2016-11-02 07:30:04 CET
2016-11-02 07:30:04 CET
REGULATED INFORMATION
Teleste - Interim report (Q1 and Q3)
TELESTE INTERIM REPORT: QUARTERLY NET SALES AND OPERATING PROFIT DOWN, GUIDANCE UNCHANGED
Turku, Finland, 2016-11-02 07:30 CET (GLOBE NEWSWIRE) --
TELESTE CORPORATION INTERIM REPORT 2 NOV 2016 AT 08:30
TELESTE CORPORATION INTERIM REPORT 1 JANUARY TO 30 SEPTEMBER 2016
QUARTERLY NET SALES AND OPERATING PROFIT DOWN, GUIDANCE UNCHANGED
July to September 2016
- Net sales amounted to EUR 62.9 (66.2) million, a decrease of 5.0%
- Operating profit stood at EUR 4.8 (5.9) million, a decrease of 18.5%
- Undiluted result per share equalled EUR 0.20 (0.23), a decrease of 15.2%
- Orders received totalled EUR 53.2 (62.0) million, a decrease of 14.3%
- Cash flow from operations was EUR 6.3 (4.8) million, an increase of 30.2%
January to September 2016
- Net sales amounted to EUR 191.0 (179.4) million, an increase of 6.5%
- Operating profit stood at EUR 11.3 (11.0) million, an increase of 2.5%
- Undiluted result per share equalled EUR 0.45 (0.45), a decrease of 0.9%
- Orders received totalled EUR 179.7 (183.1) million, a decrease of 1.9%
- Cash flow from operations was EUR 8.3 (1.5) million, an increase of 467%
Outlook for 2016
We estimate that net sales and operating profit for 2016 will exceed the 2015
level.
Comments on the third quarter of 2016 by CEO Jukka Rinnevaara:
"Results for the third quarter were divided. Net sales of Video and Broadband
Solutions declined, but the result developed favourably. Net sales of Network
Services remained at par with the comparative period, but the operating loss
was disappointing. As a whole, net sales and operating profit of the Group fell
short of the record figures of the comparative period.
Orders received and net sales by Video and Broadband Solutions remained below
the comparative period level. In spite of delayed network investments by a
number our operator customers, cable operators strengthened their position in
the broadband market. As a result, our view concerning positive sustained
investment demand for access networks remained strong. Orders for rail
transport passenger information systems fell, since ordering decisions by our
customers were delayed and certain projects were lost. In spite of lower net
sales the higher year-on-year average gross margin in the access network
products increased the operating profit of the business area.
Net sales of Network Services remained at par with the comparative period, but
the operating profit fell considerably and resulted in an operating loss. In
Germany, the launch of services for our main customer in a new geographical
area did not materialize as planned, resulting in a significant decline of the
operating profit. In addition, the supply of services containing subcontracted
construction work showed a loss. Corrective action in respect of the
loss-making German operations has been taken, but this is not expected to
improve the profit before the end of the year. As for other markets, we managed
to increase the net sales of our services business and improve the result. Our
investments in the UK paid off and the result from the launched new business
was positive.”
Group Operations in July to September 2016
Key figures (M€) 7-9/2016 7-9/2015 Change
-----------------------------------------------------
Orders received 53.2 62.0 -14.3%
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Net sales 62.9 66.2 -5.0%
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Operating profit 4.8 5.9 -18.5%
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Operating profit margin 7.7% 8.9%
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Profit for the period 3.6 4.2 -15.2%
-----------------------------------------------------
-----------------------------------------------------
Earnings per share, € 0.20 0.23 -15.2%
-----------------------------------------------------
Cash flow from operations 6.3 4.8 +30.2%
-----------------------------------------------------
In the third quarter, orders received by the Group amounted to EUR 53.2 (62.0)
million, down 14.3% over last year's comparative period. The year-on-year order
backlog decreased by 27.5% to EUR 30.9 (42.6) million.
Net sales decreased by 5.0% to EUR 62.9 (66.2) million. Net sales by Video and
Broadband Solutions decreased. Compared to the same period in the previous
year, operating profit decreased by 18.5% standing at EUR 4.8 (5.9) million,
which is 7.7% (8.9%) of the net sales. Operating profit of Video and Broadband
Solutions increased, whereas that of Network Services was in the red. Personnel
expenses totalled EUR 16.7 (17.1) million, a year-on-year decrease of 2.3%. Net
financial expenses totalled EUR 0.2 (0.4) million, a year-on-year decrease of
51.2%. Undiluted result per share stood at EUR 0.20 (EUR 0.23).
Cash flow from operations was EUR 6.3 (4.8) million, an increase of 30.2%. This
increase in the cash flow from operations was as a result of changes in the
working capital.
Group Operations in January to September 2016
Key figures (M€) 1-9/2016 1-9/2015 Change 1-12/2015
-----------------------------------------------------------------
Orders received 179.7 183.1 -1.9% 251.3
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Net sales 191.0 179.4 +6.5% 247.8
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Operating profit 11.3 11.0 +2.5% 14.3
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Operating profit, % 5.9% 6.1% 5.8%
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Profit for the period 8.1 8.1 -0.3% 11.0
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Earnings per share, € 0.45 0.45 -0.9% 0.61
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Cash flow from operations 8.3 1.5 +467.3% 4.9
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Net gearing, % 25.6% 29.0% 26.3%
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Equity ratio,% 50.5% 46.8% 48.3%
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Personnel at period-end 1,505 1,496 +0.6% 1,506
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Orders received by the Group decreased by 1.9% and stood at EUR 179.7 (183.1)
million. Net sales increased 6.5% equalling EUR 191.0 (179.4) million.
Operating profit grew by 2.5% standing at EUR 11.3 (11.0) million. Personnel
expenses totalled EUR 53.4 (52.4) million, an increase of 1.9 %. Net financial
expenses totalled EUR 0.8 (0.2) million, an increase of 306%. Foreign exchange
gains reduced the net financial expenses in the comparative period. Taxes for
the Group amounted to EUR 2.4 (2.7) million while the Group's tax rate equalled
22.9% (25.1%). Undiluted result per share decreased by 0.9% to EUR 0.45 (0.45).
Cash flow from operations stood at EUR 8.3 (1.5) million.
Video and Broadband Solutions in July to September 2016
Key figures (1,000 €) 7-9/2016 7-9/2015 Change
-------------------------------------------------
Orders received 30,601 39,616 -22.8%
-------------------------------------------------
Net sales 40,273 43,760 -8.0%
-------------------------------------------------
Operating profit 5,545 5,113 +8.4%
-------------------------------------------------
Operating profit, % 13.8% 11.7%
-------------------------------------------------
Orders received totalled EUR 30.6 (39.6) million, a decrease of 22.8% over the
comparative period. Order backlog decreased by 27.5% to EUR 30.9 (42.6)
million. The order backlog decreased most in the access network products,
because network upgrades by certain major operators have been delayed. Net
sales decreased by 8.0% to EUR 40.3 (43.8) million. This decrease in net sales
was due to year-on-year reduction in deliveries of access network products.
Operating profit increased by 8.4% to EUR 5.5 (5.1) million, representing 13.8%
(11.7%) of the net sales. The operating profit was improved by the higher
year-on-year average gross margin from access network products.
R&D expenses for the business area amounted to EUR 2.4 (2.0) million making
6.7% (4.6%) of the net sales. Product development projects focused on network
products complying with the DOCSIS 3.1 standard, distributed access
architecture, video security and information solutions, as well as
customer-specific projects. Capitalized R&D expenses amounted to EUR 0.6 (0.3)
million. Depreciation on capitalised R&D expenses equalled EUR 0.3 (0.2)
million.
Video and Broadband Solutions in January to September 2016
Key figures (1,000 €) 1-9/2016 1-9/2015 Change 1-12/2015
------------------------------------------------------------
Orders received 109,463 114,532 -4.4 % 157,951
------------------------------------------------------------
Net sales 120,735 110,812 +9.0% 154,396
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Operating profit 11,173 10,115 +10.5% 12,781
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Operating profit, % 9.3% 9.1% 8.3%
------------------------------------------------------------
Orders received decreased by 4.4% and stood at EUR 109.5 (114.5) million. Net
sales grew by 9.0 % amounting to EUR 120.7 (110.8) million. Operating profit
increased 10.5% equalling EUR 11.2 (10.1) million. Operating profit margin was
9.3% (9.1%).
Product development expenses equalled EUR 8.1 (7.8) million, in other words,
6.7% (7.0%) of the net sales. Activated R&D expenses stood at EUR 1.5 (0.9)
million while depreciation on product development expenses equalled EUR 0.8
(0.7) million. Product development projects focused on network products
complying with the DOCSIS 3.1 standard, distributed access architecture, video
security and information solutions, as well as customer-specific projects.
Network Services in July to September 2016
Key figures (1,000 €) 7-9/2016 7-9/2015 Change
--------------------------------------------------
Orders received 22,589 22,432 +0.7%
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Net sales 22,589 22,432 +0.7%
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Operating profit -717 811 -188.4%
--------------------------------------------------
Operating profit, % -3.2% 3.6%
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In the third quarter, net sales amounted to EUR 22.6 (22.4) million, up 0.7%
over the comparative period. Net sales grew in the UK. Operating profit
decreased by 188% from the comparison period and was EUR 0.7 million in the
red, while the operating profit in the comparative period was EUR 0.8 million
positive. Operating profit was -3.2% (3.6%) of the net sales. In Germany, the
launch of services for our main customer in a new geographical area did not
materialize as planned, resulting in decline of the operating profit. In
addition, the supply of services containing subcontracted construction work
showed a loss. Corrective action in respect of the loss-making operations has
been taken. Business and the operating profit developed positively in the UK,
Switzerland, Finland and Belgium.
Network Services in January to September 2016
Key figures (1,000 €) 1-9/2016 1-9/2015 Change 1-12/2015
------------------------------------------------------------
Orders received 70,231 68,554 +2.4% 93,362
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Net sales 70,231 68,554 +2.4 % 93,362
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Operating profit 128 914 -86.0% 1,520
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Operating profit, % 0.2% 1.3% 1.6%
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Net sales grew by 2.4% amounting to EUR 70.2 (68.6) million. Net sales grew in
the UK and declined in Germany. Operating profit equalled EUR 0.1 (0.9)
million. Operating profit fell in Germany and grew in all other markets.
Personnel and Organisation in January to September 2016
In the period under review, the Group had an annual average of 1,515 people
(1,485/2015, 1,292/2014), of whom 745 (694) were employed by Video and
Broadband Solutions, and 770 (791) by Network Services. At the end of the
reporting period, the Group employed 1,505 (1,496/2015, 1,318/2014) people, of
whom Video and Broadband Solutions accounted for 743 (704) and Network Services
for 763 (792). At the end of the reporting period, 66% (68%/2015, 72%/2014) of
the Group's employees were stationed outside Finland and 3% outside Europe.
Personnel costs amounted to EUR 53.4 million (52.4/2015, 43.1/2014). This
increase in the personnel expenses was mainly brought about by the increased
number of employees in Video and Broadband Solutions.
Investments and Product Development in January to September 2016
In the period under review, investments by the Group totalled EUR 3.7 (14.6)
million accounting for 2.0% (8.1%) of the net sales. In the comparative period,
EUR 11.5 million of these investments involved the acquisition of Mitron.
Product development investments totalled EUR 1.5 (0.8) million. Investments of
EUR 0.5 (0.2) million were made under financial lease arrangements.
Product development projects focused on network products complying with the
DOCSIS 3.1 standard, distributed access architecture, video security and
information solutions, as well as customer-specific projects.
Financing and Capital Structure in January to September 2016
Cash flow from operations stood at EUR 8.3 (1.5) million. This increased cash
flow from operating activities was brought about by net working capital, which
grew less than in the comparative period.
The parent company has at its disposal financial and credit facilities
amounting to a total of EUR 45.0 million. These binding credit limits are valid
until the end of March 2018. At the end of the period under review, the amount
of unused binding credit facilities amounted to EUR 15.0 (11.1) million. On 30
September 2016, the Group's interest-bearing debt stood at EUR 35.4 (36.7)
million.
The Group's equity ratio equalled 50.5% (46.8%) while net gearing was 25.6%
(29.0%).
Essential Operational Risks of our Business Areas
Founded in 1954, Teleste is a technology and services company consisting of two
business areas – Video and Broadband Solutions and Network Services. With
Europe as the main market area, our clients include European cable operators
and specified organisations in the public sector.
As to Video and Broadband Solutions, client-specific and integrated deliveries
of solutions create favourable conditions for growth, even if the concerned
resource allocation and technical implementation pose a challenge involving,
therefore, also reasonable risks. In particular, deliveries of integrated
security and information solutions for the passenger transport may be large in
size, setting high demands for the project quotation calculation and management
and, consequently, there are risks involved. Our customers' network investments
vary based on the relevant need for upgrading and their financial structure.
A significant part of Teleste's competition comes from the USA so the exchange
rate of euro up against the US dollar affects our competitiveness. The exchange
rate development of the US dollar and the Chinese renminbi to the euro affects
our product costs. The company hedges against short-term currency exposure by
means of forward exchange contracts. The modest performance in terms of
economic growth and the financial challenges faced by the European public
sector may slow down the implementation of our customers' investment plans.
Furthermore, a weakening in the consumer purchasing power in Europe could slow
down the network investments by the cable operators. Competition increased by
the new service providers (OTT) may undermine the cable operators' ability to
invest. Consequences of natural phenomena or accidents such as fire, may reduce
the availability of components in the order-delivery chain of electronics
industry or suspend our own manufacturing operations. Correct technological
choices and their timing are vital to our success. A variety of technologies
are used in products and solutions, and the intellectual property rights
associated with the application of these technologies can be interpreted in
different ways by different parties. Such divergences can lead to costly
investigations or litigation. Regardless of careful planning and quality
assurance, complex products may fail in the customer's network and lead to
expensive repair obligations.
Net sales of Network Services comes, for the most part, from a small number of
large European customers, so a significant change in the demand for our
services by any one of them is reflected in the actual deliveries and
profitability. Improvements in customer satisfaction and productivity require
efficient control of service process management as well as innovative solutions
in processes, products, and logistics to ensure the quality of services and
cost effectiveness. Smooth operation of cable networks necessitates efficient
technical management of the networks and functional solutions for devices in
accordance with contractual obligations. This, in turn, demands continuous and
determined development of skills and competencies in Teleste's own personnel as
well as those of our subcontractors. In addition, adequacy and utilisation
rates of our own personnel and subcontractor network capacity affect the
Company’s delivery capacity and profitability. Tender calculation and
management of larger projects with overall responsibility are complex and
risky. Severe weather conditions may affect the supply conditions of our
products and services.
Teleste's strategy involves risks and uncertainties: new business opportunities
may fail to be identified or they cannot be acted upon successfully. The
business areas will have to keep an eye on market movements, such as
consolidations among the customers and competitors. Intensifying competition
may decrease the prices of products and solutions faster than we manage to
reduce the manufacturing and delivery costs of our products. Various
information systems are critical to the development, manufacturing and supply
of products to our customers. Maintenance of information systems and deployment
of new systems involve risks that may affect our ability to deliver products
and services. Information systems may also be subject to external threats, from
which we aim to protect ourselves. Acquisition of skilled personnel and
maintenance of their competence require encouragement, development, and
recruitment, which can fail.
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 are reported to the Board on a regular basis.
The company has covered any major risks of loss related to the business areas
through insurance policies. Insurance will also cover credit loss risks related
to sales receivables. In the period under review, no such 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, the Netherlands, and
Denmark with subsidiaries in 14 countries outside Finland. Teleste Management
II Oy was merged with the parent company on 30 September 2016.
Shares and Changes in Share Capital
On 30 September 2016, EM Group Oy was the largest single shareholder with a
holding of 23.2%. EM Group Oy’s Board of Directors have signed draft terms of
demerger proposing the division of EM Group Oy into three new acquiring
companies through a full demerger. Of these, the new acquiring company Tianta
Oy (alternatively Taanti Oy) named in the draft terms of demerger would own EM
Group Oy’s current holding of approximately 23.2% in Teleste Corporation in
accordance with the draft terms of demerger. It is the intention that the
implementation of the demerger would be registered on 1 January 2017.
In the period under review, the lowest company share price was EUR 7.29 (5.32)
while the highest was EUR 9.89 (8.14). Closing price on 30 September 2016 stood
at EUR 9.43 (7.60). According to Euroclear Finland Ltd, the number of
shareholders at the end of the period under review was 5,903 (5,102). Foreign
and nominee-registered holdings accounted for 7.2% (7.2%). The value of shares
traded on the Nasdaq Helsinki on 1 January to 30 September 2016 was EUR 21.0
(18.2) million. In the period under review, 2.4 (2.6) million Teleste shares
were traded on the stock exchange.
On 30 September 2016, the number of own shares in the Group's possession was
863,953; all of these are held by the parent company Teleste Corporation. At
the end of the period, the Group's holding of the total amount of shares
amounted to 4.6% (4.6%).
On 30 September 2016, the registered share capital of Teleste stood at EUR
6,966,932.80 divided into 18,985,588 shares.
Valid authorisations at the end of the review period:
- Purchases of own shares: maximum 1,200,000 of the Company's own shares, valid
until 6 October 2017.
- Issue of new shares: maximum 4,000,000 shares, valid until 31 March 2017.
- Disposal of own shares in possession: maximum 1,800,000 shares, valid until
31 March 2017.
- Based on the special rights granted by the Company, the number of shares to
subscribe may not exceed 2,500,000 shares; these special rights are included in
the maximum warrants concerning new shares and the Group's own shares mentioned
above. This authorisation is valid until 31 March 2017.
Decisions by the Annual General Meeting
The Annual General Meeting (AGM) of Teleste Corporation on 7 April 2016
confirmed the financial statements for 2015 and discharged the Board of
Directors and the CEO from liability for the financial period. The AGM
confirmed the dividend of EUR 0.23 per share as proposed by the Board. The
dividend was paid to non-treasury shares on 18 April 2016.
The AGM decided that the Board of Directors consists of six members. Mr. Pertti
Ervi, Ms. Jannica Fagerholm, Mr. Esa Harju and Mr. Kai Telanne were re-elected
as members of Teleste Corporation's Board of Directors. New Members of the
Board were elected Messrs. Timo Luukkainen and Timo Miettinen. Mr. Timo
Miettinen was elected Chair of the Board in the organising meeting held
immediately after the AGM.
The Annual General Meeting decided that the number of auditors of Teleste
Corporation shall be one. KPMG Oy Ab, Authorised Public Accountants, was
elected as the auditor of the Company and KPMG Oy Ab has appointed Mr. Petri
Kettunen, APA, as the principally responsible auditor.
The Annual General Meeting decided to authorise the Board of Directors to
decide on repurchasing the Company's own shares. Based on this authorisation,
the Board of Directors may repurchase a maximum of 1,200,000 own shares of the
Company otherwise than in proportion to the holdings of the shareholders by
using the non-restricted equity through the regulated market on Nasdaq Helsinki
Ltd at the market price prevailing at the time of acquisition. The
authorisation to repurchase own shares is valid for 18 months from the
resolution of the Annual General Meeting.
Outlook for 2016
The business objective of Video and Broadband Solutions is to maintain its
strong market position in Europe and to strengthen this market position in
selected new markets outside Europe. Network capacity will continue to grow
driven by the new broadband and video services provided by the operators, even
if some cable operators have shifted their network investments scheduled for
2016 over to the next year. Our new products in line with the DOCSIS 3.1
communication standard allow the cable operators to increase their network
capacity competitively. Price erosion in the market continues. Changes in the
value of the euro, particularly against the US dollar and the Chinese renminbi,
affect Teleste’s competitiveness, on the one hand, and product manufacturing
costs, on the other. The positive trend in the markets for video security and
passenger information solutions will continue whereas the public sector
decisions concerning the initiation of projects may be delayed by the current
economic situation. The security solution for public areas introduced in Paris
provides new opportunities for other major cities of the world. Train
manufacturers and public transport operators benefit from Teleste's video
security and passenger information solutions.
As to Network Services, our business objective is to further develop the
operational efficiency and increase the share of those services that provide
our customers with higher value. Our aim is to improve the profitability of the
provided services particularly in Germany. We estimate the demand for
all-inclusive network services in our key target markets to continue at least
at the previous year level.
We estimate that net sales and operating profit for 2016 will exceed the 2015
level.
1 November 2016
Teleste Corporation Jukka Rinnevaara
Board of Directors President and 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. Teleste has prepared this report applying the same
accounting principles as those described in detail in its the consolidated
financial statements. The data stated in this report is unaudited. The changes
in IAS1, IFRS13 and IAS19 have been applied in this report and they do not have
any material impact on the financial reporting.
STATEMENT OF COMPREHENSIVE INCOME (tEUR)
7-9/ 7-9/ Change % 1-12/
2016 2015 2015
Net Sales 62,862 66,192 -5.0 % 247,758
Other operating income 736 137 435.7 % 2,854
Materials and services -33,464 -34,611 -3.3 % -128,300
Personnel expenses -16,702 -17,102 -2.3 % -70,532
Other operating expenses -7,372 -7,536 -2.2 % -32,604
Depreciation -1,233 -1,157 6.6 % -4,874
Operating profit 4,828 5,924 -18.5 % 14,302
Financial income and expenses -190 -390 -51.2 % -363
Profit after financial items 4,637 5,534 -16.2 % 13,939
Profit before taxes 4,637 5,534 -16.2 % 13,939
Taxes -1,083 -1,341 -19.2 % -2,928
Net profit 3,554 4,193 -15.2 % 11,011
Attributable to:
Equity holders of the parent 3,554 4,193 -15.2 % 11,011
Earnings per share for result of the year attributable to the equity holders of
the parent
(expressed in € per share)
Basic 0.20 0.23 -15.2 % 0.61
Diluted 0.20 0.23 -15.2 % 0.61
Total comprehensive income for the period (tEUR)
Net profit 3,554 4,193 -15.2 % 11,011
Possible items with future net
profit effect
Translation differences -286 -362 -21.0 % 240
Fair value reserve -3 8 n/a 31
Total comprehensive income for the 3,265 3,839 -14.9 % 11,282
period
Attributable to:
Equity holders of the parent 3,265 3,839 -14.9 % 11,282
STATEMENT OF COMPREHENSIVE INCOME (tEUR)
1-9/ 1-9/ Change % 1-12/
2016 2015 2015
Net Sales 190,966 179,365 6.5 % 247,758
Other operating income 1,458 1,853 -21.3 % 2,854
Materials and services -100,289 -91,052 10.1 % -128,300
Personnel expenses -53,428 -52,449 1.9 % -70,532
Other operating expenses -23,766 -23,126 2.8 % -32,604
Depreciation -3,640 -3,562 2.2 % -4,874
Operating profit 11,301 11,029 2.5 % 14,302
Financial income and expenses -807 -199 306.0 % -363
Profit after financial items 10,494 10,830 -3.1 % 13,939
Profit before taxes 10,494 10,830 -3.1 % 13,939
Taxes -2,403 -2,717 -11.5 % -2,928
Net profit 8,090 8,114 -0.3 % 11,011
Attributable to:
Equity holders of the parent 8,090 8,114 -0.3 % 11,011
Earnings per share for result of the year attributable to the equity holders of
the parent
(expressed in € per share)
Basic 0.45 0.45 -0.9 % 0.61
Diluted 0.45 0.45 -0.9 % 0.61
Total comprehensive income for the period (tEUR)
Net profit 8,090 8,114 -0.3 % 11,011
Possible items with future net
profit effect
Translation differences -884 -33 n/a 240
Fair value reserve -206 20 n/a 31
Total comprehensive income for the 7,000 8,101 -13.6 % 11,282
period
Attributable to:
Equity holders of the parent 7,000 8,101 -13.6 % 11,282
STATEMENT OF FINANCIAL POSITION (tEUR)
30/09/ 30/09/ Change % 31/12/
2016 2015 2015
Non-current assets
Intangible assets 6,763 6,317 7.1 % 6,653
Goodwill 37,366 38,211 -2.2 % 37,849
Tangible assets 11,333 10,554 7.4 % 11,648
Deferred tax asset 1,682 1,929 -12.8 % 1,843
Available-for-sale investments 693 694 0.0 % 704
57,838 57,705 0.2 % 58,698
Current assets
Inventories 34,873 31,710 10.0 % 32,661
Trade and other receivables 55,041 57,428 -4.2 % 60,422
Cash and cash equivalents 14,723 15,179 -3.0 % 12,677
104,638 104,317 0.3 % 105,759
Total assets 162,476 162,022 0.3 % 164,458
Shareholder's equity and liabilities
Share capital 6,967 6,967 0.0 % 6,967
Other equity 73,546 67,306 9.3 % 70,578
80,513 74,274 8.4 % 77,545
Non-current liabilities
Deferred tax liability 1,694 1,657 2.2 % 1,662
Non-current liabilities, 33,145 35,997 -7.9 % 30,723
interest-bearing
Non-current interest-free liabilities 206 3,511 -94.1 % 2,730
Non-current provisions 971 1,341 -27.6 % 1,026
36,015 42,506 -15.3 % 36,141
Current liabilities
Current interest-bearing liabilities 2,240 741 202.3 % 2,315
Trade Payables and other liabilities 41,941 42,171 -0.5 % 46,505
Tax liability, income tax 1,226 1,502 -18.4 % 1,062
Current provisions 541 828 -34.7 % 889
45,948 45,242 1.6 % 50,771
Total shareholder's equity and liabilities 162,476 162,022 0.3 % 164,458
CONSOLIDATED CASH FLOW STATEMENT (tEUR)
1-9/ 1-9/ Change % 1-12/
2016 2015 2015
Cash flows from operating activities
Profit for the period 8,090 8,114 -0.3 % 11,011
Adjustments 6,851 6,477 5.8 % 7,056
Interest and other financial expenses -807 -199 306.0 % -363
and incomes
Paid Taxes -2,239 -2,328 -3.8 % -2,400
Change in working capital -3,581 -10,598 -66.2 % -10,384
Cash flow from operating activities 8,314 1,466 467.3 % 4,920
Cash flow from investing activities
A conditional supplementary contract -485 -1,147 -57.7 % -1,147
price for prior subsidiary acquisitions
Purchases of property, plant and -1,100 -997 10.3 % -1,258
equipment (PPE)
Proceeds from sales of PPE 31 17 82.4 % 17
Purchases of intangible assets -1,523 -873 74.5 % -1,644
Acquisition of subsidiary, net of cash 0 -6,826 n/a -6,826
acquired
Net cash used in investing activities -3,077 -9,826 -68.7 % -10,858
Cash flow from financing activities
Proceeds from borrowings 4,170 40,300 -89.7 % 44,300
Payments of borrowings -2,308 -29,324 -92.1 % -38,521
Dividends paid -4,168 -3,694 12.8 % -3,694
Purchases of own shares 0 -1,382 n/a -1,382
Net cash used in financing activities -2,306 5,900 n/a 703
Change in cash
Cash in the beginning 12,677 17,672 -28.3 % 17,672
Change in cash during period 2,931 -2,460 n/a -5,235
Effect of currency changes -884 -33 n/a 240
Cash at the end 14,724 15,179 -3.0 % 12,677
KEY FIGURES 1-9/ 1-9/ Change % 1-12/
2016 2015 2015
Earnings per share, EUR 0.45 0.45 -0.9 % 0.61
Earnings per share fully diluted, EUR 0.45 0.45 -0.9 % 0.61
Shareholders' equity per share, EUR 4.44 4.10 8.3 % 4.28
Return on equity 13.6 % 14.9 % -8.5 % 14.9 %
Return on capital employed 13.8 % 15.0 % -8.3 % 14.2 %
Equity ratio 50.5 % 46.8 % 7.9 % 48.3 %
Gearing 25.6 % 29.0 % -11.7 % 26.3 %
Investments, tEUR 3,730 14,582 -74.4 % 16,948
Investments % of net sales 2.0 % 8.1 % 6.8 %
Order backlog, tEUR 30,878 42,605 -27.5 % 42,150
Personnel, average 1,515 1,485 2.0 % 1,485
Number of shares (thousands) 18,986 18,986 0.0 % 18,986
including own shares
Highest share price, EUR 9.89 8.14 21.5 % 9.88
Lowest share price, EUR 7.29 5.32 37.0 % 5.32
Average share price, EUR 8.61 6.98 23.3 % 7.42
Turnover, in million shares 2.4 2.6 -6.5 % 3.3
Turnover, in MEUR 21.0 18.2 15.2 % 24.6
Treasury shares
Number % of % of
of shares votes
shares
Possession of company's own shares 863,953 4.55% 4.55%
30.9.2016
Contingent liabilities and pledged assets (tEUR)
Leasing and rent liabilities 9,158 7,995 14.5 % 7,858
Derivative instruments (tEUR)
Value of underlying forward contracts 25,172 30,815 -18.3 % 24,599
Market value of forward contracts 616 -102 n/a -27
Interest rate swap 10,000 11,000 -9.1 % 10,000
Market value of interest swap -206 -10 1908.2 % 0
Taxes are computed on the basis of the tax on the profit for the period.
OPERATING SEGMENTS (tEUR) 1-9/ 1-9/ Change % 1-12/
2016 2015 2015
Video and Broadband Solutions
Orders received 109,463 114,532 -4.4 % 157,951
Net sales 120,735 110,812 9.0 % 154,396
EBIT 11,173 10,115 10.5 % 12,781
EBIT% 9.3 % 9.1 % 8.3 %
Network Services
Orders received 70,231 68,554 2.4 % 93,362
Net sales 70,231 68,554 2.4 % 93,362
EBIT 128 914 -86.0 % 1,520
EBIT% 0.2 % 1.3 % 1.6 %
Total
Orders received 179,694 183,086 -1.9 % 251,313
Net sales 190,966 179,365 6.5 % 247,758
EBIT 11,301 11,029 2.5 % 14,302
EBIT% 5.9 % 6.1 % 5.8 %
Financial items -807 -199 306.0 % -363
Operating segments net profit before 10,494 10,830 -3.1 % 13,939
taxes
Information per quarter 7-9/16 4-6/16 1-3/16 10-12/15 7-9/15 10/2015-
(tEUR) 9/2016
Video and Broadband Solutions
Orders received 30,601 42,470 36,392 43,419 39,616 152,882
Net sales 40,273 42,769 37,693 43,584 43,760 164,319
EBIT 5,545 3,180 2,449 2,666 5,113 13,685
EBIT % 13.8 % 7.4 % 6.5 % 6.1 % 11.7 % 8.3 %
Network Services
Orders received 22,589 24,719 22,923 24,809 22,432 95,040
Net sales 22,589 24,719 22,923 24,809 22,432 95,040
EBIT -717 691 154 607 811 889
EBIT % -3.2 % 2.8 % 0.7 % 2.4 % 3.6 % 0.9 %
Total
Orders received 53,190 67,189 59,315 68,228 62,048 247,922
Net sales 62,862 67,488 60,616 68,393 66,192 259,359
EBIT 4,828 3,871 2,603 3,273 5,924 14,575
EBIT % 7.7 % 5.7 % 4.3 % 4.8 % 8.9 % 5.1 %
Attributable to equity holders of the parent (tEUR)
A Share capital
B Share premium
C Translation differences
D Retained earnings
E Invested free capital
F Other funds
G Total
H Share of non-controlling interest
I Total equity
(tEUR) A B C D E F G H I
Shareholder's 6,967 1,504 -99 66,034 3,140 0 77,545 0 77,545
equity 1.1.2016
Total -885 8,091 0 -206 7,000 0 7,000
comprehensive
income for the
period
Paid dividend -4,168 0 0 -4,168 0 -4,168
Equity-settled 136 0 0 136 0 136
share-based
payments
Shareholder's 6,967 1,504 -984 70,093 3,140 -206 80,513 0 80,513
equity 30.9.2016
Shareholder's 6,967 1,504 -339 58,139 3,954 -31 70,194 487 70,682
equity 1.1.2015
Total -33 8,114 20 8,101 0 8,101
comprehensive
income for the
period
Used options -814 -814 0 -814
Paid dividend -3,802 -3,802 108 -3,694
Interest, non 10 10 -10 0
controll party
Equity-settled 585 585 -585 0
share-based
payments
Shareholder's 6,967 1,504 -372 63,046 3,140 -11 74,274 0 74,274
equity 30.9.2015
CALCULATION OF KEY FIGURES
Return on Profit/loss for the financial period
equity: ------------------------------ * 100
Shareholders’ equity (average)
Return on Profit/loss for the period after financial items + financing
capital charges
employed: ------------------------------ * 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 Profit for the period attributable to equity holder of the
share: parent
----------------------------------------------
Weighted average number of ordinary shares outstanding during
the period
Earnings per Profit for the period attributable to equity holder of the
share, parent (diluted)
diluted: ----------------------------------------------- Average number
of shares - own shares + number of options at the period-end
Major shareholders at 30/9/2016 Number of shares % of share capital
EM Group Oy 4,409,712 23.23
Mandatum Life Insurance Company Limited 1,679,200 8.84
Ilmarinen Mutual Pension Insurance Company 1,084,475 5.71
Teleste Oyj 863,953 4.55
Kaleva Mutual Insurance Company 824,641 4.34
Varma Mutual Pension Insurance Company 521,150 2.74
The State Pension Fund 500,000 2.63
Julius Tallberg Corp. 281,608 1.48
Nieminen Jorma Juhani 250,000 1.32
Shareholders by sector Number of % of Number of Number of
at 30/9/2016 shareholders Owners shares shares %
Households 5,551 94.04 4,909,398 27.6
Public sector 3 0.05 2,105,625 11.8
institutions
Financial and insurance 17 0.29 3,237,891 18.2
institutions
Corporations 259 4.39 7,243,453 40.7
Non-profit institutions 30 0.51 126,793 0.7
Foreign owners 43 0.73 165,501 0.9
Total 5,903 100 17,788,661 100
Nominee registered 0 0 1,196,927 6.3
Number of shares at Number of % of Number of % of
30/9/2016 shareholders shareholders shares shares
1 - 100 1,490 25.2 93,802 0.5
101 - 500 2,590 43.9 701,150 3.7
501 – 1,000 832 14.1 670,075 3.5
1,001 – 5,000 806 13.7 1,757,137 9.3
5,001 – 10,000 85 1.4 600,622 3.2
10,001 – 50,000 69 1.2 1,355,811 7.1
50,001 – 100,000 10 0.2 682,905 3.6
100,001 – 500,000 14 0.2 3,360,670 17.7
500,001 - 7 0.1 9,763,416 51.4
Total 5,903 100 18,985,588 100
of which nominee 8 0.1 1,196,927 6.3
registered
ADDITIONAL INFORMATION:
CEO Jukka Rinnevaara, phone +358 2 2605 866 or +358 400 747 488
DISTRIBUTION:
Nasdaq Helsinki
Main Media
www.teleste.com
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