2015-03-04 09:00:00 CET
2015-03-04 09:00:03 CET
REGLERAD INFORMATION
Panostaja Oyj - Company Announcement
PANOSTAJA GROUP’S INTERIM REPORT Nov 1, 2014-Jan 31, 2015 (3 months)
Panostaja Oyj Interim report, March 4, 2015
10:00am
PANOSTAJA GROUP'S INTERIM REPORT
November 1, 2014-January 31, 2015 (3 months)
-- Net sales increased by 13% and stood at MEUR 39.6 (MEUR 35.1).
-- EBIT remained at the same level and was MEUR 0.7 (MEUR 0.7).
-- Profit for the financial period improved by MEUR 1.5 and was MEUR -0.7
(MEUR -2.3).
-- Operating cash flow improved by MEUR 1.0 and was MEUR 2.6 (MEUR 1.6).
-- After the review period, Panostaja expanded its operations into the oral
health care sector by purchasing 75% of the shares in Megaklinikka.
Outlook for the 2015 financial period:
Panostaja keeps its result management issued on February 27, 2015 unaltered.
The Group's net sales in the 2015 financial period are expected to be greater
than in 2014 (MEUR 154.8). The Group's EBIT is expected to be on the same level
as in the 2014 financial period (MEUR 10.2).
CEO Juha Sarsama: A moderate first quarter
Profit development throughout the Group in the first quarter was moderate. The
Group's EBIT remained at the same level as the previous year, but differences
existed in profit development between segments. The active development of
segments continued during the first quarter, which was also reflected in a
slight weakening of profit level in some segments.
After the review period, Panostaja expanded its operations into the oral health
care sector by purchasing 75% of the shares in Megaklinikka. In the oral health
care sector, there is a need to provide services that are genuinely more
customer-centered than before, and Megaklinikka's service model offers a
solution to this. Megaklinikka has rapidly grown into a significant and
renowned player in the capital region and has good prospects for growth. We are
also convinced about the effectiveness and duplicability of this revolutionary
business concept both at home and abroad.
The Finnish economic situation continues to be uncertain. The crisis in Ukraine
and Russia is causing widespread and prolonged uncertainty in European economic
development. The general economic situation and atmosphere has remained
challenging, which is reflected in almost all the Group's business segments.
The segments that serve the construction industry and trade have had to deal
with a clear decline in customer demand during the first quarter.
The corporate acquisitions market still offers Panostaja opportunities both for
new acquisitions, and later also for divestments as the forecastability of
economy improves. The position of Panostaja's business segments in their
respective fields is good.
November 1, 2014-January 31, 2015 (Q1)
-- Net sales increased by 13% and stood at MEUR 39.6 (MEUR 35.1). The impact
of corporate acquisitions on the MEUR 4.5 increase of net sales stood at
MEUR 5.2. Net sales increased in three of the eight segments.
-- EBIT remained at the same level and was MEUR 0.7 (MEUR 0.7). EBIT in the
review period was encumbered by the difference of MEUR -0.5 between the
values of Kotisun Oy's additional purchase price and the value on the
balance sheet date, which has been recognized in the company's other costs.
-- Two segments out of eight exceeded the EBIT for the reference period.
-- Profit before taxes was MEUR -0.2 (MEUR -0.3)
-- The result for the review period was MEUR -0.7 (MEUR -2.3). The reference
period includes the discontinued operations of Takoma, which caused a loss
of MEUR 1.3.
-- Earnings per share (undiluted) were -2.2 cents (-3.2 cents).
-- Operating cash flow improved and was MEUR 2.6 (MEUR 1.6).
------------------------------------------------------------------------
Key figures Panostaja Group 3 months 3 months 12 months
11/14- 11/13- 1/14 11/13-10/14
1/15
------------------------------------------------------------------------
------------------------------------------------------------------------
Net sales, MEUR 39.6 35.1 154.8
EBIT, MEUR 0.7 0.7 10.2
Profit before taxes, MEUR -0.2 -0.3 6.8
Earnings per share, undiluted (EUR) -0.02 -0.03 0.09
Equity per share (EUR) 0.60 0.54 0.62
Operating cash flow (MEUR) 2.6 1.6 11.4
The income statement for operations discontinued during the reference period
has been separated from the income statement for continuing operations and the
result for them is presented in accordance with the IFRS standards on row
‘Earnings from discontinued operations'. Prior to separating discontinued and
sold operations from continuing operations in the income statement, the
consolidated net sales for the reference period were MEUR 42.4 and the EBIT was
MEUR 0.9.
Key figures by segment
Net sales, MEUR
Q1 Q1 2014
-----------------------------------------------------------
11/14- 11/13- 11/13-10/14
1/15 1/14
-----------------------------------------------------------
-----------------------------------------------------------
Digital Printing Services 13.7 13.6 57.8
Safety 8.0 8.3 33.7
Building Technology Renovation 5.2 - 8.8
Takoma 4.0 3.5 15.3
Ceiling Materials 2.3 2.7 11.0
Fittings 2.4 2.5 10.9
Spare parts for Motor Vehicles 2.6 2.6 10.8
Heat Treatment 1.4 2.0 6.8
Others 0.0 0.0 0.0
Eliminations -0.1 -0.1 -0.3
Group in total 39.6 35.1 154.8
EBIT, MEUR
Q1 Q1 2014
-----------------------------------------------------------
11/14- 11/13- 11/13-10/14
1/15 1/14
-----------------------------------------------------------
-----------------------------------------------------------
Digital Printing Services 0.8 1.0 7.1
Safety -0.3 0.1 2.1
Building Technology Renovation 0.7 - 1.1
Takoma 0.0 -0.3 -0.4
Ceiling Materials 0.1 0.1 0.5
Fittings 0.1 0.1 0.8
Spare parts for Motor Vehicles 0.0 0.2 0.7
Heat Treatment -0.1 0.2 0.2
Others -0.7 -0.7 -2.1
Group in total 0.7 0.7 10.2
PRESS CONFERENCE
Panostaja will hold a press conference for analysts, investors and the press on
the same day March 4, 2015 from 11:30 am to 12:30 pm at Hotel Scandic
Simonkenttä, Bulsa-Freda 1-2, Simonkatu 9, Helsinki.
The interim report, presentations and other investor information are available
at: www.panostaja.fi. Panostaja Oyj
Juha Sarsama
CEO
Further information:
CEO Juha Sarsama, Panostaja Oyj, +358 40 774 2099
Distribution: NASDAQ OMX Helsinki, key media, www.panostaja.fi.
PANOSTAJA GROUP INTERIM REPORT November 1, 2014-January 31, 2015
THE ECONOMIC DEVELOPMENT OF THE PANOSTAJA GROUP
3 months 3 months Change, % 12 months
--------------------------------------------------------------------------------
Key figures 11/14-1/15 11/13- 11/13-10/14
Panostaja Group 1/14
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net sales, MEUR 39.6 35.1 12.9% 154.8
EBIT, MEUR 0.7 0.7 -1.1% 10.2
Profit before taxes, MEUR -0.2 -0.3 -34.2% 6.8
Earnings per share, undiluted -0.02 -0.03 -184.6% 0.09
(EUR)
Equity per share (EUR) 0.60 0.54 11.1% 0.62
Operating cash flow (MEUR) 2.6 1.6 62.5% 11.4
--------------------------------------------------------------------------------
NOVEMBER 2014-JANUARY 2015
Net sales for the first quarter increased by 13% to MEUR 39.6 (MEUR 35.1).
Export amounted to MEUR 2.3, or 5.8 %, (MEUR 1.0, or 2.8%) of net sales. The
impact of corporate acquisitions on the MEUR 4.5 increase in net sales stood at
MEUR 5.2. Of the Group's eight business segments, three exceeded the net sales
level of the reference period.
EBIT remained at the same level and was MEUR 0.7 (MEUR 0.7). EBIT in the review
period was encumbered by the difference of MEUR -0.5 between the values of
Kotisun Oy's additional purchase price and the value on the balance sheet date,
which has been recognized in the company's other costs. Two segments out of
eight exceeded the EBIT for the reference period.
Profit before taxes was MEUR -0.2 (MEUR -0.3) Earnings per share (undiluted)
were -2.2 cents (-3.2 cents). Equity per share was EUR 0.60 (EUR 0.54).
Operating cash flow was MEUR 2.6 (MEUR 1.6).
SEGMENT REVIEW
Key figures by segment
Net sales, MEUR
Q1 Q1 Change, % 2014
------------------------------------------------------------------
11/14- 11/13- 11/13-
1/15 1/14 10/14
------------------------------------------------------------------
------------------------------- --------------------------
Digital Printing Services 13.7 13.6 1.3% 57.8
Safety 8.0 8.3 -3.2% 33.7
Building Technology Renovation 5.2 - 8.8
Takoma 4.0 3.5 14.6% 15.3
Ceiling Materials 2.3 2.7 -12.9% 11.0
Fittings 2.4 2.5 -4.8% 10.9
Spare parts for Motor Vehicles 2.6 2.6 1.0% 10.8
Heat Treatment 1.4 2.0 -31.8% 6.8
Others 0.0 0.0 0.0
Eliminations -0.1 -0.1 0.0
---------------------------------------------------------------
Group in total 39.6 35.1 12.9% 154.8
---------------------------------------------------------------
----------------------------------------------------
EBIT, MEUR
Q1 Q1 Change, % 2014
------------------------------------------------------------------
11/14- 11/13- 11/13-
1/15 1/14 10/14
------------------------------------------------------------------
------------------------------- --------------------------
Digital Printing Services 0.8 1.0 -22.3% 7.1
Safety -0.3 0.1 -290.3% 2.1
Building Technology Renovation 0.7 0.0 1.1
Takoma 0.0 -0.3 109.1% -0.4
Ceiling Materials 0.1 0.1 21.4% 0.5
Fittings 0.1 0.1 -4.6% 0.8
Spare parts for Motor Vehicles 0.0 0.2 -83.5% 0.7
Heat Treatment -0.1 0.2 -162.8% 0.2
Others -0.7 -0.7 -1.1% -2.1
Group in total 0.7 0.7 -1.1% 10.2
---------------------------------------------------------------
----------------------------------------------------
The income statement for operations discontinued during the reference period
has been separated from the income statement for continuing operations and the
result for them is presented in accordance with the IFRS standards on row
‘Earnings from discontinued operations'.
Panostaja Group's business operations for the period under review are reported
in nine segments: Digital Printing Services, Safety, Building Technology
Renovation, Takoma, Ceiling Materials, Fittings, Spare Parts for Motor
Vehicles, Heat Treatment and Other (parent company and associated companies).
Segment-by-segment comments November 2014-January 2015
Net sales during the review period in the Digital Printing Services segment
remained at the level of the previous year and were MEUR 13.7 (MEUR 13.6). EBIT
in the segment declined slightly from MEUR 1.0 to MEUR 0.8. The consumption of
printing and CAD paper has continued to fall by almost 10%. This has an impact
on the pricing of offset work, especially, and the downturn in construction
affects the CAD business. The segment has begun cost-efficiency measures, the
purpose of which is to achieve savings already this year. At the end of the
review period, the segment employed 488 (454) persons.
Net sales in the Safety segment decreased slightly MEUR 8.3 to MEUR 8.0.
Correspondingly, EBIT dropped from MEUR 0.1 to MEUR -0.3. Growth in the Safety
sector is rounding out and the sector, which had been shielded from the impact
of economic trends, is starting to see the impact of the financial crisis. The
needs of data security in particular, however, maintain demand in the sector.
The segment's stock of tenders is on a good level and growing, but at the same
time decision-making by customers is being delayed. At the end of the review
period, the segment employed 251 (214) persons.
The Building Technology Renovation segment was created when Panostaja acquired
a 60% share in KotiSun Oy in May 2014. The company offers consumers
conceptualized service water and heating network renovations as a turnkey
service. Building Technology Renovation is a new segment, so there is no
comparative data on it. During the review period, net sales in the segment
developed favourably and were MEUR 5.2 and EBIT MEUR 0.7. EBIT in the segment
was encumbered by the difference of MEUR -0.5 between the values of Kotisun
Oy's additional purchase price and the value on the balance sheet date, which
has been recognized in the company's other costs. At the end of the review
period, the segment employed 121 persons.
Net sales in the Takoma segment increased from MEUR 3.5 to MEUR 4.0. Operating
loss decreased from MEUR -0.3 to MEUR 0.0. In the review period, the business
of Takoma Gears developed as planned. The figures for operations discontinued
in the reference period are presented in their own row under ‘Discontinued
Operations'. At the end of the review period, the segment employed 92 (95)
persons. M.Sc. (Tech.) Lasse Mannola has been elected new Managing Director of
Takoma Oyj and Takoma Gears Oy. Mannola will start in his new position on March
2, 2015.
Net sales in the Ceiling Materials segment declined during the review period as
a result of the difficult market situation in construction from MEUR 2.7 to
MEUR 2.3. EBIT, however, remained at the level of the previous year at MEUR
0.1. Customer-interface competition for installation contracts has been fierce.
Furthermore, in certain product groups fierce price competition has led to a
significant fall in prices. Costs have been adapted and, through efficient
purchasing activity, it has been possible to keep the sales margin on a good
level. At the end of the review period, the segment employed 13 (14) persons.
Net sales in the Fittings segment decreased slightly during the review period
from MEUR 2.5 to MEUR 2.4.The market situation in the sector continues to be
difficult. During the review period, in spite of the difficult market
situation, however, EBIT remained at the level of the previous year at MEUR
0.1. During the review period, an investigation of new business areas was
initiated, in search of new customer lines and operating practices to support
current operations. At the end of the review period, the segment employed 34
(37) persons.
EBIT in the Spare Parts for Motor Vehicles segment remained at the level of
the previous year at MEUR 2.6. The general market situation has been as
expected. During the review period, the segment expanded both geographically
and in terms of range of models, when it opened a new branch in Vantaa and
started selling Volvo parts. EBIT weakened over the previous year, from MEUR
0.2 to MEUR 0.0, reflecting the investments made in business expansion. At the
end of the review period, the segment employed 50 (40) persons.
Net sales in the Heat Treatment segment decreased during the review period from
MEUR 2.0 to MEUR 1.4. Correspondingly EBIT weakened from MEUR 0.2 to MEUR -0.1.
The deterioration in net sales and EBIT was attributable to decreased customer
demand, both in the furnace business and at energy-sector sites. In Finland,
the market situation in the engineering sector was good during the review
period, but in Poland and especially in Sweden it was quiet. At the end of the
review period, the segment employed 53 (60) persons.
There were no significant changes in the net sales of the Other segment. In the
review period, two associated companies, Ecosir Group Oy and Spectra Yhtiöt Oy,
issued reports to the parent company. The profit/loss of the reported
associated companies in the review period was MEUR -0.1 (MEUR -0.3), which is
presented on a separate row in the consolidated income statement.
Personnel
January 31, January 31, Change
2015 2014
--------------------------------------------------------------------------------
Average number of employees 1,112 1,258 -12%
Employees at the end of the review period 1,111 1,220 -9%
--------------------------------------------------------------------------------
Employees in each segment at the end of January 31, January 31, Change
the review period 2015 2014
--------------------------------------------------------------------------------
Digital Printing Services 488 454 7%
Safety 251 214 17%
Building Technology Renovation 121 -
Takoma 92 95 -3%
Value-added Logistics - 298
Ceilings 13 14 -7%
Fittings 34 37 -8%
Spare parts for Motor Vehicles 50 40 25%
Heat Treatment 53 60 -12%
Others 9 8 13%
--------------------------------------------------------------------------------
Group in total 1,111 1,220 -9%
--------------------------------------------------------------------------------
The number of personnel employed by Panostaja fell compared with one year
earlier, mainly as a result of the sale of the Value-added Logistics segment.
On the other hand, the new Building Technology Renovation segment established
during the financial period increased the number of employees in the Group. At
the end of the review period, Panostaja Group employed a total of 1,111
persons, while the average number of personnel during the period was 1,112.
During the review period, Panostaja continued to develop its personnel in line
with its strategy.
INVESTMENTS AND FINANCE
Operating cash flow improved and was MEUR 2.6 (MEUR 1.6). Liquidity remained
good. The Group's liquid assets were MEUR 19.1 (MEUR 15.4) and interest-bearing
net liabilities MEUR 36.0 (MEUR 36.2). Gearing ratio fell and was 79.3%
(81.2%). The Group's net financial expenses for the review period were MEUR
-0.8 (MEUR -0.7), or 2.0% (2.0%) of net sales.
Panostaja Oyj's convertible subordinated loan amounted to MEUR 15 of the net
liabilities (MEUR 15.0). The Group's equity ratio at the end of the review
period was 32.2% (32.6%). Return on equity was -6.5% (-19.3 %). Return on
investment fell to 2.9% (3.8%).
The Group's gross capital expenditure for the review period were MEUR 2.1 (MEUR
0,8), or 5,3 % (2,3 %) of net sales. Investments were mainly targeted at
tangible and intangible assets.
On January 13, 2015, Panostaja Oyj announced that it had made an agreement
valued at MEUR 50 for a domestic commercial paper program. Within the
framework of the contract, the company can issue commercial papers of a tenor
of less than one year, which are used to finance Panostaja's working capital
and other current financing needs.
Financial position:
MEUR January 31, January 31,
2015 2014
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Interest-bearing liabilities 59.5 56.4
Interest-bearing receivables 4.4 4.8
Cash and cash equivalents 19.1 15.4
Interest-bearing net liabilities 36.0 36.2
Equity (belonging to the parent company's shareholders 45.4 44.6
as well as minority shareholders)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Gearing ratio, % 79.3 81.2
Equity ratio, % 32.2 32.6
Return on equity, % -6.5 -19.3
Return on investment, % 2.9 3.8
--------------------------------------------------------------------------------
GROUP STRUCTURE CHANGES
No changes in the Group structure.
SHARE PRICE DEVELOPMENT AND SHARE OWNERSHIP
Panostaja Oyj's share closing rate fluctuated between EUR 0.81 (lowest
quotation) and EUR 0.85 (highest quotation) during the first quarter. During
the period under review, a total of 1,682,275 shares were exchanged, which
amounts to 3.3% of the share capital. The January 2015 share closing rate was
EUR 0.84. The market value of the company's share capital at the end of January
2015 was MEUR 43.5 (MEUR 38.3). At the end of January 2015, the company had
3,539 shareholders (3,606).
Development of share exchange 1Q/2015 1Q/2014
-----------------------------------------------
-----------------------------------------------
Shares exchanged, 1,000 pcs 1,682 2,726
% of share capital 3.3 5.3
-----------------------------------------------
Share Jan 31, 2015 Jan 31, 2014
------------------------------------------------------
------------------------------------------------------
Shares in total, 1,000 pcs 51 733 51,733
Own shares, 1,000 pcs 384 474
Closing rate 0.84 0.74
Market value (MEUR) 43.5 38.3
Shareholders 3,539 3,606
------------------------------------------------------
ADMINISTRATION AND GENERAL MEETING
Panostaja Oyj's Annual General Meeting was held on February 5, 2015 in Tampere.
The number of Board Members was confirmed at six and Jukka Ala-Mello, Eero
Eriksson, Mikko Koskenkorva, Jukka Terhonen, Antero (Antti) Virtanen and Hannu
Tarkkonen were re-elected to the Board for the term that ends at the end of the
Annual General Meeting in 2016.
Authorized Public Accountants PricewaterhouseCoopers Oy and Authorized Public
Accountant Markku Launis were elected auditors for the period that ends at the
end of the Annual General Meeting in 2016. Authorized Public Accountants
PricewaterhouseCoopers Oy has stated that Authorized Public Accountant Lauri
Kallaskari will serve as the chief responsible public accountant.
The General Meeting confirmed the financial statements and consolidated
financial statements presented for the financial year November 1, 2013-October
31, 2014 and resolved that shareholders be paid EUR 0.04 per share as capital
repayment from the invested unrestricted equity fund.
The Meeting also resolved, in accordance with the proposal of the Board of
Directors, that the Board be authorized to decide, at its discretion, on the
potential distribution of assets to shareholders, should the company's
financial status permit this, either as dividends or as repayment of capital
from the invested unrestricted equity fund. The maximum distribution of assets
performed on the basis of this authorization totals no more than EUR 4,700,000.
The Meeting resolved that the authorization include the right of the Board to
decide on all other terms and conditions relating to the said asset
distribution and that the authorization remain valid until the start of the
next Annual General Meeting.
The General Meeting granted exemption from liability to the members of the
Board and to the CEO. The General Meeting resolved that the remuneration of the
Board of Directors remain unchanged and that Chairman of the Board be paid EUR
40,000 as compensation for the term that ends at the end of the 2016 Annual
General Meeting, and that the other members of the Board each be paid
compensation of EUR 20,000. It was also resolved that the travel expenses of
the Chairman of the Board and the Board members will be paid based on the
maximum amount specified in the valid grounds for payment of travel expenses
ordained by the Finnish Tax Administration. It was further resolved at the
General Meeting that approximately 40% of the compensation remitted to the
members of the Board be paid on the basis of the share issue authorization
given to the Board, by issuing company shares to each Board member if the Board
member does not own more than one percent of the company's shares on the date
of the General Meeting. If the holding of a Board member on the date of the
Meeting is over one percent (1%) of all company shares, the compensation will
be paid in full in monetary form.
In addition, the Board was authorized to decide on the acquisition of the
company's own shares in one or more installments so that the number of the
company's own shares to be acquired may not exceed 5,100,000 in total, which
corresponds to about 9.86% of the company's total stock of shares. By virtue of
the authorization, the company's own shares may be obtained using unrestricted
equity only. The company's own shares may be acquired at the
date-of-acquisition price in public trade arranged by NASDAQ OMX Helsinki Oy or
otherwise at the prevailing market price. The Board of Directors will decide
how the company's own shares are to be acquired. The company's own shares may
be acquired not following the proportion of ownership of the shareholders
(directed acquisition). The authorization issued at the Annual General Meeting
on January 29, 2014 to decide on the acquisition of the company's own shares is
cancelled by this authorization. The authorization remains valid until August
5, 2016.
The previous Meeting authorized the Board of Directors to decide in one or more
stages on the issuance of shares and options rights and other special rights
entitling to shares as defined in Section 1 of Chapter 10 of the Limited
Liability Companies Act in such a way that the number of shares given by virtue
of the authorization may not exceed 30,000,000 shares. The Board of Directors
decides on all terms and conditions for share issues and options as well as on
the terms and conditions for the granting of special rights providing
entitlement to shares. This authorization concerns both the issue of new shares
and the selling of the company's own shares. Share issues and the provision of
option rights as well as that of other rights providing entitlement to shares
as specified in Section 10(1) of the Limited Liability Companies Act may take
place deviating from the shareholders' pre-emptive right to subscription
(directed issue). The authorization issued at the Annual General Meeting on
January 27, 2011 to decide on share issues and the provision of special rights
providing entitlement to shares is cancelled by this authorization. The
authorization remains valid until February 5, 2020.
Immediately upon the conclusion of the General Meeting, the company's Board
held an organizing meeting in which Jukka Ala-Mello was elected Chairman and
Eero Eriksson Vice Chairman.
The Board of Directors has not used the authorization granted by the Annual
Meeting to acquire the company's own shares during the review period.
SHARE CAPITAL AND THE COMPANY'S OWN SHARES
At the close of the review period, Panostaja Oyj's share capital was EUR
5,568,681.60. The total number of shares is 51,733,110.
The total number of the company's own shares held by the company at the end of
the review period was 384,424 individual shares (at the beginning of the
financial period: 474,517). The number of the company's own shares corresponded
to 0.75% of the number of shares and votes at the end of the entire review
period.
In accordance with the decisions by the Annual General Meeting on January 29,
2014 and by the Board, on December 11, 2014 Panostaja Oyj relinquished a total
of 30,000 individual shares in share bonuses to company management and a total
of 14,634 shares on December 15, 2014 as meeting compensation to the members of
the Board.
EQUITY CONVERTIBLE SUBORDINATED LOAN AND HYBRID LOAN
At the end of the review period, EUR 15,000,000 of the 2011 convertible
subordinated loan remained. The interest on the loan is 6.5% and the loan
period February 7, 2011-April 1, 2016. The original share exchange rate is EUR
2.20, and the loan shares may be exchanged for no more than 6,818,181 company
shares. The total number of loan shares is 300, and they are available for
public trade on the Nasdaq OMX Helsinki stock exchange. The share exchange rate
will be entered into the company's invested unrestricted equity fund.
On May 27, 2013, the Group issued an equity convertible subordinated loan to
the value of MEUR 7.5. The equity convertible subordinated loan has not
maturity date, but the Group is entitled, but not obliged, to redeem the loan
within four years. Based on the contract, the annual interest is 9.75%.
Interest is only paid if the company decides to distribute dividends. If
dividends are not distributed, the Group will decide separately on the payment
of interest. In the consolidated financial statements, the loan is classified
as equity and interest is presented as dividend.
EVENTS AFTER THE REVIEW PERIOD
On February 27, 2015, Panostaja Oyj signed an agreement for the purchase of
shares in Megaklinikka Oy, which offers oral health care services. In the
transaction, Panostaja will buy a 75% share of the company. As a result of the
transaction, Panostaja expands its business operations and establishes within
the Group a new business area specializing in oral health care. As part of the
arrangement, Megaklinikka's key personnel will continue as minority
shareholders with a 25% stake in the company. Panostaja's aim is to build
Megaklinikka into a company that revolutionizes practices in the sector, and to
expand business both in Finland and internationally.
MARKET PROSPECTS
The Finnish economic situation and atmosphere and the crisis in Russia and
Ukraine have kept market prospects weak. The demand for companies operating on
the domestic market continues to be low and domestic consumer demand is not
expected to recover in the near future. The position of Panostaja's business
segments in their respective fields has on average improved. Although the
financial situation of companies in the SME sector has tightened due to
increasing regulation, finance is however available for good projects. The
prolongation of the Russian and Ukrainian crisis and the structural challenges
in the Finnish economy are still significant risks to overall economic
development in 2015, and are particularly reflected in segments serving the
construction industry and trade. On the corporate acquisitions market, activity
has increased and this will continue to offer opportunities both for new
acquisitions, and later also for divestments as the forecastability of economy
improves.
MOST SIGNIFICANT NEAR-FUTURE BUSINESS RISKS AND RISK MANAGEMENT
Risk management is part of the Panostaja Group's management and monitoring
systems Panostaja aims to identify and monitor changes in the business
environment and general market situation of its segments, to react to them and
to utilize the business opportunities that they present. Risk is classified as
factors that may endanger or impede Panostaja or the business segments owned by
it from achieving strategic objectives, improvement in profit and the financial
position or business continuity, or that may otherwise cause significant
consequences for Panostaja, its owners, segments, personnel or other
stakeholder groups. A more detailed report on Panostaja's risk management
policy and the most significant risks was published in the 2014 annual report.
Financial risks are discussed in greater detail in the Notes to the 2014
Financial Statements.
Market risks, general: General market risks are mainly tied to the uncertainty
resulting from Finland's economic situation and change caused by the crises in
Russia and Ukraine, as well as their potential impact on achieving the goals
set for the various segments. The change in the financial markets and the
tightening on credit issue may hamper the realization of corporate acquisitions
and the availability of finance for working capital.
Panostaja prepared for a weak financial market situation in the SME sector and
for a continued quiet period in the corporate acquisitions market by taking out
a MEUR 7.5 hybrid loan in May 2013. This hybrid loan will enable Panostaja to
make new complementary acquisitions in line with the company's strategy and
investment criteria, and to give more temporal room for manoeuvre for possible
divestments.
Market risks, operating fields of the segments: The instability of the overall
economic situation has led to a decline in customer demand as well as the
postponement of investments, which may result in a need for consolidated
goodwill write-downs. Economic prospects in the fields of the existing segments
are strongly tied to the prospects of customer enterprises. Expectations for
the financial situation are still characterized by uncertainty and poor
forecastability. In the various segments of Panostaja Group, the prospects
still vary from cautiously positive to neutral. Panostaja regularly assesses
the risks for each segment and, based on the updated risk assessment, takes the
necessary remedial action.
Strategic risks: Panostaja represents the Finnish SME sector extensively. Net
sales are divided into five different sectors whose cyclical nature varies. The
Group's business structure partially evens out economic fluctuations. In spite
of this, general and sector-specific market risks can, however, affect the
Group's result and financial development. In the business segments, the
expected market situation is taken into account by adapting production and
costs to market demand and by safeguarding the financial position. In changes
in the global economy, Panostaja also sees opportunities to improve its market
position, for example through corporate acquisitions. The crises in Russia and
Ukraine do not have direct effects on Panostaja Group, but their protraction is
negatively affecting demand on the domestic Finnish market and thereby the
development of Panostaja's profit and financial position.
Financial risks: As a consequence of its operations, the Group is exposed to
many financial risks. The aim of risk management is to limit the adverse
effects of changes in financial markets on the result and financial development
of the Group. The Group's revenue and operative cash flows are mainly
independent of fluctuations in market interest rates. The interest risk of the
Group mainly constitutes borrowing, which is spread over variable and
fixed-interest loans. Some of the business segments use interest rate swaps and
interest rate ceiling agreements. The Group mainly operates in the eurozone and
so is only exposed to foreign exchange risks resulting from changes in exchange
rates to a slight degree. Credit loss risks continue to represent a significant
uncertainty factor in some of the segments. This risk is increased by the
tightness of credit issue to SMEs.
Corporate acquisitions:
Panostaja actively seeks SMEs and endeavors to increase and create value,
through organic growth, corporate acquisitions and correctly-timed divestments.
The market still provides sufficient opportunities for corporate acquisitions,
and Panostaja Group aims to implement its growth strategy by means of
controlled acquisitions in current segments, and new potential segments are
also being actively studied. Preparation for divestments is being continued as
part of the ownership strategies of segments. Risks related to corporate
acquisitions are managed by investing carefully according to specific
investment criteria, as well as through efficient integration processes.
Panostaja Group has specified harmonized guidelines and a corporate
acquisitions process for the preparation and implementation of corporate
acquisitions.
Non-life risks: Non-life risks are managed in Panostaja Group through insurance
and Group guidelines, which set policy for the different areas.
Operative risks: On September 30, 2014, Pirkanmaa District Court confirmed the
reorganization programs of Takoma Oyj and Takoma Gears Oy. Confirmation of its
program gives Takoma Gears Oy the chance to develop its operations. Changes
concerning Takoma may, however, also in future cause needs for one-time
write-downs. Takoma's failure to implement the reorganization program is not
expected to cause changes to Panostaja Group's operating conditions.
OUTLOOK FOR THE 2015 FINANCIAL PERIOD
In accordance with its business strategy, Panostaja Group focuses on increasing
shareholder value in the segments owned by the Group. The development of
shareholder value will be constantly monitored as part of a changing operating
environment, and decisions on the development or divestment of business areas
will be made in order to maximize shareholder value. Active development of
shareholder value, the effective allocation of capital and finance
opportunities create a solid foundation for operational expansion. The need to
exploit ownership arrangements and growth opportunities in SMEs enables both
expansion into new segments and growth in existing ones.
Economic prospects in the fields of the existing segments are strongly tied to
the prospects of customer enterprises. Expectations for the financial situation
are still characterized by uncertainty and poor forecastability. In the various
segments of Panostaja Group, the prospects still vary from cautiously positive
to neutral. The challenges in forecastability or weakening prospects may create
a need for consolidated goodwill write-downs. However, the distribution of
ownerships through the existing segments provides protection against changes
taking place in the state of the economy.
The market still provides sufficient opportunities for corporate acquisitions,
and Panostaja Group aims to implement its growth strategy by means of
controlled corporate acquisitions in current segments, and new potential
segments are also being actively studied. Preparation for divestments is being
continued as part of the ownership strategies of segments.
Panostaja keeps its result management issued on February 27, 2015 unaltered.
The Group's net sales in the 2015 financial period are expected to be greater
than in 2014 (MEUR 154.8). The Group's EBIT is expected to be on the same level
as in the 2014 financial period (MEUR 10.2).
Panostaja Oyj
Board of Directors
For further information, contact CEO Juha Sarsama: tel. +358 40 774 2099.
Panostaja Oyj
Juha Sarsama
CEO
All forecasts and assessments presented in this interim report bulletin are
based on the current outlook of the Group and the views of the management of
the various business areas with regard to the state of the economy and its
development. The results attained may be substantially different.
ACCOUNTING PRINCIPLES
This financial statement bulletin has been prepared in compliance with the IFRS
accounting and valuation principle based on the IAS 34 standard.
The financial statement bulletin is unaudited.
INCOME STATEMENT 11/14-1 11/13-1 2014
/15 /14
3 3 12
months months months
(EUR 1,000)
Net sales 39,576 35,065 154,802
Other operating income 147 462 1,560
Costs in total 39,035 34,833 146,193
Depreciations, amortizations and impairment 1,356 1,307 5,408
Operating profit 687 695 10,169
Financial income and expenses -754 -703 -3,255
Share of associated company profits -137 -300 -137
Profit before taxes -203 -309 6,778
Income taxes -546 -919 -3,763
Profit/loss from continuing operations -749 -1,228 3,015
Profit/loss from discontinued operations 0 235 6,052
Profit/loss from discontinued operations 0 -1,267 -834
Profit/loss for the financial period -749 -2,261 8,234
Attributable to
shareholders of the parent company -964 -2,043 5,385
minority shareholders 215 -218 2,849
Earnings per share from continuing operations
EUR, undiluted -0.022 -0.032 -0.014
Earnings per share from continuing operations
EUR, diluted -0.022 -0.032 -0.014
Earnings per share from discontinued operations
EUR, undiluted 0.000 -0.011 0.108
Earnings per share from discontinued
operations EUR, diluted -0.022 -0.010 0.095
Earnings per share from continuing and discontinued -0.022 -0.043 0.094
operations EUR, undiluted
Earnings per share from continuing and discontinued -0.022 -0.043 0.094
operations EUR, diluted
EXTENSIVE INCOME STATEMENT
Items of the extensive income statement -749 -2,261 8,234
Translation differences -4 -51 -79
Extensive income statement for the period -753 -2,312 8,155
Attributable to
shareholders of the parent company -968 -2,094 5,306
minority shareholders 215 -218 2,849
BALANCE SHEET January 31, January 31,
2015 2014
(EUR 1,000)
ASSETS
Non-current assets
Goodwill 49,696 41,951
Other intangible assets 8,471 8,970
Property, plant and equipment 9,157 12,620
Interests in associated companies 3,474 3,413
Other non-current assets 10,858 12,309
Non-current assets total 81,656 79,264
Current assets
Stocks 14,898 14,580
Trade receivables and other non-interest-bearing 25,702 28,112
receivables
Financial assets at fair value through profit 8,490 8,463
and loss
Cash and cash equivalents 10,592 7,029
Current assets total 59,682 58,185
Held-for-sale non-current asset items
Assets in total 141,339 137,449
EQUITY AND LIABILITIES
Equity attributable to parent company shareholders
Share capital 5,569 5,569
Share premium account 4,646 4,646
Invested unrestricted equity fund 14,612 14,524
Equity convertible loan 7,390 7,390
Translation difference -156 -124
Retained earnings -979 -3,992
Total 31,082 28,013
Minority interest 14,324 16,551
Equity total 45,406 44,564
Liabilities
Deferred tax liabilities 968 1,244
Equity convertible subordinated loan 14,724 14,590
Non-current liabilities 34,197 27,857
Current liabilities 46,044 48,9194
Liabilities total 95,933 92,885
Equity and liabilities in total 141,339 137,449
CASH FLOW STATEMENT 01/2015 01/2014 2014
(EUR 1,000)
Operating net cash flow 2,588 1,573 11,394
Investment net cash flow -1,819 2,142 -9,260
Loans drawn 3,233 1,713 13,638
Loans repaid -3,262 -5,135 -14,502
Share issue 1,224
Disposal of own shares 37 12 48
Dividends paid and capital repayments -330 -1,467 0
Finance net cash flow -322 -4,877 -1,169
Change in cash flows 447 -1,162 965
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(EUR 1,000) Share Share Invested Transl Profit Other Minorit Total
capit premi unrestr ation funds funds y
al um icted diffe shareh
accou equity rences olders'
nt fund intere
st
Equity 5,569 4,646 14,508 -73 -1,979 7,390 19,016 49,077
Nov 1, 2013
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit for -2,043 -218 -2,261
the
financial
period
Profit and costs -2,043 -218 -2,261
recorded during the
financial period,
total
Dividends -1,638 -1,638
paid
Repayment of -2,040
capital
Disposal of 12 12
own shares
Reward scheme 4 4
Translation -51 30 -21
differences
Other changes
Changes in -609 -609
minority
interest
Other changes 16 -51 -2,622 -1,856 -4,513
in equity,
total
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity 52
Jan 31, 2014 5,569 4,646 14,524 -124 -4,601 7,390 17,160 44,564
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity
Nov 1, 2014 5,569 4,646 14,569 -152 95 7,390 15,378 47,495
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Profit for -964 215 -749
the
financial
period
Profit and -964 215 -749
costs
recorded
during the
financial
period,
total
Dividends -1,028 -1,028
paid
Interest on
equity
convertible
loan
Disposal of 37 48
own shares
Reward scheme 6 13
Translation -4 12 8
differences
Changes in -122 -240 -362
minority
interest
Other changes 43 -4 -110 -1,269 -1,340
in equity,
total
--------------------------------------------------------------------------------
Equity 5,569 4,646 14,612 -156 -979 7,390 14,324 45,406
Jan 31, 015
--------------------------------------------------------------------------------
KEY FIGURES
1/2015 1/2014
Equity per share (EUR) 0.60 0.54
Earnings per share, undiluted (EUR) -0.02 -0.03
Earnings per share, diluted (EUR) -0.02 -0.03
Average number of shares during financial period, 1,000 pcs. 51,284 51,195
Number of shares at end of financial period, 1,000 pcs. 51,733 51,733
Share issues/CL exchanges during financial period, 1,000 pcs. 0 0
Number of shares, 1,000, diluted 58,102 58,014
Return on equity,% -6.5 -19.3
Return on investment,% 2.9 3.8
Gross capital expenditure
To permanent assets (MEUR) 2.1 0.8
% of net sales 5,3% 2.3%
Interest-bearing liabilities 59.5 56.4
Equity ratio (%) 32.2 32.6
Average number of employees 1,112 1,258
GROUP DEVELOPMENT BY QUARTER
(MEUR) Q1/15 Q4/14 Q3/14 Q2/14 Q1/14 Q4/13 Q3/13 Q2/13
Net sales 39.6 44.1 38.1 37.5 35.1 38.7 33.0 34.4
Other operating income 0.1 0.3 0.6 0.2 0.5 0.6 0.2 0.2
Costs in total 39.0 40.0 35.9 35.4 34.8 37.5 33.8 34.0
Depreciations, 1.4 1.5 1.3 1.3 1.3 1.8 3.9 1.6
amortizations and
impairment
EBIT 0.7 4.4 2.8 2.3 0.7 1.8 -0.6 0.7
Finance items -0.8 -1.1 -0.8 -0.6 -0.7 -0.7 -0.7 -0.7
Share of associated -0.1 0.2 0.0 0.0 -0.3 -0.2 0.2 0.0
company profits
Profit before taxes -0.2 3.5 1.9 1.7 -0.3 1.0 -1.1 0.0
Taxes -0.5 -1.6 -0.5 -0.7 -0.9 0.6 -0.6 -0.4
Profit from continuing -0.7 1.9 1.4 1.0 -1.2 1.6 -1.7 -0.5
operations
Profit/loss from 0.0 -0.1 5.6 0.3 0.2 0.9 0.6 0.4
discontinued operations
Profit/loss from 0.0 0.6 0.0 -0.2 -1.3 -3.4 -0.7 -0.6
discontinued operations
Profit for the financial -0.7 2.4 7.0 1.1 -2.3 -1.0 -1.8 -0.7
period
Minority interest 0.2 1.4 0.7 0.9 -0.2 -0.6 -0.4 0.3
Parent company -1.0 1.0 6.3 0.2 -2.0 -0.4 -1.4 -1.0
shareholder interest
GUARANTEES GIVEN
(EUR 1,000) 01/2015 01/2014 2014
Guarantees given on behalf of Group companies
Enterprise mortgages 44,819 39,677 44,277
Pledges given 67,486 72,392 67,947
Other liabilities 3,637 2,753 4,562
Other rental agreements
In one year 5,982 7,876 6,238
In over one year but within five years maximum 12,330 13,940 13,320
In over five years 1,613 2,132 2,006
Total 19,926 23,948 21,564
SEGMENT INFORMATION
NET SALES 11/14-1/15 11/13-1/14 Change
(EUR 1,000)
Digital Printing Services 13,744 13,570 174
Safety 8,006 8,274 -268
Building Technology Renovation 5,172 - 5,172
Takoma 4,031 3,518 513
Ceiling Materials 2,322 2,667 -344
Fittings 2,409 2,532 -123
Spare parts for Motor Vehicles 2,589 2,563 26
Heat Treatment 1,374 2,016 -642
Others 0 0 0
Eliminations -71 -75 4
------------------------------------------------------------------
Group in total 39,576 35,065 4,511
------------------------------------------------------------------
------------------------------------------------------------------
OPERATING PROFIT
(EUR 1,000)
Digital Printing Services 801 1,030 -229
Safety -274 144 -419
Building Technology Renovation 699 699
Takoma 31 -346 377
Ceiling Materials 124 102 22
Fittings 63 66 -3
Spare parts for Motor Vehicles 26 155 -130
Heat Treatment -127 202 -328
Others -655 -658 4
------------------------------------------------------------------
Group in total 687 695 -7
------------------------------------------------------------------
SEGMENT INFORMATION BY QUARTER
Net sales, MEUR 1Q/15 4Q/14 3Q/14 2Q/14 1Q/14 4Q/13 3Q/13 2Q/13
Digital Printing 13.7 15.8 13.2 15.2 13.6 14.2 12.3 13.4
Services
Safety 8.0 9.3 7.7 8.4 8.3 9.5 7.0 7.8
Building Technology 5.2 4.9 3.9
Renovation
Takoma 4.0 4.6 3.5 3.8 3.5 4.0 3.6 3.5
Ceiling Materials 2.3 2.6 2.9 2.9 2.7 3.2 3.5 3.0
Fittings 2.4 2.6 2.6 3.2 2.5 3.0 2.8 3.1
Spare parts for Motor 2.6 2.9 2.7 2.6 2.6 2.7 2.6 2.5
Vehicles
Heat Treatment 1.4 1.6 1.6 1.6 2.0 2.1 1.3 1.2
Others 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Eliminations -0.1 -0.1 -0.1 0.0 -0.1 0.0 -0.1 -0.1
Group in total 39.6 44.1 38.1 37.5 35.1 38.7 33.0 34.4
Operating profit (MEUR) 1Q/15 4Q/14 3Q/14 2Q/14 1Q/14 4Q/13 3Q/13 2Q/13
Digital Printing 0.8 2.6 1.3 2.2 1.0 1.9 1.7 1.7
Services
Safety -0.3 1.0 0.9 0.1 0.1 1.0 0.4 0.4
Building Technology 0.7 0.6 0.5
Renovation
Takoma 0.0 0.2 0.0 -0.3 -0.3 -0.3 -2.9 -0.5
Ceiling Materials 0.1 0.0 0.1 0.4 0.1 0.2 0.3 0.1
Fittings 0.1 0.3 0.2 0.3 0.1 0.0 0.2 -0.2
Spare parts for Motor 0.0 0.2 0.2 0.1 0.2 0.2 0.3 0.1
Vehicles
Heat Treatment -0.1 -0.1 0.1 0.0 0.2 -0.7 -0.1 -0.3
Others -0.7 -0.4 -0.4 -0.6 -0.7 -0.5 -0.6 -0.6
Group in total 0.7 4.4 2.8 2.3 0.7 1.8 -0.6 0.7
Panostaja is an investment company developing Finnish SMEs in the role of an
active majority shareholder. The company aims to be the most sought-after
partner for business owners selling their companies as well as for the best
managers and investors. Together with its partners, Panostaja increases the
Group's shareholder value and creates Finnish success stories.
After the Megaklinikka acquisition, Panostaja has nine segments engaging in
business operations. Flexim Security Oy (Safety) is a specialist in security
technology and services, locking, door automation and access control products
and solutions. Grano Oy (Digital Printing Services) forms Finland's largest
company offering digital printing services and publication and production
services. Heatmasters Group (Heat Treatment) offers metal heat treatment
services in Finland and internationally, as well as manufacturing, developing
and marketing heat treatment technology. KL-Varaosat (Spare Parts for Motor
Vehicles) is an importer, wholesale dealer and retailer of original spare parts
and supplies for Mercedes Benz, BMW and Volvo cars. Megaklinikka Oy (Oral
Health Care) is a company providing oral health care services. The company is a
dental clinic offering a completely new kind of service concept. Suomen
Helakeskus Oy (Fittings) is a major wholesale dealer concentrating on
construction and furniture fittings. Selog Oy (Ceiling Materials) is a
specialty supplier and wholesaler of ceiling materials. Takoma Oyj (Takoma) is
a listed machine shop group. KotiSun Oy (Building Technology Renovation) is
Finland's leading company in service water and heating network building
technology renovations for detached houses.
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