2012-02-16 08:00:00 CET
2012-02-16 08:00:18 CET
REGULATED INFORMATION
Revenio Group Oyj - Financial Statement Release
REVENIO GROUP CORPORATION FINANCIAL STATEMENTS BULLETIN, January 1 to December 31, 2012
-Strong growth and profitability in 2011
Helsinki, 2012-02-16 08:00 CET (GLOBE NEWSWIRE) -- Revenio Group Corporation
STOCK EXCHANGE RELEASE February 16, 2012 at 9.00 a.m.
REVENIO GROUP CORPORATION FINANCIAL STATEMENTS BULLETIN, January 1 to December
31, 2012
-Strong growth and profitability in 2011
- Consolidated net sales from continuing operations came to EUR 33.3 million
(EUR 25.8 million), up 29.2%.
- Consolidated operating profit (EBIT) of continuing operations was EUR 3.4
million (EUR -0.9 million), representing 10.3 (-3.3)% of net sales.
- Pre-tax profit, continuing and discontinued operations, EUR 4.8 million (EUR
-0.7 million).
- Dilution-adjusted earnings per share, continuing and discontinued operations,
EUR 0.050 million (EUR -0.008 million).
- Cash flow from operating activities amounted to EUR 4.2 million (EUR 1.3
million)
- Net sales and operating profit in the Health Care segment showed sustained
strong growth
- Safety segment improved it's profit margin significantly
- Midas Touch on Service segment turned positive over the year
- Done Information was sold during the period and a non-recurring capital gain
of EUR 1.6 million was recorded in the third quarter result
- The proposed dividend is EUR 0.02 per share (EUR 0.02 per share)
- Group net sales for 2012 are forecast to see a decrease year-on-year due to
the completion of the large deliveries in the Systems segment. Operating
profit, excluding nonrecurring items, is forecast to see a similar drop to net
sales, while clearly remaining in the positive territory. In 2011, net sales
amounted to EUR 33.3 million, while operating profit totaled EUR 3.4 million.
10-12/2011
-Consolidated net sales from continuing operations came to EUR 8.8 million (EUR
8.8 million), down -0.1%.
-Consolidated operating profit (EBIT) from continuing operations was EUR 0.0
million (EUR -1.0 million), representing 0.3 (-10.5) % of net sales.
-The cost reserves allocated to the Norwegian projects of the Systems segment
played a role in the fall in consolidated operating profit in Q4, compared to
the previous quarters.
Statement by President and CEO Olli-Pekka Salovaara:
Overall, 2011 was a good year for Revenio Group, offering many reasons for
satisfaction with regard to profit performance. We once again saw the highly
profitable growth that we have come to expect from the Health Care segment.
However, the greatest profitability improvement was seen in the services
segment, in which Midas Touch was able to turn heavy losses into a profit due
to its successful adjustment and business re-orientation measures.
Another of 2011's success stories was the Safety segment, which saw a marked
improvement in its result. This is all the more impressive considering that, in
the current market situation, orders are rather small and production series
short. We are satisfied with the success of Done Software Solutions, a
subsidiary of the Systems segment.
The business operations of FLS Finland remained profitable. New success
factors are continually being sought for the business, in order to achieve
higher sales volumes. This will require success in markets outside the Nordic
countries.
Our greatest disappointment of 2011 lay in the profitability of the Norwegian
project undertaken by Done Logistics, part of the Systems segment. The planned
costs were exceeded during the installation phase, eating into the Group's
consolidated operating profit in Q4 2011. The most intensive installation work
in Norway will continue until the spring of 2012. At the same time, the near
future of Done Logistics looks challenging, since no new major orders have been
secured.
Excluding the Done Logistics situation, we are heading into 2012 with optimism,
since our other companies have the ability to achieve good results despite the
uncertain economic situation. As for Done Logistics, we are working intensively
on improving the situation.”
MARKET SITUATION
During the financial year, the Services segment saw positive development in its
market situation and business operations - particularly with regard to inbound
operations, an area towards which the segment's focus is being shifted, due to
its lower risks and more stable future prospects compared to telemarketing. The
prospects and development of telemarketing can also be characterized as
reasonably healthy, now that operations have been concentrated into the most
profitable telemarketing services yielding the highest added value.
In the Systems segment, demand for logistics systems varies according to
customer target group and geographical area. After the minor upsurge enjoyed
during the previous financial year, matters again took a turn for the worse due
to general uncertainty related to the economic situation.
During the financial year, the Health Care segment saw demand for Icare
tonometers continue to grow, while the market situation remained good. Owing
to the products' competitive position, the global market, and the degree of
market penetration, demand for these products is not forecast to be as
susceptible to market trends as it is for products in many other sectors.
The Safety segment has been able to increase its international visibility by
engaging in marketing outside its conventional markets. The product is
competitive due to its high quality and excellent product features, but the
related sales processes are long-winded, while the outlook for the national
economies of many customer countries remains uncertain. In spite of this,
public investments in defense and safety are expected to continue, since some
customer organizations need to modernize their equipment and have other,
concrete investment needs based on a requirement for additional equipment.
Demand in the Technology segment's traditional market areas was somewhat weak,
since no extensive modernization programs are currently underway for price
displays used in the fuel distribution network. Modernization projects were
less extensive than previously, although the number of small-scale investments
rose towards the end of the financial year.
NET SALES, PROFITABILITY AND PROFIT
Consolidated net sales from Revenio Group's continuing operations for the
period from January 1 to December 31, 2012 were EUR 33.3 million (EUR 25.8
million), showing an increase of 29.2%. Earnings before interest, taxes,
depreciation and amortization (EBITDA) of continuing operations amounted to EUR
4.2 million (EUR 0.2 million), or 12.5 (0.8)% of net sales.
Consolidated operating profit (EBIT) of continuing operations was EUR 3.4
million (EUR -0.9 million), representing 10.3 (-3.3)% of net sales.
Consolidated operating profit, excluding non-recurring items, of continuing
operations amounted to EUR 3.4 million (EUR 0.6 million), or 10.3 (2.4) percent
of net sales. The pre-tax result totaled EUR 4.8 million (EUR -0.7 million), or
14.4 (-2.2) percent of net sales. Consolidated net profit of continuing
operations for the financial year amounted to EUR 2.2 million (EUR -0.7
million), representing 6.6 (-2.8)% of net sales. Consolidated net profit of
discontinued operations during the financial year totaled EUR 1.7 million (EUR
0.2 million). Profit for the financial year totaled EUR 3.9 million (EUR -0.6
million).
Diluted and undiluted earnings per share of continuing operations came to EUR
0.028 (EUR -0.011). Undiluted earnings per share of discontinued operations
totaled EUR 0.023 (EUR 0.003), while dilution-adjusted earnings per share came
to EUR 0.022 (EUR 0.003). Dilution-adjusted earnings per share of continuing
and discontinued operations during the financial year totaled EUR 0.050 (EUR
-0.008).
Equity per share was EUR 0.21 (EUR 0.18).
Consolidated net sales of continued operations in Q4 came to EUR 8.8 million
(EUR 8.8 million). Net sales decreased by 0.1%. Consolidated operating profit
for Q4 amounted to EUR 0.0 million (EUR -1.0 million), or 0.3 (-10.5) percent
of net sales. The final quarter's operating profit includes a EUR 1.9-million
write-down on Midas Touch's goodwill and intangible assets on reference year's
figures. Consolidated operating profit of continuing operations without
recurring items for the last quarter amounted to EUR 0.0 million (EUR 1.0
million), or 0.3 (11.2) percent of net sales. Diluted and undiluted earnings
per share of continuing operations during Q4 came to EUR -0.003 (EUR -0.011).
In 2011, net sales for the Group's continuing operations grew 29.2 percent
year-on-year. Significant increases in net sales were seen in the Health Care
and Systems segments; the Safety and Technology segments also achieved growth
in net sales. Net sales in the Services segment fell due to the decision made
in late 2010 with regard to service production, to centralize operations and
decrease capacity.
Consolidated operating profit for all segments saw a marked improvement
year-on-year. Most of this improvement was generated by the Services and Health
Care segments.
In July 2011, the Group sold the entire capital stock of Done Information Oy to
Semantix Lingua Nordica Oy, part of the Swedish Semantix group. Revenio Group
received a capital gain of EUR 1.6 million from the divestment, which was
recorded in full in the third quarter's result.
BALANCE SHEET, FINANCIAL POSITION AND INVESTMENTS
The consolidated balance sheet total on December 31, 2011 was EUR 24.8
million(EUR 24.5 million). Shareholders' equity came to EUR 16.4 million (EUR
14.1 million). At the end of the financial year, interest-bearing net
liabilities totaled EUR -2.8 million (EUR 0.7 million) and gearing stood at
-17.3 (4.9) percent. The consolidated equity ratio was 66.6 (60.8)%. The
Group's liquid assets at the end of the fiscal year totaled EUR 4.4 million
(EUR 2.1 million) in value.
Due to the positive financial development, the Group's financial standing
remained stable throughout the fiscal year. In addition to its liquid assets,
the Group has a EUR 2.0 million credit facility, from which no funds had been
withdrawn at the end of the financial year.
Cash flow from business operations came to EUR 4.2 million (EUR 1.3 million).
Factors increasing cash flow included the improved profitability of the Group's
business operations, while factors decreasing cash flow included working
capital tied to the projects in Norway and the related installation costs.
The Group's purchases of PPE and intangible assets totaled EUR 0.7 million (EUR
0.7 million). These investments were concentrated on production equipment,
information technology and software.
GROUP STRUCTURE
At the end of the fiscal year, Revenio Group comprised parent company Revenio
Group Corporation and its wholly owned subsidiaries, all active companies:
Midas Touch Oy, Done Logistics Oy, Done Software Solutions Oy, Icare Finland
Oy, Boomeranger Boats Oy and FLS Finland Oy, along with, additionally, the
following subsidiaries of Midas Touch Oy: Midas Touch Media Oy, Midas Touch
Gateway Oy, Midas Touch Interactive Oy, Midas Touch Tech Oy, and Midas Touch
Care Oy. The decision was taken to merge subsidiaries of Midas Touch Oy with
its parent company during the first half of 2012.
OPERATIONS BY BUSINESS SEGMENT
Revenio Group Corporation's business operations are organized into five
segments: Services (Midas Touch), Systems (Done Logistics and Done Software
Solutions), Health Care (Icare Finland), Safety (Boomeranger Boats), and
Technology (FLS Finland). This structure is in line with the Group's
organization and internal reporting.
Services
The Services segment comprises Midas Touch, one of the leading contact center
companies in Finland. Midas Touch provides outsourced telephone services,
including customer service, help desk services, exchange management,
telemarketing and market surveys for the private and public sectors alike.
The Services segment's net sales in 2011 totaled EUR 4.9 million (EUR 6.7
million), down 26.4 percent. The segment's profit margin was 0.1 (-3.3),
including 1.9 million euro in write-downs on goodwill and intangible assets as
non-recurring items on reference year's figures. Q4 net sales amounted to EUR
1.3 million (EUR 1.4 million), and the margin was EUR -0.0 million (EUR -2.3
million).
Midas Touch's profitability markedly improved during the financial year. This
was the result of restructuring measures carried out at the company in late
2010, in which production capacity was markedly adjusted to the prevailing
market situation. As a result, production efficiency improved, while the cost
level dropped substantially. The company's telephone service system was also
modernized; the new system better enables the company to operate in line with
its current focal points.
Systems
The Systems segment comprises Done Logistics, which provides companies with
materials handling systems related to their internal logistics, and Done
Software Solutions, which provides the related information systems. In 2011,
the Systems segment's net sales came to EUR 13.1 million(EUR 6.8 million), up
92.9 percent. The segment's profit margin was EUR 0.3 million (EUR 0.0
million). Q4 net sales amounted to EUR 3.6 million (EUR 3.1 million), and the
margin was EUR -0.8 million (EUR 0.3 million).
In the financial year 2011, the majority of net sales of Done Logistics, part
of the Systems segment, were generated by the delivery of a system to the
Norwegian Tine SA, for the handling and collection of dairy products, as a
subcontractor for the Swiss logistics group Swisslog. Business operations
turned negative in Q4 due to the high costs incurred during the installation
and implementation phase. Most of the project's remaining installation and
implementation phase will occur in the first half of 2012.
Done Software Solutions' first full year in operation was successful, seeing an
improvement in profitability, despite the challenging market situation in the
sector's software market.
Health Care
The Health Care segment comprises Icare Finland, which specializes in the
development, manufacture and sale of tonometers measuring intraocular pressure.
In 2011, the Health Care segment's net sales came to EUR 8.9 million (EUR 7.0
million), up 26.9 percent. The segment's profit margin was EUR 3.9 million (EUR
2.9 million). Q4 net sales amounted to EUR 2.6 million (EUR 2.2 million), while
the segment's margin was EUR 1.2 million (EUR 1.1 million).
The market position of the Health Care segment improved during the financial
year, and its business operations saw favorable development. The company
invested in sensor production, with sensor sales representing an increasingly
important part of its business operations. The development of distribution
channels and the systematic international marketing of products continued. The
decision to establish a subsidiary in the USA was made during the financial
year.
At the end of the financial year, Icare had a sales license for its
first-generation tonometer and the Icare Link software, representing a new
generation of products. With regard to new-generation products, the application
related to the Icare One tonometer was pending, while the application process
for the icare Pro tonometer was being prepared. Icare One is designed for the
self-measurement of intraocular pressure ‒ a fact that may affect the length of
the licensing process.
Safety
The Safety segment consists of Boomeranger Boats, which designs, manufactures,
and sells Rigid Inflatable Boats (RIBs) of the highest quality, primarily for
navy rescue units, authorities and security forces in various countries.
In 2011, the Safety segment's net sales amounted to EUR 3.8 million (EUR 3.4
million), up 12.9 percent. The segment's profit margin was EUR 0.6 million (EUR
0.2 million). Q4 net sales amounted to EUR 0.6 million (EUR 1.2 million), while
the segment's margin was EUR 0.1 million (EUR 0.2 million).
The segment's sales during the financial year comprised rather small-scale
orders, which were delivered at high production efficiency and profitability.
However, this business sector's order backlog is uneven, leading to large
fluctuations in volume within each year.
Technology
Representing the Technology segment, FLS Finland (previously Finnish Led-Signs)
is the largest supplier of LED price displays in the Nordic region and is
Finland's leading manufacturer of LED information displays and parking guidance
systems.
In 2011, net sales of the Technology segment totaled EUR 2.5 million (EUR 1.9
million), up 29.2 percent. The segment's profit margin was EUR 0.1 million (EUR
0.0 million). Although net sales grew, investment activity among the segment's
customers, with respect to display equipment for service station networks, was
subdued in 2011.A positive result was enabled by the company's ability also to
fill small orders at a profit. The most significant customer delivery over the
period was the expansion on Helsinki-Vantaa airport's parking display
equipment.
Over the period a 2-year framework partnership agreement with British Petroleum
was signed over the LED-displays and 3-year extension on partnership agreement
with Neste Oil as well.
Q4 net sales amounted to EUR 0.7 million (EUR 0.8 million), while the segment's
margin was EUR 0.0 million (EUR 0.1 million).
Net sales and segment's margin on Jan 1 - Dec 31/ 2011 and Jan 1- Dec
31/2010 on continueing operations:
Net sales Net Segment' Segment'
sales s margin s margin
Jan 1 Jan 1 - Jan 1- Jan
-Dec 31 Dec Dec 1-Dec
/2011 31/2010 31/2011 31/2010
MEUR Share- MEUR Share- MEUR % MEUR %
% %
Services 4,9 15 % 6,7 26 % 0,12 2 % -1,31 -20 %
Systems 13,2 39 % 6,8 23 % 0,33 3 % 0,03 0 %
-Done 11,8 35 % 5,7 19 % 0,06 1 % -0,13 -2 %
Logistics
-Done
Software
Solutions 1,3 4 % 1,1 4 % 0,27 21 % 0,16 15 %
Health 8,9 27 % 7,0 24 % 3,87 44 % 2,93 42 %
care
Safety 3,8 11 % 3,4 12 % 0,57 15 % 0,18 5 %
Technology 2,5 8 % 1,9 6 % 0,09 4 % -0,05 -2 %
Total 33,3 100 % 25,8 100 % 4,99 15 % 1,79 7 %
Parent -1,57 -1,18
company
expenses
Profit margin 3,42 10 % 0,61 2 %
Net sales, margin, and profit, by segment and quarter, excluding nonrecurring
items, were as follows:
MEUR Q4/11 Q3/11 Q2/11 Q1/11 Q4/10 Q3/10 Q2/10 Q1/10
Net sales:
Services 1,3 1,2 1,2 1,2 1,4 1,5 1,8 1,9
Systems 3,6 3,9 3,2 2,6 3,1 1,7 0,8 1,2
-Done Logistics 3,1 3,6 2,9 2,2 2,8 1,4 0,5 0,9
-Done Software Solutions 0,4 0,3 0,3 0,3 0,3 0,3 0,3 0,3
Health care 2,6 1,9 2,2 2,3 2,2 1,6 1,5 1,7
Safety 0,6 0,6 1,2 1,4 1,2 0,6 0,9 0,7
Technology 0,7 0,7 0,7 0,4 0,8 0,4 0,4 0,3
Total 8,8 8,2 8,5 7,8 8,8 5,8 5,4 5,8
Segment margin: Q4/11 Q3/11 Q2/11 Q1/11 Q4/10 Q3/10 Q2/10 Q1/10
Services -0,03 0,06 0,06 0,03 -0,32 -0,21 -0,37 -0,40
Systems -0,81 0,69 0,34 0,10 0,27 0,03 -0,18 -0,09
-Done Logistics -0,94 0,64 0,30 0,04 0,22 -0,01 -0,21 -0,12
-Done Software Solutions 0,13 0,05 0,04 0,06 0,05 0,04 0,03 0,03
Health care 1,21 0,79 0,90 1,00 1,10 0,83 0,45 0,56
Safety 0,06 0,13 0,17 0,19 0,25 -0,13 0,04 0,02
Technology 0,03 0,07 0,06 -0,06 0,07 0,02 -0,03 -0,11
Total 0,46 1,74 1,53 1,26 1,37 0,54 -0,09 -0,02
Parent company expenses -0,42 -0,47 -0,37 -0,31 -0,33 -0,27 -0,30 -0,28
Profit margin 0,04 1,27 1,16 0,95 1,04 0,27 -0,39 -0,30
Profit margin-% 0,3 15,8 13,8 12,4 12,0 4,7 -7,2 -5,2
HUMAN RESOURCES
The number of personnel employed by the Group in 2011 averaged 248 (423).
Layoffs at Midas Touch, completed at the end of 2010, and the divestment of
Done Information were the most important factors affecting the number of
employees. At the end of the period, the number of employees was 265 (333). The
average age of staff was 41 years (41 years).
Owing to the deterioration in prospective demand, the company held
employer-employee negotiations at Done Logistics. On the basis of these
negotiations, the company is entitled to implement fixed-term layoffs during
2012, should the market situation so require. Boomeranger Boats also prepared
for reducing demand by means of employer-employee negotiations.
During the financial year, development projects related to the work of
supervisors and management, determined on the basis of the 2010 personnel
survey, were carried out at Group companies.
The number of personnel employed by the Group during the fiscal year, by
segment, averaged:
31.12.2011 31.12.2010 Change
Services 138 325 -187
Systems 59 48 11
Health care 13 11 2
Safety 21 23 -2
Technology 13 12 1
Parent company 4 4 0
Total 248 423 -175
Wages, salaries, and other remuneration paid during the financial year totaled
EUR 8.7 million (EUR 9.5 million).
MANAGEMENT GROUP
Olli-Pekka Salovaara is the president and CEO of Revenio Group Corporation. The
Management Group consists of Salovaara, Development Director Juha Kujala, and
CFO Pekka Raatikainen.
The managing directors of the Group's subsidiaries are Ari Tiukkanen (Icare
Finland), Riku Lamppu (Midas Touch), Helena Korte (FLS Finland), Jussi
Mannerberg (Boomeranger Boats), Pekka Soini (Done Logistics) and Ari Suominen
(Done Software Solutions).
SHARES, SHARE CAPITAL AND MANAGEMENT HOLDINGSOn December 31, 2011, Revenio Group Corporation's fully paid share capital
registered in the Trade Register was EUR 5,314,918.72 and the number of shares
outstanding totaled 76,889,730. The company has one series of shares, and all
shares confer the same voting rights and an equal right to dividends and the
company's funds.
On December 31, 2011, the Board of Directors and the President and CEO held
1.6% of the company's shares, totaling 1,202,600 shares, and 18.6% of the
option rights, for a total of 684,365 options.
CHANGES IN SHAREHOLDING
There were no significant changes in ownership to report during the fiscal year.
PURCHASE OF OWN SHARES
During the financial year, the company purchased a total of 500,000 of the
company's own shares. The buyback program, launched on 16 August 2011, was
completed on 7 September 2011. 177,391 of the acquired shares were used for
paying Board members' emoluments in accordance with the AGM's decision of March
31. The Board members - Rolf Fryckman, Matti Hyytiäinen, Julia Ormio and Pekka
Tammela - each received 31,304 in Board emoluments. Timo Mänty, the chairman of
the Board, received 52,174 shares in Board emoluments.
At the end of the financial year, the company held a total of 322,609 of its
own shares.
OPTION RIGHTS
On the basis of the share issue authorization approved by the Annual General
Meeting on April 3, 2007, the Board of Revenio Group Corporation decided, on
November 23, 2007, on a new corporate option plan, comprising a maximum of
3,684,365 option rights. Each option right entitles the holder to subscribe to
one Revenio Group Corporation share. Against the total number of the company's
shares on December 31, 2011, the proportion of shares to be subscribed for on
the basis of the option rights issued represents a maximum of 4.7 percent of
the company's shares and votes, once all new shares subscribed for with these
option rights have been registered. Share subscriptions via the option program
entitle the holder to a dividend from the subscription year onwards.
The option rights have been divided into three series: Series A (1,684,365
shares), Series B (1,000,000) and Series C (1,000,000). The subscription
periods for the options are as follows: for Series A, May 1, 2009 - May 1,
2013; for Series B, November 1, 2010 - November 1, 2014; and for Series C, May
1, 2012 - May 1, 2016. The share subscription price will be the trade-weighted
average price over the periods November 1-30, 2007 (EUR 0.64, Series A); April
1-30, 2009 (EUR 0.29, Series B); and November 1-30, 2010 (EUR 0.28, Series C).
During the financial year, a total of 148,122 Series B option rights and
1,000,000 Series C option rights were issued. The number of shares subscribed
based on Series B stock options, issued at an earlier time, totaled 50,000. At
the end of the year, the company's key personnel held, in total, 1,081,243
Series-2007A options, 858,122 Series-2007B options, and 1,000,000 Series-2007C
options.
TRADING ON THE NASDAQ OMX HELSINKI
During Q1-Q4/2011, Revenio Group Corporation's turnover on the NASDAQ OMX
Helsinki exchange totaled EUR 17.3 million (EUR 7.9 million), representing 39.4
(24.7) million shares or 51.2 (32.2)% of shares outstanding. The trading high
was EUR 0.62 (0.38) and the low EUR 0.30 (0.28). With an average share price of
EUR 0.44 (EUR 0.30), the company's share closed at EUR 0.48 (0.30) on December
31, 2011. Revenio Group Corporation's market value on December 31, 2011, was
EUR 36.9 million (EUR 23.0 million).
ANNUAL GENERAL MEETING AND BOARD AUTHORIZATIONS IN EFFECT
The Annual General Meeting, held on March 31, 2011, approved the company's
financial statements and discharged the members of the Board of Directors and
the president and CEO from liability for the January 1 - December 31, 2010,
financial year.
The AGM re-elected Rolf Fryckman, Timo Mänty and Pekka Tammela as Board members
while also appointing Matti Hyytiäinen and Julia Ormio as Board members.
The AGM decided that the Chairman of the Board should be entitled to an annual
emolument of EUR 60,000 and the other Board members to an annual emolument of
EUR 36,000, with the exception that any member who holds a stake of at least
five percent in Revenio Group Corporation, either directly or through a company
in which he or she has a minimum holding of 50%, should not be entitled to a
separate emolument. In total, 40% of Board members' emoluments will be settled
in the form of shares in the company, while 60% will consist of monetary
payment.
The AGM decided to re-elect PricewaterhouseCoopers Oy, Authorized Public
Accountants, as the company's auditor, with Juha Tuomala, Authorized Public
Accountant, acting as the chief auditor.
The AGM decided to accept the Board's proposal on profit distribution,
according to which the profit for the financial period, EUR 243,391.03, will be
added to retained earnings, and a dividend of EUR 0.02 per share will be paid,
totaling EUR 1,536,794.60.
The AGM authorized the Board of Directors to decide on buyback of a maximum of
7,683,973 own shares in one or more installments, using the company's
unrestricted equity. Any such buyback will reduce the company's distributable
earnings.
The AGM cancelled the Board of Directors' unexercised valid share-issue
authorization, and authorized the Board to decide to issue a maximum of
30,000,000 shares or to grant special rights (including stock options)
entitling to shares, as referred to in Section 1 of Chapter 10 of the Limited
Liability Companies Act, in one or several tranches. This authorization was
granted to be used to finance and implement any prospective corporate
acquisitions or other transactions, to implement the company's share-based
incentive plans, or for other purposes determined by the Board. The Board has
the right to decide on all terms and conditions governing said share issue and
the granting of special rights, including the subscribers or grantees of the
special rights, and the consideration payable. The Board's authorization
includes the right to waive shareholders' preemptive subscription rights and
covers the issue of new shares and the transfer of any shares that may be held
by the company. This authorization will be valid until April 30, 2012.
BOARD OF DIRECTORS AND AUDITORS
Since March 31, 2011, Revenio Group Corporation's Board of Directors has
included Timo Mänty, M.Econ, Managing Director of Onninen Oy (Chairman of the
Board), Pekka Tammela, M.Econ, Authorized Public Accountant, partner in Pajamaa
Partners Oy and Rolf Fryckman, optician, Chairman of Eyemaker's Finland Oy; and
as new members, Julia Ormio, Senior Legal Counsel at Foster Wheeler Energy Oy,
and Matti Hyytiäinen, M.Econ, Managing Director of OKC Group Oyj. Until March
31, 2011, the members of the Board were Jyri Merivirta, Rolf Fryckman, Pekka
Tammela, and Timo Mänty.
PricewaterhouseCoopers Oy, Authorized Public Accountants, serves as the
company's auditor, with Juha Tuomala, Authorized Public Accountant, as the
principal auditor.
In 2011, the Board of Directors met 16 times. On average, Board members'
meeting attendance rate was 98.7 percent.
In accordance with the AGM's decision, 40 percent of Board members' emoluments,
in total, were settled in the form of shares in the company, while 60 percent
consisted of monetary payment. In the course of the financial year, the company
made, in total, EUR 126,967.45 in monetary payments as Board emoluments. In
addition, 177,391 Revenio Group Corporation shares in all were granted as Board
emoluments.
In the 2011 financial year, the president and CEO was paid EUR 208,668.00 in
salary.
MAJOR BUSINESS RISKS AND UNCERTAINTIES
The Group's risks are defined as strategic, operational, trade cycle, hazard,
and financial risks.
The Group's strategic risks include strong competition in all sectors, the
threat posed by new competing products, and any other actions of the company's
rivals that may affect the competitive situation. Another factor posing a
strategic risk is related to success in R&D operations and, therefore,
preservation of the product range's competitiveness. In the Group's sectors,
requiring particular expertise in accordance with the strategy, essential risks
also include those related to the retention and development of key personnel as
well as dependence on the operational ability of the subcontractor and supplier
network.
Corporate acquisitions are part of the Group's strategy. The success of these
acquisitions has a significant impact on the reaching of growth and
profitability targets. Acquisitions may also change the Group's risk profile.
Strategic risks and the need for action are regularly assessed and are
monitored in connection with day-to-day management, monthly Group reporting,
and annual strategy updates.
Operational risks are associated with the retention and development of major
customers and success in extending the customer base. In the Health Care
segment especially, operational risks include factors related to expansion into
new markets, such as various countries' regulation of medical instruments
imposed at national level and the related official decisions concerning the
health care market.
The operational risks related to the manufacture, product development, and
production control of medical instruments are estimated to be higher than
average in the Health Care segment, because of that sector's requirements
concerning quality.
Project-based operations, mainly carried out in the Systems and Technology
segments, entail exposure to subcontractor and supplier risks in the management
of demanding integrated solutions.
The share of deferred tax assets in the assets item of the consolidated balance
sheet is significant. Changes in business profitability and tax legislation
could involve changes in the availability and amount of deferred tax assets.
Hazard risks are subject to extensive insurance coverage, and the adequacy of
that coverage is always assessed when any changes in circumstances so require -
however, no less than once per year. Property insurance and insurance against
interruptions to business provide protection against risks in these areas,
while various types of liability insurance provide protection against other
business risks.
Financial risks consist of credit, interest, liquidity, and foreign exchange
risks. The Group has taken out credit insurance covering all companies in the
Group, to manage credit loss risks. Every month, and more frequently if
necessary, the Board, in its meetings, assesses matters related to financial
issues. If required, the Board provides decisions and guidelines for the
management of financial risks concerning interest-rate and currency hedging,
for instance. Liquidity risks are monitored by means of cash forecasts, which
are drawn up for periods of 12 months at a time.
EVENTS AFTER THE FINANCIAL YEAR
On January 5, 2012, the company announced the replacement of the Managing
Director of its subsidiary, Icare Finland. The current Managing Director, Ari
Tiukkanen, had announced he would be leaving to take up a position with another
company in May, 2012.
OUTLOOK FOR 2012
Group net sales for 2012 are forecast to see a decrease year-on-year due to the
completion of the large deliveries in the Systems segment. Operating profit,
excluding nonrecurring items, is forecast to see a similar drop to net sales,
while clearly remaining in the positive territory. In 2011, net sales amounted
to EUR 33.3 million, while operating profit totaled EUR 3.4 million.
THE BOARD'S PROPOSAL TO THE ANNUAL GENERAL MEETING
The consolidated net profit for the year totaled EUR 3,911 thousand and that of
the parent company EUR 2,056,692.01.
The parent company's distributable earnings on December 31, 2011 totaled EUR
14,363,150.07.
The Board of Directors will propose to the Annual General Meeting on March 28,
2012, that the parent company's distributable earnings be allocated as follows:
- A per-share dividend of EUR 0.02, for a total of EUR 1,537,794.60, against
the total number of shares on the balance sheet date, will be distributed.
- The rest of the distributable retained earnings will be entered under equity.
In the Board's opinion, the proposed dividend distribution does not endanger
the parent company's liquidity.
ACCOUNTING PRINCIPLES
The recognition and valuation principles underlying the financial information
presented in the Interim Report comply with the principles of the International
Financial Reporting Standards (IFRS). The report does not comply with all the
requirements of IAS 34, Interim Financial Reporting. These financial statements
are based on audited figures.
CORRECTION OF AN ERRROR RELATED TO A PREVIOUS FINANCIAL YEAR IN COMPLIANCE WITH
IAS 8
During the financial year 2011, Midas Touch received an unfavorable decision
from the tax authorities concerning its practice regarding the right to deduct
VAT from the cost debits between companies belonging to the Midas sub-group.
According to this decision, the excess amount of VAT deducted by Midas Touch Oy
during the tax years 2008-2010 totaled EUR 396,000, including the consequences
for default. EUR 82,000 of this sum was accumulated during the financial year
2010.
The impact of these corrections on the consolidated income statement and
balance sheet has been implemented as follows:
Impact on Consolidated
Income Statement:
Jan 1 - Dec 31/2010 Jan 1 - Dec 31/2010
Original values Correcti Restated values
on
Continuing operations:
NET SALES 25 764 25 764
Other operating expenses -4 330 -82 -4 412
Operating result -851 -82 -933
PRE-TAX PROFIT -878 -82 -960
Income tax expense 150 150
Net profit on continuing -728 -82 -810
operations
Total Comprehensive income -507 -82 -589
Impact on Consolidated
Balance Sheet:
Jan 1 - Dec 31/2010 Jan 1 - Dec 31/2010
Original values Correcti Restated values
on
Shareholders' equity: 14 501 -396 14 091
Short-term liabilities 7 957 396 8 353
Total liabilities 9 984 396 10 380
Total liabilities and 24 485 0 24 485
shareholders' equity
Total assets 24 485 0 24 485
Impact on earnings per share
and equity ratio:
Jan 1- Dec 31/2010 Correcti Jan 1 - Dec 31/2010
on
Figures eannounced Corrected figures
before
Earnings per share, diluted -0,007 -0,001 -0,008
Equity ratio 62,5 -1,7 60,8
GROUP KEY FIGURES AND RATIOS (MEUR) 1-12/2011 1-12/2010
Net sales, continuing operations 33.3 25.8
Ebitda, continuing operations 4.2 2.1
Ebitda-%, continuing operations 12.5 8.2
Operating profit, continuing operations 3.4 -0.9
Operating profit- %, continuing operations 10.3 -3.3
Pre-tax profit, continuing operations 3.1 -1.0
Pre-tax profit- %, continuing operations 9.2 -3.7
Profit from discontinued operations 1.7 0.2
Net profit, continuing operations 2.2 -0.8
Net profit- %, continuing operations 6.6 -3.1
Gross capital expenditure 0.7 0.7
Gross capital expenditure-% 2.1 2.7
R&D costs 0.4 0.4
R&D costs -% 1.1 1.7
Gearing- % -17.3 4.9
Equity ratio- % 66.6 60.8
Return on investment -% (ROI 20.2 -2.5
Return on equity- % (ROE) 14.1 -4.0
Undiluted earnings per share EUR, continuing operations 0.028 -0.010
Diluted earnings per share EUR, continuing operations 0.028 -0.010
Undiluted earnings per share EUR, discontinued operations 0.023 0.003
Diluted earnings per share EUR, discontinued operations 0.022 0.003
Equity per share. EUR 0.21 0.18
Average no. of employees 248 387
Cash flow from operating activities 4.2 1.3
Cash flow from investing activities 1.1 0.0
Net cash used in financing activities -3.0 -2.1
Total cash flow 2.4 -0.8
CONSOLIDATED
COMPREHENSIVE
INCOME STATEMENT 1-12 1-12
(MEUR) /2011 /2010
NET SALES 33,3 25,8
Other operating income 0,1 0,6
Materials and services -13,4 -8,4
Employee benefits -10,5 -11,5
Depreciation and -0,7 -3,0
amortization
Other operating -5,4 -4,4
expenses
OPERATING PROFIT 3,4 -0,9
Share of associates' 0,0 0,0
results
Financial expenses -0,4 -0,1
(net)
PRE-TAX PROFIT 3,1 -1,0
Income tax expense -0,9 0,2
Net profit from 2,2 -0,8
continuing operations
Net profit from 1,7 0,2
discontinued
operations
NET PROFIT 3,9 -0,6
Other comprehensive 0,0 0,0
income items
Income tax expense
from
comprehensive income 0,0 0,0
items
Other comprehensive
income items
After taxes 0,0 0,0
TOTAL COMPREHENSIVE 3,9 -0,6
INCOME
Net profit
attributable to:
Parent company 3,9 -0,6
shareholders
Total comprehensive
income attributable
to:
Parent company 3,9 -0,6
shareholders
Earnings per share, 0,028 -0,010
undiluted EUR,
continuing operations
Earnings per share, 0,028 -0,010
diluted EUR,
continuing operations
operations
Earnings per share, 0,023 0,003
undiluted EUR,
discontinued
operations
Earnings per share, 0,022 0,003
diluted EUR,
discontinued
operations
CONSOLIDATED
COMPREHENSIVE
INCOME STATEMENT 10-12 10-12
(MEUR) /2011 /2010
NET SALES 8.8 8.8
Other operating 0.0 0.0
income
Materials and -4.1 -3.5
services
Employee -3.0 -3.0
benefits
Depreciation/amo -0.1 -2.2
rtization
Other operating -1.6 -1.0
expenses
OPERATING PROFIT 0.0 -1.0
Share of 0.0 0.0
associates'
results
Financial -0.3 0.0
expenses (net)
PRE-TAX PROFIT -0.3 -1.0
Income tax 0.0 0.0
expense
Net profit from -0.3 -1.0
continuing
operations
Net profit from 0.0 0.1
discontinued
operations
NET PROFIT -0.3 -0.9
Other 0.0 0.0
comprehensive
income items
Income tax
expense for
comprehensive 0.0 0.0
income
Other
comprehensive
income items
after taxes 0.0 0.0
TOTAL -0.3 -0.9
COMPREHENSIVE
INCOME
Net profit
attributable
to:
Parent company -0.3 -0.9
shareholders
Total
comprehensive
income
attributable
to:
Parent company -0.3 -1.0
shareholders
CONSOLIDATED BALANCE SHEET (MEUR) 31 Dec 2011 31 Dec 2010
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 1.7 1.6
Goodwill 8.1 8.1
Intangible assets 1.0 1.3
Shares in associates 0.3 0.4
Available-for-sale-assets 0.0 0.0
Receivables 0.0 0.0
Deferred tax assets 1.8 2.8
TOTAL NON-CURRENT ASSETS 13.0 14.3
CURRENT ASSETS
Inventories 1.2 1.1
Trade and other receivables 6.2 6.9
Cash and cash equivalents 4.4 2.1
TOTAL CURRENT ASSETS 11.8 10.1
TOTAL ASSETS 24.8 24.5
LIABILITIES AND SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY
Share capital 5.3 5.3
Share premium 2.4 2.4
Fair value reserve 0.3 0.3
Invested unrestricted capital reserve 7.0 7.0
Retained earnings/loss 1.4 -0.9
TOTAL EQUITY. attributable to holders
of parent company equity 16.4 14.1
Minority interest 0.0 0.0
TOTAL SHAREHOLDERS' EQUITY 16.4 14.1
LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax liabilities 0.3 0.4
Provisions 0.2 0.1
Financial liabilities 0.5 1.5
TOTAL LONG-TERM LIABILITIES 0.9 2.0
CURRENT LIABILITIES
Trade and other payables 6.3 7.1
Financial liabilities 1.1 1.3
TOTAL SHORT-TERM LIABILITIES 7.4 8.4
TOTAL LIABILITIES 8.3 10.4
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 24.8 24.5
CONSOLIDATED STATEMENT OF CHANGE IN EQUITY (MEUR)
Share Share Other Retained Total
capital Premium Reserves Earnings Equity
Balance Jan 1, 2010 5.3 2.4 7.3 0.7 15.7
Dividend Distribution 0.0 0.0 0.0 -0.8 -0.8
Options expense
Adjustment 0.0 0.0 0.0 0.0 0.0
Net profit 0.0 0.0 0.0 -0.5 -0.5
Adjustment to earlier
financial statements, IAS 8 0.0 0.0 0.0 -0.4 -0.4
Balance Dec 31, 2010 5.3 2.4 7.3 -1.0 14.1
Share Share Other Retained Total
capital Premium Reserves Earnings Equity
Balance Jan 1, 2011 5.3 2.4 7.3 -1.0 14.1
Dividend distribution 0.0 0.0 0.0 -1.5 -1.5
Purchase of own shares 0.0 0.0 0.0 -0.2 -0.2
Options expense adjustment 0.0 0.0 0.0 0.1 0.1
Net profit 0.0 0.0 0.0 3.9 3.9
Balance Dec 31, 2011 5.3 2.4 7.3 1.3 16.4
CONSOLIDATED CASH FLOW STATEMENT (MEUR) 1-12/2011 1-12/2010
Net profit 3.9 -0.6
Adjustments to net profit 1.9 3.0
Change in working capital -1.6 -1.0
Interest paid 0.0 -0.1
Interest received 0.0 0.0
CASH FLOW FROM OPERATING AVTIVITIES 4.2 1.3
Sales of fixed assets 0.0 0.6
Sale of subsidiary (net) 1.7 0.0
Purchase of PPE -0.5 -0.6
NET CASH USED IN INVESTING ACTIVITIES 1.1 0.0
Purchase of own shares -0.2 0.0
Paid dividends -1.5 -0.8
Repayments of long-term borrowings -1.2 -1.2
Finance lease principal payment -0.1 -0.1
NET CASH USED IN FINANCING ACTIVITIES -3.0 -2.1
Net change in cash and equivalents 2.4 -0.8
Cash and equivalents. period-start 2.1 2.9
Cash and equivalents. period-end 4.4 2.1
NET SALES AND OPERATING PROFIT BY QUARTER
(MEUR)
MEUR Q4/11 Q3/11 Q2/11 Q1/1 Q4/10 Q3/10 Q2/10 Q1/10
Net sales 8.8 8.2 8.5 7.8 8.8 5.7 5.5 5.8
Oper. Profit 0.0 1.3 1.2 1.0 -0.8 0.7 -0.4 -0.3
Oper. profit. % 0.3 15.8 13.8 11.7 -10.0 12.1 -7.2 -5.1
MAIN SHAREHOLDERS, Dec 31 2011
No. of shares %
1. Merivirta Jyri 14,500,000 18.9
2. Eyemaker´s Finland Oy 7,817,214 10.2
3. Etera 3,500,000 4.6
4. Investment Fund Evli Finland Stocks 3,033,768 3.9
5. Alpisalo Mia 2,948,153 3.8
6. Mäkinen Markku 1,600,000 2.1
7. Kiesvaara Tuomo 1,074,692 1.4
8. Oy AJP Holding 1,000,000 1.3
9. Investment Fund GARP 994,539 1.3
10.Juurakko Timo 967,000 1.3
Revenio Group Corporation
BOARD OF DIRECTORS
For further information, please contact:
Olli-Pekka Salovaara, President and CEO, mobile +358 (0)40 5675520
olli-pekka.salovaara@revenio.fi
http://www.reveniogroup.fi
DISTRIBUTION:
NASDAQ OMX Helsinki
Financial Supervisory Authority (FIN-FSA)
Key media
www.revenio.fi
Revenio Group Corporation, the parent company of the Finnish business group
Revenio Group, is listed on the NASDAQ OMX Helsinki exchange. Revenio Group
Corporation' subsidiaries share a focus on Finnish specialist expertise and
export-based operations.
Revenio Group consists of six independent subsidiaries in five business
segments. These subsidiaries are Done Logistics Oy, Done Software Solutions Oy,
Icare Finland Oy, Boomeranger Boats Oy, FLS Finland Oy and Midas Touch Oy.
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