2011-07-22 08:00:00 CEST
2011-07-22 08:00:45 CEST
REGULATED INFORMATION
Solteq Oyj - Interim report (Q1 and Q3)
SOLTEQ PLC'S INTERIM REPORT 1.1.-30.6.2011
Solteq Plc Stock Exchange Bulletin 22.7.2011 at 9.00 am
- Turnover increased by 11.0% and totalled 14,2 million euros (12,8 million
euros)
- Operating profit totalled 692 thousand euros (-2.177 thousand euros)
- In 2011 the turnover is forecasted to be at the same level as in 2010 but the
operating profit is forecasted to have improved to nearly 5 per cent
- Earnings per share were 0.04 euros (-0.14 euros)
Turnover by operation:
% 1-6/11 1-6/10 1-12/10
Softwareservices 63 68 65
Licences 31 25 27
Hardware 6 7 8
Managing Director Repe Harmanen:"The second quarter continued after the start of the year to be nearly in line
with our expectations, both functionally and financially. Our revenue increased
slightly over the previous year, partly due to the start of projects concerning
non-recurrent license sales. As regards our service revenue, the situation is
reasonable and close to expectations, which leaves growth opportunities for the
remaining second half of the year. The improvement in earnings over the previous
year is largely based on the improved functioning of monitoring and risk
management, as well as the positive development of our long-term customer
relationships. The operational efficiency improvement and development that are
part of our strategy have yet to have their proper impact, but there will be
objectives and work on that path for years to come. It is exciting, however, to
have already seen small successes with both our customers and in internal
operations down this path.
For this year, our set theme of predictable profitability is progressing and it
is also essential to strongly improve and sharpen this in the second half. This
is our main theme and I see this as a very important part of our daily and
tactical decision-making.
Demand has remained moderate or good in all business areas. With regard to
operational and financial management, our core solutions in the area, as well as
with maintenance and store systems, demand is normal and in some cases has even
improved during the first half compared to last year. In the area of master data
management, we see good and ongoing demand, although in some places the starts
of projects have moved to late summer. In each business area, we have served our
current customers, while attracting new customers at the same time.
The execution of our new strategy has progressed more or less in line with
expectations, leaving room for development in some strategic programs for the
end of the year. I am reasonably satisfied with the strategy's first impacts on
our operations and customer base. We have taken steps along this strategic path,
such as the cooperation agreement with ITC Infotech that we informed about as
well as the actions to monitor operations and risk management that I mentioned.
The feedback is encouraging and motivates us to further continue down this path.
In the second half of the year we will continue to promote the implementation of
six strategic programs and monitor the implementation of the objectives.
My expectations are that our revenues will continue in accordance with that
level given in our earlier communications. I see the future as being quite
positive, but wish to further emphasize patience and the need to maintain the
precision of our operations in all of our practice areas. Our long-term
numerical goals will not happen by themselves or very quickly, but by continuing
in a patient, systematic fashion we will best accomplish our goals.
I wish all of our stakeholders a great rest of the summer!"
BUSINESS ENVIRONMENT AND BUSINESS DEVELOPMENT
Solteq offers systematically developing operational and financial control
services to commercial, logistics, industrial and public administration actors.
We complement our core offering with solutions for specialized retail
management, maintenance and servicing management, as well as solutions for
quality improvement and the management of systems in which master data is
contained. With the help of our solutions developed using technology from the
world's leading companies, our clients guide their businesses more efficiently
and improve their profitability.
Starting from 1.1.2010, Solteq's operations were divided into four business
areas and the results of the company are monitored through these areas. Business
areas are: ERP (enterprise resource planning), EAM (enterprise asset
management), Data (data management, optimization and integration) and Store
(retail solutions and technology).
Solteq's turnover in the half of 2011 was 14.167 thousand euros (12.759 thousand
euros).
Solteq's operating profit was 692 thousand euros (-2.177 thousand euros). The
company's operating margin was 4,9 % (-17,1% in 2010).
ERP
Solteq's ERP business area offers its clientele enterprise resource planning
systems and supporting optimization and reporting solutions as well as a set of
other different added value solutions. These solutions help customers lead their
operations and enhance, for example, their purchases, sales and warehouse
management, as well as reporting. A wide group of customers use these solutions
every day in the trade, industry, auto trade and public sector operating areas,
among others.
The revenue of the ERP business area totalled 9,0 million euros. The business
area's operating profit was 0,8 million euros.
EAM
Solteq's EAM solutions include systems for maintenance management, asset
management optimization, fieldwork management and maintenance. Through these
solutions, Solteq's customers can anticipate the need for service of production
lines and machines, monitor the malfunction history and control the machinery
maintenance related material flows from purchasing to warehousing. The clientele
consists of, among others, energy and production plants, companies in the
processing and engineering industries, as well as the maintenance related
service sector.
During the review period, the revenue of the EAM business area totalled 2,1
million euros and the operating profit was 0,1 million euros.
Data
Solteq's Data business area is responsible for services and products relating to
the data (namely, masterdata) that are crucial to the customers' businesses as
well as e-commerce and integration technologies. Solteq offers to its customers
masterdata-related quality improvement projects, data maintenance services in
which the services are outsourced to masterdata service centers, software
technologies and consultancy services that can be utilized in masterdata
management. The aim of these services is to ensure that the data that is stored
in the programs that support customers' enterprise resource planning and
decision-making is high-quality, compatible and up to date.
During the review period the revenue of the Data business area totalled 1,0
million euros and the operating profit was -0.3 million euros.
Store
The solutions of Solteq's Store business sector enhance the management of the
purchases, sales and customer relationships of specialty stores and chained
commerce. Every day hundreds of retailers, entrepreneurs and salespersons lead
their businesses and serve their customers in thousands of store locations by
means of these solutions.
The revenue of Store business area totalled 2,1 million euros and the operating
profit was 0.1 million euros during the review period.
TURNOVER AND RESULT
Turnover increased by 11.0 % compared to the previous year and totalled 14.167
thousand euros (previous review period 12.759 thousand euros).
Turnover consists of several individual clienteles. At the most, one client
corresponds to less than ten per cent of the turnover.
The operating profit for the review period was 692 thousand euros (-2.177
thousand euros), the operating profit before taxes was 585 thousand euros (-
2.264 thousand euros) and the operating profit for the review period was 424
thousand euros (-1.702 thousand euros).
BALANCE SHEET AND FINANCING
The total assets amounted to 17.350 thousand euros (20.694 thousand euros).
Liquid assets totalled 131 thousand euros (119 thousand euros). In addition to
liquid assets the company had unused account limits totalling 2.295 thousand
euros at the end of the review period.
Solteq Group's interest-bearing liabilities were 4.800 thousand euros (7.998
thousand euros).
Solteq Group's equity ratio was 32,2 per cent (35,9 per cent).
INVESTMENTS, RESEARCH AND DEVELOPMENT
Gross investment during the review period was 37 thousand euros (71 thousand
euros).
Research and development
Solteq's research and development costs consist mainly of personnel costs. When
developing basic products, it is Solteq's strategy to cooperate with global
actors such as SAP, Microsoft and IBM and utilize their resources and
distribution channels. Own development efforts are focused on added value
products and developing tailored service concepts.
During the fiscal year, product development costs were not amortized in
accordance with IFRS standards (comparison year also not amortized for the
review period).
PERSONNEL
The number of permanent employees at the end of the review period was 212 (240).
The average number of personnel during the review period was 218 (238). In the
end of the review period the number of personnel could be divided as follows
ERP: 102 people; EAM: 34 people; DATA: 22 people; STORE: 23 people and 31 people
in shared functions.
RELATED PARTY TRANSACTIONS
Solteq's related parties include the board of directors, managing director and
the management team.
The company has on 1/3 and 23/3/2011 provided notification about an arrangement
in which interest bearing loans and a directed issuance have been given to
Solteq Management Oy, which is owned by management.
Solteq Management Oy is combined into consolidated financial statements on the
basis of the shareholders' agreement.
SHARES, SHAREHOLDERS AND TREASURY SHARES
Solteq Plc's equity on 30.6.2011 was 1,009,154.17 euros which was represented by
12,148,429 shares. The shares have no nominal value.
At the end of the review period, the amount of treasury shares in Solteq Plc and
the group company Solteq Management Oy's possession were 607.096 shares. The
amount of treasury shares represented 5,0 % of the total amount of shares and
votes at the end of the review period. The equivalent value of acquired shares
was 50.427 euros.
Exchange and share price
During the review period, the exchange of Solteq's shares on the Helsinki Stock
Exchange was 1.2 million shares (0.5 million shares) and 1.2 million euros (0.7
million euros). The highest price during the review period was 1.19 euros and
the lowest price was 0.96 euros. The weighted average price of the share was
1.07 euros and the price ending was 1,09 euros. The market value of the
company's shares in the end of the review period totalled 13,2 million euros
(13,5 million euros).
Ownership
At the end of the review period, Solteq had a total of 1,884 shareholders (1,987
shareholders). Solteq's 10 largest shareholders owned 8,431 thousand shares,
amounting to 69.4 per cent of the company's shares and votes. Solteq Plc board
members owned a total of 5,149 thousand shares which equals 42.4 per cent of the
company's shares and votes.
ANNUAL GENERAL MEETING
At Solteq Plc's annual general meeting on 16 March 2011 the 2010 financial
statements were adopted and the members of the board and the managing director
were discharged from liability for the 2010 review period.
The annual general meeting decided in accordance with the board's proposal that
no dividend will be paid for the review period ending on 31 December 2010.
The annual general meeting decided to authorize the board of directors to decide
on acquiring and distress the company's own shares so that the amount in the
possession of the company may reach up to 10 per cent of the company's total
shares at that moment. The shares can be acquired in order to develop the
company's capital structure, finance and execute acquisitions or similar
arrangements or be used as part of the incentive scheme of the personnel or be
otherwise conveyed or cancelled. The shares can be acquired in proportions other
than the shareholders' holdings. The shares are to be acquired through public
trading. The authorization is valid until the next annual general meeting.
The General Meeting approved proposal by the Board to cover the loss of
3.412.908,22 euros in balance sheet by the fund for invested unrestricted
equity.
BOARD OF DIRECTORS AND AUDITORS
Five members were elected to the board of directors. Ali Saadetdin, Seppo Aalto,
Markku Pietilä, Sirpa Sara-aho and Jukka Sonninen continued as members of the
board. The board elected Ali Saadetdin to act as the Chairman of the Board.
KPMG Oy Ab, Authorized Public Accountants, was re-elected as Solteq's auditors.
Frans Kärki, APA, acts as the chief auditor.
EVENTS AFTER THE REVIEW PERIOD
No events have occurred that require reporting after the review period.
RISKS AND UNCERTAINITIES
The key uncertainties and risks in short term are related to the timing and
pricing of business deals that are the basis for revenue, changes in the level
of costs and the company's ability to manage extensive contract agreements and
deliveries.
The key business risks and uncertainties of the company are monitored constantly
as a part of the board of directors' and management team's duties. The company
has not organized a separate internal audit organization or committee.
PROSPECTS
Relating to year 2011, Solteq forecasts that the annual revenue will be at the
same level as in 2010. The operating profit, however, is forecasted to have
clearly improved to approximately 5 per cent.
Financial Reporting
This interim report has been prepared in accordance with the recognition and
measurement principles of IFRS-standards.
The financial result is reported through four business areas. The ERP business
area includes systems for finance and enterprise resource planning. The EAM
business area consists of asset management optimization, material management and
maintenance management systems. The Data business area includes tools for data
collection, assurance of data's quality and accuracy, as well as tools for data
integration between different systems. The Store business area includes point-
of-sale and store management systems. The most essential product and service
types of the Solteq group of companies are software services, licenses and
hardware sales.
All forecasts and estimates presented in the interim report are based on the
current views of management on the economic environment and outlook. Because of
this, the results can differ as a result of, among other factors, changes in
economy, markets and competitive conditions, changes in the regulatory
environment and other government actions.
The interim report is unaudited.
FINANCIAL INFORMATION
GROUP PROFIT AND LOSS ACCOUNT
(TEUR)
1.4.- 1.4.- 1.1.- 1.1.- 1.1.-
30.6.2011 30.6.2010 30.6.2011 30.6.2010 31.12.2010
NET TURNOVER 7 317 6 591 14 167 12 759 26 998
Other operating
income 0 1 9 12 52
Raw materials and
services -1 585 -1 687 -3 070 -3 465 -7 394
Staff expenses -3 991 -4 730 -7 734 -8 854 -15 688
Depreciation -202 -213 -407 -424 -3 223
Other operating
expenses -1 212 -1 120 -2 273 -2 205 -5 060
OPERATING RESULT 327 -1 158 692 -2 177 -4 315
Financial income and
expenses -57 -40 -107 -87 -172
RESULT BEFORE TAXES 270 -1 198 585 -2 264 -4 487
Income taxes -74 298 -161 562 780
RESULT FOR THE PERIOD
196 -900 424 -1 702 -3 707
OTHER ITEMS OF TOTAL COMPREHENSIVE INCOME
Cash flow hedging 1 -4 21 -46 -18
Other items of total comprehensive income
after taxes 1 -3 16 -34 -13
TOTAL COMPREHENSIVE INCOME
197 -903 440 -1 736 -3 720
Total profit for the period attributable to
Owners of the parent 196 -900 424 -1 702 -3 707
Total comprehensive income attributable to
Owners of the parent 197 -903 440 -1 736 -3 720
Earnings / share,
e(undiluted) 0,02 -0,08 0,04 -0,14 -0,32
Earnings / share,
e(diluted) 0,02 -0,08 0,04 -0,14 -0,32
Taxes corresponding to the result have been presented as taxes
for the period.
GROUP BALANCE SHEET (TEUR) 30.6.2011 30.6.2010 31.12.2010
ASSETS
NON-CURRENT ASSETS
Intangible assets
Intangible rights 1 919 2 567 2 093
Goodwill 6 199 8 286 6 199
Tangible assets 2 631 2 648 2 660
Investments
Other shares and similar
rights of ownership 93 93 93
Deferred tax
assets 494 437 654
Other receivables 87 159 87
Total non-current
assets 11 423 14 190 11 786
CURRENT ASSETS
Short-term debtors 5 796 6 385 5 294
Cash in hand and at banks 131 119 131
Total current
assets 5 927 6 504 5 425
TOTAL ASSETS 17 350 20 694 17 211
EQUITY AND LIABILITIES
CAPITAL AND RESERVES ATTRIBUTABLE TO THE SHAREHOLDERS OF THE PARENT COMPANY
Share capital 1 009 1 009 1 009
Company's own shares -734 -438 -618
Share premium account 75 75 75
Account for cash flow
hedging -4 -41 -20
Unrestricted equity
fund 3 801 7 214 7 214
Retained earnings 1 012 1 307 1 306
Result for the
financial period 424 -1 702 -3 707
Total equity 5 583 7 424 5 259
Non-current liabilities
Other non-current liabilities 2 433 3 703 3 016
Current liabilities 9 334 9 567 8 936
Total liabilities 11 767 13 270 11 952
TOTAL EQUITY AND
LIABILITIES 17 350 20 694 17 211
FINANCIAL PERFORMANCE
INDICATORS (IFRS) 1-6/2011 1-6/2010 1-12/2010
Net turnover MEUR 14,2 12,8 27,0
Change in net turnover 11,0 % -13,2 % -5,4 %
Operating result MEUR 0,7 -2,2 -4,3
% of turnover 4,9 % -17,1 % -16,0 %
Result before taxes MEUR 0,6 -2,3 -4,5
% of turnover 4,1 % -17,7 % -16,6 %
Equity ratio, % 32,2 35,9 30,6
Gearing, % 83,7 % 106,2 % 132,8 %
Gross investments in
non-current assets MEUR 0,0 0,1 0,2
Return on equity, % 13,2 % -41,5 % -48,7 %
Return on investment, % 10,9 % -27,9 % -29,3 %
Personnel at end of
period 212 240 220
Personnel average
for period 218 238 233
KEY INDICATORS PER SHARE
Earnings / share, e 0,04 -0,14 -0,32
Earnings / share,
e(diluted) 0,04 -0,14 -0,32
Equity / share, e 0,48 0,63 0,45
SEGMENT INFORMATION
Turnover by segment:
Me 1-6/11 1-6/10 Change
ERP 9,0 8,3 +0,7
EAM 2,1 1,7 +0,4
DATA 1,0 0,9 +0,1
STORE 2,1 1,9 +0,2
Total 14,2 12,8 +1,4
Operating result by segment:
Me 1-6/11 1-6/10 Change
ERP 0,8 -1,1 +1,9
EAM 0,1 -0,4 +0,5
DATA -0,3 -0,4 +0,1
STORE 0,1 -0,3 +0,4
Total 0,7 -2,2 +2,9
QUARTERLY KEY INDICATORS (MEUR)
3Q/09 4Q/09 1Q/10 2Q/10
Net turnover 5,62 8,23 6,17 6,59
Operating result 0,46 0,78 -1,02 -1,16
Result before taxes 0,42 0,75 -1,07 -1,20
3Q/10 4Q/10 1Q/11 2Q/11
Net turnover 6,75 7,49 6,85 7,32
Operating result -0,04 -2,10 0,37 0,32
Result before taxes -0,08 -2,15 0,32 0,27
CASH FLOW STATEMENT (MEUR)
1-6/2011 1-6/2010 1-12/2010
Cash flow from business
operations 2,46 -0,35 0,82
Cash flow from capital
expenditure -0,04 -0,07 -0,15
Cash flow from financing activities
Dividend distribution 0,00 -0,71 -0,71
Own shares -0,12 -0,10 -0,28
Loan agreement -2,30 1,09 0,19
Cash flow from financing
activities -2,42 0,28 -0,80
Change in cash and cash
equivalents 0,00 -0,14 -0,13
TOTAL INVESTMENTS (TEUR)
1-6/2011 1-6/2010 1-12/2010
Continuing operations,
group total 37 71 153
LIABILITIES (MEUR) 30.6.2011 30.6.2010 31.12.2010
Company quorantee for
credit limits 2,61 2,61 2,61
Perfomance bonds 0,00 0,05 0,00
Lease contracts, machinery &
equipment 0,61 0,62 0,41
Lease liability,
premises 1,60 2,00 1,80
Pledged shares 1,59 1,59 1,59
MAJOR SHAREHOLDERS JUNE 30, 2011
%
1. Saadetdin Ali 3 481 383 28,7
2. Aalto Seppo 1 662 206 13,7
3. Profiz Business Solution Oyj 1 384 823 11,4
4. TP-Yhtiöt Oy 513 380 4,2
5. Solteq Management Oy 400 000 3,3
6. Roininen Matti 350 000 2,9
7. Solteq Oyj 207 096 1,7
8. Hakamäki Jorma 172 430 1,4
9. Saadetdin Katiye 156 600 1,3
10. Aukia Timo 103 230 0,8
10 largest shareholders total 8 431 148 69,4
Total of nominee-registered 20 016 0,2
Others 3 697 265 30,4
Total 12 148 429 100,0
STATEMENT OF CHANGES IN GROUP EQUITY (TEUR)
A=Share capital
B=Company's own shares
C=Share premium account
D=Account for cash flow hedging
E=Unrestricted equity fund
F=Retained earnings
G=Total
A B C D E F G
EQUITY 1.1.2010 1 009 -337 75 -7 7 213 2 020 9 973
Total comprehensive income -34 -1 702 -1 736
Acquiring of own shares -101 -101
dividend distribution -712 -712
EQUITY 30.6.2010 1 009 -438 75 -41 7 213 -394 7 424
EQUITY 1.1.2011 1 009 -618 75 -20 7 213 -2 400 5 259
Total comprehensive income 16 424 440
Acquiring of own shares -116 -116
Loss covered by fund -3 413 3 413 0
EQUITY 30.6.2011 1 009 -734 75 -4 3 800 1 437 5 583
CALCULATION OF FINANCIAL RATIOS
Solvency ratio, in percentage
equity x 100
----------------------------------
balance sheet total - advances received
Gearing
interest bearing liabilities - cash,
bank balances and securities x 100
-------------------------------------------
equity
Return on Equity (ROE) in percentage
profit or loss before taxation - taxes x 100
----------------------------------------
equity
Profit from invested equity in percentage
profit or loss before taxation +
interest expenses and other financing expenses x 100
----------------------------------------
balance sheet total - non-interest bearing
liabilities
Earnings per share
pre-tax result - taxes
+/- minority interest
------------------------------------
diluted average share issue
corrected number of shares
Diluted earnings per share
diluted profit before taxation -
taxes +/- minority interest
-----------------------------------------------
diluted average share issue
corrected number of shares
Equity per share
equity
-----------------------
number of shares
Financial Reporting
Solteq Plc's financial information bulletins in 2011 have been scheduled as
follows:
- Interim Report 1-9/2011 Thursday, 20/10/2011
More investor information is available from Solteq's website at www.solteq.com
Additional information:
CEO Repe Harmanen
Telephone: +358 400 467 717
Email: repe.harmanen@solteq.com
CFO Antti Kärkkäinen
Telephone: +358 20 1444 393 or +358 40 8444 393
Email: antti.karkkainen@solteq.com
Distribution:
NASDAQ OMX Helsinki
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[HUG#1532620]
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