2015-08-05 15:10:00 CEST
2015-08-05 15:10:04 CEST
REGULATED INFORMATION
Valoe Oyj - Interim report (Q1 and Q3)
VALOE CORPORATION, INTERIM REPORT FOR JANUARY - JUNE 2015
VALOE CORPORATION, INTERIM REPORT FOR JANUARY - JUNE 2015 5 August 2015
SUMMARY
- The restructuring of Valoe Corporation (“Valoe”) from a company providing
electronics automation solutions to a technology company focusing on clean
energy solutions, particularly on photovoltaic solutions, is completed. Now
Valoe is a technology startup which, however, already has new, competitive and
tested technology in use; operating automated production plant; worldwide
market; as well as experienced personnel with competence in international
technology sales, production and projects.
- Since Valoe sold 70 percent of its electronics automation business to FTTK
Company Limited (“FTTK”) Valoe reports of only one continuing business segment
i.e. the Clean Energy Segment. The company aims to close the FTTK transaction
in terms of the remaining 30 percent as soon as possible. However, the parties
have not agreed on the closing of the transaction in terms of the remaining 30
percent of the ownership and the dispute regarding this issue has been referred
to arbitration.
- The net sales of the continuing operations of Valoe for the reporting period
January - June 2015 were EUR 0.4 million (EUR 0.7 million in 2014). The
operating profit of continuing operations was EUR -0.7 million (EUR -5.7
million), profit for the period EUR -1.2 million (EUR -6.5 million), earnings
per share were EUR -0.001 (-0.008) and EBITDA was EUR -0.3 million (EUR -1.7
million). At the beginning of the corresponding period in 2014 the Beijing
factory had still operations but the figures of the reporting period in 2015
include only the net sales of Valoe.
- Based on tax indemnity in the share and asset sale agreement between Valoe
and Savcor Group Ltd, an Australian based company, done in 2009 a claim of EUR
0.7 million against Savcor Group Ltd has been booked in the other operating
income in relation to taxation of the Beijing factory in China in the first
quarter of 2015. The outcome of the claim will have a major importance while
evaluating the sufficiency of the parent company's equity. The Beijing factory
has been closed and Valoe has no longer any future expectations or assets
relating to the factory in its balance sheet.
- The financing situation of Valoe continues to be very tight. If the company
does not succeed in securing sufficient short-term and long-term financing, the
continuity of the company's operation may be jeopardized. The general meeting
authorized the Board of Directors to issue 900,000,000 new company shares at
the most. Since then the Board of Directors has issued a convertible bond and
resolved to start preparing a share issue. The purpose of these actions is to
acquire operating capital for the company and to secure sufficient equity until
the company's operations turn into profit. The total amount of the convertible
bond is EUR 5,000,000. By the end of the reporting period subscriptions of ca.
EUR 1,100,000 were made. A total of EUR 800,000 of the subscriptions has been
paid by the end of the reporting period and booked in the company's balance
sheet as own equity loan. At the end of July the company extended the
subscription period for a month until the end of August.
More information on principle activities and events during and after the
reporting period can be found in the stock exchange releases published on
Valoe's website at www.valoe.com. The Interim Report has been drawn up in
compliance with the IAS 34 Interim Financial Reporting standard. In the Interim
Report Valoe has applied the same accounting principles as in its Annual Report
2014. The Interim Report has not been audited.
FINANCIAL DEVELOPMENT
Since Valoe transferred its electronics automation business to Cencorp
Automation Oy and sold at first 70 percent and in December 2014 the remaining
30 percent of this company to FTTK Valoe reports of only one business segments,
the Clean Energy segment. In terms of the latter 30 percent the transaction has
not yet been closed and the dispute has been referred to arbitration.
In Valoe's financial reports the profit of discontinued operations (the LAS and
LCM Segments) is reported on a separate line, apart from continuing operations,
thus, the income statement, excluding the discontinued operations item, concern
the company's continuing operations only. The group's segment information is
based on the management's internal reporting and on the organisation structure
of the company.
Valoe's equity decreased below half of the share capital as on 31 December
2014. Thus, the Board of Directors convened a general meeting to consider
measures to remedy the financial position of the company and to reduce the
share capital among other things. The extraordinary general meeting authorized
the Board of Directors to issue 900,000,000 new company shares at the most.
Since then the Board of Directors has issued a convertible bond and resolved to
start preparing a share issue. Further, the company's share capital has been
decreased to EUR 80,000 pursuant to the resolution of the general meeting. The
purpose of these actions is to secure operating capital for the company and
sufficient equity until the company's operations turn into profit.
The figures in brackets are comparison figures for the corresponding period in
2014, unless stated otherwise. The figures for Beijing have been reported in
the continuing operations.
April - June 2015 (continuing operations i.e. the Clean Energy segment)
- Valoe Group's net sales increased by 178.6 percent to EUR 0.2 million (In
2014: EUR 0.1 million).
- EBITDA was EUR -0.5 million (EUR -0.9 million).
- Operating profit was EUR -0.7 million (EUR -4.5 million).
- The profit before taxes was EUR -1.0 million (EUR -4.8 million).
- Profit for the period was EUR -1.0 million (EUR -4.8 million).
The profit for the corresponding year 2014 was decreased by write-downs of EUR
3.2 million done in the Beijing factory and its production equipment.
January - June 2015 (continuing operations i.e. the Clean Energy segment
(“CCE”))
- Valoe Group's net sales decreased by 44.6 percent to EUR 0.4 million (In
2014: EUR 0.7 million including the component production of the Beijing factory
during the first quarter).
- EBITDA was EUR -0.3 million (EUR -1.7 million).
- Operating profit was EUR -0.7 million (EUR -5.7 million).
- The profit before taxes was EUR -1.2 million (EUR -6.5 million).
- Profit for the period was EUR -1.2 million (EUR -6.5 million).
- Earnings per share were EUR -0.001 (EUR -0.008) and diluted earnings per
share EUR -0.001 (EUR -0.008).
On the reporting period the operating profit increased due to a claim of EUR
0.7 million against Savcor Group Ltd, an Australia based company, relating to
the taxation of the Beijing factory in China that was booked in the other
operating income. The claim is based on the tax indemnity in the share and
asset sale agreement between Valoe and Savcor Group Ltd done in 2009. The
outcome of the claim will have a major importance when evaluating the
sufficiency of the parent company's equity.
MANAGING DIRECTOR IIKKA SAVISALO'S REVIEW
In 2015 Valoe's most important objective is to conclude the ongoing business
negotiations for module production line sales successfully; to secure short-
and long-term financing facility; and to sign the first manufacturing
partnership agreements.
In the second quarter of 2015 the company's net sales increased compared to the
previous quarter but were still very low. The net sales consisted of deliveries
of PV modules and solar power plants to customers who are important
particularly in terms of the company's future. From time to time the production
at the factory in Mikkeli, Finland, operated almost at full capacity. The
productivity of the module production plant was in line with the company's
expectations and the processes developed by Valoe functioned as planned.
Domestic demand for solar energy systems has grown clearly compared to the
previous year. In projects Valoe has gained valuable knowledge and experience
of the module manufacturing recipe, system design and building equipment for
module production processes. Valoe believes the reference cases are important
while Valoe is endeavouring to sign agreements on module plant deliveries and
manufacturing partnerships with foreign partners.
In the reporting period the company signed its first manufacturing partnership
agreement. However, the partner has not yet got a binding financing decision
for its plant investment from a local financer. It will be seen whether the
manufacturing partnership agreement leads to a commercial plant delivery. The
partner's investment application is being processed by the financer and so far
there have been no objects to it. According to Valoe it is still possible that
the company will sell at least one production line and one PV module plant
during this year. During the reporting period Valoe has improved its sales to
close the ongoing plant projects successfully. Further, during the reporting
period Valoe has reviewed opportunities in the North American market. In North
America solar energy is not yet as well established as in Europe. There is
barely any local production for PV modules. However, in the US the economy is
growing fast and there are signs of growing interest in reducing emission,
which creates fruitful base for new solar energy projects. Additionally the
market is expected to grow faster in the US than anywhere else in the world.
Valoe has started looking for a suitable manufacturing partner in the North
American market too. Negotiations with potential partners were commenced
during the second quarter and the negotiation partners seem to be very
interested in Valoe's technology and plans.
Valoe develops Conductive Back Sheet (“CBS”) technology for solar modules and
related production continuously. The ongoing development will further improve
the competitiveness of Valoe's technology and solutions.
As a material technology specialist Valoe participates in the development of
silicon based solar cells. Cells are the most crucial component in a module.
Together with the German Fraunhofer ISE Valoe has developed and manufactured
the first prototypes of its own back contact solar cell. The company aims to
develop a cost-efficient cell optimized for CBS technology and to build a CBS
based module of 60 cells with efficiency of more than 290 Wp (nominal power)
using the new solar cell.
Valoe negotiates with one of the world's leading solar energy companies about
manufacturing a solar cell optimized for the CBS technology for Valoe's as well
as for Valoe's manufacturing partners' needs. First test parts are already in
use and cell efficiency has measured up to the expectations. Using these test
parts Valoe has produced modules with efficiency of almost 270 Wp. Based on the
results the company believes that by optimizing the processes it can
manufacture mass produced modules of 275 Wp using low-priced polycrystalline
silicon as raw material in the near future. Valoe trusts that by using more
expensive PERC or N type silicon it can produce high-end modules with
efficiency of 300 Wp. Worldwide there are only very few advanced manufacturers
of high efficiency modules with the power exceeding 300 Wp for the moment.
Typically these high efficiency cells are heterojunction (HJ) or interdigitated
back contact (IBC) cells that are produced using complex and expensive methods.
The price level of modules with HJ or IBC cells is significantly higher than
the price level of traditional polycrystalline silicon modules of 250 - 260 Wp.
Valoe's objective is to achieve efficiency of HJ and IBC modules, i.e. more
than 300 Wp, using clearly lower-cost structure than competitors.
Valoe strives to develop new pioneering CBS based modules as well as components
and production solutions for modules. If Valoe succeeds in its goal, future
users, component suppliers, manufacturers and developers of CBS based modules
will form their own ecosystem. If the ecosystem is strong enough it is expected
to draw in new manufacturing and other partners who operate in their own local
geographical areas. Thus the partners can speed up commercialization of Valoe's
technology remarkably and enhance establishment of the technology in larger
geographical area compared to Valoe using only its own resources.
VALOE'S STRATEGY
The net sales of Valoe's Clean Energy segment will be generated by the
following four product concepts:
1. Photovoltaic modules and systems
Sales of modules and small photovoltaic systems are probably Valoe's most
visible but in terms of revenue potential the smallest product group. All
Valoe's PV modules are manufactured at the company's factory in Mikkeli for the
time being. They are mainly delivered to the company's distributors and future
manufacturing partners. Further, the company provides solar power plants and
systems to its customers in Finland and abroad.
Current capacity of the company's Mikkeli factory is designed to annually
produce PV modules worth max EUR 6 - 8 million at the current market prices.
Thus, the module sales do not form a major part of the sales of the company.
The first module manufacturing recipes fully developed by Valoe has passed the
demanding test programs of the German Fraunhofer ISE, which enables Valoe's
modules to be certified in all market areas the company is targeting.
2. Production lines and related components
Typically, manufacturers operating in the developing markets, e.g. in China,
could be interested in investing in new production lines. These Valoe's
potential customers are producing traditional stringed H-pattern modules.
According to the information available to Valoe many manufacturers are going to
start to manufacture next generation modules using the CBS technology. At least
one of the world's biggest manufacturers has already announced in public that
it will start using CBS technology in 2015. These kinds of customers usually
have their own module manufacturing recipe and require only production
equipment or lines. According to Valoe's estimation typical price of production
equipment or a production line for solar modules is EUR 4 - 8 million.
The company is having negotiations on delivering solar module plants or
production lines with several potential customers interested in Valoe's
production technology worldwide. The value of the contracts Valoe is
negotiating for varies from approximately 2 million Euros to approximately 60
million Euros.
If Valoe is able to achieve market position it is targeting as a supplier of
CBS production lines expected development in the market facilitates orders for
tens of production lines in the next five years. The company estimates it will
get the first order for this kind of production line in 2015.
3. Manufacturing partners
For the moment Valoe is negotiating for cooperation agreements with several
potential manufacturing partners who as newcomers in the market would commit
themselves to both Valoe's production technology and module manufacturing
recipe. In these cases Valoe would provide a partner with a turnkey delivery
project and commit to minority shareholding in a manufacturing company if
required. Manufacturing partners operate mainly in developing markets and
produce solar energy modules for local and nearby markets. Value of a typical
turnkey plant delivery is more than ten million euros. Valoe is aiming to sign
at least 10 manufacturing partner contracts in the next five years.
4. Special components
Special components are the most important part in Valoe's strategy and most
remarkable in terms of net sales potential. Valoe's first component is
Conductive Back Sheet (CBS) developed by the company. All back contact modules
require conductive back sheet in order to function. One normal size production
line using back contact technology needs approximately 300,000 - 500,000
conductive back sheets in a year when operating at full capacity. Based on
current estimation, considering price level in the near future, each production
line will annually require back sheets worth approximately 5 - 11 million
Euros.
In the future Valoe is planning to offer its partners other components too.
These components might include e.g. various intelligent components, components
relating to energy storages and special back contact based cell technologies.
The non-binding objectives of Valoe for both market share and the number of
partners are ambitious and attainment of the objectives involves significant
risks. However, Valoe views it has a technological concept that provides the
company a good position to achieve the objectives. Attainment of the objectives
is subject to sufficient financing.
OPERATING ENVIRONMENT
Valoe operates in industries applying clean energy technology. Valoe's
operating environment is global. The company's customers operating in the clean
energy business are companies that provide products and services locally and/or
worldwide.
Valoe's key products and services have been designed for the photovoltaic
market. Modern next generation conductive back sheet based solar modules can be
manufactured with Valoe's own module manufacturing recipe and automated
production.
In the market, general attitude to the solar energy investments improved
clearly already at the end of 2013. The same trend continued the whole year
2014 and in the first half of the year 2015. Many solar module manufacturers
with solid market position have started to plan investing in capacity, partly
to increase the amount of their production capacity and partly to replace
production capacity for old H-pattern solar modules.
Valoe has previously informed that it views the focus of its future business
will be in the developing countries. This view has further strengthened in
2015. Many of the mega trends such as national climate protection objectives;
increasing industrialisation in the developing countries and increasing energy
self-sufficiency, favour local manufacturing of solar modules. For the moment
major part of the world's solar module manufacturing is concentrated in China.
Modules are manufactured in large labour-intensive units and are delivered from
there to the world market to be installed.
In the developed countries solar electricity is mainly produced in large solar
power plants located in open landscape feeding electricity to main grid. In
this kind of power plants logistics costs, among others, can be optimized and
such parameters as module's capacity per square meter have not had major
importance. In the developing countries logistics costs, in particular, are
significant and demand is focused on so called mini grid systems where solar
power plants have been decentralized and new local grid is built around them.
Grids are connected to each other and to new small power plants as electricity
consumption, distribution and production increases steadily. Electricity
production is decentralized and electricity is distributed through a new type
of grid infrastructure. Small power plants are often so called hybrids where
solar power plants are operated together with diesel, water and wind power
plants in same grid and where various energy storages can be integrated.
In an environment described above a local producer has much better
possibilities to control logistics costs and adopt legislation favouring local
production. Many of the partners Valoe is negotiating with have noticed that
local production costs are clearly lower than prices of modules imported from
China. When modules are produced locally possibilities to control the quality
increase, too. In Valoe's view CBS based modules have typically solid quality
which improves module capacity in most of the cases.
MARKET OUTLOOK
Demand for high capacity modules has increased in the EU, US and Japanese
markets as well in the last six months. Valoe is having negotiations on
delivering solar modules developed by the company to these markets. According
to Valoe's plans major part of Valoe's modules to be sold by module
distributors will be manufactured by Valoe's manufacturing partners in the
future.
As announced on 21 August 2012 Valoe has decided not to give any financial
guidance for the time being. Though the company's transition to a company
providing solely clean energy solutions, especially PV solutions, is completed,
the company cannot yet give any financial guidance for 2015 as the guidance
would be fully depended on execution of the first manufacturing partnership
agreements that are not yet secured.
LONG-TERM OBJECTIVES FOR MANAGING DIRECTOR
Based on Valoe's experience in the clean energy business so far and knowledge
of technological development in the industry as well as the company's
evaluation of market development the Board of Directors of the company has set
the long-term financial objectives for Managing on 12 November 2014. The
objectives have been disclosed in the Interim Report for the third quarter of
2014. The long-term objectives set for Managing Director and realization of the
company's business model involve significant risks and the objectives set for
Managing Director should not be considered as the company's financial guidance.
The long-term objectives set for Managing Director and their attainment fully
depend on sufficiency of the company's short-term financing and success in
securing the long-term financing. Negotiations on both short-term and long-term
financing are going on.
FINANCING
Cash flow from business operations before investments in January - June was EUR
-0.4 million (EUR -2.0 million). Trade receivables at the end of the reporting
period were EUR 0.4 million (EUR 1.1 million). Net financial items amounted to
EUR 0.4 million (EUR 0.7 million).
At the end of March the equity ratio was -174.6 percent (-26.0 %) and equity
per share was EUR -0.013 (EUR -0.005). The equity ratio including capital loans
was -116.6 percent (-3.9 %). At the end of the reporting period, the Group's
liquid assets totaled EUR 0.2 million (EUR 0.2 million) and unused export
credit limits and bank guarantee limits amounted to EUR 0.0 million (EUR 0.8
million).
The financing situation of Valoe continues to be very tight. The company has
taken actions for its short-term and long-term financing and to ensure the
company's strategy to be materialized as planned. Valoe has begun negotiations
with domestic and international investors to find an arrangement for its
financing. The negotiations are going on. The company's purpose is to secure
short-term bridging financing with the convertible bond issued on 29 May 2015
and to arrange long-term financing with a share issue to investors in Finland
and abroad.
In terms of the short-term financing of the company, Valoe's preliminary object
is to turn the cash flow before investments with the company's current cost
structure into profit as soon as possible.
Should there be delays in getting new orders or should the market conditions
weaken compared to the company's current view, changing orders into sales may
slow down and have a major impact in the schedule in which the cash flow of the
business operations turns positive. In such case the financing situation of the
company would further tighten if all or part of the other on-going financing
negotiations would not have been materialized by then.
Negotiations on both financing and deliveries of production technology have
improved. However, Valoe's financing situation continues to be very tight. The
sufficiency of the company's financing for the next twelve months involves very
significant risks. According to the current view of Valoe's management the
company needs to obtain bridging financing until a long-term financing
arrangement has been secured by the planned share issue and the cash flow from
the business operations of the company has turned positive. The company will
have a significant deficit in its working capital until the first delivery of
production technology for solar modules will start to generate positive cash
flow. If the company does not succeed in securing sufficient short-term and
long-term financing, the continuity of the company's operation may be
jeopardized.
Valoe has agreed with Danske Bank Plc on extending the overdraft facility of
EUR 0.95 million available to the company until 30 September 2015. The export
credit limit and the bank guarantee limit have expired. For the moment Valoe
does not have significant number of projects which would require export credit
limits and bank guarantee limits. In the future Valoe is aiming to have
necessary export credit limits and bank guarantee limits available when the
company has signed new export contracts. Valoe has agreed with Savcor Group Oy
on extending the loan period of a convertible bond of ca. EUR 0.364 million,
with SCI Invest Oy on extending the loan period of a convertible bond of ca.
EUR 0.746 million, and with Savcor Invest B.V. on extending the loan period of
a loan of EUR 1.0 million until 30 September 2015. Negotiations with the
holders of the convertible bond I/2013 on converting their loans to convertible
bond I/2015 loans are going on.
In order to strengthen Valoe's capital structure the company issues Convertible
Bond of EUR 5,000,000 at the most at the end of May. Loan shares of the
Convertible Bond can be converted to 500,000,000 new company shares at the
most. Subscription price is EUR 0.01 per share. The convertible bond is issued
in deviation from the shareholders' pre-emptive subscription rights to the
shareholders approved by the Board of Directors. Convertible bond can also be
subscribed against a loan receivable of min. EUR 100,000 from Valoe, undisputed
during the subscription period, by conversing the loan's capital and/or
interest into convertible bond pursuant to the terms of the convertible bond.
The minimum amount of subscription and one loan share shall be EUR 100,000. The
loan period shall commence on the payment date and expire on 1 August 2018 on
which date the convertible bond shall expire to be repayable in its entirety in
accordance with the terms of the loan. As of the date of withdrawal an annual
interest of eight (8) percent shall be paid to the capital of the Convertible
Bond. The interest shall be added to the loan capital annually on 30 July. The
interest shall be paid in shares at the end of the loan period. A promissory
note holder shall be entitled to participate in potential future share issues
arranged by the Company in which the subscription period shall terminate at the
latest on 1 August 2018 by subscribing the shares at the subscription price
that is 20 per cent lower compared to the subscription price offered in the
respective share issues.
By the end of the reporting period subscriptions of ca. EUR 1,100,000 were
made. A total of EUR 800,000 of the subscriptions has been paid by the end of
the reporting period and booked in the company's balance sheet as own equity
loan. At the end of July the company extended the subscription period for a
month until the end of August.
RESEARCH AND DEVELOPMENT
The Group's research and development costs during the January - June period
amounted to EUR 0.6 million (EUR 0.8 million) or 153.1 (18.1) percent of net
sales. The research and development costs of the Group's continuing operations
during the January - June period totaled EUR 0.6 million (EUR 0.5 million) or
177.8 (70.5) percent of net sales.
INVESTMENTS
Gross investments in the continuing operations during January - June period
amounted to EUR 0.2 million (EUR 0.2 million). The most part of the investments
on the reporting period and almost all of the investments on the corresponding
period were in development costs.
PERSONNEL
At the end of June the Group employed 22 (71) people, out of which 21 persons
worked in Finland and 1 person in the USA. During the reporting period the
Group's salaries and fees totaled EUR 0.8 million (EUR 2.2 million).
SHARES AND SHAREHOLDERS
Valoe's share capital amounted to EUR 80,000.00 at the end of the reporting
period. The number of shares was 862,472,136. The company has one series of
shares, which confer equal rights in the company. Valoe did not own any of its
own shares at the end of the reporting period.
The company had a total of 6,144 shareholders at the end of June 2015, and 20.4
percent of the shares were owned by foreigners. The ten largest shareholders
held 79.9 percent of the company's shares and voting rights on 30 June 2015.
The largest shareholders on 30 June 2015
shares percent
1 SAVCOR GROUP OY 328 451 387 38.08
2 SAVCOR GROUP LIMITED 133 333 333 15.46
3 GASELLI CAPITAL OY 95 000 000 11.01
4 KESKINÄINEN ELÄKEVAKUUTUSYHTIÖ ETERA 63 673 860 7.38
5 SAVCOR INVEST B.V. 39 374 994 4.57
6 FRATELLI OY 9 223 250 1.07
7 SCI INVEST OY 6 870 645 0.80
8 HUHTALA KAI 4 704 756 0.55
9 NORDEA PANKKI SUOMI OYJ 4 479 655 0.52
10 VUORENMAA TIMO ANTERO 3 959 860 0.46
OTHERS 173 400 396 20.10
TOTAL 862 472 136 100.00
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The members of the Board of Directors and the President and CEO, either
directly or through companies under their control, held a total of 377,195,785
shares in the company on 30 June 2015, representing about 43.7 percent of the
company's shares and voting rights. Iikka Savisalo, Valoe's Managing Director,
either directly or through companies under his control, held a total of
374,697,026 shares in the company and 15,852,856 options connected to bond
I/2012.
In order to strengthen Valoe's capital structure the company issued Convertible
Bond of EUR 5,000,000 at the most at the end of May. Loan shares of the
Convertible Bond can be converted to 500,000,000 new company shares at the
most. Subscription price is EUR 0.01 per share.
The price of Valoe's share varied between EUR 0.007 and 0.02 during the January
- June period. The average price was EUR 0.011 and the closing price at the end
of June EUR 0.015. A total of 61.5 million Valoe shares were traded at a value
of EUR 0.7 million during the January - June period. The company's market
capitalization at the end of June stood at EUR 12.9 million.
No share options were granted to the company's management during the reporting
period. On 30 June 2015, the company hold 15,852,856 options connected to bond
I/2012 with subscription period ended on 7 December 2014. Options connected to
bond I/2012 are held by SCI Invest Oy and Savcor Group Oy. On 30 Juneh 2015 the
company had 30,000,000 options connected to bond I/2013 with a subscription
period ended on 2 June 2015. The options connected to bond I/2013 are held by
Keskinäinen Vakuutusyhtiö Etera and Oy Ingman Finance Ab.
SHARE ISSUE AUTHORIZATIONS IN FORCE
At the extraordinary general meeting held on 29 April 2015 the Board of
Directors was authorized to decide on a share issue of max. 900,000,000 shares
to enable the company to realize its financial arrangements fast after
financial negotiations have been finished. Simultaneously the general meeting
revoked all previous authorizations. 500,000,000 shares out of the
authorization were allocated to the issued convertible bond with a subscription
period ending at the end of August 2015.
THE RESOLUTIONS OF CENCORP'S EXTRAORDINARY GENERAL MEETING
The following resolutions were made at Cencorp's an extraordinary general
meeting held on 29 April 2015.
The article 1 in the company's Articles of Association was amended as follows:
”1§ The trading name and domicile of the company: The trading name of the
company is Valoe Oyj, Valoe Abp in Swedish and Valoe Corporation in English.
The company's domicile is Mikkeli.”
The company's new trading name was registered in the Finnish Trade Register on
13 May 2015.
The article 2 in the company's Articles of Association was amended as follows:
“2§ The company's line of business: The company's line of business is to
develop, sell and manufacture industrial applications and solutions for clean
energy production. The company may also own and be in possession of real estate
property and securities.”
The article 4 in the company's Articles of Association was amended as follows:
”4§ Board of Directors: The company's administration and appropriate activity
shall be attended to by a Board of Directors with at least three and no more
than seven members. The term of notice of the members of the Board of Directors
shall end with the ending of the next annual general meeting of the company
following their election. The Board of Directors shall elect a chairman and a
vice chairman among the board members. The Board of Directors has a quorum when
more than half of the members of the Board are present at a meeting. Issues are
decided by majority rule. In case of equality of votes the chairman has a
casting vote.“
It was resolved that the article regarding the company's financial year,
currently number 13, will be changed to an article number 12 and the current
article 12 saying “Removed” will be totally removed from the Articles of
Association. Thus, there is only 12 articles in the company's Articles of
Association.
It was resolved that that by revoking the previous authorizations the general
meeting authorized the Board of Directors to decide on a share issue with
and/or without payment, either in one or in several occasions, including right
to resolve on option rights and other rights entitling to shares pursuant to
the Chapter 10, Section 1 of the Finnish Companies Act so that the number of
new shares issued based on the authorization or number of shares issued based
on option rights and other special rights entitling to the shares pursuant to
the Chapter 10, Section 1 of the Finnish companies Act, would equal to the
total amount of max. 900,000,000 shares which equals to ca. 51.1 percent, at
the most, of all shares in the company including shares issued based on the
authorization and/or shares to be issued based on option rights and other
special rights entitling to shares pursuant to the Chapter 10, Section 1 of the
Finnish Companies Act. The authorization does not exclude the Board's right to
decide also on directed issue of shares or option rights and other special
rights pursuant to the Chapter 10, Section 1 of the Finnish Companies Act. It
is proposed that the authorization may be used for important arrangements from
the company's point of view e.g. to strengthen the capital structure, to
finance investments, for acquisitions and business transactions or other
business arrangements, or to expand ownership structure, or for incentive
plans, or for other purposes resolved by the Board involving a weighty
financial reason for issuing shares or option rights or special rights
entitling to shares pursuant to the Chapter 10, Section 1 of the Finnish
Companies Act. The share issue may be executed by deviating from the
shareholders' pre-emptive subscription right provided the company has a weighty
financial reason for that. The authorization is in force until 30 June 2017.
THE RESOLUTIONS OF VALOE'S ANNUAL GENERAL MEETING AND ORGANISING OF THE BOARD
OF DIRECTORS
Valoe Corporation's Annual General Meeting was held on 28 May 2015 in Mikkeli,
Finland. The AGM approved the 2014 financial statements and discharged the
members of the Board and the President and CEO from liability for the financial
year 2014. According to the Board' proposal, it was decided that no dividend
for the financial year 2014 will be distributed. It was also decided that theloss for the financial period that ended on 31 December 2014 will be entered in
retained earnings.
It was decided that the Board of Directors will have three members. Ville
Parpola (b. 1972) who was elected as a new member in the Board of Directors has
a degree of Master of Laws and worked as Vice President, Legal Affairs, in the
Savcor Group until 31 July 2015. Parpola has a long experience in Valoe
Corporation. He has worked as Vice President, Legal Affairs, also in Valoe's
predecessors in PMJ Automec Oy and Cencorp Corporation in 1999 - 2010. Parpola
is the Chairman of Board of Directors of Tonfisk Design Oy, Oy Marville Ab,
Idem Finland Oy and Lumonator Oy. Parpola owns 2,498,759 shares in Valoe
Corporation. Industrial counsellor Hannu Savisalo and Iikka Savisalo continue
as old Board members in the Board of Directors.
At its organizing meeting following the AGM, Valoe's Board of Directors elected
Hannu Savisalo as the Chairman and Ville Parpola as the Vice Chairman of the
Board. The Board of Directors decided, due to the scope of the company's
business, that it is not necessary to establish any separate Board committees.
The AGM decided that an annual remuneration of EUR 40,000 will be paid to the
Chairman and to the Vice Chairman of the Board, and EUR 30,000 to the members
of the Board of Directors. Travel costs will be paid to the Board members
pursuant to the company's travel policy.
KPMG Oy Ab, Authorized Public Accounting Firm, was elected as the company's
auditor and Petri Kettunen, APA, as the responsible auditor.
The general meeting resolved to reduce the company's share capital of EUR
3,425,059.10 by EUR 3,345,059.10 to cover losses. The accrued losses from the
financial year ended on 31 December 2014 and the previous financial years will
be partly covered by reducing the company's share capital by EUR 3,345,059.10
and the distributable non‐restricted equity fund by EUR 44,031,988.69, the
reserve fund by EUR 211,384.16 and the premium fund by EUR 4,695,570.81. Since
the reductions the company's new share capital is EUR 80,000.00. The reductions
are allocated to the losses in chronological sequence starting from the oldest
one.
The reduction of the share capital was registered in the Finnish Trade Register
on 18 June 2015.
At the end of the meeting the Board of Directors informed the general meeting
on the company's financing situation pursuant to the item 17 on the Notice to
the annual general meeting. The general meeting discussed actions to remedy the
company's financing position pursuant to the resolutions done at the annual
general meeting and the extraordinary general meeting held 29 April 2015.
RISK MANAGEMENT, RISKS AND UNCERTAINTIES
Valoe's Board of Directors is responsible for the control of the company's
accounts and finances. The Board is responsible for internal control, while the
President and CEO handles the practical arrangement and monitors the efficiency
of internal control. Business management and control are taken care of using a
Group-wide reporting and forecasting system.
The purpose of risk management is to ensure that any significant business risks
are identified and monitored appropriately. The company's business and
financial risks are managed centrally by the Group's financial department, and
reports on risks are presented to the Board of Directors as necessary.
Due to the small size of the company and its business operations, Valoe does
not have an internal auditing organization or an audit committee.
Valoe's objective is to achieve a strong market position as a provider of, in
various geographical areas, locally produced high-quality photovoltaic modules.
Achievement of the objectives as well as realization of the transformation
involves risks. Even though Valoe's strategy and objectives are based on market
knowledge and technical surveys, the risks are significant and it is not
certain if the company reaches all or part of the targets set for it. Valoe's
future outlook will be highly dependent on the company's ability to reach the
targeted market position in the global photovoltaic module market as well as on
the company's short and long-term financing.
Negotiations on both financing and deliveries of production technology have
improved. However, the financing situation of Valoe continues to be very tight.
The sufficiency of the company's financing and working capital for the next
twelve months involve very significant risks. According to the current view of
Valoe's management the company continues to need a bridging loan until a
long-term financing arrangement has been secured with the planned share issue
and the cash flow from the business operations of the company has turned
positive. The company will have a significant deficit in its working capital
until the first delivery of production technology for solar modules will start
to generate positive cash flow. If the company does not succeed to secure
sufficient short-term and long-term financing, the continuity of the company's
operation may be jeopardized. If the company does not receive new orders as
fast as it expects or if the market situation gets worse it may take longer
time to turn orders into revenue. This would affect significantly the schedule
in which cash flow before investments would turn positive. In such a case the
company's financing situation would further tighten provided all or part of the
other ongoing financing negotiations would not have been completed successfully
by then.
In the Auditor's Report in the Annual Report 2014 the company's auditor drew
attention to the financial risk management with a so called Emphasis of Matter
as follows: “Without qualifying our opinion, we draw attention to the basis of
preparation of the financial statements and to the note 29. Financial risk
management. The financial statements have been prepared under the going concern
assumption. The continuity of operations requires the company to be able to
obtain supplementary funding and to negotiate changes to the terms of payment
during 2015. The company continues negotiating with its major financers and
shareholders on measures to strengthen the financing situation until the
company's cash flow is expected to turn positive. The sufficiency of the
company's financing and working capital for the next twelve months involve very
significant risks. According to the current view of Valoe's management the
company needs to obtain a bridging loan until long-term financing arrangement
has been secured and the cash flow of the business operations of the company
has turned positive. Negotiations on bridging financing are going on. The
company will have a significant deficit in its working capital until the first
delivery of production technology for solar modules will start to generate
positive cash flow. If the company does not succeed in securing sufficient
short-term and long-term financing, the continuity of the company's operation
may be jeopardized. The valuation of the assets is based on the going concern
assumption. If the estimates are not achieved the assets may become impaired.”
Attainment of project financing for the first manufacturing partnership
agreement as well as result of the convertible bond and a share issue involve
risks. It is not certain whether the company is able to collect five million
Euros with the convertible bond to strengthen its capital structure or capital
with a share issue to execute its Clean Energy business plan and to secure a
long-term financing arrangement. Further, it is not certain that a local
project financing facility for building a module plant pursuant to the first
manufacturing partnership agreement will be secured. If local project financing
is not available the manufacturing partnership agreement in question and a
relating potential order will not materialize.
The equity of Valoe decreased below half of the company's share capital as per
31 December 2014. The parent company's equity will not be sufficient for long
without equity financing or significant profitable sales. The company has
already taken actions to get more equity financing by issuing the convertible
bond and by starting preparing a share issue. Result of the convertible bond
and a share issue involve risks.
In terms of profitability, the most essential risks are related to the
achievement of a sufficient invoicing volume in the Clean Energy business
segment.
The execution of the non-binding cooperation agreement signed between Valoe and
Vikram Solar involves typical business risks. Arrangements pursuant to the
non-binding cooperation agreement are subject to several terms and conditions,
especially to Valoe's short-term and long-term financing.
The execution of the non-binding Memorandum of Understanding signed with a
Chinese photovoltaic module manufacturer involves risks. The final terms of an
agreement are still under negotiations, thus execution of the agreement is not
yet guaranteed. Additionally, the agreement is subject to Valoe's short-term
and long-term financing.
The long-term objectives set for the Managing Director involves also
significant risks and the long-term objective should not be considered as the
company's financial guidance. Even though the objectives are based on market
knowledge and technical surveys, the risks are significant and it is not
certain if the Managing Director reaches all or part of the targets set for him
within estimated new timetable. If Valoe's financing arrangements are delayed,
the risk of the Managing Director reaching the objectives set for him in the
stated timetable will increase.
The non-binding objectives of Valoe for both market share and the number of
partners are ambitious and attainment of the objectives involves significant
risks. However, Valoe views it has a technological concept that provides the
company a good position to achieve the objectives. Attainment of the objectives
is subject to sufficient financing.
The sufficiency of the company's own equity involves risks. Relating to
taxation of the Beijing factory in China a claim of EUR 0.7 million against
Savcor Group Ltd was booked in the other operating income of the company's
continuing operations in the first quarter of 2015. The outcome of the claim
will have a major importance when evaluating the sufficiency of the parent
company's equity.
The closing of the latter part (30 %) of the transaction between Valoe and FTTK
Company Limited involves risks. In terms of the latter part of the transaction
the deal was supposed to be closed by 1 March 2015, however, the closing of the
transaction has been postponed. The postponement relates to division of costs
of an unfinished customer project in electronics automation business between
Valoe and FTTK. The dispute has been referred to arbitration on 24 June 2015.
Other risks connected to Valoe have been presented in more detail in the Annual
Report for 2014.
In Mikkeli, 5 August 2015
Valoe Corporation
BOARD OF DIRECTORS
For more information please contact:
Valoe: Iikka Savisalo, President and CEO, tel. +358 40 521 6082,
iikka.savisalo@valoe.com
Consolidated statement of comprehensive income
(unaudited)
1 000 EUR 4-6/2015 4-6/2014 1-6/2015 1-6/2014 1-12/2014
--------------------------------------------------------------------------------
Continuing
operations
Net sales 234 84 360 650 841
Cost of sales -270 -3 797 -434 -4 844 -8 398
--------------------------------------------------------------------------------
Gross profit -36 -3 714 -74 -4 194 -7 557
Other operating 120 -1 871 9 23
income
Product development -309 -284 -640 -459 -1 109
expenses
Sales and marketing -179 -196 -340 -411 -840
expenses
Administrative -318 -266 -557 -611 -1 146
expenses
Other operating -1 -55 -3 -67 -256
expenses
Operating profit -723 -4 516 -743 -5 733 -10 885
Financial income -10 97 111 193 903
Financial expenses -250 -427 -525 -931 -1 707
Profit before taxes -983 -4 846 -1 157 -6 471 -11 689
from continuing
operations
Income taxes 0 0 1 0 -4
Profit/loss for the -983 -4 846 -1 157 -6 471 -11 693
period from
continuing
operations
Discontinued
operations
Profit/loss after -142 -38 -123 -550 -712
tax for the period
from discontinued
operations
Profit/loss for the -1 125 -4 884 -1 279 -7 021 -12 405
period
--------------------------------------------------------------------------------
Profit/loss
attributable to:
Shareholders of the -1 125 -4 884 -1 279 -7 021 -12 405
parent company
Earnings/share -0,001 -0,006 -0,001 -0,009 -0,015
(diluted), eur
Earnings/share -0,001 -0,006 -0,001 -0,009 -0,015
(basic), eur
Continuing
operations:
Earnings/share -0,001 -0,006 -0,001 -0,008 -0,014
(diluted), eur
Earnings/share -0,001 -0,006 -0,001 -0,008 -0,014
(basic), eur
Profit/loss for the -1 125 -4 884 -1 279 -7 021 -12 405
period
Other comprehensive
income
Translation 129 -24 -334 -122 -1 114
difference
Net other comprehensive income to be
reclassified to
profit or loss in 129 -24 -334 -122 -1 114
subsequent periods
Total comprehensive -996 -4 908 -1 614 -7 143 -13 519
income for the
period
--------------------------------------------------------------------------------
Total comprehensive
income attributable
to:
Shareholders of the -996 -4 908 -1 614 -7 143 -13 519
parent company
Consolidated statement of financial position
(unaudited)
1 000 EUR 30.6.2015 30.6.2014 31.12.2014
--------------------------------------------------------------------------------
ASSETS
Non-current assets
Property, plant and equipment 55 2 653 44
Consolidated goodwill 441 2 538 441
Other intangible assets 3 796 4 852 4 092
Available-for-sale investment 9 9 9
Deferred tax assets 0 6 0
Total non-current assets 4 301 10 058 4 586
--------------------------------------------------------------------------------
Current assets
Inventories 106 1 565 67
Trade and other non-interest-bearing 1 751 1 777 2 013
receivables
Cash and cash equivalents 222 193 161
Total current assets 2 080 3 535 2 240
--------------------------------------------------------------------------------
Assets classified as held for sale 73 0 733
Total assets 6 454 13 593 7 560
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
Equity attributable to shareholders of the
parent company
Share capital 80 3 425 3 425
Other reserves 806 49 466 49 460
Translation difference -616 711 -281
Retained earnings -11 494 -57 116 -62 500
-11 225 -3 514 -9 897
--------------------------------------------------------------------------------
Non-controlling interests 9 0 8
Total equity -11 216 -3 514 -9 888
--------------------------------------------------------------------------------
Non-current liabilities
Non-current loans 2 243 1 528 1 571
Deferred tax liabilities -1 5 0
Total non-current liabilities 2 242 1 532 1 571
--------------------------------------------------------------------------------
Current liabilities
Current interest-bearing liabilities 7 072 7 319 7 357
Trande and other payables 7 618 8 146 6 693
Current provisions 0 110 0
Total current liabilities 14 690 15 575 14 050
--------------------------------------------------------------------------------
Liabilities directly associated with assets 738 0 1 828
classified as held for sale
Total liabilities 17 670 17 107 17 449
--------------------------------------------------------------------------------
Equity and liabilities total 6 454 13 593 7 560
--------------------------------------------------------------------------------
Consolidated statement of cash flows
(unaudited)
1 000 EUR 1-6/20 1-6/20 1-12/20 15 14 14
--------------------------------------------------------------------------------
Cash flow from operating activities
Income statement profit/loss from continuing -1 157 -6 471 -11 689
operations before taxes
Income statement profit/loss from discontinued -123 -548 -712
operations before taxes
Income statement profit/loss before taxes -1 280 -7 018 -12 401
------------------------
Non-monetary items adjusted on income statement
--------------------------------------------------------------------------------
Depreciation and + 443 4 279 7 844
impairment
Gains/losses on disposals +/- 0 0 -298
of non-current assets
Unrealized exchange rate +/- -118 -40 -256
gains (-) and losses (+)
Other non-cash +/- -746 109 87
transactions
Financial income and + 533 777 1 060
expense
Total cash flow before change in working capital -1 168 -1 893 -3 964
--------------------------------------------------------------------------------
Change in working capital
Increase (-) / decrease -11 13 179
(+) in inventories
Increase (-) / decrease 1 610 854 289
(+) in trade and other
receivables
Increase (+) / decrease -623 -611 -516
(-) in trade and other
payables
Change in provisions -58 -39 -5
Change in working capital 918 217 -53
--------------------------------------------------------------------------------
Adjustment of financial items and taxes to cash-based
accounting
Interest paid - 84 157 308
Interest received + 1 0 3
Other financial items - 29 142 -304
Taxes paid - 0 10 17
Financial items and taxes -112 -309 -17
--------------------------------------------------------------------------------
NET CASH FLOW FROM BUSINESS OPERATIONS -362 -1 985 -4 034
CASH FLOW FROM INVESTING ACTIVITIES
Investments in tangible and intangible assets - 203 568 1 084
Proceeds on disposal of tangible and intangible + 34 0 29
assets
Loans granted - 160 0 0
Loans granted to associated companies - 0 0 103
Repayment of loan receivables + 263 0 0
Acquisition of subsidiaries and other business + 0 0 1
units
Disposal of + 0 0 3 048
subsidiaries and
other business units
----------------------------
NET CASH FLOW FROM INVESTMENTS -66 -568 1 890
--------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from share issue + 0 2 352 2 400
Proceeds from non-current borrowings + 121 256 256
Repayment of non-current borrowings - 8 7 7
Proceeds from current borrowings + 822 3 169 3 737
Repayment of current borrowings - 454 3 159 3 878
NET CASH FLOW FROM FINANCING ACTIVITIES 481 2 611 2 509
--------------------------------------------------------------------------------
INCREASE (+) OR DECREASE (-) IN CASH FLOW 53 58 364
Consolidated statement of changes in equity
(unaudited
)
1 000 EUR Share Other Transl Distribut Retaine Total Non-co Total
capit reser ation able d ntroll equity
al ves diffe non-rest earnin ing
rence ricted gs inter
equity ests
fund
--------------------------------------------------------------------------------
31.12.2014 3 425 4 908 -281 44 552 -62 500 -9 897 8 -9 888
own equity 0 286 0
component
of the
convertib
le bond
Reduction -3 345 -4 908 - -44 032 52 285 0 0 0
of the
share
capital
Translatio - - -334 - - -334 1 -334
n
differenc
e,
comprehen
sive
income
Profit/los - - - - -1 279 -1 279 0 -1 279
s for the
period
31.6.2015 80 0 -616 806 -11 494 -11 511 9 -11 502
1 000 EUR Share Other Transl Distribut Retaine Total Non-co Total
capit reser ation able d ntroll equity
al ves diffe non-rest earnin ing
rence ricted gs inter
equity ests
fund
--------------------------------------------------------------------------------
31.12.2013 3 425 4 908 833 39 661 -50 095 -1 269 0 -1 269
Directed share 204
issue
Share - - - 4 882 - 4 882 - 4 882
issue
Share - - - -188 -188 - -188
issue
expenses
Translatio - - -122 -122 - -122
n
differenc
e,
comprehen
sive
income
Profit/los - - - - -7 021 -7 021 - -7 021
s for the
period
31.6.2014 3 425 4 908 711 44 558 -57 116 -3 514 0 -3 514
Segment
information
(unaudited)
From 1 January 2013 Valoe reported of three business segments to comply with the
company's Cleantech strategy. The segments were Laser and Automation
Applications (LAS), Life Cycle Management (LCM) and Clean Energy (CCE). 17
September Valoe announced that it has transfered the company's electronics
automation business into Cencorp Automation Oy, a fully-owned subsidiary of
Valow. Further, in accordance to the agreement signed earlier, FTTK Company
Limited has purchased 70 percent of the shares in Cencorp Automation Oy.
Further FTTK has used its option to purchase the remaining 30 percent of the
shares in Cencorp Automation Oy and the parties have signed an agreement on
exercising the option in December 2014. In consequence of the sale of the
shares Valoe reports the financial figures relating to the electronics
automation business, i.e. LAS and LCM segments, as discontinued operations from
Q3/2014 and segment information is divided into continuing and discontinued
operations. Segment information is not available after operating profit in
profit and loss statement. Financial income and expenses or balance sheet items
are not booked to segments. Valoe's new segment information is based on the
management's internal reporting and on the organisation structure. During the
year 2015 the discontinued operations include the finishing up of few remaining
projects of the electronics automation business sold to FTTK.
1 000 EUR 4-6/2015 4-6/2014 1-6/2015 1-6/2014 1-12/2014
--------------------------------------------------------------------------------
Net sales
Cencorp 234 84 360 650 841
Clean
Energy
-
continui
ng
operatio
ns
Discontin -74 2 127 58 3 997 5 665
ued
operatio
ns
Total 160 2 211 418 4 647 6 506
Operating
profit
Cencorp -723 -4 516 -743 -5 733 -10 885
Clean
Energy
-
continui
ng
operatio
ns
Discontin -142 -35 -123 -547 -712
ued
operatio
ns
Total -865 -4 552 -865 -6 281 -11 597
EBITDA
Cencorp -504 -885 -300 -1 686 -3 342
Clean
Energy
-
continui
ng
operatio
ns
Discontin -142 61 -123 -315 -411
ued
operatio
ns
Total -646 -825 -422 -2 002 -3 753
Depreciation
Cencorp 219 432 443 847 1 318
Clean
Energy
-
continui
ng
operatio
ns
Discontin 0 95 0 231 301
ued
operatio
ns
Total 219 527 443 1 079 1 619
Impairment
Cencorp 0 3 200 0 3 200 6 225
Clean
Energy
-
continui
ng
operatio
ns
Discontin 0 0 0 0 0
ued
operatio
ns
Total 0 3 200 0 3 200 6 225
Discontinued operations
(unaudited)
17 September Valoe announced that it has transfered the company's electronics
automation business into Cencorp Automation Oy, a fully-owned subsidiary of
Valoe. Further, in accordance to the agreement signed earlier, FTTK Company
Limited has purchased 70 percent of the shares in Cencorp Automation Oy.
Further FTTK has used its option to purchase the remaining 30 percent of the
shares in Cencorp Automation Oy and the parties have signed an agreement on
exercising the option in December 2014. In consequence of the sale of the
shares Valoe reports the financial figures relating to the electronics
automation business as discontinued operations from Q3/2014.
The results and major classes of assets and liabilities of Cencorp's electronics
automation business are as follows:
1 000 EUR 1-6/2015 1-6/2014 1-12/2014
--------------------------------------------------------------------------------
Revenue 58 3 997 5 665
Expenses -181 -4 612 -6 824
Other opeating income 0 69 171
Impairment 0 0 0
Operating profit/loss -123 -547 -988
from discontinued
operation
--------------------------------------------------------
Gain on discontinued - - 276
operations
Assets
Property, plant and 0 - 0
equipment
Other intangible assets 0 - 0
Inventories 0 - 28
Trade and other 73 - 705
non-interest-bearing
receivables
Cash and cash 0 - 0
equivalents
Assets classified as 73 n/a 733
held for sale
--------------------------------------------------------
Liabilities
Trande and other 651 - 1 683
payables
Provisions 86 - 145
Liabilities directly 738 n/a 1 828
associated with assets
classified as held for
sale
--------------------------------------------------------
Net assets directly -665 n/a -1 094
associated with
disposal group
--------------------------------------------------------
Cumulative translation
difference
Net cash flow of
Cencorp's electronics
automation business:
1 000 EUR 1-6/2015 1-6/2014 1-12/2014
--------------------------------------------------------------------------------
Operating -364 n/a -1 858
Investing 102 n/a 2 701
(includes the return on sales
of discontinued operations
in 2014)
Earnings/share (basic), -0,0001 -0,001 -0,001
from discontinued
operations
Earnings/share -0,0001 -0,001 -0,001
(diluted) from
discontinued
operations
Key figures
(unaudited)
1 000 EUR 4-6/20 4-6/2014 1-6/201 1-6/20 1-12/201
15 5 14 4
--------------------------------------------------------------------------------
Net sales 234 84 360 650 841
Operating profit -723 -4 516 -743 -5 733 -10 885
% of net sales -308,9 -5 406,6 -206,4 -881,5 -1 294,2
EBITDA -504 -885 -300 -1 686 -3 342
% of net sales -215,4 -1 059,1 -83,2 -259,2 -397,4
Profit before taxes -983 -4 846 -1 157 -6 471 -11 689
% of net sales -420,1 -5 801,7 -321,6 -994,9 -1 389,8
Balance Sheet value 6 454 13 593 6 454 13 593 7 560
Equity ratio, % -174,6 -26,0 -174,6 -26,0 -130,8
Net gearing, % neg. neg. neg. neg. neg.
Gross investments (continuing 151 53 192 152 377
operations)
% of net sales 64,5 63,0 53,3 23,4 44,9
Research and development costs 309 284 640 459 1 109
(continuing oper.)
% of net sales 132,3 340,4 177,8 70,5 131,8
Order book 87 2 148 87 2 148 314
Personnel on average 23 71 24 108 74
Personnel at the end of the period 22 71 22 71 26
Non-interest-bearing liabilities 8 269 8 146 8 269 8 146 8 376
Interest-bearing liabilities 9 315 8 846 9 315 8 846 8 928
Share key indicators
Earnings/share (basic) -0,001 -0,006 -0,001 -0,009 -0,015
Earnings/share (diluted) -0,001 -0,006 -0,001 -0,009 -0,015
Earnings/share (basic), from -0,001 -0,006 -0,001 -0,008 -0,014
continuing operations
Earnings/share (diluted) from -0,001 -0,006 -0,001 -0,008 -0,014
continuing operations
Equity/share -0,013 -0,004 -0,013 -0,004 -0,011
P/E ratio -11,50 -3,51 -10,11 -2,35 -0,61
Highest price 0,020 0,030 0,020 0,04 0,04
Lowest price 0,008 0,010 0,007 0,01 0,01
Average price 0,013 0,020 0,011 0,02 0,02
Closing price 0,015 0,020 0,015 0,02 0,01
Market capitalisation, at the end 12,9 18,8 12,9 18,8 7,8
of the period, MEUR
Calculation of Key Figures
EBITDA, %: Operating profit +
depreciation +
impairment
--------------------------
Net
sales
Equity ratio, %: Total equity x
100
--------------------------
Total assets - advances
received
Net gearing, %: Interest-bearing
liabilities - cash and
cash equivalents
and marketable securities x 100
--------------------------
Shareholders' equity +
minority interest
Earnings/share (EPS): Profit/loss for the
period to the owner of
the parent company
--------------------------
Average number of shares
adjusted for share issue
at the end of the
financial year
Equity/share: Equity attributable to
shareholders of the
parent company
--------------------------
Undiluted number of
shares on the balance
sheet date
P/E ratio: Price on the balance
sheet date
--------------------------
Earnings per
share
Related party
transactions
(unaudited)
The Group has sold and purchased goods and services from companies in which the
majority holding and/or power of decision granting control of the company is
held by members of the Group's related parties. Sales of goods and services
carried out with related parties are based on market prices. Valoe Corporation
has also sold and purchased goods and services from its associated company,
Cencorp Automation Oy. Sales of goods and services carried out with the
associated company are based on the costs, according to the agreement.
The Group entered into the following
transactions with related parties:
1 000 EUR 1-6/2015 1-6/2014 1-12/2014
--------------------------------------------------------------------------------
Continuing
operations
Sales of goods and
services
Savcor companies 43 26 67
Cencorp Automation 0 0 19
Oy
Savcor Face Ltd 36 0 20
Others 0 0 0
Total 79 26 106
Purchases of goods
and services
Savcor companies 110 98 196
Savcor Face Ltd 16 17 36
SCI-Finance Oy 46 0 14
Others 1 0 0
Total 174 115 246
Interest income
Savcor companies 1 0 3
Interest expenses
and other
financial expenses
Savcor companies 73 103 213
SCI Invest Oy 30 30 60
Muut 6 0 0
Total 109 133 273
Discontinued
operations
Sales of goods and
services
Cencorp Automation 0 0 87
Oy
Purchases of goods
and services
Savcor companies 0 128 194
Savcor Face Ltd 0 30 46
Cencorp Automation 0 0 395
Oy
SCI-Finance Oy 0 0 30
Others 0 0 0
Total 0 158 665
Non-current 187 0 0
convertible
subordinated loan
from related
parties
Interest payable to 322 290 416
related parties
Other current 1 375 1 519 1 769
liabilities to
related parties
Current convertible 1 110 1 085 1 159
subordinated loan
from related
parties
Trade payables and
other
non-interest-beari
ng liabilities to
related parties 545 789 1 363
Trade and other 63 103 371
current
receivables from
related parties
From the beginnin of 2015 Savcor Group Limited in Australia is no longer part of
Savcor Group, and liabilities to the company are not included in related party
transactions.
SCI Invest Oy is a company under control of Iikka Savisalo, Cencorp's CEO.
1 000 EUR 1-6/2015 1-6/2014 1-12/2014
--------------------------------------------------------------------------------
Wages and
remuneration
Salaries of the 273 537 867
management and
Board
Fair values
(unaudited)
Carrying Fair value
amount
1 000 EUR 30.6.2015 30.6.2015
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Financial assets
Available-for-sale investments 9 9
Trade and other receivables 1 824 1 824
Cash and cash equivalents 222 222
The fair value of trade and other receivables is expected to correspond to the
carrying amount due to their short maturity.
Financial liabilities
R&D loan, non-current 1 727 1 727
Other liabilities, non-current 516 0
Loans from financial institutions, current 1 822 1 822
Other liabilities, current 5 250 5 250
Trade payables and other non-interest-bearing 6 213 6 213
liabilities
The fair value of non-current liabilities is expected to correspond to the
carrying amount and recognized to their fair value when recorded. There has
been no significant change in common interest rate after the withdrawal of the
loans.
EUR 6.5 million out of trade payables and other current liabilites was overdue
at the end of the reporting period. That included EUR 3.5 million of Savcor
Face Bejing's overdue liabilities. During H1 2015 there was an increase of 0.3
million in Savcor Face Beijing's overdue liabilities, which was mainly caused
by exchange rate difference. In addition, an interest-bearing loan of EUR 0,5
million to Savcor Group Limited / The Savcor Creditors' Trust and an export
credit limit of EUR 0,9 million to Danske Bank were overdue.
Change in intangible and tangible assets
(unaudited)
1 000 EUR 30.6.2015 30.6.2014 31.12.2014
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Includes tangible assets, consolidated
goodwill and other intangible assets
Carrying amount, beginning of period 4 577 13 654 13 654
Depreciation and impairment -443 -3 650 -6 905
Additions 192 276 659
Disposals -34 0 -142
Discontinued operations 0 -129 -2 955
Exchange rate difference 0 -108 265
Carrying amount, end of period 4 292 10 043 4 577
Inventories
(unaudited)
1 000 EUR 4-6/20 4-6/20 1-6/20 1-6/20 1-12/2
15 14 15 14 014
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Impairment losses and reversals of
impairment losses for inventories
booked in Income Statement
Continuing operations
Impairment loss 0 629 0 629 939
Reversal of impairment loss 0 0 0 0 0
Discontinued operations
Impairment loss 0 0 0 0 0
Reversal of impairment loss 0 0 0 0 0
Commitments and contingent liabilities
(unaudited)
1 000 EUR 30.6.2015 30.6.2014 31.12.2014
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Loans from financial institutions 950 1 186 948
Promissory notes secured by pledge 12 691 12 691 12 691
Factoring loan and export credit limit 872 1 463 1 307
Trade receivables 41 479 91
Deposits 14 0 0
Promissory notes secured by pledge 12 691 12 691 12 691
Collaterals given from other short-term loans
Deposits 518 0 477
Operating leases - continuing operations
Payable within one year 0 4 0
Payable over one year 0 0 0
Operating leases - discontinued operations
Payable within one year 0 1 0
Payable over one year 0 0 0
Commitments - continuing operations
Payable within one year 83 770 58
Payable over one year 0 734 0
Commitments - discontinued operations
Payable within one year 0 114 0
Payable over one year 0 73 0
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