2013-10-18 08:00:00 CEST
2013-10-18 08:00:03 CEST
REGULATED INFORMATION
Solteq Oyj - Company Announcement
SOLTEQ PLC’S INTERIM REPORT 1.1.-30.9.2013
SOLTEQ PLC STOCK EXCHANGE BULLETIN 18.10.2013 at 9.00 am
- Solteq Plc changes the turnover and result estimates for the whole financial
year. We estimate our turnover to be approx. 38-40 million EUR and the
operating profit 5-7% from the turnover (earlier our turnover estimate was
40-43 million EUR and the level of EBIT 6-9% from the turnover).
- Solteq Plc's turnover increased 1.8 per cent and totalled 28.3 million euros
(27.8 million euros).
- Solteq Plc's operating profit totalled 1.712 thousand euros (1.853 thousand
euros). The operating profit for the collation period includes a total of 276
thousand EUR of one-time profit and expenses as gross.
- The company's operating margin was 6.0 % (6.7 % in 2012, cleared from
one-time profit and expenses 5.7 %).
- Solteq Group's equity ratio was 41.7 per cent (36.5 per cent).
- Earnings per share were 0.08 euros (0.08 euros).
KEY FIGURES
Turnover by operation:
% 1-9/13 1-9/12 1-12/12
Softwareservices 67 61 61
Licences 27 33 32
Hardware 6 6 7
CEO Repe Harmanen:
“Like the previous two quarters, the third quarter was as expected. Both the
turnover and financial result improved from the previous year. In the current
market situation, I feel that in this respect our position has been fairly
consistent during the quarter. However, we estimate that during the last
quarter the growth in turnover will be slower than earlier this year because of
postponing of new projects. Because of this, we will not quite reach the
earlier turnover estimates, which we estimate to be at the same level as last
year.
The business operations during the third quarter were burdened by the risks of
one major project in the Wholesale Trade, Logistics and Services Unit.
Preparations and corrective measures are still being made in this area.
In our operative activities, we have succeeded well in terms of cost control as
well as personnel and other expenses. Through this action, we will ensure the
predicted result level for the rest of the year. We will continue implementing
such projects that help us make our cost structure flexible and boost our
operations.
Due to the mentioned reasons the level of our operation profit will decrease by
some to the level 5-7% compared to our earlier estimate for the year 2013. I
see this preparation successful as the impact in level of operating profit is
limited, but in the future we have to be able to be even more flexible with our
cost structure in case of similar situations.
As to demand, the situation has remained at the same level as in summer. The
first weak signals that economy is picking up in Finland and in Europe have not
materialized into faster project launches. The general uncertainty in the
economy is still reflected in a hesitation to start major project and in slow
investment willingness. In our opinion, it is more a question of postponing
projects than cancelling them.
Operations with our long-term and large-scale clients have continued the same
as last year. These long-term, confidential client relationships are the major
factor that explains why our financial situation continues comparatively
stable.
Our strategy work has been started and continues during the coming months. I
feel that after this strategy period, which will end in 2014, we should follow
the current strategy lines but at the same time look for new, sufficiently
challenging and bold goals. With the continuity of our clients' businesses as
our first priority, we will seek new directions for our operations.
The agreement that we published after the quarter in our Stock Exchange Release
on 2 October 2013 is significant for us economically and strategically. In
terms of strategy, the agreement is important because it implements the
strategy that we published on 4 February 2011. With this long-term project, we
also ensure growth for the future financial periods.
I feel that the strategic solutions that we have made so far have been
successful.
I wish all our stakeholders and interest groups brisk autumn days."
BUSINESS ENVIRONMENT AND BUSINESS DEVELOPMENT
Solteq is a leading retail and service industry software service company. We
offer long-term partnership and the markets' widest range of retail and service
industry software services, from the optimisation of the entire supply chain to
the management of consumer-customer information. Our technology-independent
solutions help our customers to guide their business operations as efficiently
and profitably as possible.
Solteq Plc's reported segments are Grocery and special retail, HoReCa;
Wholesale trade, Logistics and Services and Service Business and Maintenance
Management.
The aim of the segmentation is to respond to customer demand as a field total
supplier and therefore to improve the availability of services and ease for our
customers.
Solteq's turnover for the review period was 28.303 thousand euros (27.811
thousand euros).
Solteq's operating profit was 1.712 thousand euros (1.853 thousand euros). The
operating profit for the collation period includes a total of 276 thousand EUR
of one-time profit and expenses as gross.
The company's operating margin was 6.0 % (6.7 % in 2012, cleared from one-time
profit and expenses 5.7 %).
Grocery and Special Retail, HoReCa
Solteq's Grocery and Special Retail Segment provides its clients with total
solutions that they can utilise to improve efficiency in terms of logistics,
store operations, customer service, point of sale operations, as well as loyal
customer management.
The grocery and special retail solutions help optimise the management of the
product selection, space, deliveries, logistics and customer satisfaction while
increasing sales and improving the result. The solutions speed up the basic
operations, improve delivery reliability, reduce storage value, increase stock
turnover and enhance predictability. The store always has the right products in
the right place, at the right time, and at the right price.
During the review period the revenue of the Grocery and Special Retail segment
totalled 13.2 million euros and the operating result was 0.8 million euros.
Wholesale Trade, Logistics and Services
Solteq's Wholesale Trade, Logistics and Services Segment provides its clients
with ERP and financial management systems, as well as optimisation, integration
and reporting solutions that support these systems.
Solteq's solutions help clients manage their operations and enhance purchases,
sales, stock management and reporting. The systems can be utilised to improve
delivery reliability, reduce storage value, increase stock turnover and enhance
predictability. Materials flow management ensures that the right goods reach
the right customers at the right time, packed in an optimal manner.
Solteq's wholesale trade, logistics and services systems improve the
effectiveness of operations and enable more flexible and versatile customer
service. At the same time, automated data management enhances the company's
internal operations. Solteq's solutions are used daily by a large number of
clients representing various industries and sectors, such as wholesale, retail
and public administration.
During the review period the revenue of the Wholesale Trade, Logistics and
Services segment totalled 11.2 million euros and the operating result was 0.2
million euros. In the third quarter, one major project in progress had an
adverse effect on the result level of the Wholesale Trade, Logistics and
Services Unit. Corrective measures are, however, being taken.
Service Business and Maintenance Management
Solteq's Service Business and Maintenance Management Segment provides its
clients with ERP and master data management solutions.
The enterprise resource planning solutions developed for the optimisation of
service processes help clients manage their operations in many ways, for
instance enhance production plant reliability, task and resources management,
field work, sales and customer service, partner network management and
materials management. The solutions are utilised by a large number of clients
representing various industries and sectors, such as energy production,
maintenance services, life cycle services, engineering and technical services
of cities and municipalities, property management services, and home and care
services.
The Service Business and Maintenance Management Segment also provides client
companies with services and products related to business critical data (master
data) in the form of master data improvement projects, data maintenance
services outsourced to master data service centres, software technologies for
master data management, and consultation services. The aim of these services is
to ensure that the data in the systems that support the clients' enterprise
resource planning and decision making processes are of high quality, compatible
and up-to-date. Solteq's master data management solutions are used by clients
across industries and sectors.
During the review period the revenue of the Enterprise resource planning of
services segment totalled 3.9 million euros and the operating result was 0.7
million euros.
TURNOVER AND RESULT
Turnover increased by 1.8 % compared to the previous review period and totalled
28.303 thousand euros (previous review period 27.811 thousand euros).
Turnover consists of several individual clienteles. At the most, one client
corresponds to less than ten per cent of the turnover.
The profit for the review period was 1.712 thousand euros (1.853 thousand
euros), the operating profit before taxes was 1.572 thousand euros (1.592
thousand euros) and the operating profit for the review period was 1.192
thousand euros (1.078 thousand euros).
Due to successful customer projects and the intensification and specification
of own activities, the company has managed to maintain the turnover and level
of EBIT at the level of the year of comparison despite the weakened general
market situation.
During the second and the third quarters, we put into practice cost saving
measures which are estimated to contribute to some extend to our relative
profitability in the second half year.
BALANCE SHEET AND FINANCING
The total assets amounted to 25.686 thousand euros (25.914 thousand euros).
Liquid assets totalled 2.390 thousand euros (501 thousand euros). In addition
to liquid assets the company had unused account limits totalling 1.500 thousand
euros at the end of the review period. Solteq Group's interest-bearing
liabilities were 5.688 thousand euros (6.674 thousand euros).
Solteq Group's equity ratio was 41.7 per cent (36.5 per cent).
INVESTMENTS, RESEARCH AND DEVELOPMENT
Net investment during the review period was 713 thousand euros (7.373 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, Symphony EYC and Microsoft and utilize their resources and
distribution channels. Own development efforts are focused on added value
products and developing tailored service concepts.
During the review period product development costs were not amortized in
accordance with IFRS standards (none in the reference year, either).
PERSONNEL
The number of permanent employees at the end of the review period was 287
(287). The average number of personnel during the review period was 290 (257).
In the end of the review period the number of personnel could be divided as
follows: Grocery and special retail, HoReCa segment: 99 people; Wholesale
trade, Logistics and Services: 95 people; Service Business and Maintenance
Management segment: 41 people and 52 people in shared functions.
RELATED PARTY TRANSACTIONS
Solteq's related parties include the board of directors, managing director and
the management team. There has not been any significant changes related parties
after the 2012 year end closing.
SHARES, SHAREHOLDERS AND TREASURY SHARES
Solteq Plc's equity on 30.9.2013 was 1.009.154,17 euros which was represented
by 14.998.061 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 companies Solteq Management Oy's and Solteq Management Team Oy's
possessions were 773.404 shares. The amount of treasury shares represented 5.2
% of the total amount of shares and votes at the end of the review period. The
equivalent value of acquired shares was 52.039 euros.
During the review period, 2.4.2013 one flagging announcement was made. The
Mutual Insurance Company Pension Fennia and LocalTapiola Mutual Pension
Insurance Company will form a new Pension Company starting from 1.1.2014. The
merger still requires the acceptance from the authorities and the general
meeting. If the merger is realized, this leads to a situation where the new
company owns more than 10 % of the shares and votes in Solteq Plc.
Exchange and share price
During the review period, the exchange of Solteq's shares on the Helsinki Stock
Exchange was 0.6 million shares (1.7 million shares) and 1.0 million euros (1.9
million euros). The highest price during the review period was 1.77 euros and
the lowest price was 1.20 euros. The weighted average price of the share was
1.48 euros and the price ending was 1.55 euros. The market value of the
company's shares in the end of the review period totalled 23.2 million euros
(20.2 million euros).
Ownership
At the end of the review period, Solteq had a total of 1.759 shareholders
(1.809 shareholders). Solteq's 10 largest shareholders owned 11.316 thousand
shares, amounting to 75.4 per cent of the company's shares and votes. Solteq
Plc board members owned a total of 5.524 thousand shares which equals 36.8 per
cent of the company's shares and votes.
ANNUAL GENERAL MEETING
At Solteq Plc's Annual General Meeting on 15 March 2013 the 2012 financial
statements were adopted and the members of the board and the managing director
were discharged from liability for the 2012 review period.
In the meeting was accepted the proposal by the board that for the financial
year 2012, there will be paid a dividend of 0.04 euros per each share on the
market. In addition to this, the annual general meeting authorized the board to
decide on a distribution of dividend, or other distribution of funds from the
equity trust, for an amount of maximum 0.04 euros. The board is also allowed to
decide on the timing and other details of this.
The Annual General Meeting authorized the board to acquire or pledge the
company's own shares in such a way that the amount of own shares can be at any
time maximum 10 per cent of the whole amount of company shares. With this
authorization, shares can be acquired or pledged in order to develop the equity
structure; or to be used as part of the personnel incentive system; or as a
funding or for the realization of acquisitions of another company; or for other
business arrangements; or they can be disclosed or invalidated. These shares
can be acquired also in other ratios than the shareowners ownership ratio. The
shares should be acquired from the public stock exchange. The board can decide
on the other conditions for this procedure. This authorization is valid until
next annual general meeting.
The Annual General Meeting authorized the board to decide on an issue of shares
for a maximum amount of 3 000 000 new or existing shares, owned by the company,
in one or several lots. The issue of shares should be implemented as a directed
issue, on the contrary to shareowners subscription rights. With this
authorization the board decides on all other conditions for the share issue.
This authorization is valid until next Annual General Meeting.
BOARD OF DIRECTORS AND AUDITORS
Six members were elected to the Board of Directors. Ali Saadetdin, Seppo Aalto,
Markku Pietilä, Matti Roininen, 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, is re-elected as Solteq's auditors.
Lotta Nurminen, APA, was elected to act as the chief auditor.
EVENTS AFTER THE REVIEW PERIOD
Solteq Plc concluded a significant software deal with Veljekset Halonen Ltd and
Carlson Ltd Department Store Chains. That was reported 2.10.2013.
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
Solteq Plc changes the turnover and result estimates for the whole financial
year. We estimate our turnover to be approx. 38-40 million EUR and the
operating profit 5-7% from the turnover (earlier our turnover estimate was
40-43 million EUR and the level of EBIT 6-9% from the turnover).
Financial Reporting
This interim report has been prepared in accordance with the recognition and
measurement principles of IFRS-standards as is Financial Statements 2012.
The financial result is reported through three business areas: Grocery and
special retail, HoReCa; Wholesale Trade, Logistics and Services and Service
Business and Maintenance Management. 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.
GROUP PROFIT AND LOSS ACCOUNT
(TEUR)
1.7.- 1.7.- 1.1.- 1.1- 1.1.- 30.9.2013 30.9.2012 30.9.2013 30.9.2012 31.12.2012
NET TURNOVER 8 587 8 521 28 303 27 811 39 016
Other operating
income 4 9 12 900 900
Raw materials and
services -2 335 -2 283 -6 623 -7 366 -10 369
Staff expenses -3 944 -4 066 -14 283 -13 878 -19 304
Depreciation and -309 -320 -918 -846 -1 126
impairments
Other operating
expenses -1 370 -1 350 -4 778 -4 769 -6 386
OPERATING RESULT 632 511 1 712 1 853 2 731
Financial income and
expenses -33 -76 -140 -261 -298
RESULT BEFORE TAXES 599 435 1 572 1 592 2 433
Income taxes -152 -102 -380 -514 -735
RESULT FOR THE PERIOD
447 333 1 192 1 078 1 697
OTHER ITEMS OF TOTAL COMPREHENSIVE
INCOME
Cash flow hedging 13 -25 33 -37 -45
Other items of total comprehensive
income
after taxes 11 -19 26 -28 -34
TOTAL COMPREHENSIVE
INCOME
458 314 1 218 1 050 1 663
Total profit for the period
attributable to
Owners of the parent 447 333 1 192 1 078 1 697
Total comprehensive income
attributable to
Owners of the parent 458 314 1 218 1 050 1 663
Earnings / share,
e(undiluted) 0,03 0,03 0,08 0,08 0,12
Earnings / share,
e(diluted) 0,03 0,03 0,08 0,08 0,12
Taxes corresponding to the result have been presented as taxes for the period.
GROUP BALANCE SHEET (TEUR) 30.9.2013 30.9.2012 31.12.2012
ASSETS
NON-CURRENT ASSETS
Intangible assets
Intangible rights 3 036 3 738 3 590
Goodwill 12 730 12 728 12 728
Tangible assets 1 290 1 079 942
Investments
Other shares and similar
rights of ownership 546 537 538
Trade receivables 63 67 63
Total non-current
assets 17 665 18 150 17 861
CURRENT ASSETS
Inventories 131 86 126
Short-term debtors 5 500 7 177 7 867
Cash and cash equivalents 2 390 501 1 242
Total current
assets 8 021 7 764 9 235
TOTAL ASSETS 25 686 25 914 27 096
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 -933 -933 -933
Share premium account 74 74 75
Account for cash flow
hedging -23 -43 -49
Unrestricted equity
fund 6 392 6 368 6 368
Retained earnings 3 004 1 911 1 910
Result for the
financial period 1 192 1 078 1 697
Total equity 10 715 9 464 10 077
Non-current liabilities
Deferred tax liabilities 1 217 809 1 048
Other non-current liabilities 3 974 5 101 4 827
Current liabilities 9 780 10 540 11 144
Total liabilities 14 971 16 450 17 019
TOTAL EQUITY AND
LIABILITIES 25 686 25 914 27 096
FINANCIAL PERFORMANCE 1-9/2013 1-9/2012 1-12/2012
INDICATORS (IFRS)
Net turnover MEUR 28,3 27,8 39,0
Change in net turnover 1,8 % 42,7 % 43,7 %
Operating result MEUR 1,7 1,9 2,7
% of turnover 6,0 % 6,7 % 7,0 %
Result before taxes MEUR 1,6 1,6 2,4
% of turnover 5,6 % 5,7 % 6,2 %
Equity ratio, % 41,7 36,5 37,2
Gearing, % 30,8 % 65,2 % 51,5 %
Gross investments in
non-current assets MEUR 0,7 7,4 7,4
Return on equity, % 15,8 % 19,0 % 21,2 %
Return on investment, % 14,5 % 18,8 % 20,8 %
Personnel at end of
period 287 287 288
Personnel average
for period 290 257 270
KEY INDICATORS PER SHARE
Earnings / share, e 0,08 0,08 0,12
Earnings / share,
e(diluted) 0,08 0,08 0,12
Equity / share, e 0,72 0,67 0,67
SEGMENT INFORMATION
Turnover by segment:
Me 1-9/13 1-9/12 Change
Grocery and special retail, HoReCa 13,2 11,7 +1,5
Wholesale trade, Logistics and
Services 11,2 12,4 -1,2
Service Business and
Maintenance Management 3,9 3,7 +0,2
Total 28,3 27,8 +0,5
Operating result by segment:
Me 1-9/13 1-9/12 Change
Grocery and special retail, HoReCa 0,8 0,4 +0,4
Wholesale trade, Logistics and
Services 0,2 1,8 -1,6
Service Business and
Maintenance Management 0,7 -0,3 +1,0
Total 1,7 1,9 -0,2
QUARTERLY KEY INDICATORS (MEUR)
4Q/11 1Q/12 2Q/12 3Q/12
Net turnover 7,65 8,85 10,40 8,52
Operating result 0,47 0,95 0,39 0,51
Result before taxes 0,43 0,84 0,32 0,44
4Q/12 1Q/13 2Q/13 3Q/13
Net turnover 11,21 9,99 9,73 8,59
Operating result 0,88 0,54 0,54 0,63
Result before taxes 0,84 0,48 0,49 0,60
CASH FLOW STATEMENT (MEUR)
1-9/2013 1-9/2012 1-12/2012
Cash flow from business
operations 3,19 0,80 2,28
Cash flow from capital
expenditure -0,72 -5,96 -5,95
Cash flow from financing activities
Own shares 0,00 -0,10 -0,10
Dividend distribution -0,60 0,00 0,00
Return of equity (paid) 0,00 0,00 -0,45
Directed issue 0,00 3,02 3,02
Loan agreements -0,72 2,46 2,17
Cash flow from financing
activities -1,32 5,38 4,64
Change in cash and cash
equivalents 1,15 0,22 0,97
TOTAL INVESTMENTS (TEUR)
1-9/2013 1-9/2012 1-12/2012
Continuing operations,
group total 713 7 373 7 439
LIABILITIES (MEUR) 30.9.2013 30.9.2012 31.12.2012
Company quorantee for
credit limits 10,00 10,00 10,00
Lease contracts, machinery &
equipment 0,05 0,30 0,10
Lease liability,
premises 3,51 4,26 4,08
MAJOR SHAREHOLDERS SEPTEMBER 30, 2013
Shares and votes
Number %
1. Saadetdin Ali 3 481 383 23,2
2. Eläke-Fennia Keskinäinen vakuutusyhtiö 2 000 000 13,3
3. Profiz Business Solution Oyj 1 747 180 11,6
4. Aalto Seppo 1 662 206 11,1
5. Keskinäinen Työeläkevakuutusyhtiö Varma 644 917 4,3
6. Pirhonen Jalo 513 380 3,4
7. Solteq Management Oy 400 000 2,7
8. Roininen Matti 360 000 2,4
9. Solteg Management Team Oy 350 000 2,3
10. Saadetdin Katiye 156 600 1,0
10 largest shareholders total 11 315 666 75,4 %
Total of nominee-registered 19 987 0,1 %
Others 3 662 408 24,4 %
Total 14 998 061 100 %
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 1.1.2012 1 009 -835 75 -14 3 800 1 910 5 945
Total comprehensive income -28 1 078 1 050
Acquiring of own shares -99 -99
Directed issue 3 017 3 017
Return of equity (paid) -449 -449
EQUITY 30.9.2012 1 009 -934 75 -42 6 368 2 988 9 464
EQUITY 1.1.2013 1 009 -933 75 -49 6 368 3 607 10 077
Total comprehensive income 26 1 192 1 218
Directed issue 24 24
Dividend distribution -603 -603
EQUITY 30.9.2013 1 009 -933 75 -23 6 392 4 196 10 715
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 estimates to publish the financial statements bulletin from the
financial year 2013 February 14, 2014 at 9.00 am
More investor information is available from Solteq's website at www.solteq.com
Additional information:
CEO Repe Harmanen,
Tel +358 400 467 717,
E-mail repe.harmanen@solteq.com
CFO Antti Kärkkäinen
Tel +358 40 8444 393,
E-mail antti.karkkainen@solteq.com
Distribution:
NASDAQ OMX Helsinki
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