409 shareholders
(1,159). Nominee-registered or foreign owners held 27.3% (0.5%) of all shares.
The company does not hold any of its own shares.
The largest shareholders on 31 december 2013| No. of| Share of
| shares|ownership, %
---------------------------------------------+----------+------------
Inission AB (nominee-registered) |28,500,000| 26.1
---------------------------------------------+----------+------------
Oy Etra Invest Ab |16,934,547| 15.5
---------------------------------------------+----------+------------
Ingman Finance Oy Ab | 8,662,425| 7.9
---------------------------------------------+----------+------------
Ilmarinen | 8,307,692| 7.6
---------------------------------------------+----------+------------
Varma | 7,684,615| 7.0
---------------------------------------------+----------+------------
Finnvera plc | 6,238,600| 5.7
---------------------------------------------+----------+------------
Onvest Oy | 5,197,286| 4.8
---------------------------------------------+----------+------------
Nordea Bank Finland Plc | 3,761,400| 3.4
---------------------------------------------+----------+------------
Laurila Kalevi | 2,735,429| 2.5
---------------------------------------------+----------+------------
JMC Finance Oy | 2,402,286| 2.2
At the end of the financial period, the members of Incap Corporation's Board of
Directors and the President and CEO and their interest parties owned a total of
29,344,858 shares or approximately 26.9% of the company's shares outstanding.
Share-based incentive system 2009
The option scheme implemented in 2009 included a total of 600,000 stock options
entitling their holders to subscribe for an equal number of Incap shares. The
stock options were broken into three categories: 2009A, 2009B and 2009C. The
subscription price for all stock options was EUR 1. The subscription period was
from 1 April 2010 to 31 January 2014 for 2009A stock options and from 1 April
2011 to 31 January 2014 for 2009B and 2009C stock options.
The subscription period ended on 31 January 2014, after the close of the
financial year, and the incentive system 2009 was closed at the same time. No
options were used for the subscription of shares. Incap Group has no other
share-based incentive systems.
Announcements in accordance with Section 10 of Chapter 9 of the Securities
Market Act on a change in holdings
Following the directed share issue arranged in January 2013, there were the
following changes in holdings exceeding the announcement limit on 11 February
2013:
The number of shares held by Mandatum Life increased to 1,116,059 and their
holding after the registration of the share issue is 4.95% of all shares of the
company. The holding of Onvest Oy increased to 1,697,286 shares, or 7.53% of all
shares. The holding of Finnish Industry Investment Ltd. decreased to 9.69%.
On 11 March 2013, Oy Ingman Finance Ab's holding in Incap shares decreased to
1,081,485 shares, or 4.80% of total number of shares and votes.
Following the directed share issue and conversion of loans as announced on 22
July 2013, the following changes in holdings exceeding the announcement limit
took place:
| | |
|Share of ownership and| Number of new|Share of ownership
Shareholder |number of shares prior|shares subscribed| after the share
| to the share issue| and converted| issue and
| | | conversion
-------------------+-----+----------------+-----------------+------------------
| %| shares| shares| %
-------------------+-----+----------------+-----------------+------------------
Inission AB | 0| 0| 28,500,000| 26.12
-------------------+-----+----------------+-----------------+------------------
Oy Etra Invest Ab |21.44| 4,834,547| 12,100,000| 15.52
-------------------+-----+----------------+-----------------+------------------
Ilmarinen | 0| 0| 8,307,692| 7.61
-------------------+-----+----------------+-----------------+------------------
Varma | 0| 0| 7,684,615| 7.04
-------------------+-----+----------------+-----------------+------------------
Finnvera | 0| 0| 6,238,600| 5.72
-------------------+-----+----------------+-----------------+------------------
Oy Ingman Finance | 0| 0| 8,780,769| 8.05
Ab | | | |
-------------------+-----+----------------+-----------------+------------------
Onvest Oy | 7.53| 1,697,286| 3,500,000| 4.76
-------------------+-----+----------------+-----------------+------------------
JMC Finance Oy |10.65| 2,402,286| 0| 2.20
-------------------+-----+----------------+-----------------+------------------
Finnish Industry | 9.69| 2,185,509| 0| 2.00
Investment Ltd. | | | |
-------------------+-----+----------------+-----------------+------------------
Göran Sundholm | 6.57| 1,481,113| 0| 1.36
-------------------+-----+----------------+-----------------+------------------
Kalevi Laurila | 6.48| 1,460,429| 1,275,000| 2.51
On 22 January 2014, after the end of the financial period, Oy Ingman Finance
Oy's share out of all shares and votes of Incap Corporation decreased to 4.99%
or to 5,441,725 shares. Also the share of Finnvera Oy, out of all shares and
votes of Incap Corporation, decreased to 4.98% or 5,434,045 shares after the end
of the financial period on 24 January 2014.
Risk management
The Risk Management Policy approved by the Incap Board classifies risks as risks
connected to the operating environment, operational risks and damage and funding
risks. Risk management at Incap is mainly focused on risks that threaten the
company's business objectives and continuity of operations. In order to improve
its business opportunities, Incap is willing to take on managed risks within the
scope of the Group's risk management capabilities. Incap regularly reviews its
insurance policies as part of its risk management system.
Short-term risks and factors of uncertainty concerning operations
The risks related to Incap's business operations changed on 21 July 2013 when
the company realised the comprehensive financing arrangement that had long been
negotiated. The arrangement stabilised the company's financial position.
General risks related to the company's business operations and sector include
the development of customer demand, price competition in contract manufacturing,
ability to acquire new customers, availability and price development of raw
material and components, sufficiency of funding, liquidity and exchange rate
fluctuations. Of these, the most significant risks at the moment are the
development of revenue and the sufficiency of funding.
To assess its liquidity, Incap has prepared a 12-month cash flow projection for
the Group, based on its performance forecast for 2014 and the actual turnover of
its sales receivables, accounts payable and inventories. Since the profit levels
used in the calculations do not reflect the actual past development, there is an
element of uncertainty associated with them.
Based on the cash flow estimate Incap does not have sufficient working capital
for the company's needs for the forthcoming 12 months. The company estimates
that the additionally needed working capital amounts to approximately EUR 1-1.5
million. The working capital is, however, sufficient for the forthcoming 12
months if the following provisions are met:
* the company succeeds in regaining the present customers' trust and is
successful in new customer acquisition, and/or
* the company reaches the estimated profitability targets in the way that the
company has sufficient means to cover the debt instalment of EUR 1.8 million
by the end of 2014, and/or
* the financing negotiations with the bank succeed as planned so that the debt
instalments are postponed, and/or
* the business operations in India develop favourably so that the subsidiary
in India is able to pay off its accounts payable to the parent company, and
* the covenants for the bank loans are met or in case the covenants are not
met, the bank does not use its right to call in the loans.
Incap's management is confident that the negotiations with the bank succeed and
the cash flow of operations develops in the way that the company is able to meet
its commitments. The company has implemented towards the end of 2013 a
comprehensive Turnaround program, which was completed successfully after the end
of the financial period in January 2014. After the implementation of the actions
of the Turnaround program Incap is able to operate profitably in 2014 even with
remarkably smaller manufacturing volumes than in 2013. The actions of the
program are estimated to reflect in full in the profitability during the latter
part of 2014.
During the first half of the year 2013 the equity of the Group's parent company
was less than half of the share capital. The equity structure of the Group was
improved by the comprehensive financing arrangement in July 2013. The loss of
the parent company and the Estonian subsidiary in 2013 affects the Group's
equity, which at the end of the financial period is EUR 0.7 million. The equity
of the parent company on 31 December 2013 is EUR 10.8 million, i.e. 51% of the
share capital.
The value of the shares of subsidiaries has an elementary impact on the parent
company's equity and therefore also on the equity ratio. Based on the impairment
testing carried out in connection with the financial statements the value of the
Estonian subsidiary's shares in the parent company was decreased by EUR 4.0
million. Despite of the decrease in value, there is an element of uncertainty
associated with the value of the subsidiary's shares due to its unprofitability
in the past. The operations of the Indian subsidiary have developed favourably
and there is no related risk involved in its value of shares.
Demand for Incap's services as well as the company's financial position are
affected by global economic trends and economic trends among Incap's customer
industries. In 2014, the business environment is estimated to develop steadily
in the sectors where Incap and its customers operate, and the general economic
development is not estimated to have any negative effect on the demand or the
solvency of the company's customers.
The company's sales are spread over several customer sectors balancing out the
impact of the economic fluctuation in different industrial sectors. In 2013, the
biggest single customer's share of the Group revenue was 20%. The company's
operating segment, contract manufacturing, is highly competitive, and there are
major pressures on cost level management. In the challenging market situation
the management of customer relationships is of special importance and management
has paid special attention to this. The cost structure has been made more
flexible by distributing production activities into several countries: Finland,
Estonia and India. The focus of production activities is in countries where wage
and general cost levels are competitive.
Events after the end of the financial period
Incap announced on 2 January 2014 that Inission AB did not exercise its option
to combine the operations of Inission AB with Incap Corporation in line with the
respective agreement. Therefore, the option is not valid anymore.
The Board of Directors of Incap Corporation evaluated on 24 January 2014 the
efficiency of the actions in the Turnaround program, which was launched earlier
in 2013. It was announced that the main objectives of the program were met: the
delivery accuracy improved significantly, the operational efficiency was
enhanced both in manufacturing units and in support functions, the group
organisation was streamlined to cover only essential functions and the
production capacity was adjusted to meet with the actual demand. The
organisation structure was renewed and the manufacturing units now operate as
self-sufficient profit centres having full responsibility of their own
operations and sales.
According to the estimate of the Board of Directors, Incap is now after the
implementation of the actions in the Turnaround program able to make a positive
result in 2014 even with substantially lower manufacturing volumes than in 2013.
Even though Inission AB did not exercise its option to combine the operation of
Incap and Inission by the end of 2013, it has indicated to the Board its
continued interest on the merger. In this new situation the Board of Directors
of Incap started evaluating strategic options for further development of the
company's business. For the assessment of eventual strategic alliances the Board
of Incap had decided to engage an investment bank.
Strategy and objectives
In 2014 Incap will continue focusing on its core business: producing products to
its customer with world-class quality and shipping them on-time. Incap will
continue moving from a centralised to a decentralised organisation. The improved
financial position will be stabilised by ensuring positive result and positive
cash flow for the full year.
Demand in the strategic customer segments is expected to grow even though no
quick turn upwards is anticipated. In addition to the existing customer base
Incap will focus on profitable growing customers with products that are in the
forefront of their respective business segment. Incap provides the full scope of
EMS services, everything from product development to end of life-cycle service.
The company believes that the focus segments energy efficiency and well-being
will grow more rapidly than economy in general. Many new growth companies have
adopted the strategy of focusing on their core competence and outsourcing all
production activities. For these companies, Incap is able to offer the entire
production process or comprehensive product integration.
Being in charge of the complete supply chain with direct connections from
component producers in Asia will become an even more important competitive edge
in the future. By turning to a decentralised organisation there will be a full
focus on getting the best possible logistic set up for each and every project.
According to Incap's way of thinking all of its customers are unique and
therefore, Incap shall create a unique set-up for each and every customer. The
target is not only to understand the customer but even the customers' customer
as only then Incap can do a really good job.
The competition in Incap's industry is fierce and there are no low-hanging
fruits. Incap will continue to enhance the efficiency of its operations. The
organisation shall be smart and efficient in each and every step. Lean is the
operational strategy. Big structural changes have been done, yet still everyday
small improvements will make the difference over time.
In order to ensure the future growth of the company, Incap is also investigating
business potential of eventual consolidation.
Outlook for 2014
Incap's estimates for future business development are based both on its
customers' forecasts and on the company's own assessments. The demand of present
customers of the company is expected to increase moderately from the level of
2013 especially in Europe.
Thanks to the improved efficiency gained in the Turnaround program the company's
profitability is expected to improve in 2014 and the actions of the program are
estimated to reflect in the result in full in the latter part of the year.
The company estimates that the Group's revenue in 2014 will be significantly
smaller than in 2013 when the revenue amounted to EUR 36.8 million. The company
estimates that the full-year operating result (EBIT) is positive. In 2013, the
result was negative amounting to EUR -5.9 million.
Board of Directors' proposal on measures related to the result
The parent company's loss for the financial period totalled EUR 6,979,595.95.
The Board will propose to the Annual General Meeting on 10 April 2014 that no
dividend be paid and the result for the financial period be recognised in
equity.
Annual General Meeting 2014
Incap Corporation's Annual General Meeting will take place on Wednesday, 10
April 2013 at 3:00 p.m. at BANK, Unioninkatu 20, 00130 Helsinki. Notice to the
Annual General Meeting will be given on 20 March 2014 at the latest.
Publication of the financials for 2013
Incap Group's annual report and financials including the report of the Board of
Directors and the Auditor's report for 2013 will be published during week 12 in
the company's website www.incap.fi.
Change in reporting of the company
Instead of quarterly interim reports Incap will publish in 2014 the interim
management statements and interim report for the six month periods of the year.
The interim management statement for the period 1 January-15 May 2014 will be
published on Thursday, 15 May 2014.
Helsinki, 25 February 2014
INCAP CORPORATION
Board of Directors
For additional information, please contact:
Fredrik Berghel, President and CEO, tel. +46 73 202 2210
Kirsti Parvi, CFO, tel. +358 50 517 4569
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Principal media
The company's home page www.incap.fi
ANNEXES
1 Consolidated Statement of Comprehensive Income
2 Consolidated Balance Sheet
3 Consolidated Cash Flow Statement
4 Consolidated Statement of Changes in Equity
5 Group Key Figures and Contingent Liabilities
6 Quarterly Key Figures
7 Calculations of Key Figures
INCAP IN BRIEF
Incap Corporation is an international contract manufacturer whose comprehensive
services cover the entire life-cycle of electromechanical products from design
and sourcing to actual manufacture and further to maintenance services. Incap's
customers are leading suppliers of high-technology equipment in their own
business segments, and Incap increases their competitiveness as a strategic
partner. Incap has operations in Finland, Estonia, India and China. The Group's
revenue in 2013 amounted to approximately EUR 36.8 million, and the company
currently employs approximately 470 people. Incap's share has been listed on the
NASDAQ OMX Helsinki Ltd since 1997. Additional information: www.incap.fi.
Annex 1
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
--------------------------------------------------------------------------------
(EUR
thou-
sands, 10- 7- 4- 1- 10- 7- 4- 1- 1- 1-
un- 12/ 9/ 6/ 3/ 12/ 9/ 6/ 3/ 12/ Change, 12/
audited) 2013 2013 2013 2013 2012 2012 2012 2012 2013 % 2012
--------------------------------------------------------------------------------
8, 8, 9, 10, 14, 15, 18, 15, 36, 64,
REVENUE 014 206 883 654 498 701 378 564 757 -43 141
Work
performed
by
the
enterprise
and
capitalised 0 0 0 0 0 0 0 0 0 0 0
Change
in
inventories
of
finished
goods
and
work
in
progress -737 -256 -97 -260 -323 -169 -327 176 -1,349 -109 -643
Other
operating
income 15 8 -12 51 49 136 134 85 63 -84 404
Raw
materials
and
consum-
ables 5, 4, 5, 7, 9, 10, 12, 10, 22, 44,
used 980 120 617 112 968 978 568 801 828 -48 315
Personnel 2, 2, 2, 2, 2, 2, 3, 3, 9, 11,
expenses 936 067 428 527 538 419 119 011 957 -10 087
Deprecia-
tion,
amortisa-
tion
and
impair-
ment 1, 1,
losses 95 115 227 628 231 378 435 415 065 -58 460
Other
operating 1, 1, 1, 1, 2, 1, 2, 1, 7, 7,
expenses 964 987 917 611 114 612 051 944 479 3 721
OPERAT-
ING
PROFIT/ -3, -1, -5,
LOSS 681 -331 -415 432 -628 280 13 -345 859 -760 -681
Financing
income
and -1, -2,
expenses -74 000 -595 -439 -569 -156 339 -366 108 -181 -751
PROFIT/
LOSS
BEFORE -3, -1, -1, -1, -1, -7,
TAX 755 331 010 871 197 124 352 -711 966 -456 -1,432
Income
tax -3
expense -234 -150 -162 -14 ,418 -79 0 0 -560 - -3,498
PROFIT/
LOSS
FOR
THE -3, -1, -1, -1, -4, -8, -4,
PERIOD 989 481 172 885 616 44 352 -711 527 -73 930
Earnings
per
share -0.06 -0.03 -0.05 -0.09 -0.23 0.00 0.02 -0.04 -0.14 - -0.25
--------------------------------------------------------------------------------
-----------------------------------------------------------------------
OTHER
COM-
PRE-
HEN- 10- 7- 4- 1- 10- 7- 4- 1- 1-
SIVE 12/ 9/ 6/ 3/ 12/ 9/ 6/ 3/ 1-12/ Change, 12/
INCOME 2013 2013 2013 2013 2012 2012 2012 2012 2013 % 2012
-----------------------------------------------------------------------
PROFIT
/LOSS
FOR
THE -3, -1, -1, -1, -4, -8, -4,
PERIOD 989 481 172 885 616 44 352 -711 527 -73 930
OTHER
COM-
PRE-
HEN-
SIVE
INCOME:
Items
that
may
be
recog-
nised
in
profit
or
loss at
a later
date:
Trans-
lation
differ-
rences
from
foreign
units 43 -190 -285 91 -129 63 -50 -2 -341 -189 -118
Other
com-
pre-
hen-
sive
income,
net 43 -190 -285 91 -129 63 -50 -2 -341 -189 -118
TOTAL
COM-
PRE-
HEN-
SIVE -3, -1, -1, -1, -4, -8, -5,
INCOME 946 671 457 793 745 107 302 -712 867 -76 048
Attribu-
table
to:
Share-
holders
of
the
parent -3, -1, -1, -1, -4, -8, -5,
company 946 671 457 793 745 107 302 -712 867 -76 048
Non-
controlling
interest 0 0 0 0 0 0 0 0 0 0 0
-----------------------------------------------------------------------
Annex 2
-------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET (IFRS)
(EUR thousands, unaudited) 31 December 2013 Change, % 31 December 2012
-------------------------------------------------------------------------------
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 1,790 -31 2,578
Goodwill 866 -8 940
Other intangible assets 80 -55 178
Other financial assets 311 0 311
Deferred tax assets 0 -100 560
Other receivables 859 -100 0
TOTAL NON-CURRENT ASSETS 3,906 -14 4,568
CURRENT ASSETS
Inventories 4,304 -54 9,352
Trade and other receivables 6,217 -51 12,815
Cash and cash equivalents 1 507 146 613
TOTAL CURRENT ASSETS 12,028 -43 22,780
Non-current assets held-for-sale 0 -100 1,936
TOTAL ASSETS 15 934 -46 29,283
EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT COMPANY
Share capital 20 487 0 20,487
Share premium account 44 0 44
Reserve for invested unrestricted
equity 17,471 263 4,818
Exchange differences -1,258 -37 -917
Retained earnings -36,057 -31 -27,440
TOTAL EQUITY 687 123 -3,008
NON-CURRENT LIABILITIES
Deferred tax liabilities 0 0 0
Interest-bearing loans and
borrowings 2,054 -18 2,492
NON-CURRENT LIABILITIES 2,054 -18 2,492
CURRENT LIABILITIES
Trade and other payables 5,397 -54 11,841
Current interest-bearing loans and
borrowings 7,797 -57 17,959
CURRENT LIABILITIES 13,193 -56 29,800
Liabilities relating to non-
current assets held-for-sale 0
TOTAL EQUITY AND LIABILITIES 15, 934 -46 29,283
-------------------------------------------------------------------------------
Annex 3
--------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT
(EUR thousands, unaudited) 1-12/2013 1-12/2012
--------------------------------------------------------------------------
Cash flow from operating activities
Operating profit/loss -5,858 -681
Adjustments to operating profit 3,581 728
Change in working capital 3,157 4,188
Interest paid and payments made -1,195 -1,814
Interest received 14 27
Cash flow from operating activities -301 2,448
Cash flow from investing activities
Capital expenditure on tangible and intangible assets -280 -124
Proceeds from sale of tangible and intangible assets 1,496 139
Other investments 0 -61
Loans granted 0 0
Sold shares of subsidiary 0 0
Repayments of loan assets 0 3
Cash flow from investing activities 1,216 -43
Cash flow from financing activities
Proceeds from share issue 4,282 734
Drawdown of loans 2,044 1,819
Repayments of borrowings -6,438 -4,201
Repayments of obligations under finance leases -70 -594
Cash flow from financing activities -182 -2,242
Change in cash and cash equivalents 733 163
Cash and cash equivalents at beginning of period 613 369
Effect of changes in exchange rates 177 99
Changes in fair value (cash and cash equivalents) -16 -18
Cash and cash equivalents at end of period 1,507 613
--------------------------------------------------------------------------
Annex 4
-------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(EUR thousands,
unaudited)
Share Share Reserve for Exchange Retained Total capital premium invested differences earnings
account unrestricted
equity
-------------------------------------------------------------------------------
Equity at 1
January 2013 20,487 44 4,818 -917 -27,440 -3,008
Total
comprehensive
income -8,527 -8 527
Currency
translation
differences -341 0 -341
Transactions
with
shareholders
Directed share
issue 9,703 9,703
Imputed
financing cost
for share issue 3,235 3,235
Transaction
costs for
equity 0 0 -286 0 0 -286
Other changes 0 0 0 0 -90 -90
Equity at 31
December 2013 20,487 44 17,471 -1,258 -36,057 686
Equity at 1
January 2012 20,487 44 4,084 -799 -22,506 1 311
Total
comprehensive
income -4,930 -4,930
Currency
translation
differences -118 -118
Share issue 0 0 759 0 0 759
Transaction
costs for
equity 0 0 -25 0 0 -25
Options and
share-based
compensation 0 0 0 0 -5 -5
Equity at 31
December 2012 20,487 44 4,818 -917 -27,440 - 3 008
-------------------------------------------------------------------------------
Annex 5
-------------------------------------------------------------------------------
GROUP KEY FIGURES AND CONTINGENT LIABILITIES
31 Dec 2013 31 Dec 2012
-------------------------------------------------------------------------------
Revenue, EUR million 36.8 64.1
Operating profit/loss, EUR million -5.9 -0.7
% of revenue -16.0 -1.1
Profit/loss before taxes, EUR million -8.0 -1.4
% of revenue -22.0 -2.2
Return on investment (ROI), % 1) -30.2 -12.6
Return on equity (ROE), % 2) 734.7 580.8
Equity ratio, % 4.3 -10.3
Gearing, % 1,215.3 -659.4
Net debt, EUR million 7.5 18.9
Net interest-bearing debt, EUR million 8.2 19.8
Quick ratio 0.6 0.5
Current ratio 0.9 0.8
Average number of shares during the review
period, adjusted for share issues 60,117,106 20,067,042
Earnings per share (EPS), EUR -0.14 -0.25
Equity per share, EUR 0.01 -0.14
Divident per share, EUR 0 0
Dividend out of profit, EUR 0 0
P/E ratio -0.8 -0.8
Trend in share price
Minimum price during the period, EUR 0.10 0.15
Maximum price during the period, EUR 0.25 0.65
Mean price during the period, EUR 0.14 0.30
Closing price at the end of the period, EUR 0.11 0.19
Total market capitalisation, EUR million 12.0 4.0
Trade volume, no. of shares 7,065,282 2,952,411
Trade volume, % 6.5 14.2
Investments, EUR million 0.3 0.1
% of revenue 0.0 0.2
Average number of employees 556 697
CONTINGENT LIABILITIES, EUR million
FOR OWN LIABILITIES
Mortgages and pledges 12,7 14.3
Off-balance sheet liabilities 3) 3,8 7.1
Nominal value of currency options, EUR thousand 0
Fair values of currency options, EUR thousand 0
1) In the calculation of return on investment, the
financing costs include financing income of a total
of EUR 3.2, which were subscribed in connection with
the conversion of loans in line with the IFRIC19 and
IAS 39/32 standards.
2) In the calculation of return on equity, the
numerator and the
denominator are negative.
3) The repurchase obligation of invoiced receivables
has been added to
off-balance sheet liabilities on 30 September 2012.
-------------------------------------------------------------------------------
Annex 6
QUARTERLY KEY FIGURES (IFRS)
--------------------------------------------------------------------------
10-12/ 7-9/ 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/
2013 2013 2013 2013 2012 2012 2012 2012
--------------------------------------------------------------------------
Revenue,
EUR
million 8.0 8.2 9.9 10.7 14.5 15.7 18.4 15.6
Operating
profit,
EUR
million -3.8 -0.3 -0.4 -1.4 -0.6 0.3 0.0 -0.3
%
of
revenue -47.5 -4.0 -4.2 -13.4 -4.3 1.8 0.1 -2.2
Profit
before
taxes,
EUR
million -3.8 -1.3 -1.0 -1.9 -1.2 0.1 0.4 -0.7
% of
revenue -47.5 -16.2 -10.2 -17.6 -8.3 0.8 1.9 -4.6
Return
on
invest-
ment
(ROI), % -117.2 56.2 -12.1 -31.2 -73.2 3.3 17.8 -1.5
Return
on
equity
(ROE),
% -590.0 -691.1 105.3 202.5 2,175.3 11.7 95 -297.7
Equity
ratio,
% 4.3 23.9 -25.8 -17.7 -10.3 4.9 4.3 1.6
Gearing,
% 1,198.8 159.1 -266.1 -393.5 -659.4 1,205.2 1,372.9 4,103.2
Net
debt,
EUR
million 7.5 5.7 16.5 18.7 18.9 18.9 20.3 23.2
Net
interest-
bearing
debt,
EUR
million 8.2 7.5 15.7 17.5 19.8 20.8 22.7 24.6
Average
number
of
shares
during
the
review
period,
adjusted
for
share 60, 43, 22, 21, 20, 19, 19, 18,
issues 117,106 605,321 264,948 980,504 067,042 804,494 276,512 680,880
Earnings
per
share
(EPS),
EUR -0.14 -0.03 -0.05 -0.09 -0.23 0.00 0.02 -0.04
Equity
per
share,
EUR -0.41 0.04 -0.26 -0.20 -0.14 0.08 0.08 0.03
Invest-
ments,
EUR
million 0.15 0.05 0.1 0 0.1 0.0 0.1 0.0
%
of
revenue 1.88 0.59 0.9 0.4 0.3 -0.1 0.3 0.2
Average
number
of
employees 518 563 556 590 652 698 710 727
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Annex 7
CALCULATION OF KEY FIGURES
100 x (profit/loss for the period + financial
Return on investment, % expenses)
---------------------------------------------------
equity + interest-bearing financing loans
Return on equity, % 100 x profit/loss for the period
---------------------------------------------------
average equity during the financial period
Equity ratio, % 100 x equity
---------------------------------------------------
balance sheet total - advances received
Gearing, % 100 x interest-bearing net financing loans
---------------------------------------------------
equity
Net liabilities liabilities - current assets
Quick ratio current assets
---------------------------------------------------
short-term liabilities - short-term advances
received
Current ratio current assets + inventories
---------------------------------------------------
short-term liabilities
Earnings per share net profit/loss for the period
---------------------------------------------------
average number of shares during the period,
adjusted for share issues
Equity per share equity
---------------------------------------------------
number of shares at the end of the period,
adjusted for share issues
VAT-exclusive working capital acquisitions,
Capital expenditure without deduction of investment subsidies
average of personnel numbers calculated at the end
Average number of employees of each month
closing price for the period x number of shares
Total market capitalisation available for public trading
[HUG#1764191]
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