2010-02-18 12:13:00 CET
2010-02-18 12:13:07 CET
REGULATED INFORMATION
Neomarkka - Financial Statement Release
NEOMARKKA'S RESULT FOR THE LAST QUARTER AND FULL YEAR 2009
Neomarkka Plc FINANCIAL STATEMENTS REVIEW February 18, 2010 at 13.10 NEOMARKKA'S RESULT FOR THE LAST QUARTER AND FULL YEAR 2009 -------------------------------------------------------------------------------- | | 10-12/200 | 10-12/2008 | 1-12/2009 | 1-12/2008 | | | 9 | | | | -------------------------------------------------------------------------------- | Turnover, EUR million, of | 16.4 | 25.7 | 69.1 | 116.6 | | which | | | | | -------------------------------------------------------------------------------- | - Cable business turnover | 16.4 | 25.7 | 69.1 | 116.6 | -------------------------------------------------------------------------------- | - Other operations | 0.0 | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Operating profit or loss, | -2.6 | -5.5 | -5.4 | -1.5 | | EUR million, of which | | | | | -------------------------------------------------------------------------------- | - Cable business | -2.3 | -5.0 | -4.1 | -0.1 | -------------------------------------------------------------------------------- | - Other operations | -0.3 | -0.5 | -1.3 | -1.4 | -------------------------------------------------------------------------------- | Profit for the period, EUR | -1.3 | -5.4 | -3.9 | -5.0 | | million | | | | | -------------------------------------------------------------------------------- Return on investment (ROI) during the 12 months under review was -3.0% (-1.2%), earnings per share -0,65 EUR (-0,84 EUR). The equity ratio was 47.4% (47.8%). MAJOR EVENTS IN THE LAST QUARTER OF 2009 Industrial private equity investments: Cable business The turnover of Neomarkka's cable business in the fourth quarter decreased by 36 percent compared to the previous year. The loss in the fourth quarter was, however, cut by half compared to the level a year ago. The result was affected by an improvement in the result of Russian companies in the last quarter. The adjustment of the Neomarkka's subsidiary, Reka Cables, continued in the fourth quarter and the company announced lay-offs at its Keuruu factory in December. The lay-offs involved approximately 60 people of the factory personnel. The lay-offs began in January 2010. Other operations Neomarkka started acquiring its own shares based on an authorization by the Annual General Meeting on June 10, 2009. In December, the company also announced that it will utilize the authorization made by the Annual General Meeting on June 10, 2009 to acquire own shares by a contractual trade so that each trade will involve at least 15,000 shares. By December 31, 2009, the company has acquired 52,256 B series shares via contractual trade and 3,267 shares in continuous trading through automatic bid matching. REPORT BY THE BOARD OF DIRECTORS 2009 Neomarkka has since 2007 followed a new investment strategy. Investments in high-risk securities have been abandoned and investments are made in companies involved in industrial operations. Neomarkka's financial development as an industrial investment company is tightly linked to the financial success of its investment companies. Currently the investments are all in one industry, i.e. the cable industry. Neomarkka's other investments apart from industrial investments are mainly investing cash funds. Holdings in unlisted companies have remained unchanged but their share of total investments is relatively low. The company has invested in direct corporate loans and bonds and as well as bonds with credit risk swaps. The credit risk swaps are valid for under a year and concern financially sound companies. Funds have also been invested in fixed-term deposits. Neomarkka Group's turnover in 2009 amounted to EUR 69.1 million (EUR 116.6 million in 2008). The full year result was in the red as anticipated in the third quarter review. The operating loss was EUR -3.9 million (EUR -5.0 million). Year 2009 was difficult for the cable industry. Of Neomarkka Group's operating loss, EUR -4.1 million was generated from operating losses in the cable business. The company was not able to increase the market share of the cable business in Russia in 2009 according to plan. The company still believes in market growth in the cable industry in Russia and will continue focusing on seeking growth potential in Russia. OPERATING ENVIRONMENT AND FINANCIAL DEVELOPMENT IN THE CABLE BUSINESS IN 2009 Sales in the cable business decreased heavily in 2009. Turnover in 2009 was EUR 69.1 million, which is EUR 47.5 million less than a year ago (EUR 116.6 million). The operating result was EUR -4.1 million in red (EUR -0.1 million). The global financial crisis that began in the autumn of 2008 effected also in the construction industry which weakened the demand for cable products. Machine and equipment investments in the industry were nearly at a standstill throughout the year both in Finland and internationally. Customers used up old inventories, which lowered the amount of new cable orders. In Russia, local manufacturers also emptied inventories at low prices, in particularly during the first half of the year, which tightened competition considerably. Construction projects of electricity transmission and supply infrastructure in Russia were postponed indefinitely due to the financial crisis already in late 2008, and it is still impossible to estimate when the projects will be implemented. In the second half of the year, an increase in raw material prices and manufacturers' low inventories helped boost the demand on the Russian markets and there have been mild signals of recovery in investment activity. The order book of Expokabel that manufactures special cables has not been affected as heavily by the general weak financial situation and the company posted satisfactory results in the last quarter. Even though the prices of aluminium and copper increased throughout the review period, the rise in raw material prices could not be fully transferred to product prices in the tight competition. The Russian rouble remained weak throughout the year, which weakened the result of the cable business. The weak Swedish krona tightened price competition particularly in Finland. In order to adjust its operations to the weaker market situation, Reka Cables launched a cost savings programme in the first quarter. The aim of the programme was to save EUR 2 million by cutting costs. The programme was successful and the company managed to exceed the target. The full effect of the programme on the result will be seen in 2010. Personnel costs were adjusted by reducing the number of personnel both employees and officials through dismissals and lay-offs. In order to increase operational efficiency Reka Cables has continued renewing its production structure. The restructuring in Riihimäki factory continued, and the expansion of the Keuruu factory is ongoing. There are also ongoing ERP processes to develop and increase efficiency in finance, production and sales. For associated company Nestor Cables, 2009 was the first full year of operation. Company turnover continued growing but the full year result was in red due to the economic situation. The company has, however, reached a strong market position as a supplier of communication cables and fibre optic accessories in Finland and the Baltic countries. The company aims at strong growth for instance through internationalization; co-operation in Russia and deliveries to Sweden have began. MAJOR EVENTS IN THE FISCAL PERIOD In February, the company issued a profit warning stating that the 2008 result will be negative. Neomarkka's subsidiary Reka Cables strengthened its Russian organization in March by appointing a new Managing Director for ZAO Reka Kabel and a new sales and marketing manager for Russia, as well as a new regional manager in the autumn. Strengthening of the Nordic sales network continued in May by establishing a sales company in Norway. In February, the company announced that it would start acquiring own shares based on an authorization by the Annual General Meeting on June 11, 2008. By June 1 2009, the company had acquired 5,884 B series shares. In March, Neomarkka's subsidiary Reka Cables announced lay-offs at the Hyvinkää and Riihimäki factories, and in May, concerning officials in all factories. The aim was to adjust operations to a weaker market situation. In March, Neomarkka's associated company Expokable received order of EUR 5 million from a Russian oil refinery for electric cables. EUR 1.8 million of the order was completed during 2009. In June, the company announced that the final purchase price of Reka Cables Ltd's share transaction made on June 1, 2007 had been confirmed. The final purchase price was adjusted downward by EUR 1.2 million from the preliminary price to EUR 24.6 million. The refunded share of the purchase price decreased the amount of goodwill in Neomarkka's balance sheet. The effect was recognized in second quarter figures. In July, the company issued a profit warning stating that the second quarter result will be negative. In August, Neomarkka's subsidiary Reka Cables announced that it will continue renewing its production structure by expanding its factory in Keuruu and transferring the manufacturing of copper wires to Keuruu. Transfer of the production lines began in the second half of 2009 and manufacturing in Keuruu should start by the end of the first quarter in 2010. In November, the company announced that it would start acquiring own shares based on an authorization by the Annual General Meeting on June 10, 2009. In December, the company also announced that it will utilize the authorization by the Annual General Meeting on June 10, 2009 to acquire own shares by contractual trade so that each trade will involve at least 15,000 shares. By December 31, 2009, the company has acquired 52,256 B series shares via contractual trade and 3,267 shares in continuous trading through automatic bid matching. In December, Neomarkka's subsidiary Reka Cables announced lay-offs in its Keuruu factory. The lay-offs involved approximately 60 people of the factory personnel. During the lay-offs factory production will stand still but preparations for the new production line are constantly ongoing. FINANCIAL STATEMENT The financial statements of the Neomarkka Group have been drawn in accordance with the International Financial Reporting Standard (IFRS). At the end of the financial year the consolidated turnover (IFRS) was EUR 69.1 million (EUR 116.6 million in 2008). The consolidated result (IFRS) shows a loss of EUR -3,9 million (EUR -5.0 million in 2008). KEY INDICATORS CONCERNING THE GROUP'S FINANCIAL POSITION AND RESULT (IFRS) -------------------------------------------------------------------------------- | | 2009 | 2008 | 2007 | -------------------------------------------------------------------------------- | Turnover, EUR million | 69.1 | 116.6 | 62.4 | -------------------------------------------------------------------------------- | Operating profit % of the turnover | -7.8 | -1.3 | 6.7 | -------------------------------------------------------------------------------- | Return on equity, % | neg. | neg. | 1.9 | -------------------------------------------------------------------------------- | Return on investment, % | neg. | neg. | 4.7 | -------------------------------------------------------------------------------- | Equity ratio, % | 47.4 | 47.8 | 56.1 | -------------------------------------------------------------------------------- | Earnings per share, EUR | -0.65 | -0.84 | 0.19 | -------------------------------------------------------------------------------- Note that in 2007 cable business was included into the figures only for a part of the year and that they have not been recalculated to correspond the figures in 2008 and 2009. SHARE PRICE DEVELOPMENT AND VOLUMES TRADED During 2009, a total of 278,431 (408,186) of Neomarkka's B series shares were traded on NASDAQ OMX in Helsinki, which corresponds with 4.7 percent (6.8%) of the number of all shares and EUR 1.6 million (EUR 3.7 million). The closing price on December 31, 2009 was EUR 6.85 (EUR 5.80) and the average share price for the period was EUR 5.76. The lowest quotation during the period was EUR 4.45 (EUR 5.31) and the highest quotation was EUR 6.85 (EUR 10.50). The value of all company shares on 31 December 2009 measured by the share price amounted to EUR 40.7 million (EUR 35.4 million). GROUP STRUCTURE AND SHAREHOLDERS There was no changes to the Group structure in 2009. Neomarkka Plc is the parent company in a Group consisting of Neomarkka's fully owned subsidiaries Novalis Plc and Alnus Ltd and their subsidiaries and associated companies. The domicile of the parent company is Hyvinkää. On December 31, 2009, Neomarkka Plc had 12,629 shareholders. The company's largest shareholder, Reka Ltd had a 50.76% holding of shares and 60.77% of votes at the end of the period. Thus Neomarkka Plc is part of Reka Group. Reka Ltd is domiciled in Hyvinkää. At the end of the year, the combined holding of the ten largest shareholders was 60.76% of shares and 72.72% of votes. The company's Board members, Managing Director and CFO owned a total of 2,947,017 B series shares on December 31, 2009 (the Managing Director's holding was through corporations under his control). RISKS AND UNCERTAINTY FACTORS Neomarkka's main financial risks are currency, interest rate, commodity, liquidity, credit and investment market-risks. The financial risks and their hedging measures are described in more details in the notes to the Consolidated Financial Statements. The company's future risk factors are related to the business development of the portfolio companies. Currently there is only one portfolio industry, i.e. the cable industry. The most significant risks in the cable business are the development of the market situation, fluctuation in raw material prices and changes in exchange rates. In order to be aware of and prepared for the risks, Reka Cables Ltd carried out an extensive risk-charting process in 2007. In 2009, Audit Committee was focusing on risks on business operations in Russia by initiating a risk assessment. The results of the assessment was utilized in 2010 when drafting the audit plan for internal audit. The company believes in growth and development on the Russian cable markets and has invested heavily in utilizing the business opportunities in Russia. These investments include a risk that the growth in Russia will not materialize as expected. RESEARCH AND DEVELOPMENT The Group invested EUR 0.4 million (EUR 0.8 million in 2008) in R&D in 2009. In accounting, these investments are recognized as expenses. PERSONNEL During the fiscal period, the Group employed an average of 484 people (403 in 2008). At the end of 2009, the Group had 502 employees (531 at the end of 2008) of which 499 (528 in 2008) were employed in the cable business. The total sum of the Group's performance-based salaries and fees in 2009 was EUR 12.4 million (EUR 12.4 million in 2008). ENVIRONMENT Through the strategy renewal, the importance of environmental factors increased. Looking after the environment and constant improvement of operations with consideration to environmental wellbeing are part of Reka Cables' everyday operations. Reka Cables' environmental system has been certified in accordance with ISO 14001. DECISIONS OF THE ANNUAL GENERAL MEETING Neomarkka Plc's Annual General Meeting was held on June 10, 2009 at Hyvinkää. The AGM resolved to approve the Annual Report, the Financial Statement and the Consolidated Financial Statement for 2008 and discharged the members of the Board of Directors and the Managing Director from the liability for 2008. The AGM accepted the Board's dividend proposal of EUR 0.25 per share for the fiscal period 2008. In the fiscal period 2007, EUR 0.50 per share was paid as an dividend. The dividend was paid on June 23, 2009. The AMG resolved that the members of the Board be paid an annual remuneration of EUR 10,000, the Deputy Chairman of the Board an annual remuneration of EUR 12,500, the Chairman of the Board an annual remuneration of EUR 15,000, and the Board and the Committees an attendance remuneration of EUR 600 per each meeting. The members of the board are compensated for their travel expenses. The AGM resolved that the members of the Board are paid a bonus based on the development of the company's B stock price, the amount of which is EUR 2,000 for the Chairman of the Board and EUR 1,000 for the ordinary members of the Board, multiplied by the annual return based on the stock price development of Neomarkka Plc's class B share for the period May 2008 - May 2010. Should the annual return exceed 50 percent, the bonus shall be paid in accordance with 50 percent. The new persons to be elected in Neomarkka Plc's Board of Directors shall undertake to acquire shares in the company by a minimum of EUR 30,000 during the year 2009. A new member of the Board shall not transfer the class B shares so acquired prior to December 31, 2011. The AMG confirmed that the number of members of the Board is six (6) and re-elected the following members to the Board of Directors: Matti Lainema (Chairman), Pekka Soini (Deputy Chairman), Ilpo Helander and Taisto Riski. Risto Kyhälä and Matti Lappalainen were elected as new members. The AGM elected Authorized Public Accountants Ernst & Young Oy, with Authorized Public Accountant Heikki Ilkka as responsible auditor as the new auditor of the company. The term of the auditor will expire at the end of the annual general meeting of 2010. The AGM authorized the Board of Directors to decide on acquisition of the company's own shares by using the assets from the company's unrestricted equity so that the maximum number of class B shares to be acquired is 588,076. The amount corresponds to approximately 9.77 percent of all the shares in company and in total ten percent of the company's class B shares. The shares will be acquired in public trading arranged by NASDAQ OMX Helsinki in accordance with its rules, and the consideration to be paid for the shares to be acquired must be based on market price. The company may acquire B class shares directly from other shareholders than the biggest shareholder by entering into a contractual trade, provided that the trade involves at least 15,000 B series shares and that the purchase price of the shares corresponds to the prevailing market price in NASDAQ OMX Helsinki at the time of the acquisition. When acquiring the company's own shares, derivatives, share lending and other contracts customary to the capital markets may be entered into within the limits set by law and regulations. The authorization entitles the Board of Directors to decide on the acquisition in a proportion other than that of the shares held by the shareholders (directed acquisition). The shares are acquired to be used in order to carry out acquisitions or other arrangements within the scope of the company's business operations, to improve the company's capital structure, as part of implementing the company's incentive scheme, or to be further transferred for other purposes or to be cancelled. The Board of Directors is entitled to decide on other matters pertaining to the acquisition of the company's own shares. The authorization is valid until the next Annual General Meeting. The Board of Directors has used the authorizations granted by the AGM on June 11, 2008 and June 10, 2009 and acquired 61,407 Neomarkka Plc's B series shares during the review period for EUR 381,474.45. The value of the shares on December 31, 2009 calculated using the closing price was EUR 420,637.95. The holding corresponds with 1.0% of the company's share capital and 0.7% of votes. The company's B shares have been registered on Neomarkka Plc's joint book-entry account in Euroclear Finland Oy. No declaration for registration of the shares has been made, although ten years have passed since the end of the registration period, which was on September 29, 2007. The Annual General Meeting decided that the rights to such shares and the rights carried by such shares have been forfeited and that the shares will remain in the possession of the company, once ten years have passed from the entry into force of the new Finnish Companies Act, aka year 2016. AUDIT COMMITTEE Neomarkka's Board of Directors appointed the following persons as members of the Audit Committee during their first meeting after the AGM: Taisto Riski, Pekka Soini and Ilpo Helander. The Audit Committee's task is to monitor the Group's financial situation, oversee financial reporting, assessing the sufficiency and pertinence of internal supervision and risk management, assessing the compliance with legislation and regulations, communicating with the auditor, and reviewing the auditor's reports. The Audit Committee reports to the Board of Directors. NEOMARKKA'S CORPORATE GOVERNANCE STATEMENT Corporate Governance Statement of Neomarkka Plc has been drawn up in accordance with the recommendation 51 of the Finnish Corporate Governance Code. The statement has been issued as a separate report and the Group's Audit Committee has reviewed the statement. Furthermore, the statement is available on Neomarkka's website at www.neomarkka.fi. Finnish Corporate Governance Code itself is publicly available on the website of the Securities Market Association, address www.cgfinland.fi. SHARES AND SHARE CAPITAL Neomarkka Plc's share capital is divided into A and B shares. The total share capital including all shares stood at EUR 24,802,000 at the end of 2009 and the total number of shares was 6,020,360. The number of shares includes 61,407 B series shares held by Neomarkka Group. The holding corresponds with 1.0% of the company's share capital and 0.7% of votes. The company held no A series shares. Neomarkka Plc's B series share is quoted on the main list of NASDAQ OMX Helsinki Ltd. -------------------------------------------------------------------------------- | Company shares | 31.12.2009 | 31.12.2008 | 31.12.2007 | -------------------------------------------------------------------------------- | Company share capital (EUR) | 24,082,000 | 24,082,000 | 24,082,000 | -------------------------------------------------------------------------------- | A shares (20 votes/share) | 139,600 | 139,600 | 139,600 | -------------------------------------------------------------------------------- | B shares (1 vote/share) | 5,880,760 | 5,880,760 | 5,880,760 | -------------------------------------------------------------------------------- | Total | 6,020,360 | 6,020,360 | 6,020,360 | -------------------------------------------------------------------------------- | B shares held by the company | 61,407 | 0 | 0 | -------------------------------------------------------------------------------- DIVIDEND POLICY Neomarkka's aim is to use at least 30% of its net earnings for dividend payments. PROPOSAL FOR DISPOSAL OF PROFITS The parent company's distributable funds at the end of 2009 totalled EUR 29,429,358.26 of which the profit for the period was EUR 163,216.34. No material changes have taken place in the company's financial position since the end of the fiscal period and the liquidity test referred to in the Limited Liability Companies Act § 13:2 does not affect the amount of distributable funds. The Board of Directors proposes to the Annual General Meeting that the distributable funds will be disposed of as follows: - EUR 0.25 per share as dividend to the shareholders, a total of EUR 1,505,090.00 - retained profit of EUR 6,597,461.80 - other unrestricted equity of EUR 21,326,806.46 In 2008 the company paid a dividend of EUR 0.25 share, totalling EUR 1.5 million. MAJOR EVENTS AFTER THE END OF THE FISCAL PERIOD The company has continued acquiring own shares and has acquired 2,080 Neomarkka B shares after the end of the period. At the time the financial statements review is published, the company holds 63,487 B shares. NEAR TERM OUTLOOK The near term outlook for Neomarkka's cable business is still weak. The effect of subsidies granted by the State to enhance the growth of construction investments in Finland and thus on the cable industry will, at the earliest, materialize in the second half of 2010. Russia is showing weak signals of a recovery in investments and a price increase. The result in the first quarter of 2010 will be depressed by the low volume and the stand still at the Keuruu factory and the EUR 0.6 million non-recurring costs from the transfer of production equipment needed in copper wire production. The full year 2010 operating result of the cable business is estimated to be better than in 2009. ANNUAL GENERAL MEETING 2010 The Board of Directors has decided that Neomarkka Plc's Annual General Meeting will be held on June 9, 2010 at 2 pm at Hyvinkää. A separate invitation to the AGM will be published on May 6, 2010. CONSOLIDATED INCOME STATEMENT (IFRS) -------------------------------------------------------------------------------- | EUR 1,000 | 1.1. - 31.12.2009 | 1.1. - 31.12.2008 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Turnover | 69,095 | 116,647 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Change in inventories of finished | 2,733 | 428 | | products and production in progress | | | -------------------------------------------------------------------------------- | Production for own use | 72 | 118 | -------------------------------------------------------------------------------- | Materials and services | -45,464 | -86,345 | -------------------------------------------------------------------------------- | Personnel expenses | -14,835 | -15,147 | -------------------------------------------------------------------------------- | Depreciation and impairment | -4,748 | -3,928 | -------------------------------------------------------------------------------- | Other operating income and expenses | -12,270 | -13,238 | -------------------------------------------------------------------------------- | | -74,514 | -118,112 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Operating profit or loss | -5,419 | -1,465 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Financial income | 3,078 | 1,241 | -------------------------------------------------------------------------------- | Financial expenses | -1,621 | -4,986 | -------------------------------------------------------------------------------- | Share of the result of associates | -202 | -802 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Profit or loss before taxes | -4,163 | -6,012 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Taxes | 269 | 1,061 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Profit or loss for the financial | -3,894 | -4,951 | | year | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Profit or loss attributable to: | | | -------------------------------------------------------------------------------- | Equity holders of the parent | -3,872 | -5,047 | -------------------------------------------------------------------------------- | Minority interests | -22 | 96 | -------------------------------------------------------------------------------- | | -3,894 | -4,951 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Earnings per share attributable to | | | | the shareholders of the parent after | -0.65 | -0.84 | | and before dilution, EUR | | | -------------------------------------------------------------------------------- | Number of shares | 5,958,953 | 6,020,360 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | CONSOLIDATED STATEMENT OF | | | | COMPREHENSIVE INCOME | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Profit | -3,894 | -4,951 | -------------------------------------------------------------------------------- | Other comprehensive income items | | | -------------------------------------------------------------------------------- | Translation difference related to | -389 | -1,538 | | international units | | | -------------------------------------------------------------------------------- | Total | -389 | -1,538 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Total comprehensive income | -4,283 | -6,489 | -------------------------------------------------------------------------------- | attributable to: | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Shareholders of the parent company | -4,202 | -6,585 | -------------------------------------------------------------------------------- | Minority interests | -81 | 96 | -------------------------------------------------------------------------------- | | -4,283 | -6,489 | -------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEET (IFRS) -------------------------------------------------------------------------------- | EUR 1,000 | 31.12.2009 | 31.12.2008 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | ASSETS | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | NON-CURRENT ASSETS | | | -------------------------------------------------------------------------------- | Goodwill | 3,520 | 4,587 | -------------------------------------------------------------------------------- | Other intangible assets | 6,794 | 7,303 | -------------------------------------------------------------------------------- | Tangible assets | 32,978 | 34,686 | -------------------------------------------------------------------------------- | Holdings in associates | 0 | 202 | -------------------------------------------------------------------------------- | Receivables | 0 | 414 | -------------------------------------------------------------------------------- | Derivative contracts | 55 | 0 | -------------------------------------------------------------------------------- | Deferred tax assets | 909 | 947 | -------------------------------------------------------------------------------- | Total non-current assets | 44,257 | 48,139 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Current assets | | | -------------------------------------------------------------------------------- | Inventories | 21,085 | 17,903 | -------------------------------------------------------------------------------- | Available-for-sale financial assets | 3,733 | 3,733 | -------------------------------------------------------------------------------- | Sales receivables and other receivables | 15,431 | 13,741 | -------------------------------------------------------------------------------- | Tax receivables from the profit | | | -------------------------------------------------------------------------------- | | 131 | 1,975 | -------------------------------------------------------------------------------- | Derivative contracts | 1,170 | 28 | -------------------------------------------------------------------------------- | Other financial assets | 7,016 | 0 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 3,000 | 22,382 | -------------------------------------------------------------------------------- | Total current assets | 51,566 | 59,761 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Total assets | 95,823 | 107,900 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | SHAREHOLDERS' EQUITY AND LIABILITIES | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Shareholders' equity | | | -------------------------------------------------------------------------------- | Share capital | 24,082 | 24,082 | -------------------------------------------------------------------------------- | Premium fund | 66 | 66 | -------------------------------------------------------------------------------- | Reserve fund | 1,221 | 1,221 | -------------------------------------------------------------------------------- | Own shares | -381 | 0 | -------------------------------------------------------------------------------- | Translation differences | -2,013 | -1,683 | -------------------------------------------------------------------------------- | Retained profit | -309 | 5,067 | -------------------------------------------------------------------------------- | Other unrestricted equity | 21,327 | 21,327 | -------------------------------------------------------------------------------- | Equity attributable to shareholders of | 43,992 | 50,080 | | the parent company | | | -------------------------------------------------------------------------------- | Minority interest | 1,445 | 1,526 | -------------------------------------------------------------------------------- | Total shareholders' equity | 45,437 | 51,606 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Non-current liabilities | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 4,012 | 4,482 | -------------------------------------------------------------------------------- | Provisions | 650 | 802 | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 18,472 | 21,193 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Current liabilities | | | -------------------------------------------------------------------------------- | Tax liabilities from the profit | 46 | 497 | -------------------------------------------------------------------------------- | Reserves | 176 | 163 | -------------------------------------------------------------------------------- | Short-term interest-bearing liabilities | 10,432 | 11,950 | -------------------------------------------------------------------------------- | Derivative contracts | 32 | 1,769 | -------------------------------------------------------------------------------- | Accounts payable and other liabilities | 16,568 | 15,437 | -------------------------------------------------------------------------------- | Total liablities | 50,386 | 56,293 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Shareholders' equity and liabilities | 95,823 | 107,900 | -------------------------------------------------------------------------------- BALANCING ACCOUNT OF SHAREHOLDERS EQUITY (IFRS) -------------------------------------------------------------------------------- | EUR | Shar | Prem | Rese | Own | Tran | Othe | Reta | Tota | Minor | Total | | 1,00 | e | ium | rve | shar | slat | r | ined | l | ity | share | | 0 | capi | fund | fund | es | ion | unre | prof | | inter | holde | | | tal | | | | diff | stri | it | | est | rs' | | | | | | | eren | cted | | | | equit | | | | | | | ces | equi | | | | y | | | | | | | | ty | | | | | -------------------------------------------------------------------------------- | Shar | 24,0 | 66 | 1,22 | 0 | -145 | 21,3 | 13,1 | 59,6 | | 59,67 | | ehol | 82 | | 1 | | | 27 | 24 | 75 | | 5 | | ders | | | | | | | | | | | | ' | | | | | | | | | | | | equi | | | | | | | | | | | | ty | | | | | | | | | | | | 31.1 | | | | | | | | | | | | 2.20 | | | | | | | | | | | | 07 | | | | | | | | | | | -------------------------------------------------------------------------------- | Tran | | | | | -1,5 | | | -1,5 | | -1,53 | | slat | | | | | 38 | | | 38 | | 8 | | ion | | | | | | | | | | | | diff | | | | | | | | | | | | eren | | | | | | | | | | | | ce | | | | | | | | | | | -------------------------------------------------------------------------------- | Prof | | | | | | | -5,0 | -5,0 | | -5,04 | | it | | | | | | | 47 | 47 | | 7 | | for | | | | | | | | | | | | the | | | | | | | | | | | | fina | | | | | | | | | | | | ncia | | | | | | | | | | | | l | | | | | | | | | | | | year | | | | | | | | | | | -------------------------------------------------------------------------------- | Divi | | | | | | | -3,0 | -3,0 | | -3,01 | | dend | | | | | | | 10 | 10 | | 0 | | s | | | | | | | | | | | | paid | | | | | | | | | | | -------------------------------------------------------------------------------- | Mino | | | | | | | | 0 | 1,526 | 1,526 | | rity | | | | | | | | | | | | inte | | | | | | | | | | | | rest | | | | | | | | | | | -------------------------------------------------------------------------------- | Shar | 24,0 | 66 | 1,22 | 0 | -1,6 | 21,3 | 5,06 | 50,0 | 1,526 | 51,60 | | ehol | 82 | | 1 | | 83 | 27 | 7 | 80 | | 6 | | ders | | | | | | | | | | | | ' | | | | | | | | | | | | equi | | | | | | | | | | | | ty | | | | | | | | | | | | 31.1 | | | | | | | | | | | | 2.20 | | | | | | | | | | | | 08 | | | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR | Shar | Prem | Rese | Own | Tran | Othe | Reta | Tota | Minor | Total | | 1,00 | e | ium | rve | shar | slat | r | ined | l | ity | share | | 0 | capi | fund | fund | es | ion | unre | prof | | inter | holde | | | tal | | | | diff | stri | it | | est | rs' | | | | | | | eren | cted | | | | equit | | | | | | | ces | equi | | | | y | | | | | | | | ty | | | | | -------------------------------------------------------------------------------- | Shar | 24,0 | 66 | 1,22 | 0 | -1,6 | 21,3 | 5,06 | 50,0 | 1,526 | 51,60 | | ehol | 82 | | 1 | | 83 | 27 | 7 | 80 | | 6 | | ders | | | | | | | | | | | | ' | | | | | | | | | | | | equi | | | | | | | | | | | | ty | | | | | | | | | | | | 31.1 | | | | | | | | | | | | 2.20 | | | | | | | | | | | | 08 | | | | | | | | | | | -------------------------------------------------------------------------------- | Tran | | | | | -330 | | | -330 | -59 | -389 | | slat | | | | | | | | | | | | ion | | | | | | | | | | | | diff | | | | | | | | | | | | eren | | | | | | | | | | | | ce | | | | | | | | | | | -------------------------------------------------------------------------------- | Prof | | | | -381 | | | -3,8 | -4,2 | | -4,25 | | it | | | | | | | 72 | 53 | | 3 | | for | | | | | | | | | | | | the | | | | | | | | | | | | fina | | | | | | | | | | | | ncia | | | | | | | | | | | | l | | | | | | | | | | | | year | | | | | | | | | | | -------------------------------------------------------------------------------- | Divi | | | | | | | -1,5 | -1,5 | | -1,50 | | dend | | | | | | | 04 | 04 | | 4 | | s | | | | | | | | | | | | paid | | | | | | | | | | | -------------------------------------------------------------------------------- | Mino | | | | | | | | 0 | -22 | -22 | | rity | | | | | | | | | | | | inte | | | | | | | | | | | | rest | | | | | | | | | | | -------------------------------------------------------------------------------- | Shar | 24,0 | 66 | 1,22 | -381 | -2,0 | 21,3 | -308 | 43,9 | 1,444 | 45,43 | | ehol | 82 | | 1 | | 13 | 27 | | 93 | | 7 | | ders | | | | | | | | | | | | ' | | | | | | | | | | | | equi | | | | | | | | | | | | ty | | | | | | | | | | | | 31.1 | | | | | | | | | | | | 2.20 | | | | | | | | | | | | 09 | | | | | | | | | | | -------------------------------------------------------------------------------- CONSOLIDATED CASH FLOW STATEMENT (IFRS) -------------------------------------------------------------------------------- | EUR 1,000 | 1.1. - | 1.1. - | | | 31.12.2009 | 31.12.2008 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Cash flows from operating activities | | | -------------------------------------------------------------------------------- | Payments received from operating | 73,956 | 130,183 | | activities | | | -------------------------------------------------------------------------------- | Payments paid on operating activities | -75,726 | -97,227 | -------------------------------------------------------------------------------- | Paid interests and other financial | -2,109 | -3,149 | | expenses | | | -------------------------------------------------------------------------------- | Interest received and other financial | 779 | 99 | | incomes | | | -------------------------------------------------------------------------------- | Direct taxes paid | 1,408 | -1,794 | -------------------------------------------------------------------------------- | Net cash provided by operating | -1,691 | 28,112 | | activities | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Cash flows from investing activities | | | -------------------------------------------------------------------------------- | Acquisition of subsidiaries and new | 0 | -6,595 | | business | | | -------------------------------------------------------------------------------- | Change in purchase price of subsidiary | 1,200 | 0 | | shares | | | -------------------------------------------------------------------------------- | Investments in tangible assets | -3,566 | -10,056 | -------------------------------------------------------------------------------- | Sales of tangible assets | 0 | 19 | -------------------------------------------------------------------------------- | Investments in intangible assets | -2 | -2 | -------------------------------------------------------------------------------- | Investments in other financial assets | -7,016 | 0 | -------------------------------------------------------------------------------- | Loans granted | -2,000 | 0 | -------------------------------------------------------------------------------- | Net cash provided by investing | -11,385 | -16,634 | | activities | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Cash flows from financing activities | | | -------------------------------------------------------------------------------- | Acquisition of own shares | -381 | 0 | -------------------------------------------------------------------------------- | Increase in loans | 0 | 5,540 | -------------------------------------------------------------------------------- | Decrease in loans | -3,479 | -4,171 | -------------------------------------------------------------------------------- | Payment of finance lease activities | -749 | -651 | -------------------------------------------------------------------------------- | Dividends paid | -1,678 | -2,968 | -------------------------------------------------------------------------------- | Net cash provided by financing | -6,287 | -2,250 | | activities | | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Change in cash and cash equivalent | -19,364 | 9,228 | -------------------------------------------------------------------------------- | Cash and cash equivalents at the | 22,382 | 13,344 | | beginning of period | | | -------------------------------------------------------------------------------- | Exchange rate differences | -18 | -189 | -------------------------------------------------------------------------------- | Cash and cash equivalents at the end | 3,000 | 22,382 | | of period | | | -------------------------------------------------------------------------------- Note that the 2008 figures in the Cash Flow Statement are only partly equivalent to the new segment reporting. The fixed term deposits are included into Cash and Cash Equivalents also in 2008 but items from the Investments in Securities segment are included into Cash flows from Operating Activities. Neomarkka withdrew from its Investments in Securities segment on in the beginning of the financial period starting from 1.1.2009. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Neomarkka Plc is the parent company in a Group consisting of Neomarkka's fully owned subsidiaries Novalis Plc and Alnus Ltd and their subsidiaries. The domicile of the parent company is Hyvinkää. Neomarkka Plc's address is Aleksanterinkatu 48 A, FI-00100 Helsinki, Finland. Neomarkka Plc's B shares are listed on NASDAQ OMX Helsinki. Neomarkka Group is part of Reka Group. The parent company of Reka Group is Reka Ltd that is domiciled in Hyvinkää. Reka Ltd's address is Niinistönkatu 8 - 12, FI-05800 Hyvinkää, Finland. Neomarkka Group has one segment: Industrial private equity investments: Cable business. As the share of investments in securities has decreased considerably it is no longer reported as a separate segment from January 1, 2009 onwards. The remaining investments are included in other operations. Neomarkka Group operates, in addition to Finland, in Russia, Sweden, the Baltic countries, Denmark and Norway. ACCOUNTING POLICIES OF THE CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), in compliance with the IAS and IFRS standards as well as SIC and IFRIC interpretations effective on December 31, 2009. International Financial Reporting Standards stands for standards and their interpretations enacted in the Finnish Accounting Act and in regulations passed by the force of the Act, which have been approved by the European Union in accordance with EC Regulation. The notes of the consolidated financial statements also comply with Finnish accounting and companies' legislation that supplement IFRS regulations. The consolidated financial statements have been prepared based on original cost except for the following assets that have been measured at fair value: derivative contracts, liquid assets, other financial assets and tangible and intangible assets measured at fair value in the calculation of the acquisition cost of Reka Cables Ltd (2007) and OAO Expokabel (2008) under IFRS 3. After Neomarkka gave up its investments in securities segment in 2009, the profit and losses from security investments have been transferred from turnover to financial items in the income statement. In the balance sheet investments are presented under other financial assets. Previously investments were presented in inventories. The information for the comparison year has been adjusted to correspond with new principles. The presentation of changes in the value of derivative contracts in the income statement has changed. Derivatives that hedge turnover are included in turnover and changes in metal derivatives that are directed at customer orders are included in material purchases (previously in other operating income and expenses). Changes in hedging of raw material purchases less than 12 months are included in material purchases. Longer raw material purchase hedging is still included in financial income and/or expenses. The information for the comparison year has been adjusted to correspond with new principles. A complete list of the accounting standards applied by the Group can be found in the consolidated financial statements. The most significant of new standards adopted in 2009 are: - IFRS 8 Operating Segments IFRS 8 replaces IAS 14 Segment Reporting. According to the new standard segment, the reporting is based on management's internal reporting and the accounting principles applied there. IFRS 8 requires information to be presented concerning Group products, services, geographical areas and significant customers. - IAS 1 Presentation of Financial Statements The figures included in the financial statements review are audited. SEGMENT INFORMATION According to the new IFRS 8 segment, the reporting is based on management's internal reporting. The accounting principles did not change but assets and liabilities have been more accurately allocated. Distribution of turnover by product group and sales area is presented as complementary information. The comparison data has been adjusted to correspond with changes adopted on January 1, 2009. -------------------------------------------------------------------------------- | 2009 | Industrial | Other | Eliminations | Group | | EUR 1,000 | investments; | operations | and | Total | | | Cable | | balancing | | | | business | | | | -------------------------------------------------------------------------------- | Turnover | 69,095 | 0 | | 69,095 | -------------------------------------------------------------------------------- | Segment's | -4,110 | | | -4,110 | | operating | | | | | | profit | | | | | -------------------------------------------------------------------------------- | Unallocated | | -1,309 | | -1,309 | | items | | | | | -------------------------------------------------------------------------------- | Operating | | -1,309 | | -5,419 | | profit | | | | | -------------------------------------------------------------------------------- | Share of the | -202 | | | -202 | | result of | | | | | | associates | | | | | -------------------------------------------------------------------------------- | Unallocated | | | 1,726 | 1,726 | | items | | | | | -------------------------------------------------------------------------------- | Profit for | | | | -3,894 | | the | | | | | | financial | | | | | | year | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | | | | | -------------------------------------------------------------------------------- | Segment's | 84,340 | | | 84,340 | | assets | | | | | -------------------------------------------------------------------------------- | Unallocated | | 14,680 | -3,198 | 11,482 | | assets | | | | | -------------------------------------------------------------------------------- | Total assets | 84,340 | 14,680 | -3,198 | 95,823 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities | | | | | -------------------------------------------------------------------------------- | Segment's | 59,421 | | | 59,421 | | liabilities | | | | | -------------------------------------------------------------------------------- | Unallocates | | 13,920 | -22,956 | -9,036 | | liabilities | | | | | -------------------------------------------------------------------------------- | Total | 59,421 | 13,920 | -22,956 | 50,385 | | liabilties | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets - | 24,919 | 760 | 19,758 | 45,437 | | liabilities | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investments | 3,915 | 0 | 0 | 3,915 | -------------------------------------------------------------------------------- | Depreciation | -4,747 | -1 | 0 | -4,748 | | s | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 2008 | Industrial | Other | Eliminations | Group | | EUR 1,000 | investments; | operations | and | Total | | | Cable | | balancing | | | | business | | | | -------------------------------------------------------------------------------- | Turnover | 116,647 | 0 | | 116,647 | -------------------------------------------------------------------------------- | Segment's | -45 | -1,378 | | -1,423 | | operating | | | | | | profit | | | | | -------------------------------------------------------------------------------- | Unallocated | | | -43 | -43 | | items | | | | | -------------------------------------------------------------------------------- | Operating | | | | -1,465 | | profit | | | | | -------------------------------------------------------------------------------- | Share of the | -802 | | | -802 | | result of | | | | | | associates | | | | | -------------------------------------------------------------------------------- | Unallocated | | | | -2,683 | | items | | | | | -------------------------------------------------------------------------------- | Profit for | | | | -4,951 | | the | | | | | | financial | | | | | | year | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | | | | | -------------------------------------------------------------------------------- | Segment's | 80,628 | | | 80,628 | | assets | | | | | -------------------------------------------------------------------------------- | Unallocated | | 24,002 | 3,270 | 27,272 | | assets | | | | | -------------------------------------------------------------------------------- | Total assets | 80,628 | 24,002 | 3,270 | 107,900 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities | | | | | -------------------------------------------------------------------------------- | Segment's | 22,111 | | | 22,111 | | liabilities | | | | | -------------------------------------------------------------------------------- | Unallocates | | 351 | 33,833 | 34,184 | | liabilities | | | | | -------------------------------------------------------------------------------- | Total | 22,111 | 351 | 33,833 | 56,294 | | liabilties | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets - | 58,518 | 23,651 | -30,563 | 51,606 | | liabilities | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investments | 12,745 | 0 | -109 | 12,636 | -------------------------------------------------------------------------------- | Depreciation | -3,868 | -22 | 0 | -3,890 | | s | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cable business' turnover by product group, | 1-12/2009 | 1-12/2008 | | EUR million | | | -------------------------------------------------------------------------------- | LV energy | 28.3 | 39.9 | -------------------------------------------------------------------------------- | Power cable | 40.8 | 76.4 | -------------------------------------------------------------------------------- | Others | 0.0 | 0.3 | -------------------------------------------------------------------------------- | Total | 69.1 | 116.6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cable business' turnover by sales region | 1-12/2009 | 1-12/2008 | -------------------------------------------------------------------------------- | EU -countries, EUR million | 58.8 | 97.3 | -------------------------------------------------------------------------------- | Non-EU -countries | 10.3 | 19.3 | -------------------------------------------------------------------------------- | Group total | 69.1 | 116.6 | -------------------------------------------------------------------------------- ACQUIRED BUSINESSES OAO Expokabel In 2009, Neomarkka acquired supplementary shares from OAO Expokabel through a public purchase offer. Shareholding before the public purchase offer was 81.27% and after 83.34%. Below is the updated purchase price allocation. -------------------------------------------------------------------------------- | EUR 1,000 | Acquiree's | Fair | Fair | | | carrying | value | value | | | amount before | adjustments | | | | combination | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net assets acquired | | | | -------------------------------------------------------------------------------- | Intangible assets | 0 | 4,794 | 4,794 | -------------------------------------------------------------------------------- | Tangible assets | 210 | 5,871 | 6,081 | -------------------------------------------------------------------------------- | Inventories | 822 | 0 | 822 | -------------------------------------------------------------------------------- | Current receivables | 292 | 0 | 292 | -------------------------------------------------------------------------------- | Cash in hand and at bank | 160 | 0 | 160 | -------------------------------------------------------------------------------- | Short term liability | -1,061 | 0 | -1,061 | -------------------------------------------------------------------------------- | Deferred tax liability | 0 | -2,560 | -2,560 | -------------------------------------------------------------------------------- | Net assets acquired | | | 8,528 | -------------------------------------------------------------------------------- | Minority interest | -71 | -1,350 | -1,421 | -------------------------------------------------------------------------------- | Net assets acquired | | | 7,108 | -------------------------------------------------------------------------------- | Goodwill | | | 235 | -------------------------------------------------------------------------------- | Total consideration, | | | 7,343 | | satisfied by cash | | | | -------------------------------------------------------------------------------- | Net cash outflow arising on | | | | | acquisition: | | | | -------------------------------------------------------------------------------- | Cash consideration, expert | | | -7,343 | | fees and taxes | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents | | | 160 | | acquired | | | | -------------------------------------------------------------------------------- | Net cash outflow arising on | | | -7,183 | | acquisition: | | | | -------------------------------------------------------------------------------- The original purchase price allocation has been partially faulty. The relative minority share had not been considered in the net assets according to IFRS 3. A separate stock exchange release will be published on the restatements effects on interim reports in 2009. The table below shows the 2008 presented faulty and restated preliminary purchase price allocation. The acquired shareholding was 81.27% in December 31, 2008. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Purchase price allocation as | Restated purchase price | | | in Financial Statements in | allocation | | | 2008 | | | -------------------------------------------------------------------------------- | Acquiree | Fair | Fair | Acquiree | Fair | Fair | | | 's | value | value | 's | value | value | Restateme | | carrying | adjustme | | carrying | adjustme | | nt | | amount | nts | | amount | nts | | effects | | before | | | before | | | | | combinat | | | combinat | | | | | ion | | | ion | | | | -------------------------------------------------------------------------------- | EUR | | | 1,000 | | -------------------------------------------------------------------------------- | | | | | | | | | -------------------------------------------------------------------------------- | Net | | | | | | | | | assets | | | | | | | | | acquir | | | | | | | | | ed | | | | | | | | -------------------------------------------------------------------------------- | Intang | 0 | 4,136 | 4,136 | 0 | 5,089 | 5,089 | 953 | | ible | | | | | | | | | assets | | | | | | | | -------------------------------------------------------------------------------- | Tangib | 171 | 4,771 | 4,942 | 210 | 5,871 | 6,081 | 1,139 | | le | | | | | | | | | assets | | | | | | | | -------------------------------------------------------------------------------- | Invent | 668 | 0 | 668 | 822 | 0 | 822 | 154 | | ories | | | | | | | | -------------------------------------------------------------------------------- | Curren | 238 | 0 | 238 | 292 | 0 | 292 | 55 | | t | | | | | | | | | receiv | | | | | | | | | ables | | | | | | | | -------------------------------------------------------------------------------- | Cash | 130 | 0 | 130 | 160 | 0 | 160 | 30 | | in | | | | | | | | | hand | | | | | | | | | and at | | | | | | | | | bank | | | | | | | | -------------------------------------------------------------------------------- | Short | -862 | 0 | -862 | -1,061 | 0 | -1,061 | -199 | | term | | | | | | | | | liabil | | | | | | | | | ity | | | | | | | | -------------------------------------------------------------------------------- | Deferr | 0 | -2,138 | -2,138 | 0 | -2,630 | -2,630 | -493 | | ed tax | | | | | | | | | liabil | | | | | | | | | ity | | | | | | | | -------------------------------------------------------------------------------- | Net | | | 7,113 | | | 8,752 | 1,639 | | assets | | | | | | | | | acquir | | | | | | | | | ed | | | | | | | | -------------------------------------------------------------------------------- | Minori | | | 0 | | | -1,639 | -1,639 | | ty | | | | | | | | | intere | | | | | | | | | st | | | | | | | | -------------------------------------------------------------------------------- | Net | | | 7,113 | | | 7,113 | 0 | | assets | | | | | | | | | acquir | | | | | | | | | ed | | | | | | | | -------------------------------------------------------------------------------- | Goodwi | | | 139 | | | 139 | 0 | | ll | | | | | | | | -------------------------------------------------------------------------------- | Acqusi | | | 7,252 | | | 7,252 | 0 | | tion | | | | | | | | | cost | | | | | | | | -------------------------------------------------------------------------------- | Cash | | | -7,252 | | | -7,252 | 0 | | consid | | | | | | | | | eratio | | | | | | | | | n, | | | | | | | | | expert | | | | | | | | | fees | | | | | | | | | and | | | | | | | | | taxes | | | | | | | | -------------------------------------------------------------------------------- | Cash | | | 130 | | | 160 | 30 | | and | | | | | | | | | cash | | | | | | | | | equiva | | | | | | | | | lents | | | | | | | | | acquir | | | | | | | | | ed | | | | | | | | -------------------------------------------------------------------------------- | Net | | | -7,122 | | | -7,092 | 30 | | cash | | | | | | | | | outflo | | | | | | | | | w | | | | | | | | | arisin | | | | | | | | | g on | | | | | | | | | acquis | | | | | | | | | ition: | | | | | | | | -------------------------------------------------------------------------------- Restated financial statement 2008 includes 39 thousand euros increase in depreciations and 9 thousand euros increase in deferred tax income. Minority intrest decreased by 5 thousand euros and the share of operating profit for the year of Neomarkka's share holders decreased by 23 thousand euros. Restated balance sheet was 1,774 thousand euros bigger thus changing the key figures. The changes in the current value of intangible assets consist of rights (electricity and gas connections). Changes in the current value of tangible assets are directed at real estate and land. The result for the period of OAO Expokabel in the fiscal period August 1, 2008 -December 31, 2009 was RUT 0.5 million. The share belonging to Neomarkka's shareholders is EUR 0.4 million. Had OAO Expokabel been acquired at the beginning of the fiscal period, the turnover of the cable business (January 1 - December 31, 2008) would have been EUR 119.1 million. In this case, Neomarkka's turnover would have been EUR 118.7 million and loss for the period EUR -5.3 million. LIABILITIES AND DERIVATIVE CONTRACTS -------------------------------------------------------------------------------- | EUR | Positive | Negative | Current | Current | Nominal | Nominal | | 1,000 | current | current | net | net | values | values | | | values | values | values | values | 2009 | 2008 | | | | | 2009 | 2008 | | | -------------------------------------------------------------------------------- | | | | | | | | -------------------------------------------------------------------------------- | Interest | | | | | | | | rate | | | | | | | | derivati | | | | | | | | ves | | | | | | | -------------------------------------------------------------------------------- | Interest | 0 | 0 | 0 | -315 | 0 | 14,590 | | rate | | | | | | | | swaps | | | | | | | -------------------------------------------------------------------------------- | Interest | 0 | 0 | 0 | 28 | 9,800 | 9,800 | | rate | | | | | | | | ceiling | | | | | | | | options | | | | | | | -------------------------------------------------------------------------------- | Currency | | | | | | | | derivati | | | | | | | | ves | | | | | | | -------------------------------------------------------------------------------- | Forward | 0 | -32 | -32 | 0 | 1,500 | 0 | | exchange | | | | | | | | agreemen | | | | | | | | ts | | | | | | | -------------------------------------------------------------------------------- | Option | 0 | 0 | 0 | -21 | 0 | 2,500 | | contract | | | | | | | | s | | | | | | | -------------------------------------------------------------------------------- | Credit | | | | | | | | derivati | | | | | | | | ves | | | | | | | -------------------------------------------------------------------------------- | Credit | 78 | 0 | 78 | 0 | 10,000 | 0 | | risk | | | | | | | | swaps | | | | | | | -------------------------------------------------------------------------------- | Raw | | | | | | | | material | | | | | | | | options | | | | | | | -------------------------------------------------------------------------------- | Metal | 1,147 | 0 | 1,147 | -1,433 | 3,406 | 3,655 | | derivati | | | | | | | | ves | | | | | | | -------------------------------------------------------------------------------- | Total | 1,225 | | | | | | | derivati | | | | | | | | ves | | | | | | | -------------------------------------------------------------------------------- | | | | | | | | -------------------------------------------------------------------------------- | Long-ter | | | | | | | | m | | | | | | | | derivati | | | | | | | | ves | | | | | | | | deducted | | | | | | | -------------------------------------------------------------------------------- | Metal | 55 | | | | | | | derivati | | | | | | | | ves | | | | | | | -------------------------------------------------------------------------------- | Short-te | 1,170 | | | | | | | rm share | | | | | | | -------------------------------------------------------------------------------- OTHER LIABILITIES -------------------------------------------------------------------------------- | EUR 1,000 | | 31.12.2009 | 31.12.2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Debts with corporate mortgages | | | | -------------------------------------------------------------------------------- | Loans from financial institutions | | 6,489 | 8,467 | -------------------------------------------------------------------------------- | Granted corporate mortgages | | 15,000 | 15,000 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Debts with securities or guarantees | | | | -------------------------------------------------------------------------------- | Loans from financial institutions | | 10,767 | 11,900 | -------------------------------------------------------------------------------- | Book value of pledged securities | | 25,787 | 26,987 | -------------------------------------------------------------------------------- | Granted guarantees | | 10,767 | 11,900 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other collaterals | | | | -------------------------------------------------------------------------------- | Bond guarantees | | 0 | 1,326 | -------------------------------------------------------------------------------- | Guarantees and payment commitments | 1,058 | 1,058 | -------------------------------------------------------------------------------- Reka Cables Ltd has granted a promissory note for the raw material purchases of its subsidiary ZAO Reka Cables. The promissory note is included in the above figures. The guarantee for the factoring credit is the accounts receivable in question, which on December 31, 2009 amounted to EUR 3.6 million (EUR 3.9 million on December 31, 2008). The factoring credit amounted to EUR 3.2 million on December 31, 2009 (EUR 3.5 million on December 31, 2008). The above mentioned loans from credit institutions include covenants and terms. The main terms are: - Neomarkka Group's holding in the companies taking out the loans cannot drop below 100% without the financer's agreement. - Internal financing (subordinated loan EUR 13.6 million) provided by Neomarkka Group can only be repaid once the above-mentioned loans have been repaid. - Reka Cables' adjusted equity ratio must be at least 16% in the 2010 financial statements and 20% after this. - Turnover + depreciation must be at the agreed sub-group level of at least EUR 1.6 million in the 2010 financial statements. Financial leasing commitments are presented in notes number 24 and other lease liabilities in notes number 29. Investment commitments Investment commitments on tangible fixed assets amounted to EUR 0,4 million on December 31, 2009 (EUR 0,0 million on December 31, 2008). Derivative contract liabilities are presented in notes number 26. RELATED PARTY EVENTS Neomarkka Plc and thus Neomarkka Group is part of Reka Group. Reka Ltd's share of Neomarkka Plc's share capital is 50.76% and 65.77% of votes. Transactions with Reka-Group -------------------------------------------------------------------------------- | EUR 1,000 | 2009 | 2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Sales to Reka Group | 30 | 90 | -------------------------------------------------------------------------------- | Dividens to Reka Group | -764 | -1,528 | -------------------------------------------------------------------------------- | Acquisition of Reka Cables Ltd | 1,200 | 0 | -------------------------------------------------------------------------------- | Other purchases from Reka Group | -1,204 | -1,102 | -------------------------------------------------------------------------------- | Sales receivables and other receivables at the | 917 | 398 | | end of period | | | -------------------------------------------------------------------------------- | Finance leases (activated on balance sheet) | -8,488 | -9,237 | -------------------------------------------------------------------------------- | Other debts at the end of period | -3 | -35 | -------------------------------------------------------------------------------- KEY FIGURES FROM THE INCOME STATEMENT AND BALANCE SHEET -------------------------------------------------------------------------------- | EUR 1,000 | 2009 | 2008 | 2007 | -------------------------------------------------------------------------------- | Turnover | 69,095 | 116,647 | 62,443 | -------------------------------------------------------------------------------- | Operating profit or loss | -5,419 | -1,465 | 4,182 | -------------------------------------------------------------------------------- | Operating profit or loss % | -7.8 | -1.3 | 6.7 | -------------------------------------------------------------------------------- | Profit before taxes | -4,163 | -6,012 | 1,916 | -------------------------------------------------------------------------------- | % of turnover | -6.0 | -5.2 | 3.1 | -------------------------------------------------------------------------------- | Profit or loss for the financial | -3,894 | -4,951 | 1,153 | | year | | | | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Return on equity % (ROE) | neg. | neg. | 1.9 | -------------------------------------------------------------------------------- | Return on investment % (ROI) | neg. | neg. | 4.4 | -------------------------------------------------------------------------------- | Equity ratio, % | 47.4 | 47.8 | 56.1 | -------------------------------------------------------------------------------- | Net-debt-equity ratio (Gearing), % | 41.6 | 20.9 | 13.7 | -------------------------------------------------------------------------------- | Investments in tangible assets | 3,135 | 9,313 | 8,572 | -------------------------------------------------------------------------------- | Number of employees in average | 484 | 403 | 172 | -------------------------------------------------------------------------------- KEY FIGURES PER SHARE (SERIES A AND B) -------------------------------------------------------------------------------- | | | 2009 | 2008 | 2007 | -------------------------------------------------------------------------------- | Equity/share, EUR | | 7.59 | 8.57 | 9.91 | -------------------------------------------------------------------------------- | Earnings/share (EPS), EUR | | -0.65 | -0.84 | 0.19 | -------------------------------------------------------------------------------- | Dividend/share, EUR | | 0.25* | 0.25 | 0.50 | -------------------------------------------------------------------------------- | Dividend/earnings, % | | neg. | neg. | 261.0 | -------------------------------------------------------------------------------- | Effective dividend yield, | | 3.7 | 4.3 | 5.1 | | % | | | | | -------------------------------------------------------------------------------- | P/E- ratio | | neg. | neg. | 51.1 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Share performance, EUR | -------------------------------------------------------------------------------- | - average quotation | | 5.76 | 9.06 | 9.29 | -------------------------------------------------------------------------------- | - lowest quotation | | 4.45 | 5.31 | 7.78 | -------------------------------------------------------------------------------- | - highest quotation | | 6.85 | 10.50 | 10.10 | -------------------------------------------------------------------------------- | - quotation at the end of | | 6.85 | 5.80 | 9.79 | | period | | | | | -------------------------------------------------------------------------------- | Market capitalisation, EUR | | 40,667 | 35,373 | 58,870 | | 1,000 | | | | | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Trading in shares , no. | | | | | -------------------------------------------------------------------------------- | B shares | | 278,431 | 408,186 | 2,548,864 | -------------------------------------------------------------------------------- | - % of B shares | | 4.6 | 6.8 | 42.3 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Adjusted and weighted average number of shares during the year | -------------------------------------------------------------------------------- | | | 6,020,360 | 6,020,360 | 6,020,360 | -------------------------------------------------------------------------------- | A shares | | 139,600 | 139,600 | 139,600 | -------------------------------------------------------------------------------- | B shares | | 5,880,760 | 5,880,760 | 5,880,760 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | Adjusted number of shares | | 6,020,360 | 6,020,360 | 6,020,360 | | at the end of period | | | | | -------------------------------------------------------------------------------- | A shares | | 139,600 | 139,600 | 139,600 | -------------------------------------------------------------------------------- | B shares | | 5,880,760 | 5,880,760 | 5,880,760 | -------------------------------------------------------------------------------- | | | | | | -------------------------------------------------------------------------------- | | | | | *)The | | | | | | Board's | | | | | | proposal | -------------------------------------------------------------------------------- CALCULATION OF KEY FIGURES -------------------------------------------------------------------------------- | Return on equity | = | Profit for the period/Shareholders' equity | x 100 | | (ROE) % | | (average) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on | = | Profit before taxes + interest and other | x 100 | | investment (ROI) | | financial expenses/[Balance sheet total - | | | % | | obligatory provisions and non-interest | | | | | bearing debts] (average) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity ratio, % | = | Shareholders' equity + minority interest | x 100 | | | | less deferred tax assets/Balance sheet | | | | | total - advances received | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net-debt-equity | = | Interest bearing-liabilities - cash in | x 100 | | ratio (Gearing) | | hand and at bank and other liquid | | | % | | financial and investment | | | | | securities/Shareholdrs' equity + minority | | | | | interest | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per | = | Profit for the review period belonging to | | | share, EUR | | parent company owners/Number of shares, | | | | | adjusted for share issues (average) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity per | = | Shareholders' equity - minority interest | | | share, EUR | | less deferred taxes/Number of shares | | | | | adjusted for share issues at the end of | | | | | the financial period | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Dividend per | = | Dividend for the financial year/Number of | | | share, EUR | | shares adjusted for share issues at the | | | | | end of the financial period | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Dividend/earning | = | Dividend per share/Earnings per share | x 100 | | s, % | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Effective | = | Dividend per share/Closing price at | x 100 | | dividend yield, | | year-end adjusted for share issues | | | % | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | P/E - ratio | = | Closing price at year-end adjusted for share | | | | issues/Earnings per share | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Market | = | (Number of series B shares - own B shares) x Closing | | capitalisation | | price at year-end + number of Series A shares x | | | | average share price | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Helsinki February 18, 2010 Neomarkka Plc Board of Directors on behalf of Sari Tulander CFO For further information please contact: Markku E. Rentto, Managing Director, tel: +358 20 720 9191 Sari Tulander, CFO, tel: + 358 20 720 9192 www.neomarkka.fi Neomarkka's financial reporting in 2010 Neomarkka's 2009 Financial Statement and Annual Report are published during week 11. In 2010 Neomarkka will publish three interim reviews as follows: - January-March interim review on May 6, 2010 - January-June interim review on August 5, 2010 - January-September interim review on November 4, 2010 Any statements in the financial statement that do not apply to actual facts are estimates concerning the future. Such estimates include expectations concerning market development, growth and profitability, as well as any sentences containing such words as ”believe”, ”assume”, ”may”, ”expect”, and other similar terms. Because such estimates are based on current plans and assessments, they include risks and uncertainty factors that may result in actual results deviating clearly from the statements made concerning them. These factors include: 1) operational preconditions, such as successful production and generated efficiency benefits, availability of production input and costs, demand for new products, changes in the availability of financing at reasonable terms; 2) conditions in the industry, such as the strength for product demand, the competitive situation, the prevailing and future market prices for Group products and related price pressure, the financial situation of the Group's customers and competitors, possible new products launched by competitors; and 3) the general economic situation, such as economic growth in the Group's main market areas or changes in exchange rates and interest rate levels. Neomarkka Plc is an investment company that invests mainly in industrial companies with similar synergic benefits. The aim of investments is with active ownership to develop the purchased companies and establish additional value. Returns are sought both through dividend flow and an increase in value. The company may also invest in listed and unlisted securities and in real estates. Neomarkka's B shares are listed on the NASDAQ OMX Helsinki Oy main market.
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