2011-08-10 07:30:00 CEST
2011-08-10 07:30:11 CEST
REGULATED INFORMATION
Tecnomen Lifetree Oyj - Interim report (Q1 and Q3)
Tecnotree Corporation Interim Report 1 Jan - 30 Jun 2011 (unaudited)
Tecnotree Corporation
Interim Report
10 August 2011 at 8.30 am
Positive operating result in the second quarter
Net sales in the second quarter of the year, EUR 18.5 million (EUR 19.3 million
last year), were EUR 7.9 million more than in the previous quarter. The cash
flow after investments was EUR -5.5 (-4.6) million. The adjusted operating
result* was EUR 3.3 (2.0) million. Net sales for the first half of the year
were EUR 29.1 (33.5) million.. The order book at the close of the period stood
at EUR 21.5 million (31 December 2010: EUR 14.3 million).
KEY FIGURES 4-6/201 4-6/201 1-6/201 1-6/201 1-12/201
1 0 1 0 0
Net sales, MEUR 18.5 19.3 29.1 33.5 60.7
Adjusted operating result, MEUR* 3.3 2.0 -1.6 1.4 -2.5
Operating result, MEUR 0.6 0.7 -7.7 -1.2 -8.1
Result before taxes, MEUR 0.6 0.0 -7.2 -2.5 -9.4
Result for the period -0.9 -0.8 -9.0 -3.6 -11.0
Earnings per share, basic, EUR -0.01 -0.01 -0.12 -0.05 -0.15
Order book, MEUR 21.5 21.0 14.3
Cash flow after investments, MEUR -5.5 -4.6 -12.2 -4.0 -10.6
Change in cash and cash -2.6 -5.7 -6.3 -5.1 -9.8
equivalents, MEUR
Cash and cash equivalents, MEUR 10.4 22.0 16.7
Equity ratio % 57.4 66.9 66.4
Net gearing % 23.9 -6.2 3.3
Personnel at end of period 930 794 858
* Adjusted operating result = operating result before R & D capitalisation,
amortization of this and one-time costs. Details of these are given in the
section “Result analysis”.
Unless otherwise stated, all figures presented below are for the review period
1-6/2011 and the figures for comparison are for the corresponding period
1-6/2010.
President and CEO Kaj Hagros:
”During the first half of 2011 net sales fell to EUR 29.1 million from EUR 33.5
million in the same period last year. Sales in the Middle East and Africa were
higher than in 2010 but in other regions were lower than in the previous year.
However, the company has received an encouraging number of new orders in the
product areas prioritised in its revised strategy, and we believe that sales in
the second half of the year will increase from the previous year in many areas.
We are currently negotiating new business that would position us for further
growth. The 2011 net sales and the adjusted operating result are expected to
match or exceed the 2010 figures.”
SALES AND NET SALES
Tecnotree's net sales in the review period declined 13.2 per cent to EUR 29.1
(33.5) million. The reduction was mainly due to the low net sales in the first
quarter.
EUR 14.3 million of sales in the review period have been recognised by stage of
completion (IAS 11 Construction Contracts) and EUR 14.8 million on delivery
(IAS 18 Revenues).
NET SALES BY MARKET AREA 1-6/2011 1-6/2010 1-6/2011 1-6/2010
MEUR MEUR % %
Americas (North, Central and South 10.2 15.2 35.2 45.3
America)
Europe 3.4 3.9 11.8 11.7
MEA (Middle East and Africa) 13.6 11.5 46.6 34.4
APAC (Asia and Pacific) 1.9 2.9 6.4 8.6
TOTAL 29.1 33.5 100.0 100.0
CONSOLIDATED ORDER BOOK 30.6.2011 31.12.2010 30.6.2011 31.12.2010
MEUR MEUR % %
Americas (North, Central and South 9.7 1.5 45.0 10.5
America)
Europe 2.9 2.6 13.5 17.9
MEA (Middle East and Africa) 8.2 9.3 38.1 65.4
APAC (Asia and Pacific) 0.7 0.9 3.4 6.3
TOTAL 21.5 14.3 100.0 100.0
Maintenance and service sales totalled EUR 13.0 (13.6) million or 44.7 per cent
(40.6 %) of net sales.
RESULT ANALYSIS
Tecnotree's business operations are based on project sales. The income and
costs recorded for these vary considerably from one quarter to another. For
this reason it is important to base an examination of the profitability of the
company on the result for more than one quarter.
INCOME STATEMENT, KEY FIGURES, MEUR 1-6/2011 1-6/2010 1-12/2010
Net sales 29.1 33.5 60.7
Operating costs excluding product -30.7 -32.1 -63.2
development capitalisation and
one-time costs
Adjusted operating result, MEUR -1.6 1.4 -2.5
Product development capitalisation 0.0 0.4 0.6
Product development amortisation -3.7 -2.9 -6.1
One-time costs -2.4 0.0 0.0
Operating result -7.7 -1.2 -8.1
Result before taxes -7.2 -2.5 -9.4
The adjusted operating result was down EUR 3.0 million from the previous year.
This was due in particular to low net sales in the first quarter of the year.
Capitalisation of research and development costs and amortisation of this had
the net impact of weakening the result by EUR 1.2 million compared to the
corresponding period in the previous year.
The operating result for the review period includes one-time costs of EUR 2.4
million for settling the law suit brought against the company early in the
year.
Taxes for the period totalled EUR 1.8 (1.1) million, including the following
items:
TAXES IN INCOME STATEMENT, MEUR 1-6/2011 1-6/2010 1-12/2010
Withholding tax expenses in parent company -0.6 -1.1 -1.7
Income taxes on the results of Group companies -1.9 -0.6 -1.5
Deferred tax asset based on tax allowances in 0.3 0.2 0.8
India
Change in deferred tax liability based on:
- R&D capitalisation 0.9 0.6 1.1
- dividend tax in India -0.7 -0.2 -0.8
Other items 0.2 0.1 0.5
TAXES IN INCOME STATEMENT, TOTAL -1.8 -1.1 -1.6
Earnings per share were EUR -0.12 (-0.05). Equity per share at the end of the
period was EUR 0.81 (EUR 1.11).
FINANCING AND INVESTMENTS
Tecnotree's liquid funds totalled EUR 10.4 (31.12.2010: 16.7) million. The
change in cash and cash equivalents for the review period was EUR -6.3 million.
The balance sheet total on 30 June 2011 stood at EUR 105.1 (123.4) million.
Interest-bearing liabilities were EUR 25.6 (17.9) million. The net debt to
equity ratio (net gearing) was 23.9 per cent (-6.2 %). The balance sheet
structure remained strong and the equity ratio on 30 June 2011 was 57.4 per
cent (66.9 %).
Tecnotree's gross capital expenditure during the review period, excluding the
capitalisation of development costs, was EUR 0.6 (0.5) million or 2.2 per cent
(1.4 %) of net sales.
Financial income and expenses (net) during the review period totalled EUR 0.5
(-1.3) million. The change from the comparative period is due mainly to the
positive change in loan interest hedging in the review period.
FINANCIAL INCOME AND EXPENSES, MEUR 1-6/2011 1-6/2010 1-12/2010
Interest income 0.1 0.1 0.2
Exchange rate gains 0.6 0.1 0.4
Other financial income 0.5 0.3 0.5
FINANCIAL INCOME, TOTAL 1.2 0.5 1.1
Interest expenses -0.5 -0.7 -0.8
Exchange rate losses -0.1 -1.1 -1.7
Other financial expenses -0.0 -0.0 -0.0
FINANCIAL EXPENSES, TOTAL -0.7 -1.8 -2.4
CHANGE IN WORKING CAPITAL, MEUR (increase - / 1-6/2011 1-6/2010 1-12/2010
decrease +)
Change in trade receivables -6.5 -0.6 2.1
Change in other short-term receivables -3.3 -5.7 -6.5
Change in inventories -0.1 0.1 0.3
Change in trade payables 0.6 0.9 3.9
Change in other current liabilities 0.3 1.6 -7.6
CHANGE IN WORKING CAPITAL, TOTAL -9.0 -3.7 -7.7
Tecnotree is planning additional funding in the range of EUR 10 million during
the rest of the year, in order to improve its financing structure, finance
working capital and accelerate growth.
The company has receivables totalling EUR 5.9 million from a government owned
customer in the MEA region, for which impairment totalling EUR 0.9 million has
been booked in 2010 and EUR 1.1 million in the review period.
SEGMENT INFORMATION
The operating segments under IFRS 8 reported by Tecnotree are the geographical
areas, which are Americas (North, Central and South America), Europe, MEA
(Middle East and Africa), and APAC (Asia Pacific). This is because their
results are monitored separately in the company's internal financial reporting.
Tecnotree's chief operating decision maker, as referred to in IFRS 8, is the
Group's management board.
Net sales and the result for the operating segments are presented based on the
location of customers. The result for the operating segments includes the costs
that can be allocated to the segments on a reasonable basis. Common costs for
the whole Group as well as taxes and financial items are not allocated.
GEOGRAPHICAL AREAS
Tecnotree Group operates in the following geographical areas: Americas (North,
Central and South America), Europe, MEA (Middle East and Africa) and APAC (Asia
Pacific).
Americas (North, Central and South America)
In Latin America net sales were weaker than in the corresponding period in the
previous year, although the figures were higher than the targets set in the
business plan for the first half of the year. The order book increased
significantly. Tecnotree received several orders from existing clients in the
region for expansions of current systems and for completely new solutions.
Relative growth in regional sales is highest specifically in systems supporting
the business of operators, based on products developed by Tecnotree's business
unit in India. Operators are continuously launching new projects in Latin
America, investing in the expansion or replacement of existing systems, and
these offer growth potential for Tecnotree.
Europe
Net sales in the Europe region fell slightly short of the figure for the
previous year. Good progress has been made with delivery projects but income
recognition for them fell short of targets. Tecnotree has made a major effort
to sell its new solutions in Europe and expects to see concrete results from
this in the form of new orders in the second half of the year.
MEA (Middle East and Africa)
Sales in the Middle East and Africa continued to increase in the first half of
the year from the previous year. New orders were received especially for
support systems and managed services for the operator's business. The company
received orders in new countries through existing clients and began delivery of
a major cloud computing business solution for joint use by four clients with
operations in different countries. Business growth in Middle East and Africa
could be even faster if the scaling up or down of delivery capacity could be
improved.
APAC (Asia and Pacific)
Sales in the APAC region in the first half of the year fell clearly from the
previous year, but there were signs of improvement in the second quarter.
Business at the start of the year focused on renewing annual service contracts
and ensuring the company won the contracts for replacing existing systems, and
this was very successful. Relatively few completely new projects were underway
in the region in the first half of the year, so Tecnotree concentrated on
serving existing customers. In the second half of the year the focus will be
much more on developing new customer relations and on expansion and replacement
projects for existing customers.
RESEARCH AND DEVELOPMENT
Research and development costs during the review period totalled EUR 6.3 (6.7)
million, corresponding to 21.8 per cent (20.1 %) of net sales. EUR 0.0 (0.4)
million of development costs were capitalised. At the end of review period,
Tecnotree does not have any open capitalised research and development projects.
Capitalised costs are amortised over 3-5 years from the start of commercial
use. R&D costs of EUR 3.7 (2.9) million were amortised during the review
period.
PERSONNEL
At the end of June 2011 Tecnotree employed 930 (31.12.2010: 858) persons, of
whom 77 (31.12.2010: 70) worked in Finland and 853 (31.12.2010: 788) elsewhere.
The company employed on average 895 (756) people during the review period.
Personnel by country were as follows:
1-6/2011 1-6/2010 1-12/2010
Personnel, at end of period 930 794 858
Finland 77 71 70
Ireland 61 68 64
Brazil 42 47 47
India 705 558 625
Other countries 45 50 52
Personnel, average 895 763 797
Personnel expenses before R&D capitalisation 16.5 14.6 29.3
(MEUR)
TECNOTREE SHARES AND SHARE CAPITAL
At the end of June 2011 the shareholders' equity of Tecnotree Corporation stood
at EUR 59.5 (31.12.2010: 72.1) million and the share capital was EUR 4.7
million. The total number of shares was 73,630,977. The company held 134,800 of
these shares, which represents 0.18 per cent of the company's total number of
shares and votes. Equity per share was EUR 0.81 (31.12.2010 0.98).
A total of 13,510,826 Tecnotree shares (EUR 6,341,616) were traded on the
Helsinki Exchanges during the period 3 January - 30 June 2011, representing
18.3 per cent of the total number of shares.
The highest share price quoted in the period was EUR 0.63 and the lowest EUR
0.33. The average quoted price was EUR 0.47 and the closing price on 30 June
2011 was EUR 0.53. The market capitalisation of the share stock at the end of
the period was EUR 39,024,418.
CURRENT AUTHORISATIONS
The Annual General Meeting held on 23 March 2011 authorised the Board of
Directors to decide on the acquisition of a maximum of 7,360,000 of the
Company's own shares. Own shares may be acquired with unrestricted
shareholders' equity otherwise than in proportion to the holdings of the
shareholders through public trading of the securities on NASDAQ OMX Helsinki Oy
at the market price of the shares in public trading at the time of the
acquisition. Own shares may be acquired for the purpose of developing the
capital structure of the Company, carrying out corporate acquisitions or other
business arrangements to develop the business of the Company, financing capital
expenditure, to be used as part of the Company's incentive schemes, or to be
otherwise retained in the possession of the Company, disposed of or nullified
in the extent and manner decided by the Board of Directors. The authorisation
is valid for one year from the decision of the Annual General Meeting. The
Board of Directors has not exercised this authorisation during the review
period.
Furthermore, the Annual General Meeting authorised the Board of Directors to
decide to issue and/or to convey a maximum of 17,800,000 new shares and/or the
Company's own shares either against payment or for free. New shares may be
issued and the Company's own shares may be conveyed to the Company's
shareholders in proportion to their current shareholdings in the Company or
waiving the shareholder's pre-emption right, through a directed share issue if
the Company has a weighty financial reason to do so. The Board of Directors may
also decide on a free share issue to the Company itself. The Board of Directors
is, within the authorization, authorized to grant the special rights referred
to in Chapter 10, Section 1 of the Companies Act. The authorisation is valid
for one year from the decision of the Annual General Meeting.
STOCK OPTION PROGRAMMES
During the review period the company had in force the 2006 and 2009 stock
option programmes. The exercise period for the 2009A options ended on 31 March
2011 and for the 2006B options on 30 April, 2011.
At its meeting on 9 March 2011, the company's Board of Directors allocated
altogether 575,000 2006C options, 315,000 2009B options, and 445,000 2009C
options
The state of the options on 30 June 2011 was as follows:
Option series Maximum number of Number of options Exercise Exercise
options granted period price
2006C 667,000 575,000 1.4.2009-30.4 0.98
.2012
Total 667,000 575,000
2009B 2,394,013 1,397,206 1.4.2010-31.3 0.86
.2012
2009C 3,420,018 1,980,178 1.4.2011-31.3 0.86
.2013
Total 5,814,031 3,377,384
2006 and 2009 6,481,031 3,952,384
Total
Some of the 2009B and 2009C stock options become available to key personnel
based on a performance appraisal. The stock options are part of the incentive
and commitment scheme for key personnel.
Altogether 6,481,031 stock options remained on 30 June 2011 of all the
company's stock options in circulation. The shares that could be subscribed on
the basis of these stock options accounted for a maximum of 8.09 % of the
Company's shares and the votes carried by the shares after any increase in
share capital. On 30 June 2011 the Company still held 2,528,647 of all the
current stock options. The issued stock options had a maximum diluting effect
on 30 June 2011 of 5.09 %.
RISKS AND UNCERTAINTY FACTORS
The greatest risks in Tecnotree's operations are related to major customer and
partner relationships, to agreements made with these, and to the correct timing
of product development decisions.
Tecnotree's largest customers are much bigger businesses than the company
itself and the five largest customers account for more than half of net sales.
The relationship between the company and its major customers is one of
interdependence, which poses a potential risk but also offers significant new
business opportunities.
Certain commitments are associated with the project and maintenance agreements
made by the company, and unforeseen costs may arise in the future from these
agreements. The company aims to limit these liabilities with limitation of
liability clauses in customer contracts. In addition the company has a current
global liability insurance to cover any liabilities that may materialise in
connection with customer projects.
Project deliveries result in large accounts receivable. Most of Tecnotree's net
sales come from developing countries and some of these contain political and
economic challenges. There is the risk of a considerable delay in the payment
of invoices in these countries and that Tecnotree will have to record credit
losses. The payment record of customers and the situation concerning trade
receivables are actively monitored and credit rating checks are made on new
customers before confirming an offer.
The company has receivables totalling EUR 5.9 million from a government owned
customer in the MEA region, for which impairment totalling EUR 0.9 million has
been booked in 2010 and EUR 1.1 million in the review period.
Changes in exchange rates create risks especially in sales activities. A
significant part of the company's net sales is in US dollars. The company
hedges its currency denominated net position for a maximum period of 12 months,
using currency forward contracts and currency options. Liquid funds are
invested, avoiding credit and liquidity risks, in money-market deposits and
short-term interest funds with a good credit rating.
Carrying out projects creates risks. They are contained for example in projects
that require new product development, where creating new product features may
prove more difficult than anticipated. Another problem with project sales
arises from variations in net sales and profit during the different quarters of
the year. Forecasting these variations is often difficult.
Tecnotree operates in a rapidly changing sector. When making R&D decisions
there is the risk that the choice made may not bring the expected returns.
The acquisition of Tecnotree Convergence Limited opened up many new
opportunities for Tecnotree. Taking advantage of these requires various changes
in sales and R & D activities and in the organisation, and there are risks
relating to the success of these changes. The amount paid for the acquisition
and the resulting goodwill also involve risks.
Tecnotree's risks and uncertainties in the near future relate to major projects
and to their timing, deliveries, receivables and changes in foreign exchange
rates.
EVENTS AFTER THE END OF PERIOD
No significant events have occurred after the end of period.
PROSPECTS IN 2011
The company is currently carrying out its strategy based on an expanded product
range. Tecnotree is turning into an advanced supplier of telecommunications
system solutions, operating in a broad sector. The company is anticipating new
growth based on the new range of products and solutions that it announced on 14
February 2011.
Net sales and the adjusted operating result are expected to match or exceed the
2010 figures. Quarterly variations will be considerable.
The adjusted operating result is the operating result before capitalisation of
development costs, amortization of these and one-time costs.
FINANCIAL INFORMATION
Tecnotree is holding a conference for analysts and the media to announce its
results for the second quarter of 2011 at 10.00 am on 10 August 2011 in the
Pavilion conference room at the Scandic Hotel Simonkenttä, Simonkatu 9,
Helsinki. The interim review will be presented by CEO Kaj Hagros and the
conference will be held in Finnish. The material to be presented at the press
conference will be available at www.tecnotree.com.
TECNOTREE CORPORATION
Board of Directors
FURTHER INFORMATION
Mr Kaj Hagros, President and CEO, tel. +358 (0)40 849 1749
Mr Tuomas Wegelius, CFO, tel. +358 (0)400 433 228
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Main media
www.tecnotree.com
TABLE SECTION
The financial figures in the income statement, balance sheet and key indicators
are presented in million euros. The figures shown here have been calculated
using exact values.
CONSOLIDATED INCOME STATEMENT, Note 4-6/ 4-6/ 1-6/ 4-6/ 1-12/
MEUR 2011 2010 2011 2010 2010
NET SALES 2 18.5 19.3 29.1 33.5 60.7
Other operating income 0.0 0.0 0.0 0.0 0.0
Materials and services -3.1 -3.8 -4.8 -5.9 -10.1
Employee benefit expenses -8.2 -7.4 -16.6 -14.5 -29.1
Depreciation, amortisation and -2.5 -2.1 -5.1 -4.2 -8.7
impairment charges
Other operating expenses -4.1 -5.3 -10.2 -10.1 -20.8
OPERATING RESULT 2 0.6 0.7 -7.7 -1.2 -8.1
Financial income 0.5 0.2 1.2 0.5 1.1
Financial expenses -0.5 -0.9 -0.7 -1.8 -2.4
RESULT BEFORE TAXES 2 0.6 0.0 -7.2 -2.5 -9.4
Income taxes -1.6 -0.8 -1.8 -1.1 -1.6
RESULT FOR THE PERIOD -0.9 -0.8 -9.0 -3.6 -11.0
Allocated to:
Equity holders of parent -0.9 -0.8 -9.0 -3.6 -11.0
company
Non-controlling 0.0 0.0 0.0 -0.0 -0.0
interest
Earnings per share calculated from
the profit attributable to equity
holders of parent company:
Earnings per share, basic, EUR -0.01 -0.01 -0.12 -0.05 -0.15
Earnings per share, diluted, EUR -0.01 -0.01 -0.12 -0.05 -0.15
CONSOLIDATED STATEMENT OF Note 4-6/ 4-6/ 1-6/ 1-6/ 1-12/
COMPREHENSIVE INCOME, MEUR 2011 2010 2011 2010 2010
RESULT FOR THE PERIOD -0.9 -0.8 -9.0 -3.6 -11.0
Other comprehensive income:
Translation differences from -1.4 3.6 -3.8 8.2 5.8
foreign operations Tax relating to components of 0.0 -0.1 0.1 -0.1 -0.1
other comprehensive income
Other comprehensive income, net of -1.4 3.5 -3.8 8.0 5.7
tax
TOTAL COMPREHENSIVE INCOME FOR THE -2.3 2.7 -12.7 4.4 -5.3
PERIOD
Allocated to:
Equity holders of parent -2.3 2.6 -12.7 4.4 -5.3
company
Non-controlling 0.0 0.0 0.0 0.0 -0.0
interest
ABRIDGED CONSOLIDATED BALANCE SHEET Note 30.6.2011 30.6.2010 31.12.2010
Assets
Goodwill 20.2 22.5 21.6
Other intangible assets 3 13.5 21.5 18.0
Tangible assets 4 6.4 7.2 6.8
Deferred tax assets 2.6 2.0 2.5
Other non-current trade and other 0.7 1.0 0.7
receivables
Current assets
Inventories 1.2 1.2 1.0
Trade receivables 22.4 20.9 17.3
Other receivables 26.7 24.2 24.2
Investments 0.9 0.9 0.7
Cash and cash equivalents 10.4 22.0 16.7
TOTAL ASSETS 105.1 123.4 109.7
Shareholders' equity 59.5 81.6 72.1
Non-current liabilities
Deferred tax liabilities 2.7 3.8 3.3
Non-current interest-bearing 13.4 15.6 14.5
liabilities
Other non-current liabilities 0.5 0.9 0,4
Current liabilities
Current interest-bearing liabilities 12.2 2.3 5.2
Trade payables and other
liabilities 16.9 19.3 14.2
EQUITY AND LIABILITIES, TOTAL 105.1 123.4 109.7
CALCULATION OF CHANGES IN SHAREHOLDERS' EQUITY, MEUR
A = Share capital
B = Share premium fund
C = Own shares
D = Translation differences
E = Invested non-restricted equity reserve
F = Other reserves
G = Retained earnings
H = Total equity attributable to equity holders of parent company
I = Non-controlling interest
J = Total shareholders' equity
MEUR A B C D E F G H I J
Shareholders' 4.7 0.8 -0.1 6.1 12.6 29.4 18.5 72.1 0.1 72.1
equity
1 Jan. 2011
Covering loss -10.4 10.4
Share-based payments 0.0 0.0 0.0
Other adjustments 0.0 -0.0
Total comprehensive -3.7 -9.0 -12.7 0.0 -12.7
income for the
period
Shareholders' equity 4.7 0.8 -0.1 2.4 12.6 19.0 19.9 59.4 0.0 59.5
30 June 2011
MEUR A B C D E F G H I J
Shareholders' 4.7 0.8 -0.1 0.4 12.6 52.1 6.6 77.1 0.1 77.2
equity
1 Jan. 2010
Covering loss -22.7 22.7
Share-based payments 0.2 0.2 0.2
Other adjustments -0.1 -0.1 -0.1
Total comprehensive 7.8 -3.3 4.4 0.0 4.4
income for the period
Shareholders' equity 4.7 0.8 -0.1 8.2 12.6 29.4 25.6 81.6 0.1 81.6
30 June 2010
ABRIDGED CONSOLIDATED CASH FLOW STATEMENT, MEUR 1-6/2011 1-6/2010 1-12/2010
Cash flow from operating activities
Result for the period -9.0 -3,6 -11.0
Adjustments to the result 8.4 5,0 11.5
Changes in working capital -9.0 -3,7 -7.7
Interest paid -0.5 -0,2 -0.3
Interest received 0.3 0,2 0.5
Income taxes paid -1.5 -1.7 -3.2
Net cash flow from operating activities -11.4 -4,0 -10.2
Cash flow from investing activities
Investments in intangible assets -0.4 -0.4 -0.8
Investments in tangible assets -0.3 -0.5 -0.9
Investments in other securities -0.3 -0.2
Proceeds from disposal of other securities 0.0 0.9 0.9
Interest received from investments 0.0 0.0
Dividends received from investments 0.2 0.0 0.3
Net cash flow from investing activities -0.8 0.0 -0.4
Cash flow from financing activities
Borrowings received 7.0 3.0
Repayment of borrowings -1.1 -1.1 -2.2
Net cash flow from financing activities 5.9 -1.1 0.8
Increase (+) and decrease (-) in cash and cash -6.3 -5.1 -9.8
equivalents
Cash and cash equivalents at beg. of period 16.7 25.7 25.7
Impact of changes in exchange rates 0.0 1.5 1.1
Change in fair value of investments -0.0 -0.1 -0.3
Cash and cash equivalents at end of period 10.4 22.0 16.7
1. ACCOUNTING PRINCIPLES FOR THE INTERIM REPORT
This interim report has been prepared in accordance with the international
financial reporting standard IAS 34 Interim Financial Reporting. The formulas
for calculating the key figures presented and the accounting principles for the
interim report are the same as the principles published in the 2010 Annual
Report. The new and revised IFRS regulations that came into force on 1 January
2011 have not had a significant impact on the accounting principles and basis
for preparing the interim report.
2. SEGMENT INFORMATION
The operating segments under IFRS 8 reported by Tecnotree are the geographical
areas, which are Americas (North, Central and South America), Europe, MEA
(Middle East and Africa), and APAC (Asia Pacific). This is because their
results are monitored separately in the company's internal financial reporting.
Tecnotree's chief operating decision maker, as referred to in IFRS 8, is the
Group's management board.
Net sales and the result for the operating segments are presented based on the
location of customers. The result of the operating segments includes costs that
can be allocated to the segments on a reasonable basis, such as sales, customer
service and delivery costs. Product management, product development and
administrative costs, depreciation, taxes and financial items are not allocated
OPERATING SEGMENTS: 1-6/20 1-6/20 1-12/20
NET SALES, MEUR 11 10 10
Americas (North, Central and South America) 10.2 15.2 25.2
Europe 3.4 3.9 6.7
MEA (Middle East and Africa) 13.6 11.5 23.7
APAC (Asia Pacific) 1.9 2.9 5.1
TOTAL 29.1 33.5 60.7
RESULT, MEUR 1-6/20 1-6/20 1-12/20
11 10 10
Americas (North, Central and South America) 2.8 5.6 8.9
Europe 1.8 1.9 3.0
MEA (Middle East and Africa) 8.4 9.1 16.1
APAC (Asia Pacific) 0.7 1.4 1.9
TOTAL 13.6 18.1 14.0
Non-allocated items -15.2 -16.7 -32.4
OPERATING RESULT BEFORE R&D CAPITALISATION & -1.6 1.4 -2.5
AMORTISATION AND ONE-TIME COSTS
Product development capitalisation 0.0 0.4 0.6
Product development amortisation -3.7 -2.9 -6.1
One-time costs -2.4
OPERATING RESULT -7.7 -1.2 -8.1
Financial items 0.5 -1.3 -1.4
RESULT BEFORE TAXES -7.2 -2.5 -9.4
3. INTANGIBLE ASSETS
During the review period EUR 0.0 (0.4) million of development costs have been
capitalised and will be amortised over 3-5 years from the start of commercial
use. Research and development costs of EUR 3.7 (2.9) million were amortised
during the review period.
4. TANGIBLE ASSETS
Acquisitions of tangible assets in the review period totalled EUR 0.3 (0.5)
million. Disposals during the review period were EUR 0.0 (0.0) million.
5. CONSOLIDATED CONTINGENT LIABILITIES, MEUR 30.6.2011 30.6.2010 31.12.2010
Pledges given 0.1 0.1 0.1
Guarantees
On own behalf 0.6 0.4 1.0
Other liabilities
Restriction related to real estate in 0.4 0.4 0.4
Ireland
OTHER OPERATING LEASES, MEUR 30.6.2011 30.6.2010 31.12.2010
Minimum rents payable based on other leases
that cannot be cancelled:
Other operating leases
Less than one year 0.4 0.8 0.6
Between one and five years 0.4 0.4 0.5
6. INSIDER EVENTS
The operating result for the January-March period includes one-time costs of
EUR 2.4 million that are mentioned under ‘Result analysis'. The costs are
related to settling the law suit against the company at the beginning of the
year. EUR 2.1 million of these costs concern the company's insiders. The
insider events include compensation of EUR 0.4 million for settlement of terms
of employment and share based payments of EUR 1.7 million.
7. CONSOLIDATED KEY FINANCIAL FIGURES 1-6/2011 1-6/2010 1-12/2010
Return on investment, % -14.7 -1.5 -7.4
Return on equity, % -27.4 -9.1 -14.7
Equity ratio, % 57.4 66.9 66.4
Net gearing, % 23.9 -6.2 3.3
Investments, MEUR 0.7 0.5 1.8
% of net sales 2.6 1.4 3.0
Research and development, MEUR 6.3 6.7 13.1
% of net sales 21.8 20.1 21.7
Order book, MEUR 21.5 21.0 14.3
Personnel, average 895 763 797
Personnel, at end of period 930 794 858
CONSOLIDATED KEY FIGURES PER SHARE 1-6/201 1-6/201 1-12/201
1 0 0
Earnings per share, basic, EUR -0.12 -0.05 -0.15
Earnings per share, diluted, EUR -0.12 -0.05 -0.15
Equity per share, EUR 0.81 1.11 0.98
Number of shares at end of period, x 1,000 73,496 73,496 73,496
Number of shares on average, x 1,000 73,496 73,496 73,496
Share price, EUR
Average 0.47 0.90 0.79
Lowest 0.33 0.70 0.58
Highest 0.63 1.00 1.00
Share price at end of period, EUR 0.53 0.82 0.60
Market capitalisation of issued stock at end of 39.0 60.4 44.2
period, MEUR
Share turnover, million shares 13.5 8.0 16.6
Share turnover, % of total 18.3 10.9 22.6
Share turnover, MEUR 6.3 7.2 13.2
Price/earnings ratio (P/E) -4.0
QUARTERLY KEY FIGURES 2Q/11 1Q/11 4Q/10 Q3/10 2Q/10 1Q/10
Net sales, MEUR 18.5 10.6 14.0 13.3 19.3 14.1
Net sales, change % -4.5 -25.1 3.3 0.5 28.7 22.8
Adjusted operating result* 3.3 -4.9 -3.2 -0.7 2,0 -0,6
% of net sales 17.8 -46.3 -22.7 -5.1 10.2 -4.2
Operating result, MEUR 0.6 -8.3 -4.9 -2.0 0.7 -1.9
% of net sales 3.2 -78.1 -35.1 -14.7 3.8 -13.7
Result before taxes, MEUR 0.6 -7.8 -5.2 -1.8 0.0 -2.5
Personnel at end of period 930 914 858 830 794 759
Earnings per share, basic, EUR -0.01 -0.11 -0.07 -0.03 -0.01 -0.04
Earnings per share, diluted, EUR -0.01 -0.11 -0.07 -0.03 -0.01 -0.04
Equity per share, EUR 0.81 0.83 0.98 1.03 1.11 1.07
Net interest-bearing liabilities, MEUR 14.2 8.4 2.4 2.2 -5.0 -9.1
Order book, MEUR 21.5 22.1 14.3 20.1 21.0 21.9
* Adjusted result = operating result before R & D capitalisation, amortization
of this and one-time costs. Details of these are given in the section “Result
analysis”.
About Tecnotree
Tecnotree is a global provider of a broad range of telecom IT solutions focused
on charging, billing, customer care, messaging and content services. Tecnotree
empowers communication service providers to create and monetize a broad
marketplace of digital services, and augment value across the customer
lifecycle. Acknowledged for agility and commitment, Tecnotree has more than 900
employees serving over 120 operators globally. Tecnotree is listed on the main
list of NASDAQ OMX Helsinki Ltd. with the trading code TEM1V. For more
information on Tecnotree visit www.tecnotree.com
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