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2010-07-21 08:00:00 CEST 2010-07-21 08:00:12 CEST REGULATED INFORMATION Teleste - Interim report (Q1 and Q3)TELESTE CORPORATION INTERIM REPORT 1 JAN TO 30 JUNE 2010TELESTE CORPORATION INTERIM REPORT 21.7.2010 AT 09:00 TELESTE CORPORATION INTERIM REPORT 1 JAN TO 30 JUNE 2010 Second quarter of 2010 - Net sales amounted to EUR 43.5 (30.6) million, an increase of 42.3% over the year of comparison. - Operating profit stood at EUR 1.7 (0.4) million. - Undiluted result per share equalled EUR 0.05 (EUR 0.01). - Orders received amounted to EUR 39.0 (29.6) million, a year-on-year increase of 31.8%. - Orders received by Video and Broadband Solutions amounted to EUR 19.7 (19.1) million - Orders received by Network Services stood at EUR 19.3 (10.5) million. - Operating cash flow stood at EUR 1.3 (2.2) million. Outlook for 2010 Due to increased net sales and adaptation of costs we estimate the operating profit for 2010 to improve clearly over 2009. Comments on Q2 by CEO Jukka Rinnevaara In the second quarter, the demand on the market continued in line with Q1 on a relatively low level and, therefore, the development of orders received failed to show a clear indication of the market picking up. In our estimation investments have been slowed down by ownership arrangements of our European customers as well as by the tightened financial situation in the public sector. In April, we expanded our offering of services through an acquisition in Switzerland. In June, we received, in joint delivery with IBM, a strategically important order from the French National Railways (SNCF) for a video surveillance centralised recording solution. The year-on-year improvement in profitability was due to a reduction in material costs of the Video and Broadband Solutions, on the one hand, and cost adaptation, on the other. In contrast, profitability of the services business weakened over the comparative year, which was mainly due to costs related to the reorganization of our German operations and the growth in low-margin deliveries. We have maintained our strong market position in Europe and our competitiveness is good. Our competitiveness is supported by the weakened euro. We will press on determinedly with the implementation of our growth strategy, which consists of R&D solutions ensuring profitable growth, strengthening of our distribution channels and expansion of our services offering. In the prevailing market situation careful cost management and adaptation measures will be continued. Reorganization of the German services business has come a long way, and thus, better utilization of synergies and the streamlining measures will improve the business area's profitability in the second half of the year. Moreover, we expect in particular the sales of optical network solutions, the Luminato headend and video surveillance systems to develop positively. The positive development in Q2 has strengthened our previous view of profitable growth for our operations in 2010. In our view, the difficult general financial situation in Europe and the ownership arrangements among the cable operators will continue for the rest of the year, and these may have implications for the timing of investments. Group's Business in the Second Quarter In Q2, the year-on-year orders received increased by 31.8% standing at EUR 39.0 (29.6) million. The growth in orders received was mainly caused by acquisitions in our Network Services business area carried out in the second half of 2009. The Group's order backlog totalled EUR 14.7 (23.4) million. The order of EUR 12.0 million for the headend video centre received from India in June 2008 has been removed from the order backlog, because we still see uncertainties in its realization. The customer's investment plans are also delayed because of on-going ownership arrangements. The matter has no effect on the outlook for the current year. Net sales in Q2/2010 grew by 42.3% amounting to EUR 43.5 (30.6) million. This growth in net sales was mainly caused by acquisitions in our Network Services business area carried out in the second half of 2009. Operating profit improved over the period of comparison standing at EUR 1.7 (0.4) million, which is 3.8% (1.3%) of the net sales. The growth in operating profit over the comparative period was due to Video and Broadband Solutions' reduced material costs and cost adaptation. Operating profit for the period of comparison included EUR 1.0 million of other operating income, whereas in the period under review these amounted to EUR 0.3 million. Undiluted result per share for Q2 was EUR 0.05 (0.01). Group Operations January to June Year-on-year orders received improved by 37.7% standing at EUR 76.5 (55.6) million. In the first half of the year, the order intake for both of our business areas was adversely affected by the cold winter in Europe as well as some major sporting events like the Winter Olympics and the FIFA World Championship, for the time of which some European cable operators froze all their network upgrading. Investments were also delayed by the ownership arrangements among our clientele and the deteriorated economic situation in Europe. Net sales grew by 47.0% over the year of comparison amounting to EUR 82.6 (56.2) million. The increase in net sales was mainly due to acquisitions carried out in the second half of 2009. Operating profit stood at EUR 2.5 (-0.8) million making 3.0 % (-1.4 %) of the net sales. The year-on-year growth in operating profit was due to Video and Broadband Solutions' increased net sales, reduced material costs and cost adaptation. Operating profit for the period of comparison included EUR 2.1 million of other operating income, whereas in the period under review these amounted to EUR 0.6 million. Undiluted result per share was EUR 0.08 (-0.07). Video and Broadband Solutions This business area focuses on broadband subscriber networks, video services platforms and CCTV applications. Major clientele of the business area consists of cable operators but includes also resellers and public sector organizations. The main market of the business area is Europe. Video and Broadband Solutions in Q2 Orders received totalled EUR 19.7 (19.1) million. Order intake was still affected by the ownership arrangements among the European cable operators and the freeze on network upgrading by some European network operators for the time of major sporting events. An order of EUR 1.5 million was received from France placed by the French National Railways (SNCF) for a video surveillance centralized recording solution. Delivery of the order is scheduled over five years. Ordering decisions involving certain video surveillance projects have been delayed by the tightened European public sector funding. Order backlog totalled EUR 14.7 (23.4) million. The order of EUR 12.0 million received in June 2008 from India has been excluded from the order backlog. Net sales in Q2 equalled EUR 20.1 (20.1) million. Operating profit stood at EUR 1.5 (-0.3) million making 7.3 % (-1.5 %) of the net sales. This improvement in operating profit was due to enhanced material margin and cost adaptation. Product development expenses in Q2 equalled EUR 2.9 (2.7), in other words 14.4% (13.6%) of the net sales. Approximately 60% (70%) of the product development expenses involved further development of product platforms currently in production, maintenance, and customer-specific product applications. Activated product development expenses stood at EUR 0.5 (0.3) million. Out of the R&D expenses, EUR 0.5 (0.3) were activated for the Luminato video processing system and the processing system for the Advanced Video Coding protocol (H.264). Our R&D efforts continued regarding the new generation amplifier technology (the Access product range), the optical transfer and reception system for HFC networks (the HDO product range) and the video surveillance management system (VMX). R&D and the product management have been actively involved in several customer network evolution studies. Video and Broadband Solutions January to June Orders received stood at EUR 38.3 (36.4) million, i.e. 5.2% above the period of comparison. Net sales grew by 6.0% amounting to EUR 39.2 (37.0) million. The growth in net sales was mainly due to deliveries of the Access network products to the Nordic countries and video surveillance deliveries to the USA. Deliveries related to the Luminato headend system were above the comparative period. Operating profit amounted to EUR 2.0 (-1.8) million. This improvement in the operating profit was due to increased net sales, better material margin and cost adaptation. R&D expenses of Video and Broadband Solutions amounted to EUR 5.5 (5.9) million. Activated R&D expenses stood at EUR 0.8 (0.8) million and depreciation on previous activation items equalled EUR 1.2 (1.1) million. Network Services Clientele of our Network Services business consists mainly of large European cable operators. Services provided by this business area include planning, new construction, upgrading and maintenance of cable networks. Implementation and scope of the relevant services vary by client ranging from stand-alone applications to integrated turnkey deliveries. Some of our projects also include Teleste's own product solutions. Our services know-how covers all the sectors related to cable network technology from installation and maintenance of headends to upgrading of house networks. Parts of the projects are carried out by our subcontractor network. Network Services in Q2 Orders received totalled EUR 19.3 (10.5) million. In Q2, our main customer's internet connections service orders also involved low-margin supplemental items with no house network upgrading included. Acquisition of Freycom S.A. in Switzerland did not have any significant impact on orders received. Deliveries by the business area will be carried out mainly based on frame agreements. Net sales of the business area amounted to EUR 23.3 (10.5) million. The year-on-year increase in net sales was due to acquisitions carried out in Germany in the second half of 2009. Operating profit stood at EUR 0.2 (0.7) million making 0.8% (6.7%) of the net sales. The profitability was undermined by the fact that deliveries to the main customer involved low-margin services and, secondly, by the reorganization costs. Network Services January to June Orders received totalled EUR 38.2 (19.2) million. The growth in orders received over the comparative period was due to restructuring carried out in H2 of 2009 (the German acquisitions). Network Services received from Germany two frame agreements, which are contract extensions from current clients (NetCologne, delivery span 12 months and TeleColumbus, delivery span 6 years). The value of these contracts equals approximately EUR 8 million. Net sales amounted to EUR 43.4 (19.2) million. The increased net sales over the comparative period was due to restructuring carried out in H2 of 2009. Operating profit decreased over the previous year amounting to EUR 0.5 (1.0) million. Profitability weakened and the operating profit stood at 1.1% (5.0%) of the net sales. This decline in profitability was due to the fact that our main customer's demand involved low-margin deliveries. Also the cold winter in the beginning of the year hampered our delivery of services. Our German operations are being reorganized, which has caused expenses in the period under review. Finance and Investments January to June Operating cash flow stood at EUR 3.7 (3.3) million. At the end of the period under review, the amount of unused binding stand-by credits amounted to EUR 19.5 (23.0) million. The current binding stand-by credits of EUR 40.0 million run till November 2013. The Group's equity ratio equalled 44.4% (49.3%) and net gearing 21.7% (21.3%). Interest bearing debt on 30 June 2010 amounted to EUR 22.8 (18.5) million. Investments by the Group for the period under review totalled EUR 2.4 (13.2) million accounting for 2.9% (23.6%) of net sales; of the made investments, EUR 1.1 million involved the acquisition of the Swiss Freycom (including the estimated additional purchase price) by Network Services, 0.3 million related to the expansion investment in the premises in Finland and 0.8 (0.8) million in product development. As to investments for the period, EUR 0.1 (0.1) million was carried out by means of financial leasing. Personnel and Organisation January to June At the end of the reporting period, the number of full-time personnel employed by the Group equalled 1,203 (1,009/2009, 754/2008), of which Video and Broadband Solutions accounted for 550 and Network Services 653, respectively. Expenditure on employee benefits amounted to EUR 25.1 (20.3/January to June/2009, 16.6/January to June/2008) million. As part of the cost-structure adaptation measures required by the general market situation, the Finnish personnel have continued on a rotating layoff. Measures agreed on in the co-determination procedures will be sustained until the end of 2010 as required by the market situation. The co-determination procedure was concluded on 22 January 2010. Streamlining of German operations of Network Services is in progress. Essential Operational Risks of the Business Areas Founded in 1954, Teleste is a technology and service provider consisting of two business areas: Video and Broadband Solutions and Network Services. With Europe as the main market area our most significant clients include European cable operators. Concerning Video and Broadband Solutions, integrated deliveries of solutions create favourable conditions for growth, even if the involved resource allocation and technical implementation pose a challenge involving, therefore, also reasonable risks. The present difficult market situation may delay implementation of investment plans among our clientele. Network investments carried out by the clients vary based on their need for upgrading and their capital structure. Much of Teleste's competition comes from the USA so the exchange rate of euro up against the US dollar affects our competitiveness. Teleste hedges against short-term currency exposure by means of forward contracts. Correct technological choices and their timing are vital for our success. Net sales for Network Services comes, for the most part, from a small number of large European customers, so a significant change in the demand for services by any one of them is reflected in the actual deliveries. Along with efficient service process management, customer satisfaction requires innovative solutions in terms of processes, products and logistics to ensure the quality of services and cost-efficiency. Ensuring the smooth operation of the cable operators' networks requires constant focusing on the development of qualifications of Teleste's own and its suppliers' personnel, particularly concerning the technical management of the networks and functional product solutions. It is equally important for our business areas to take into account any market developments such as consolidations taking place among the clientele and competition. The Board of Directors annually reviews any essential risks related to the company operation and the management thereof. Risk management constitutes an integral part of the strategic and operative practices of our business areas. Risks and their probability are reported to the Board with regular monthly reports. The company has covered major risks of damage through insurance policies. These insurances do not include credit loss risks. In the period under review, no such risks materialized, and no legal proceedings or judicial procedures were pending that would have had any essential significance for the Group operation. Group Structure Parent company Teleste has branch offices in Australia, Spain, the Netherlands, China and Denmark with subsidiaries in 13 countries outside Finland. Teleste Management Oy, which was founded in March 2010, is included in the Teleste Group figures because, owing to financial arrangements, Teleste Corporation has control over the company. Decisions by the Annual General Meeting The Annual General Meeting (AGM) held on 9 April 2010 confirmed the financial statements for 2009 and discharged the Board and the CEO from liability for the financial period. The AGM confirmed the Board's proposed dividend of EUR 0.08 per share. The dividend was paid out on 21 April 2010. The AGM decided that the Board of Directors shall consist of six members. Marjo Miettinen was reappointed Chairman of the Board of Directors while the reappointed Board Members include Pertti Ervi, Tero Laaksonen, Pertti Raatikainen, Kai Telanne and Petteri Walldén. Authorised Public Accountants KPMG Oy Ab continue as the auditor until the next AGM. Accountant authorised by the Central Chamber of Commerce of Finland Esa Kailiala was chosen auditor-in-charge. The AGM authorised the Board to acquire the maximum of 1,400,000 of the company's own shares and to convey the maximum of 1,779,985 company's own shares. The AGM also authorised the company Board to issue 10,000,000 new shares. Pursuant to the special rights provided by the company, the maximum number of significant shares is 5,000,000; these special rights are included in the authorisation to issue 10,000,000 new shares. The authorizations are valid until the Annual General Meeting of Shareholders for year 2011. The Board has not exercised these rights. Shares and Changes in Share Capital On 30 June 2010, EM Group Oy was the largest single shareholder with a holding of 21.02%. In the period under review, the lowest company share price was EUR 3.63 (2.25) and the highest was EUR 5.28 (4.18). Closing price on 30 June 2010 stood at EUR 4.45 (3.13). According to the Finnish Central Security Depository the number of shareholders at the end of the period under review was 5,347 (5,427). Foreign ownership accounted for 8.6% (10.6%). From 1 January to 30 June 2010, trading with Teleste share at NASDAQ OMX Helsinki amounted to EUR 9.5 (22.8) million. In the period under review, 2.2 (6.4) million Teleste shares were traded on the stock exchange. In March 2010, Teleste Board of Directors decided on a directed share issue of 381,000 shares to Teleste Management Oy established by the management of Teleste Corporation. This directed share issue was authorized by the AGM on 7 April 2009. At the end of June 2010, the number of own shares in the Group possession stood at 760,985 (379,985) out of which parent company Teleste Corporation had none (0) while other Group or controlled companies had 760,985 shares, respectively. At the end of the period, the Group's holding of the total amount of shares amounted to 4.18% (2.13%). On 30 June 2010, the registered share capital of Teleste stood at EUR 6,966,932.80 divided in 18,186,590 shares. Outlook Cautious approach to network investments is likely to continue among the operator clientele of Video and Broadband Solutions. Nevertheless, we believe the deliveries will continue at least on the level of 2009. We estimate the demand by the current clientele of Network Services to continue steady. The strategic investments already carried out ensure that our net sales will improve from last year. Due to increased net sales and adaptation of costs we estimate the operating profit for 2010 to improve clearly over 2009. 20 July 2010 Teleste Corporation Jukka Rinnevaara Board of Directors CEO This interim report has been compiled in compliance with IAS 34, as it is accepted within EU, using the recognition and valuation principles with those used in the Annual Report. The data stated in this report is unaudited. -------------------------------------------------------------------------------- | STATEMENT OF | 4-6/2010 | 4-6/2009 | Change % | | | COMPREHENSIVE INCOME | | | | | | (tEUR) | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net Sales | 43,474 | 30,552 | 42.3 % | | -------------------------------------------------------------------------------- | | Other operating | 251 | 1,000 | -74.9 % | | | | income | | | | | -------------------------------------------------------------------------------- | | Materials and | -21,918 | -13,605 | 61.1 % | | | | services | | | | | -------------------------------------------------------------------------------- | | Personnel expenses | -12,781 | -10,247 | 24.7 % | | -------------------------------------------------------------------------------- | | Other operating | -5,993 | -5,958 | 0.6 % | | | | expenses | | | | | -------------------------------------------------------------------------------- | | Depreciation | -1,378 | -1,339 | 2.9 % | | -------------------------------------------------------------------------------- | Operating profit | 1,655 | 403 | 310.7 % | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Financial income and | -238 | -146 | 63.0 % | | | | expenses | | | | | -------------------------------------------------------------------------------- | | Share of profit of | 0 | -90 | n/a | | | | associates | | | | | -------------------------------------------------------------------------------- | Profit after financial | 1,417 | 167 | 748.5 % | | | items | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit before taxes | 1,417 | 167 | 748.5 % | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Taxes | -470 | -78 | 500.4 % | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net profit | 947 | 89 | 964.0 % | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | | -------------------------------------------------------------------------------- | | Equity holders of the | 947 | 89 | 964.0 % | | | | parent | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share for result of the year attributable to the equity holders | | of the parent | -------------------------------------------------------------------------------- | (expressed in euro per | | | | | | share) | | | | | -------------------------------------------------------------------------------- | | Basic | 0.05 | 0.01 | 443.5 % | | -------------------------------------------------------------------------------- | | Diluted | 0.05 | 0.01 | 435.2 % | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (tEUR) | -------------------------------------------------------------------------------- | Net profit | 947 | 89 | 964.0 % | | -------------------------------------------------------------------------------- | Translation differences | -239 | 49 | n/a | | -------------------------------------------------------------------------------- | Fair value reserve | -113 | 0 | n/a | | -------------------------------------------------------------------------------- | Total comprehensive | 595 | 138 | 331.2 % | | | income for the period | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | | -------------------------------------------------------------------------------- | | Equity holders of the | 595 | 138 | 331.2 % | | | | parent | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENT OF | 1-6/2010 | 1-6/2009 | Change % | 1-12/2009 | | COMPREHENSIVE INCOME | | | | | | (tEUR) | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net Sales | 82,568 | 56,156 | 47.0 % | 141,651 | -------------------------------------------------------------------------------- | | Other operating | 608 | 2,113 | -71.2 % | 3,124 | | | income | | | | | -------------------------------------------------------------------------------- | | Materials and | -41,330 | -25,508 | 62.0 % | -69,962 | | | services | | | | | -------------------------------------------------------------------------------- | | Personnel expenses | -25,060 | -20,265 | 23.7 % | -44,584 | -------------------------------------------------------------------------------- | | Other operating | -11,412 | -10,620 | 7.5 % | -21,323 | | | expenses | | | | | -------------------------------------------------------------------------------- | | Depreciation | -2,893 | -2,678 | 8.0 % | -5,582 | -------------------------------------------------------------------------------- | | Impairment loss | 0 | 0 | n/a | -800 | -------------------------------------------------------------------------------- | Operating profit | 2,481 | -802 | n/a | 2,524 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Financial income and | -386 | -385 | 0.3 % | -605 | | | expenses | | | | | -------------------------------------------------------------------------------- | | Share of profit of | 0 | -190 | n/a | -544 | | | associates | | | | | -------------------------------------------------------------------------------- | Profit after financial | 2,095 | -1,377 | n/a | 1,375 | | items | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit before taxes | 2,095 | -1,377 | n/a | 1,375 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Taxes | -653 | 258 | n/a | -959 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net profit | 1,442 | -1,119 | n/a | 416 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | | -------------------------------------------------------------------------------- | | Equity holders of the | 1,442 | -1,119 | n/a | 416 | | | parent | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share for result of the year attributable to the equity holders | | of the parent | -------------------------------------------------------------------------------- | (expressed in EUR per | | | | | | share) | | | | | -------------------------------------------------------------------------------- | | Basic | 0.08 | -0.07 | n/a | 0.02 | -------------------------------------------------------------------------------- | | Diluted | 0.08 | -0.07 | n/a | 0.02 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (tEUR) | -------------------------------------------------------------------------------- | Net profit | 1,442 | -1,119 | n/a | 416 | -------------------------------------------------------------------------------- | Translation differences | -58 | 92 | n/a | 189 | -------------------------------------------------------------------------------- | Fair value reserve | -157 | 0 | n/a | -116 | -------------------------------------------------------------------------------- | Total comprehensive | 1,227 | -1,027 | n/a | 489 | | income for the period | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | | -------------------------------------------------------------------------------- | | Equity holders of the | 1,227 | -1,027 | n/a | 489 | | | parent | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENT OF FINANCIAL | 30.06.20 | 30.06.2009 | Change % | 31.12.2009 | | POSITION (tEUR) | 10 | | | | -------------------------------------------------------------------------------- | Non-current assets | | | | | -------------------------------------------------------------------------------- | | Property,plant,equipm | 9,542 | 7,102 | 34.4 % | 9,960 | | | ent | | | | | -------------------------------------------------------------------------------- | | Goodwill | 32,257 | 21,977 | 46.8 % | 31,657 | -------------------------------------------------------------------------------- | | Intangible assets | 6,755 | 8,166 | -17.3 % | 7,664 | -------------------------------------------------------------------------------- | | Investments | 713 | 833 | -14.4 % | 713 | -------------------------------------------------------------------------------- | | | 49,267 | 38,078 | 29.4 % | 49,994 | -------------------------------------------------------------------------------- | Current assets | | | | | -------------------------------------------------------------------------------- | | Inventories | 16,419 | 20,375 | -19.4 % | 20,682 | -------------------------------------------------------------------------------- | | Other current assets | 27,780 | 28,239 | -1.6 % | 26,884 | -------------------------------------------------------------------------------- | | Liquid funds | 12,605 | 8,932 | 41.1 % | 12,518 | -------------------------------------------------------------------------------- | | | 56,804 | 57,546 | -1.3 % | 60,084 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total assets | 106,071 | 95,624 | 10.9 % | 110,078 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholder's equity and | | | | | | liabilities | | | | | -------------------------------------------------------------------------------- | | Share capital | 6,967 | 6,967 | 0.0 % | 6,967 | -------------------------------------------------------------------------------- | | Other equity | 39,668 | 38,018 | 4.3 % | 39,702 | -------------------------------------------------------------------------------- | | Non-controlling | 319 | 0 | n/a | 0 | | | interest | | | | | -------------------------------------------------------------------------------- | | | 46,954 | 44,985 | 4.4 % | 46,669 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current liabilities | | | | | -------------------------------------------------------------------------------- | | Provisions | 513 | 314 | 63.4 % | 513 | -------------------------------------------------------------------------------- | | Non interest bearing | 7,036 | 2,356 | 198.6 % | 6,726 | | | liabilities | | | | | -------------------------------------------------------------------------------- | | Interest bearing | 12,237 | 10,175 | 20.3 % | 12,237 | | | liabilities | | | | | -------------------------------------------------------------------------------- | | | 19,786 | 12,845 | 54.0 % | 19,476 | -------------------------------------------------------------------------------- | Short-term liabilities | | | | | -------------------------------------------------------------------------------- | | Trade payables and | 27,663 | 27,904 | -0.9 % | 32,372 | | | other s-t liabilities | | | | | -------------------------------------------------------------------------------- | | Provisions | 1,112 | 1,545 | -28.0 % | 1,026 | -------------------------------------------------------------------------------- | | S-t interest bearing | 10,556 | 8,345 | 26.5 % | 10,535 | | | liabilities | | | | | -------------------------------------------------------------------------------- | | | 39,331 | 37,794 | 4.1 % | 43,933 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total shareholder's | 106,071 | 95,624 | 10.9 % | 110,078 | | equity and liabilities | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED CASH FLOW | 1-6/2010 | 1-6/2009 | Change % | 1-12/2009 | | STATEMENT (tEUR) | | | | | -------------------------------------------------------------------------------- | Cash flows from operating | | | | | | activities | | | | | -------------------------------------------------------------------------------- | | Profit for the period | 1,442 | -1,119 | n/a | 416 | -------------------------------------------------------------------------------- | | Adjustments | 4,065 | 2,921 | 39.2 % | 8,230 | -------------------------------------------------------------------------------- | | Interest and other | -386 | -385 | 0.3 % | -937 | | | financial expenses | | | | | | | and incomes | | | | | -------------------------------------------------------------------------------- | | Paid Taxes | -150 | -550 | -72.7 | -1,708 | -------------------------------------------------------------------------------- | | Change in working | -1,244 | 2,401 | -151.8 % | 3,830 | | | capital | | | | | -------------------------------------------------------------------------------- | Cash flow from operating | 3,727 | 3,268 | 14.0 % | 9,831 | | activities | | | | | -------------------------------------------------------------------------------- | Cash flow from investing | | | | | | activities | | | | | -------------------------------------------------------------------------------- | | Acquisition of | -374 | -8,394 | -95.5 % | -10,281 | | | subsidiary, net of | | | | | | | cash acquired | | | | | -------------------------------------------------------------------------------- | | Purchases of | -873 | -2 | 43550.0 % | -2,772 | | | property, plant and | | | | | | | equipment (PPE) | | | | | -------------------------------------------------------------------------------- | | Purchases of | -694 | -640 | 8.4 % | -1,327 | | | intangible assets | | | | | -------------------------------------------------------------------------------- | | Investments in shares | 0 | 0 | n/a | -10 | -------------------------------------------------------------------------------- | Net cash used in | -1,941 | -9,036 | -78.5 % | -14,390 | | investing activities | | | | | -------------------------------------------------------------------------------- | Cash flow from financing | | | | | | activities | | | | | -------------------------------------------------------------------------------- | | Proceeds from | 0 | 12,000 | n/a | 20,542 | | | borrowings | | | | | -------------------------------------------------------------------------------- | | Payments of | -566 | -4,360 | -87.0 % | -10,623 | | | borrowings | | | | | -------------------------------------------------------------------------------- | | Dividends paid | -1,364 | -2,035 | n/a | -2,035 | -------------------------------------------------------------------------------- | | Own shares | 0 | -264 | n/a | -264 | -------------------------------------------------------------------------------- | | Proceeds from | 289 | 0 | n/a | 0 | | | issuance of ordinary | | | | | | | shares | | | | | -------------------------------------------------------------------------------- | Net cash used in | -1,641 | 5,341 | -130.7 % | 7,620 | | financing activities | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in cash | | | | | -------------------------------------------------------------------------------- | | Cash in the beginning | 12,518 | 9,268 | 35.1 % | 9,268 | -------------------------------------------------------------------------------- | | Change in cash during | 145 | -428 | n/a | 3,061 | | | period | | | | | -------------------------------------------------------------------------------- | | Effect of currency | -58 | 92 | n/a | 189 | | | changes | | | | | -------------------------------------------------------------------------------- | | Cash at the end | 12,605 | 8,932 | 41.1 % | 12,518 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | KEY FIGURES | 1-6/2010 | 1-6/2009 | Change % | 1-12/2009 | -------------------------------------------------------------------------------- | | Earnings per share, | 0.08 | -0.07 | n/a | 0.02 | | | EUR | | | | | -------------------------------------------------------------------------------- | | Earnings per share | 0.08 | -0.07 | n/a | 0.02 | | | fully diluted, EUR | | | | | -------------------------------------------------------------------------------- | | Shareholders' equity | 2.69 | 2.58 | 4.3 % | 2.68 | | | per share, EUR | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Return on equity | 6.2 % | -4.9 % | n/a | 0.9 % | -------------------------------------------------------------------------------- | | Return on capital | 7.1 % | -3.6 % | n/a | 3.3 % | | | employed | | | | | -------------------------------------------------------------------------------- | | Equity ratio | 44.4 % | 49.3 % | -9.9 % | 43.6 % | -------------------------------------------------------------------------------- | | Gearing | 21.7 % | 21.3 % | 1.9 % | 22.0 % | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Investments, tEUR | 2,387 | 13,248 | -82.0 % | 25,241 | -------------------------------------------------------------------------------- | | Investments % of net | 2.9 % | 23.6 % | -87.8 % | 17.8 % | | | sales | | | | | -------------------------------------------------------------------------------- | | Order backlog, tEUR | 14,716 | 23,396 | -37.1 % | 33,100 | -------------------------------------------------------------------------------- | | Personnel, average | 1,221 | 998 | 22.3 % | 1,103 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Number of shares | 18,187 | 17,806 | 2.1 % | 17,806 | | | (thousands) | | | | | -------------------------------------------------------------------------------- | | including own shares | | | | | -------------------------------------------------------------------------------- | | Highest share price, | 5.28 | 4.18 | 26.3 % | 4.30 | | | EUR | | | | | -------------------------------------------------------------------------------- | | Lowest share price, | 3.63 | 2.25 | 61.3 % | 2.25 | | | EUR | | | | | -------------------------------------------------------------------------------- | | Average share price, | 4.39 | 3.58 | 22.7 % | 3.62 | | | EUR | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Turnover, in million | 2.2 | 6.4 | -66.3 % | 7.8 | | | shares | | | | | -------------------------------------------------------------------------------- | | Turnover, in MEUR | 9.5 | 22.8 | -58.5 % | 28.5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Treasury shares | | | | | -------------------------------------------------------------------------------- | | | Number | | % of | % of | -------------------------------------------------------------------------------- | | | of | | shares | votes | | | | shares | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Teleste companies own | 760,985 | | 4.18 % | 4.18 % | | | shares 30.6.2010 | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Contingent liabilities and pledged assets (tEUR) | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | For own debt | | | | | -------------------------------------------------------------------------------- | | Other securities | 120 | 120 | 0.0 % | 120 | -------------------------------------------------------------------------------- | Leasing and rent | 6,159 | 5,801 | 6.2 % | 6,016 | | liabilities | | | | | -------------------------------------------------------------------------------- | | | 6,279 | 5,921 | 6.0 % | 6,136 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Derivative instruments | | | | | | (tEUR) | | | | | -------------------------------------------------------------------------------- | | Value of underlying | 3,554 | 4,132 | -14.0 % | 8,043 | | | forward contracts | | | | | -------------------------------------------------------------------------------- | | Market value of | -59 | -186 | -68.3 % | -228 | | | forward contracts | | | | | -------------------------------------------------------------------------------- | | Interest rate swap | 11,500 | 0 | n/a | 11,500 | -------------------------------------------------------------------------------- | | Market value of | -273 | 0 | n/a | -157 | | | interest swap | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Taxes are computed on the basis of the tax on the profit for the period. | -------------------------------------------------------------------------------- | RECLASSIFICATION OF SEGMENTS 1.1.2010 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OPERATING SEGMENTS (tEUR) | 1-6/2010 | 1-6/2009 | Change % | 1-12/2009 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Video and Broadband Solutions | -------------------------------------------------------------------------------- | | Order intake | 38,280 | 36,399 | 5.2 % | 81,612 | -------------------------------------------------------------------------------- | | Net sales | 39,210 | 37,003 | 6.0 % | 76,280 | -------------------------------------------------------------------------------- | | EBIT | 2,025 | -1,759 | n/a | -692 | -------------------------------------------------------------------------------- | | EBIT% | 5.2 % | -4.8 % | n/a | -0.9 % | -------------------------------------------------------------------------------- | Network Services | -------------------------------------------------------------------------------- | | Order intake | 38,204 | 19,153 | 99.5 % | 69,408 | -------------------------------------------------------------------------------- | | Net sales | 43,358 | 19,153 | 126.4 % | 65,371 | -------------------------------------------------------------------------------- | | EBIT | 456 | 957 | -52.4 % | 3,216 | -------------------------------------------------------------------------------- | | EBIT% | 1.1 % | 5.0 % | -79.0 % | 4.9 % | -------------------------------------------------------------------------------- | Total | -------------------------------------------------------------------------------- | | Order intake | 76,484 | 55,552 | 37.7 % | 151,020 | -------------------------------------------------------------------------------- | | Net sales | 82,568 | 56,156 | 47.0 % | 141,651 | -------------------------------------------------------------------------------- | | EBIT | 2,481 | -802 | n/a | 2,524 | -------------------------------------------------------------------------------- | | EBIT% | 3.0 % | -1.4 % | n/a | 1.8 % | -------------------------------------------------------------------------------- | | Financial items | -386 | -385 | 0.3 % | -605 | -------------------------------------------------------------------------------- | | Share of profit of | 0 | -190 | n/a | -544 | | | associates | | | | | -------------------------------------------------------------------------------- | | Operating segments | 2,095 | -1,377 | n/a | 1,375 | | | net profit before | | | | | | | taxes | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Segment assets | | Segment assets include items directly attributable as well as those that can | | be allocated on a reasonable basis. | -------------------------------------------------------------------------------- | | | 30.6.2010 | 30.6.2009 | Change % | 31.12.200 | | | | | | | 9 | -------------------------------------------------------------------------------- | | Video and Broadband | 54,997 | 63,941 | -14.0 % | 56,120 | | | Solutions | | | | | -------------------------------------------------------------------------------- | | Network Services | 38,469 | 22,751 | 69.1 % | 41,440 | -------------------------------------------------------------------------------- | | Segment assets total | 93,466 | 86,692 | 7.8 % | 97,560 | -------------------------------------------------------------------------------- | | Unallocated assets | 12,605 | 8,932 | 41.1 % | 12,518 | -------------------------------------------------------------------------------- | | Assets total | 106,071 | 95,624 | 10.9 % | 110,078 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Information | 4-6/10 | 1-3/10 | 10-12/09 | 7-9/09 | 4-6/09 | 7/2009- | | per quarter | | | | | | 6/2010 | | (tEUR) | | | | | | | -------------------------------------------------------------------------------- | Video and Broadband Solutions | -------------------------------------------------------------------------------- | | Order | 19,702 | 18,578 | 22,705 | 22,508 | 19,109 | 83,493 | | | intake | | | | | | | -------------------------------------------------------------------------------- | | Net sales | 20,148 | 19,062 | 21,015 | 18,262 | 20,095 | 78,487 | -------------------------------------------------------------------------------- | | EBIT | 1,463 | 562 | -457 | 1,524 | -295 | 3,092 | -------------------------------------------------------------------------------- | | EBIT % | 7.3 % | 2.9 % | -2.2 % | 8.3 % | -1.5 % | 3.9 % | -------------------------------------------------------------------------------- | Network Services | -------------------------------------------------------------------------------- | | Order | 19,278 | 18,926 | 24,119 | 26,136 | 10,457 | 88,459 | | | intake | | | | | | | -------------------------------------------------------------------------------- | | Net sales | 23,326 | 20,032 | 22,769 | 23,449 | 10,457 | 89,576 | -------------------------------------------------------------------------------- | | EBIT | 192 | 264 | 2,175 | 84 | 698 | 2,715 | -------------------------------------------------------------------------------- | | EBIT % | 0.8 % | 1.3 % | 9.6 % | 0.4 % | 6.7 % | 3.0 % | -------------------------------------------------------------------------------- | Total | -------------------------------------------------------------------------------- | | Order | 38,980 | 37,504 | 46,824 | 48,644 | 29,566 | 171,952 | | | intake | | | | | | | -------------------------------------------------------------------------------- | | Net sales | 43,474 | 39,094 | 43,784 | 41,711 | 30,552 | 168,063 | -------------------------------------------------------------------------------- | | EBIT | 1,655 | 826 | 1,718 | 1,608 | 403 | 5,807 | -------------------------------------------------------------------------------- | | EBIT % | 3.8 % | 2.1 % | 3.9 % | 3.9 % | 1.3 % | 3.5 % | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attri- | Share | Share | Tran | Reta | Inve- | Other | Total | Share | Total | | butabl | capit | premi | s-la | -ine | sted | funds | | of | equit | | e to | al | um | tion | d | free | | | non-c | y | | equity | | | Dif- | Earn | capi- | | | ontr- | | | holder | | | fer- | -ing | tal | | | ollin | | | s of | | | renc | s | | | | g | | | the | | | es | | | | | Inte- | | | parent | | | | | | | | rest | | | (tEUR) | | | | | | | | | | -------------------------------------------------------------------------------- | Share- | 6,967 | 1,504 | -372 | 35,9 | 2,737 | -116 | 46,66 | 0 | 46,66 | | holder | | | | 49 | | | 9 | | 9 | | 's | | | | | | | | | | | equity | | | | | | | | | | | 1.1.20 | | | | | | | | | | | 10 | | | | | | | | | | -------------------------------------------------------------------------------- | Total | | | -58 | 1,44 | | -157 | 1,227 | 0 | 1,227 | | compre | | | | 2 | | | | | | | -hensi | | | | | | | | | | | ve | | | | | | | | | | | income | | | | | | | | | | | for | | | | | | | | | | | the | | | | | | | | | | | period | | | | | | | | | | -------------------------------------------------------------------------------- | Share | | | | | 0 | | 0 | 289 | 289 | | issue | | | | | | | | | | -------------------------------------------------------------------------------- | Paid | | | | -1,3 | | | -1,39 | 30 | -1,36 | | divide | | | | 94 | | | 4 | | 4 | | nd | | | | | | | | | | -------------------------------------------------------------------------------- | Equity | | | | 133 | 0 | 0 | 133 | 0 | 133 | | -settl | | | | | | | | | | | ed | | | | | | | | | | | share- | | | | | | | | | | | based | | | | | | | | | | | paymen | | | | | | | | | | | ts | | | | | | | | | | -------------------------------------------------------------------------------- | Share- | 6,967 | 1,504 | -430 | 36,1 | 2,737 | -273 | 46,63 | 319 | 46,95 | | holder | | | | 30 | | | 5 | | 4 | | 's | | | | | | | | | | | equity | | | | | | | | | | | 30.6.2 | | | | | | | | | | | 010 | | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Share- | 6,967 | 1,504 | -561 | 37,2 | 1,451 | 0 | 46,64 | 0 | 46,64 | | holder | | | | 84 | | | 5 | | 5 | | 's | | | | | | | | | | | equity | | | | | | | | | | | 1.1.20 | | | | | | | | | | | 09 | | | | | | | | | | -------------------------------------------------------------------------------- | Profit | | | 92 | -1,1 | | 0 | -1,02 | 0 | -1,02 | | of the | | | | 19 | | | 7 | | 7 | | period | | | | | | | | | | -------------------------------------------------------------------------------- | paid | | | | -2,0 | | | -2,03 | 0 | -2,03 | | divide | | | | 35 | | | 5 | | 5 | | nd | | | | | | | | | | -------------------------------------------------------------------------------- | Equity | | | | 116 | 1,286 | 0 | 1,402 | 0 | 1,402 | | -settl | | | | | | | | | | | ed | | | | | | | | | | | share- | | | | | | | | | | | based | | | | | | | | | | | paymen | | | | | | | | | | | ts | | | | | | | | | | -------------------------------------------------------------------------------- | Share- | 6,967 | 1,504 | -469 | 34,2 | 2,737 | 0 | 44,98 | 0 | 44,98 | | holder | | | | 46 | | | 5 | | 5 | | 's | | | | | | | | | | | equity | | | | | | | | | | | 30.6.2 | | | | | | | | | | | 009 | | | | | | | | | | -------------------------------------------------------------------------------- CALCULATION OF KEY FIGURES -------------------------------------------------------------------------------- | Return on equity: | Profit/loss for the financial period | | | ------------------------------ * 100 | | | Shareholders' equity (average) | -------------------------------------------------------------------------------- | Return on capital | Profit/loss for the period after financial | | employed: | items + financing charges | | | ------------------------------ * 100 | | | Total assets - non-interest-bearing | | | liabilities (average) | -------------------------------------------------------------------------------- | Equity ratio: | Shareholders' equity | | | ----------------------------- * 100 | | | Total assets - advances received | -------------------------------------------------------------------------------- | Gearing: | Interest bearing liabilities - cash in hand and | | | in bank - interest bearing assets | | | ----------------------------- * 100 | | | Shareholders' equity | -------------------------------------------------------------------------------- | Earnings per share: | Profit for the period attributable to equity | | | holder of the parent | | | ---------------------------------------------- | | | Weighted average number of ordinary shares | | | outstanding during the period | -------------------------------------------------------------------------------- | Earnings per share, | Profit for the period attributable to equity | | diluted: | holder of the parent (diluted) | | | ----------------------------------------------- | | | Average number of shares - own shares + number | | | of options at the period-end | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | MAJOR SHAREHOLDERS 30.6.2010 | Shares | % | -------------------------------------------------------------------------------- | EM Group Oy | 3,822,813 | 21.02 | -------------------------------------------------------------------------------- | Mandatum Life | 1,679,200 | 9.23 | -------------------------------------------------------------------------------- | Ilmarinen Mutual Pension Insurance | 936,776 | 5.15 | | Company | | | -------------------------------------------------------------------------------- | Kaleva Mutual Pension Insurance Company | 824,641 | 4.53 | -------------------------------------------------------------------------------- | Varma Mutual Pension Insurance Company | 521,150 | 2.87 | -------------------------------------------------------------------------------- | State Pension Fund | 500,000 | 2.75 | -------------------------------------------------------------------------------- | Op-Suomi Small Cap | 496,112 | 2.73 | -------------------------------------------------------------------------------- | Aktia Capital Mutual Fund | 450,000 | 2.47 | -------------------------------------------------------------------------------- | Skagen Vekst Verdipapierfond | 437,000 | 2.4 | -------------------------------------------------------------------------------- | Teleste Management Oy | 381,000 | 2.09 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SECTOR DISPERSION 30.6.2010 | Shareholder | % | Shares | % | | | s | | | | -------------------------------------------------------------------------------- | Corporations | 317 | 5.92 | 5,835,378 | 32.08 | -------------------------------------------------------------------------------- | Financial and insurance | 14 | 0.26 | 3,687,601 | 20.27 | | corporations | | | | | -------------------------------------------------------------------------------- | Public institutions | 9 | 0.16 | 2,248,700 | 12.36 | -------------------------------------------------------------------------------- | Non-profit institutions | 37 | 0.69 | 429,611 | 2.36 | -------------------------------------------------------------------------------- | Households | 4,929 | 92.18 | 4,420,695 | 24.30 | -------------------------------------------------------------------------------- | Foreign countries and nominee | 41 | 0.76 | 1,564,605 | 8.60 | | registered | | | | | -------------------------------------------------------------------------------- | Total | 5,347 | 100.00 | 18,186,590 | 100.00 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Preliminary calculation of recognised fair values on the acquisition | | Freycom. | -------------------------------------------------------------------------------- | 1 000 EUR | Recognised fair values | | | on acquisition | -------------------------------------------------------------------------------- | Fair values used in consolidation | | -------------------------------------------------------------------------------- | Trade marks (inc. in intangible assets) | 63 | -------------------------------------------------------------------------------- | Customer relationship (inc. in intangible assets) | 101 | -------------------------------------------------------------------------------- | Technology (inc. in intangible assets) | 0 | -------------------------------------------------------------------------------- | Book values used in consolidation | | -------------------------------------------------------------------------------- | Tangible assets | 107 | -------------------------------------------------------------------------------- | Inventories | 321 | -------------------------------------------------------------------------------- | Other receivables | 204 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 197 | -------------------------------------------------------------------------------- | Total assets | 993 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Book values used in consolidation | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 0 | -------------------------------------------------------------------------------- | Deferred tax liabilities | 0 | -------------------------------------------------------------------------------- | Other liabilities | 524 | -------------------------------------------------------------------------------- | Total liabilities | 524 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net identifiable assets and liabilities | 469 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total consideration | 1,071 | -------------------------------------------------------------------------------- | Goodwill on acquisition | 602 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consideration paid in cash | -571 | -------------------------------------------------------------------------------- | Cash and cash equivalents in acquired subsidiary | 197 | -------------------------------------------------------------------------------- | Total net cash outflow on the acquisition | -374 | -------------------------------------------------------------------------------- ADDITIONAL INFORMATION: Mr Jukka Rinnevaara, CEO, Tel. +358 2 2605 866 or +358 400 747 488 DISTRIBUTION: NASDAQ OMX Helsinki Ltd Media www.teleste.com |
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