2014-02-13 07:00:01 CET
2014-02-13 07:00:05 CET
REGULATED INFORMATION
Comptel - Financial Statement Release
Comptel Corporation's Financial Statements Bulletin for 2013
Comptel Corporation Stock exchange release 13 February 2014 at 8.00 am
COMPTEL CORPORATION'S FINANCIAL STATEMENTS BULLETIN FOR 2013
The Q4 and full year profitability improved significantly. New solutions sales
growing.
Key Figures for Fourth Quarter
-- Net sales EUR 22.2 million (Q4 2012: 21.9), growth +1.3%
-- Operating profit EUR 3.7 million (1.8), growth +107.1%
-- Operating profit 16.7% of net sales (8.2%)
-- Earnings per share EUR 0.02 (0.02)
-- Order backlog EUR 40.8 million (48.4), change -15.7%
Key Figures for Full Year
-- Net sales EUR 82.7 million (2012: 82.4), growth +0.3%
-- Operating profit EUR 7.3 million (-13.5), growth +154.1%
-- Operating profit 8.8% of net sales (-16.4)
-- Operating profit excluding one-time items EUR 7.3 million (-0.8)
-- Earnings per share EUR 0.02 (-0.12)
-- Number of employees at the year-end 690 (679)
Board of Directors proposes to the Annual General Meeting that dividend of 0.01
EUR per share will be paid for 2013.
We expect the 2014 operating result to be EUR 5-10 million. The 2014 revenue is
expected to remain at 2013 level while the new solutions are expected to grow
from Q2 onwards.
The full year financial information in this stock exchange release is based on
the company's audited financial statements. The auditor's report was issued on
12 February 2014.
Juhani Hintikka, President and CEO:
” The last quarter of the year was again the most successful both in terms of
sales and profitability. The operating profit in the fourth quarter doubled
compared to the same time last year. For the full year sales growth was modest
but the sales of new solutions grew 22 per cent year-over-year. The new
solutions comprise of Fulfillment, Analytics and Policy Control solutions. The
growth of new solutions will be reported separately in the future earnings
releases.
Comptel entered a new market in Vietnam where we closed a new customer for
Comptel Fulfillment. In New Zealand, we also won a new customer for the Comptel
Fulfillment solution. Altogether in 2013, we won four new customers.
Our main target for 2013 was to improve profitability. In the first half of
2013, we continued the cost savings program that was started in 2012 with the
aim to improve efficiency and the company cost structure. Our operating profit
excluding one-time items increased to 8.8 per cent (-1.0) on an annual level in
2013.
As defined in our strategy, we continued our Research and Development
investments into our new solution areas. Fulfillment, Analytics and Policy
Control sales grew by 22 per cent year-over-year. In Analytics, we won two new
customers.
The Support and maintenance sales continued to be strong in 2013.
Geographically our sales grew especially in the Middle East and the Americas.
In the Asia-Pacific region, our investments into new growth areas did not yet
materialize as expected. In Europe, operators postponed their new investments
which impacted our new order intake.
During the year we secured 17 significant orders, valued over EUR 0.5 million.”
Business Review
In the fourth quarter, Comptel's net sales increased 1.3 per cent from the
previous year and were EUR 22.2 million (21.9). Full-year net sales increased
by 0.3 per cent compared to the previous year and were EUR 82.7 million (82.4).
In the fourth quarter, operating profit increased to EUR 3.7 million (1.8),
representing 16.7 per cent (8.2) of net sales. Profitability improved by the
cost saving measures done during the year. Full-year operating result was EUR
7.3 million (-13.5), which amounts to 8.8 per cent (-16.4) of net sales. The
operating result of 2012 includes one-time impairment loss of EUR 10.2 million
as well as restructuring charges of EUR 2.5 million. The operating costs,
without one-time charges, were EUR 7.7 million lower on an annual basis due to
cost savings measures.
Result before taxes was EUR 5.6 million (-14.0), which corresponds to 6.7 per
cent (-16.9) of net sales. Net profit was EUR 2.6 million (-12.8). Earnings per
share for the financial year were EUR 0.02 (-0.12).
Tax expense for the financial year was EUR 3.0 million (-1.2). The tax expense
included EUR 1.3 million (1.7) of withholding taxes due to double taxation. The
cumulative amount of outstanding, non-credited and expensed withholding taxes
payment since 2004 is EUR 10.5 million.
The Group's order backlog decreased from the previous year and was EUR 40.8
million (48.4) at the end of the financial year. Maintenance agreements
represented EUR 22.3 million (27.2) and other order backlog EUR 18.5 million
(21.2) of the total.
Business Areas
Net sales, 10-12 2013 10-12 2012 Change 1-12 2013 1-12 2012 Change
EUR million % %
--------------------------------------------------------------------------------
Europe East 4.1 4.3 -4.3 15.3 16.3 -6.1
--------------------------------------------------------------------------------
Europe West 3.8 5.7 -33.6 17.8 21.0 -15.4
--------------------------------------------------------------------------------
Asia-Pacific 5.0 5.0 -0.8 20.9 21.7 -3.3
--------------------------------------------------------------------------------
Middle East and 5.6 4.4 28.7 16.3 14.5 12.2
Africa
--------------------------------------------------------------------------------
Americas 3.7 2.5 46.4 12.3 8.9 38.1
--------------------------------------------------------------------------------
Total 22.2 21.9 1.3 82.7 82.4 0.3
--------------------------------------------------------------------------------
Operating profit
by area, EUR
million
--------------------------------------------------------------------------------
Europe East 2.2 1.8 19.4 7.7 6.3 21.5
--------------------------------------------------------------------------------
Europe West 1.6 2.8 -44.7 8.0 9.7 -17.9
--------------------------------------------------------------------------------
Asia-Pacific 2.5 1.9 32.1 10.1 9.5 5.8
--------------------------------------------------------------------------------
Middle East and 3.0 1.4 114.2 6.7 3.0 124.2
Africa
--------------------------------------------------------------------------------
Americas 2.4 1.2 103.2 7.0 3.8 85.7
--------------------------------------------------------------------------------
Unallocated costs -7.9 -7.3 8.2 -32.1 -45.8 -30.0
--------------------------------------------------------------------------------
Total 3.7 1.8 107.1 7.3 -13.5 154.1
--------------------------------------------------------------------------------
Operating profit,
% of net sales
--------------------------------------------------------------------------------
Europe East 52.9 42.4 50.0 38.6
--------------------------------------------------------------------------------
Europe West 41.2 49.5 44.9 46.3
--------------------------------------------------------------------------------
Asia-Pacific 50.2 37.6 48.0 43.9
--------------------------------------------------------------------------------
Middle East and 53.3 32.0 40.8 20.4
Africa
--------------------------------------------------------------------------------
Americas 64.8 46.7 56.9 42.3
--------------------------------------------------------------------------------
Total 16.7 8.2 8.8 -16.4
--------------------------------------------------------------------------------
Net sales continued to grow in the fourth quarter in the Americas, also the
Middle East and Africa grew significantly compared to year-over-year. The
proportional profitability improved in all areas except for Europe West
During the financial year, Comptel received 17 significant orders (15). Out of
these 17 orders, 9 were Comptel Policy Control & Charge, 4 Comptel Fulfillment,
4 Managed Services. All sold projects and licenses with a minimum value of EUR
500,000 are considered significant orders and are reported by Comptel.
Net sales 10-12 2013 10-12 2012 Change 1-12 2013 1-12 2012 Change
breakdown, % %
EUR million
--------------------------------------------------------------------------------
Licenses 3.7 3.2 13.2 14.4 16.6 -13.6
--------------------------------------------------------------------------------
Services 9.6 10.6 -9.2 32.7 33.2 -1.5
--------------------------------------------------------------------------------
Maintenance 8.9 8.0 10.4 35.6 32.6 9.2
--------------------------------------------------------------------------------
Total 22.2 21.9 1.3 82.7 82.4 0.3
--------------------------------------------------------------------------------
License sales decreased from the previous year. Service sales were on same
level as last year. Maintenance revenue consists of maintenance and support of
the delivered systems.
Net sales by sales 10-12 2013 10-12 2012 Change 1-12 2013 1-12 2012 Change
channel, EUR % %
million
--------------------------------------------------------------------------------
Direct sales 18.4 17.2 6.7 64.1 62.1 3.3
--------------------------------------------------------------------------------
Partner sales 3.8 4.7 -18.4 18.5 20.3 -8.9
--------------------------------------------------------------------------------
Total 22.2 21.9 1.3 82.7 82.4 0.3
--------------------------------------------------------------------------------
No significant change in the sales mix between direct sales and partner sales.
Financial Position
EUR million 31 Dec 2013 31 Dec 2012 Change %
-------------------------------------------------------------------------------
Statement of financial position total 67.9 68.5 -0.7
-------------------------------------------------------------------------------
Liquid assets 6.5 4.8 35.8
-------------------------------------------------------------------------------
Trade receivables, gross 23.7 24.1 -1.6
-------------------------------------------------------------------------------
Bad debt provision -1.0 -1.3 -19.8
-------------------------------------------------------------------------------
Trade receivables, net 22.7 22.8 -0.5
-------------------------------------------------------------------------------
Accrued income 9.4 12.6 -25.2
-------------------------------------------------------------------------------
Deferred income related to partial debiting 1.9 2.8 -32.6
-------------------------------------------------------------------------------
Interest-bearing debt 8.8 8.4 4.9
-------------------------------------------------------------------------------
Equity ratio, per cent 50.5 46.8 8.0
-------------------------------------------------------------------------------
Statement of financial position total on 31 December 2013 was EUR 67.9 million
(68.5), of which liquid assets amounted to EUR 6.5 million (4.8).
Operating cash flow was EUR 5.1 million (-0.6) in the last quarter and EUR 8.8
million
(1.1) during the financial year.
The trade receivables were EUR 22.7 million (22.8) at the end of the period.
The accrued income was EUR 9.4 million (12.6). The deferred income related to
partial debiting was EUR 1.9 million (2.8).
Comptel has an 18 million credit facility arrangement consisting of 5 million
term-loan and a revolving credit facility of 13 million. Out of this
arrangement Comptel had 5 million of the term-loan and 3 million of the
revolving credit facility outstanding at year end. The credit facility is valid
until January 2016.
The equity ratio was 50.5 per cent (46.8) and the gearing ratio was 7.7 per
cent (13.1).
Research and Development (R&D)
EUR million 10-12 10-12 Change 1-12 1-12 Change
2013 2012 % 2013 2012 %
--------------------------------------------------------------------------------
Direct R&D expenditure 4.9 4.5 8.1 17.8 18.6 -4.3
--------------------------------------------------------------------------------
Capitalisation of R&D expenditure -1.5 -1.3 11.0 -5.5 -6.2 -10.7
according to IAS 38
--------------------------------------------------------------------------------
R&D depreciation and impairment 1.2 0.8 44.0 4.2 2.8 47.2
charges
--------------------------------------------------------------------------------
R&D expenditure, net 4.6 4.0 14.5 16.5 15.3 7.9
--------------------------------------------------------------------------------
Direct R&D expenditure, % of net 21.9 20.6 21.5 22.5
sales
--------------------------------------------------------------------------------
Direct R&D expenditure represented 21.5 per cent (22.5) of 2013 net sales.
Comptel's R&D expenditure was mainly targeted at the service fulfillment
automation of telecom operators and to the management and real-time analysis of
rapidly increasing data traffic. Comptel seeks global market leadership in
these areas, since they are at the core of operators' and service providers'
business challenges and we can help in solving them. In addition, the company
is developing an integrated software platform which will enable a
cost-efficient and solution-based R&D.
In 2013, the company focused on developing its offering within the Fulfillment
and advanced analytics product areas. In terms of advanced analytics,
integrating the acquired Xtract advanced analytics into the Comptel software
platform is a priority. With a combined offering including real-time analytics,
Comptel can help operators to improve customer loyalty as well as enable
individually targeted marketing. Twelve major software releases were launched
in these respective product areas during 2013.
Investments
EUR million 10-12 2013 10-12 2012 Change 1-12 2013 1-12 2012 Change
% %
--------------------------------------------------------------------------------
Gross investments 0.1 0.6 -88.2 0.6 4.5 -87.7
in property,
plant and
equipment and
intangible assets
--------------------------------------------------------------------------------
The investments comprised of devices, software and furnishings. The investments
were funded through liquid assets and cash flow from operations. The
acquisition of Xtract Oy is reflected in the 2012 figures.
Personnel
31 Dec 2013 31 Dec 2012 Change %
----------------------------------------------------------------------------
Number of employees at the end of period 690 679 1.6
----------------------------------------------------------------------------
1-12 2013 1-12 2012 Change %
-----------------------------------------------------------------------------
Average number of personnel during the period 684 700 -2.3
-----------------------------------------------------------------------------
The number of employees increased slightly as Comptel invested in its R&D
organisation.
In the last quarter, the personnel expenses were 45.5 per cent of net sales
(46.8). In the financial year, the personnel expenses were 49.2 per cent of net
sales (53.5).
At the end of the year, 29.6 per cent (31.7) of the personnel were located in
Finland, 28.1 per cent (26.1) in Malaysia, 10.9 per cent (9.7) in Bulgaria, 7.5
per cent (7.7) in the United Arab Emirates, 5.9 per cent (6.8) in the United
Kingdom, 2.8 per cent (3.2) in Norway, and 15.2 per cent (14.8) in other
countries where Comptel operates.
Comptel Share
The closing share price of the financial year was EUR 0.48 (0.40). Comptel's
market capitalisation at the end of the year was EUR 51.5 million (42.8).
Comptel share 10-12 2013 10-12 2012 Change 1-12 2013 1-12 2012 Change
% %
--------------------------------------------------------------------------------
Shares traded, 6.2 7.6 -18.1 18.4 26.7 -31.3
million
--------------------------------------------------------------------------------
Shares traded, EUR 3.2 3.0 6.9 8.7 13.4 -35.4
million
--------------------------------------------------------------------------------
Highest price, EUR 0.59 0.45 31.1 0.59 0.63 -6.3
--------------------------------------------------------------------------------
Lowest price, EUR 0.46 0.37 24.3 0.38 0.37 2.7
--------------------------------------------------------------------------------
Of Comptel's outstanding shares, 6.4 per cent (6.4) were nominee registered or
held by foreign shareholders at the end of the financial year.
During the year, Comptel Corporation allotted gratuitously 164,203 shares to
the members of the Board of Directors as part of their annual compensation and
50,000 shares to the President and CEO as per the 2011 share-based incentive
scheme.
The company held 161,219 of its own shares at the end of the financial year,
which is 0.15 per cent of the total number of its shares. The total
counter-book value of the shares held by the company was EUR 3,213.
No share options were distributed during 2013.
Corporate Governance
The Annual General Meeting (AGM), held on 20 March 2013, elected the following
members to the Board of Directors: Mr Pertti Ervi, Mr Hannu Vaajoensuu, Mr
Petteri Walldén, Mrs Eriikka Söderström and Mr Antti Vasara. In its meeting
held after the AGM, the Board of Directors elected Mr Pertti Ervi as chairman
and Mr Hannu Vaajoensuu as vice chairman. The board did not have any
committees.
The Annual General Meeting appointed Ernst & Young Oy as the company's auditor.
Mr Heikki Ilkka is the principal auditor.
The AGM resolved that no dividend payment will be made for 2012.
The AGM authorised the Board of Directors to decide on share issues amounting
to a maximum of 21,400,000 new shares and on repurchase or conveying of the
company's own shares up to a maximum number of 10,700,000 shares. The
authorisations are valid until 30 June 2014. However, the authorisation to
implement the company's share-based incentive programs is valid until five
years from the AGM resolution.
A separate stock exchange release about the authorisations given and other
decisions made by the Annual General Meeting was published on 20 March 2013.
Events after the Reporting Period
The Board of Directors of Comptel Corporation has resolved on a new stock
option incentive plan for the Group key personnel as part of the Company's
incentive and commitment program. The target group of the Plan consists of
approximately 30 people. The aim of the new plan is to combine the objectives
of the shareholders and the key personnel in order to increase the value of the
Company, to commit the key personnel to the Company, and to offer them a
competitive reward plan based on long-term shareholding in the Company. A
separate stock exchange release was published, about this, on 5 February 2014.
Near-term Risks and Uncertainties
Comptel develops dynamic end-to-end solutions for leading operators globally in
the telecom field. This requires that Comptel understands correctly the
changing trends in its business environment and the needs of its customers and
resellers in each region. Failure to identify market conditions, address
customers' needs and develop products in a timely fashion may significantly
undermine Comptel's growth business and profitability.
The timing of a single major deal and variations in the customer purchase
behaviour cause significant quarterly variations in sales and profit, and are
typical of Comptels' field of industry.
Comptel's business consists of delivering large productised IT systems, and the
value of a single project may be several million euros. Therefore, the
financial loss or credit risk associated with a single project or an individual
customer may be significant. Furthermore, some of Comptel's customers operate
in countries where the political or financial climate can be unstable which in
part may increase credit risk.
Comptel operates globally and is exposed to risks arising from currency
fluctuations. The exchange rate changes between the Euro, which is the
company's reporting currency, and the US Dollar, UK Pound Sterling and
Malaysian Ringgit affect the company's net sales, expenses and net profit.
The application process where Comptel seeks to avoid double taxation is still
pending with the Ministry of Finance in Finland. However, the legal process
between the states is very slow and the results are difficult to foresee. The
interpretation of tax treaties may result in different views between the
countries in question. This could mean that the double taxation will persist.
Comptel's risks and uncertainties are described more in detail in the company's
financial statements and the Board of Directors' report for 2013.
Outlook
The company will change its reporting in the future and will report net sales
for new solutions and current solutions in addition to the geographical area's.
Project- and maintenance business will be separately reported in the future.
This should give an improved view of sales. Presenting license and other
service sales separately, sometimes gives an artificial view of the business
model. Going forward license and other service sales will be reported as
project sales.
The company's mid-term aim is to grow over 10% in net sales annually through
the increasing growth of the new businesses.
We expect the 2014 operating result to be EUR 5-10 million. The 2014 revenue is
expected to remain at 2013 level while the new solutions are expected to grow
from Q2 onwards.
Characteristically a significant part of Comptel's operating profit and net
sales is generated in the second half of the year.
Board of Directors' Proposal for the Disposal of Profits
The Group parent company's distributable equity on 31 December 2013 was EUR
4,107,351.91 (1,840,001.68).
Board of Directors proposes to the Annual General Meeting that dividend of 0.01
EUR per share will be paid for 2013.
TABLE PART
The full year financial information in this stock exchange release is based on
the company's audited financial statements. The auditor's report was issued on
12 February 2014. The release has been prepared in accordance with IAS 34,
Interim Financial Reporting, as adopted by the EU. The accounting policies and
methods of computation adopted in the financial statements are consistent with
those of the annual financial statements for the year ended 2012 except for the
application of new or amended standards and interpretations as set forth in
note 1.
All figures in the financial report have been rounded and consequently the sum
of the individual figures can deviate from the sum figure.
Consolidated Statement of Comprehensive 1 Jan - 1 Jan - 1 Oct - 1 Oct -
Income 31 Dec 31 Dec 31 Dec 31 Dec
(EUR 1,000) 2013 2012 2013 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales 82,668 82,428 22,172 21,889
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other operating income 8 9 - 6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Materials and services -3,418 -5,477 -588 -1,121
--------------------------------------------------------------------------------
Employee benefits -40,678 -44,108 -10,089 -10,244
--------------------------------------------------------------------------------
Depreciation, amortisation and impairment -5,682 -14,619 -1,470 -1,320
charges
--------------------------------------------------------------------------------
Other operating expenses -25,591 -31,749 -6,324 -7,423
--------------------------------------------------------------------------------
-75,369 -95,954 -18,470 -20,108
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating profit/loss 7,308 -13,517 3,702 1,787
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Financial income 367 1,042 156 65
--------------------------------------------------------------------------------
Financial expenses -1,706 -1,739 -362 -137
--------------------------------------------------------------------------------
Share of result of associated companies -415 259 -415 259
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss before income taxes 5,554 -13,955 3,081 1,975
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Income taxes -2,962 1,152 -783 228
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period 2,592 -12,804 2,298 2,203
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive income
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other comprehensive income to be
reclassified to profit or loss in
subsequent periods
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Translation differences -582 46 -107 -104
--------------------------------------------------------------------------------
Cash flow hedges - 781 - -118
--------------------------------------------------------------------------------
Income tax relating to components of other - -191 - 31
comprehensive income
--------------------------------------------------------------------------------
-582 636 -107 -191
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive income for the period 2,009 -12,168 2,191 2,011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss attributable to:
--------------------------------------------------------------------------------
Equity holders of the parent company 2,592 -12,804 2,298 2,203
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total comprehensive income attributable to:
--------------------------------------------------------------------------------
Equity holders of the parent company 2,009 -12,168 2,191 2,011
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Shareholders of the parent company:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Earnings per share, EUR 0.02 -0.12 0.02 0.02
--------------------------------------------------------------------------------
Earnings per share, diluted, EUR 0.02 -0.12 0.02 0.02
--------------------------------------------------------------------------------
Consolidated Statement of Financial Position (EUR 31 Dec 2013 31 Dec 2012
1,000)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Assets
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Goodwill 2,646 2,646
--------------------------------------------------------------------------------
Other intangible assets 14,174 13,350
--------------------------------------------------------------------------------
Tangible assets 1,629 1,518
--------------------------------------------------------------------------------
Investments in associates 661 1,076
--------------------------------------------------------------------------------
Available-for sale financial assets 87 87
--------------------------------------------------------------------------------
Deferred tax assets 4,358 3,804
--------------------------------------------------------------------------------
Other non-current receivables 500 493
--------------------------------------------------------------------------------
24,055 22,974
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Trade and other current receivables 37,144 40,617
--------------------------------------------------------------------------------
Current tax assets 202 43
--------------------------------------------------------------------------------
Cash and cash equivalents 6,542 4,817
--------------------------------------------------------------------------------
43,889 45,476
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total assets 67,944 68,451
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity and liabilities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity attributable to equity holders of the parent
company
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Share capital 2,141 2,141
--------------------------------------------------------------------------------
Fund of invested non-restricted equity 401 243
--------------------------------------------------------------------------------
Translation differences -1,219 -636
--------------------------------------------------------------------------------
Retained earnings 27,600 25,208
--------------------------------------------------------------------------------
Total equity 28,924 26,956
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Non-current liabilities
--------------------------------------------------------------------------------
Deferred tax liabilities 2,983 3,302
--------------------------------------------------------------------------------
Provisions - 787
--------------------------------------------------------------------------------
Non-current financial liabilities 3,483 5,275
--------------------------------------------------------------------------------
6,466 9,364
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Provisions 1,939 1,511
--------------------------------------------------------------------------------
Current financial liabilities 5,287 3,082
--------------------------------------------------------------------------------
Trade and other current liabilities 25,078 27,230
--------------------------------------------------------------------------------
Current tax liabilities 250 307
--------------------------------------------------------------------------------
32,554 32,130
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total liabilities 39,020 41,494
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total equity and liabilities 67,944 68,451
--------------------------------------------------------------------------------
Consolidated Statement of Cash Flows 1 Jan - 31 1 Jan - 31
(EUR 1,000) Dec 2013 Dec 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from operating activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit/loss for the period 2,592 -12,804
--------------------------------------------------------------------------------
Adjustments:
--------------------------------------------------------------------------------
Non-cash transactions or items that are not part of 7,330 15,815
cash flows from operating activities
--------------------------------------------------------------------------------
Interest and other financial expenses 434 228
--------------------------------------------------------------------------------
Interest income -71 -412
--------------------------------------------------------------------------------
Income taxes 2,962 -1,152
--------------------------------------------------------------------------------
Change in working capital:
--------------------------------------------------------------------------------
Change in trade and other current receivables 3,074 -592
--------------------------------------------------------------------------------
Change in trade and other current liabilities -2,997 4,307
--------------------------------------------------------------------------------
Change in provisions -359 -452
--------------------------------------------------------------------------------
Interest paid -355 -312
--------------------------------------------------------------------------------
Interest received 63 17
--------------------------------------------------------------------------------
Income taxes paid and tax returns received -3,849 -3,551
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash from operating activities 8,825 1,092
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from investing activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Acquisition of subsidiaries, net of cash acquired - -1,812
--------------------------------------------------------------------------------
Investments in tangible assets -466 -1,044
--------------------------------------------------------------------------------
Investments in intangible assets -85 -417
--------------------------------------------------------------------------------
Investments in development projects -5,510 -6,101
--------------------------------------------------------------------------------
Proceeds from sale of intangible assets 5 -
--------------------------------------------------------------------------------
Change in other non-current receivables -7 -32
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash used in investing activities -6,063 -9,406
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from financing activities
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dividends paid - -3,207
--------------------------------------------------------------------------------
Acquisition of Corporation's own shares -88 -
--------------------------------------------------------------------------------
Proceeds from borrowings 16,702 29,000
--------------------------------------------------------------------------------
Repayment of borrowings -17,073 -22,020
--------------------------------------------------------------------------------
Lease payments -191 -38
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net cash used in financing activities -650 3,735
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash and cash equivalents 2,112 -4,579
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the 4,817 9,401
period
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 6,542 4,817
--------------------------------------------------------------------------------
Change 1,726 -4,585
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Effects of changes in foreign exchange rates -386 -5
--------------------------------------------------------------------------------
Consolidated Statement of Changes in Equity
--------------------------------------------------------------------------------
-
Equity attributable to equity holders of the parent company
--------------------------------------------------------------------------------
-
EUR 1,000 Share Other Translation Fair Retained Total
capital reserve differences value earnings
s reserve
--------------------------------------------------------------------------------
Equity at 2,141 178 -682 -589 40,758 41,805
31 Dec 2011
--------------------------------------------------------------------------------
Dividends -3,207 -3,207
--------------------------------------------------------------------------------
Transfer of 66 66
treasury shares
--------------------------------------------------------------------------------
Share-based 460 460
compensation
--------------------------------------------------------------------------------
Total comprehensive 46 590 -12,804 -12,168
income for the
period
--------------------------------------------------------------------------------
Equity at 2,141 243 -636 0 25,208 26,956
31 Dec 2012
--------------------------------------------------------------------------------
Consolidated Statement of Changes in Equity
--------------------------------------------------------------------------------
Equity attributable to equity holders of the parent
company
--------------------------------------------------------------------------------
EUR 1,000 Share Other Translation Fair Retained Total
capital reserve differences value earnings
s reserve
--------------------------------------------------------------------------------
Equity at 2,141 243 -636 0 25,208 26,956
31 Dec 2012
--------------------------------------------------------------------------------
Acquisition of -88 -88
Corporation's own
shares
--------------------------------------------------------------------------------
Transfer of treasury 158 66 223
shares
--------------------------------------------------------------------------------
Share-based -50 -50
compensation
--------------------------------------------------------------------------------
Other changes -127 -127
--------------------------------------------------------------------------------
Total comprehensive -582 2,592 2,009
income for the
period
--------------------------------------------------------------------------------
Equity at 2,141 401 -1,219 0 27,600 28,924
31 Dec 2013
--------------------------------------------------------------------------------
Notes
1. Application of new or amended standards and interpretations
On 1 January 2013 the Group adopted the following new and amended standards and
interpretations endorsed by the EU and that are applicable to Comptel:
Amendments to IAS 1 Presentation of Financial Statements. The major change is
the requirement to group items of other comprehensive income as to whether or
not they will be reclassified subsequently to profit or loss when specific
conditions are met.
The other new or amended standards in force as of 1 January 2013 did not have
an impact on the accounting policies and methods of computation.
2. Segment information
Net sales by segment
EUR 1,000 1 Jan - 1 Jan - 1 Oct - 1 Oct -
31 Dec 2013 31 Dec 2012 31 Dec 2013 31 Dec 2012
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Europe East 15,320 16,312 4,075 4,258
--------------------------------------------------------------------------
Europe West 17,753 20,975 3,793 5,715
--------------------------------------------------------------------------
Asia-Pacific 20,946 21,665 4,969 5,012
--------------------------------------------------------------------------
Middle East and Africa 16,312 14,541 5,613 4,362
--------------------------------------------------------------------------
Americas 12,337 8,934 3,721 2,542
--------------------------------------------------------------------------
Group total 82,668 82,428 22,172 21,889
--------------------------------------------------------------------------
Operating profit/loss by segment
EUR 1,000 1 Jan - 1 Jan - 1 Oct - 1 Oct -
31 Dec 31 Dec 31 Dec 31 Dec
2013 2012 2013 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Europe East 7,661 6,304 2,155 1,805
--------------------------------------------------------------------------------
Europe West 7,974 9,712 1,564 2,828
--------------------------------------------------------------------------------
Asia-Pacific 10,056 9,504 2,493 1,886
--------------------------------------------------------------------------------
Middle East and Africa 6,652 2,967 2,994 1,398
--------------------------------------------------------------------------------
Americas 7,023 3,782 2,410 1,186
--------------------------------------------------------------------------------
Group unallocated expenses -32,059 -45,786 -7,913 -7,316
--------------------------------------------------------------------------------
Group operating profit/loss total 7,308 -13,517 3,702 1,787
--------------------------------------------------------------------------------
Financial income and expenses -1,339 -697 -206 -72
--------------------------------------------------------------------------------
Share of result of associated -415 259 -415 259
companies
--------------------------------------------------------------------------------
Group profit/loss before income 5,554 -13,955 3,081 1,975
taxes
--------------------------------------------------------------------------------
3. Business combinations
During accounting year 2013 no new business were acquired.
On 9 February 2012, Comptel Corporation acquired all shares of Xtract Oy, a
Finnish software company specialising in analytics.
The total consideration (enterprise value) was EUR 3,100 thousand. The actual
purchase price was EUR 2,075 thousand.
4. Impairment loss on goodwill
No impairment loss were recorded during accounting year 2013.
Comptel changed the allocation method of goodwill during the first quarter of
the year 2012. Due to the change, an impairment testing was performed at the
new cash generating unit level which was lower level compared to the one used
during financial year 2011.
As a result of impairment testing Comptel recorded an impairment loss of EUR
10,179 thousand in the first quarter result in 2012.
5. Income tax
Income tax according to the statement of comprehensive income for the period
was EUR 2,962 thousand positive (EUR 1,152 thousand positive in 2012) as a
change of EUR 2,494 thousand in deferred tax liabilities was booked in
connection with the impairment of goodwill.
In 2006, Adjustment of the Tax Office for Major Corporations refused to accept
the crediting of taxes withheld at source in taxation of 2004 and 2005.
The application process to prevent Comptel's double taxation is still pending
with the Ministry of Finance in Finland. However, the process between the
states is very slow and the timing of a change is hard to forecast. The
interpretation of tax treaties may result in different views between the
countries in questions. This could mean that the double taxation will prevail.
According to the Board of Adjustment's decision currently in force, Comptel
Corporation has expensed taxes withheld at source amounting to EUR 1,300
thousand in accounting year 2013 (EUR 1,680 thousand).
6. Tangible assets
EUR 1,000 1 Jan - 31 Dec 2013 1 Jan - 31 Dec 2012
---------------------------------------------------
---------------------------------------------------
Additions 1,139 1,044
---------------------------------------------------
Disposals -60 -1
---------------------------------------------------
7. Related party transactions
The Comptel Group have a related party relationship with its associate, the
Board of Directors, the Executive Board and also with people and companies
under Comptel management's influence.
Transactions, which have been entered into with related parties are as follows:
EUR 1,000 1 Jan - 31 Dec 2013 1 Jan - 31 Dec 2012
----------------------------------------------------------------
----------------------------------------------------------------
Associate
----------------------------------------------------------------
Other operating income 4 2
----------------------------------------------------------------
Interest income 8 8
----------------------------------------------------------------
----------------------------------------------------------------
EUR 1,000 31 Dec 2013 31 Dec 2012
-------------------------------------------------
-------------------------------------------------
Associate
-------------------------------------------------
Non-current receivables 106 98
-------------------------------------------------
Trade receivables - 1
-------------------------------------------------
-------------------------------------------------
Remuneration to key management
The key management personnel compensation includes the employee benefits of the
members of the Board of Directors and the Executive Board.
EUR 1,000 1 Jan - 31 Dec 1 Jan - 31 Dec
2013 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Salaries and other short-term employee 1,524 2,033
benefits
--------------------------------------------------------------------------------
Share-based payments 125 233
--------------------------------------------------------------------------------
Total 1,649 2,267
--------------------------------------------------------------------------------
Guarantees and other commitments
EUR 1,000 31 Dec 2013 31 Dec 2012
------------------------------------
------------------------------------
Guarantees 33 70
------------------------------------
8. Commitments
Minimum lease payments on non-cancellable office facilities and other operating
leases are payable as follows:
EUR 1,000 31 Dec 2013 31 Dec 2012
----------------------------------------------------
----------------------------------------------------
Less than one year 2,312 2,934
----------------------------------------------------
Between one and five years 4,596 6,087
----------------------------------------------------
Total 6,908 9,021
----------------------------------------------------
The group had no material capital commitments for the purchase of tangible
assets at 31 December 2013 and 31 December 2012.
9. Contingent liabilities
EUR 1,000 31 Dec 2013 31 Dec 2012
---------------------------------------------
---------------------------------------------
Bank guarantees 1,674 2,969
---------------------------------------------
Corporate mortgages 200 200
---------------------------------------------
EUR 1,000 31 Dec 2013 31 Dec 2012
--------------------------------------------------------------------
--------------------------------------------------------------------
Contingent liabilities on behalf of others
--------------------------------------------------------------------
Guarantees 72 123
--------------------------------------------------------------------
10. Key figures
Financial summary 1 Jan 31 Dec 1 Jan - 31 Dec
2013 2012
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales, EUR 1,000 82,668 82,428
--------------------------------------------------------------------------------
Net sales, change % 0.3 7.4
--------------------------------------------------------------------------------
Operating profit/loss, EUR 1,000 7,308 -13,517
--------------------------------------------------------------------------------
Operating profit/loss, change % 154.1 -213.6
--------------------------------------------------------------------------------
Operating profit/loss, as % of net sales 8.8 -16.4
--------------------------------------------------------------------------------
Profit/loss before taxes, EUR 1,000 5,554 -13,955
--------------------------------------------------------------------------------
Profit/loss before taxes, as % of net sales 6.7 -16.9
--------------------------------------------------------------------------------
Return on equity, % 9.3 -37.2
--------------------------------------------------------------------------------
Return on investment, % 16.1 -36.3
--------------------------------------------------------------------------------
Equity ratio, % 50.5 46.8
--------------------------------------------------------------------------------
Gross investments in tangible and intangible 551 4,484
assets, EUR 1,0001)
--------------------------------------------------------------------------------
Gross investments in tangible and intangible 0.7 5.4
assets, as % of net sales
--------------------------------------------------------------------------------
Capitalisations according to IAS 38 to intangible 5,510 6,170
assets
--------------------------------------------------------------------------------
Research and development expenditure, EUR 1,000 17,790 18,581
--------------------------------------------------------------------------------
Research and development expenditure, 21,5 22.5
as % of net sales
--------------------------------------------------------------------------------
Order backlog, EUR 1,000 40,756 48,368
--------------------------------------------------------------------------------
Average number of employees during the period 684 700
--------------------------------------------------------------------------------
Interest-bearing net liabilities, EUR 1,000 2,228 3,541
--------------------------------------------------------------------------------
Gearing ratio, % 7.7 13.1
--------------------------------------------------------------------------------
Per share data 1 Jan - 1 Jan -
31 Dec 2013 31 Dec 2012
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Earnings per share (EPS), EUR 0.02 -0.12
-----------------------------------------------------------------------------
EPS diluted, EUR 0.02 -0.12
-----------------------------------------------------------------------------
Equity per share, EUR 0.27 0.25
-----------------------------------------------------------------------------
Dividend per share, EUR2) 0.01 0.00
-----------------------------------------------------------------------------
Dividend per earnings, % 41.2 -
-----------------------------------------------------------------------------
Effective dividend yield, % 2.1 -
-----------------------------------------------------------------------------
P/E ratio 19.8 -3.3
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Adjusted number of shares at the end of the period 107,421,270 107,054,810
-----------------------------------------------------------------------------
of which the number of treasury shares 161,219 161,219
-----------------------------------------------------------------------------
Outstanding shares 107,260,051 106,893,591
-----------------------------------------------------------------------------
Adjusted average number of shares during the period 106,893,591 106,863,518
-----------------------------------------------------------------------------
Average number of shares, dilution included 106,893,591 107,650,327
-----------------------------------------------------------------------------
1) The figure does not include investments in development projects.
2) The Board's proposal
11. Definition of key figures
--------------------------------------------------------------------------------
Operating margin % = Operating profit/loss x100
------------------------------------ -----------------------------------------
------------------------------------
Net sales
------------------------------------ -----
------------------------------------ -----
Profit margin (before income taxes) = Profit/loss before taxes x100
%
------------------------------------ -----------------------------------------
------------------------------------
Net sales
------------------------------------ -----
------------------------------------ -----
Return on equity % (ROE) = Profit/loss x100
------------------------------------ -----------------------------------------
------------------------------------
Total equity (average during year)
------------------------------------ -----
------------------------------------ -----
Return on investment % (ROI) = Profit/loss before taxes + x100
financial expenses
------------------------------------ -----------------------------------------
------------------------------------
Total equity + interest bearing
liabilities (average during the
year)
------------------------------------ -----
------------------------------------ -----
Equity ratio % = Total equity x100
------------------------------------ ----------------------------------------- ------------------------------------
Statement of financial position
total - advances received
------------------------------------ -----
------------------------------------ -----
Gross investments in tangible and = Gross investments in tangible and x100
intangible assets, as % of net intangible assets
sales
------------------------------------ -----------------------------------------
------------------------------------
Net sales
------------------------------------ -----
------------------------------------ -----
Research and development = Research and development x100
expenditure, as % of net sales expenditure
------------------------------------ -----------------------------------------
------------------------------------
Net sales
------------------------------------ -----
------------------------------------ -----
Gearing ratio % = Interest-bearing liabilities - x100
cash and cash equivalents
------------------------------------ -----------------------------------------
------------------------------------
Total equity
------------------------------------ -----
------------------------------------ -----
Earnings per share (EPS) = Profit/loss for the financial year
attributable to equity
shareholders
------------------------------------ -----------------------------------------
------------------------------------
Average number of outstanding
shares for the financial year
------------------------------------ -----
------------------------------------ -----
Equity per share = Equity attributable to the equity
holders of the parent company
------------------------------------ -----------------------------------------
------------------------------------
Adjusted number of shares at the
end of period
------------------------------------ -----
------------------------------------ -----
Dividend per share = Dividend
------------------------------------ -----------------------------------------
------------------------------------
Adjusted number of shares at the
end of period
------------------------------------ -----
------------------------------------ -----
Dividend per earnings % = Dividend per share x100
------------------------------------ -----------------------------------------
------------------------------------
Earnings per share (EPS)
------------------------------------ -----
------------------------------------ -----
Effective dividend yield % = Dividend per share x100
------------------------------------ -----------------------------------------
------------------------------------
Share closing price at end of
period
------------------------------------ -----
------------------------------------ -----
P/E ratio = Share closing price at end of
period
------------------------------------ ----------------------------------------- ------------------------------------
Earnings per share (EPS)
------------------------------------ -----
--------------------------------------------------------------------------------
Comptel Corporation´s Annual General Meeting will be held on 12 March 2014 at 3
pm in Helsinki.
The annual report for 2013 can be obtained from Comptel´s website
www.comptel.com in week 8.
Schedule for Comptel's interim reports in 2014:
January-March 17 April 2014
January-June 29 July 2014
January-September 21 October 2014
COMPTEL CORPORATION
Board of Directors
Additional information:
Mr Juhani Hintikka, President and CEO, tel. +358 9 700 1131
Mr Tom Jansson, CFO, tel. +358 40 700 1849
Distribution:
NASDAQ OMX Helsinki
Major media
www.comptel.com
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