Tecnotree Oyj - Interim report (Q1 and Q3)

Tecnotree Corporation Interim Report 1 January - 30 September 2014 (unaudited)

Tecnotree Corporation
Interim Report
29th October, 2014 at 8.30 am EET

Tecnotree is a global supplier of telecom IT solutions, providing products and
services for charging, billing, customer care, and messaging and content
services. The company's product portfolio comprises virtually the full range of
business management systems for telecom operators, with standard solutions for
fixed networks, mobile services and broad band and for managing subscriptions,
services and cash flows for prepaid and post-paid customers. Tecnotree has a
strong footing especially in developing markets. 

Quarter in line with expectations

Third quarter

  -- Third quarter net sales were EUR 23.7 (17.4) million. This is the highest
     net sales figure ever for any quarter in the history of Tecnotree.
  -- The adjusted operating result was EUR 4.7 (1.0) million and the result for
     the period was EUR 1.2 (0.4) million. The adjusted operating result also
     set a new record.
  -- The order book at the end of the period stood at EUR 52.7 (31 December
     2013: 45.0) million.
  -- Third quarter cash flow after investments was EUR -0.7 (-0.5) million.
  -- Earnings per share were EUR 0.01 (0.00).

January - September 2014

  -- Net sales for the review period decreased 7.5 per cent from the
     corresponding period in the previous year to EUR 49.8 (53.9) million.
  -- The adjusted operating result was EUR -1.4 (-0.3) million. The operating
     result was EUR -1.4 (-2.0) million and the result for the period EUR -9.8
     (-3.0) million.
  -- Cash flow after investments for the review period was EUR -4.5 (-4.8)
     million and the company's cash and cash equivalents were EUR 2.0 (31
     December 2013: 6.6) million.
  -- Earnings per share were EUR -0.08 (-0.02).





KEY FIGURES                                7-9/  7-9/   1-9/   1-9/  1-12/
                                           2014  2013   2014   2013   2013
Net sales, MEUR                            23.7  17.4   49.8   53.9   73.9
Adjusted operating result, MEUR 1           4.7   1.0   -1.4   -0.3    3.3
Operating result, MEUR                      4.7   0.5   -1.4   -2.0    1.6
Result before taxes, MEUR                   2.8   1.9   -6.4    0.5    4.1
Result for the period                       1.2   0.4   -9.8   -3.0   -2.5
Earnings per share, basic, EUR             0.01  0.00  -0.08  -0.02  -0.02
Order book, MEUR                                        52.7   48.0   45.0
Cash flow after investments, MEUR          -0.7  -0.5   -4.5   -4.8   -4.6
Change in cash and cash equivalents, MEUR  -1.3   3.7   -4.7   -3.5   -3.8
Cash and cash equivalents, MEUR                          2.0    7.0    6.6
Equity ratio % 2                                        20.8   29.9   30.3
Net gearing % 2                                        196.0  109.5  113.4
Personnel at end of period                             1,059   1053  1,059


1 Adjusted operating result = operating result before R & D capitalisation,
amortisation of this and one-time costs. Details of these are given in the
section “Result analysis” of the interim report. 
2 This key figure has been corrected for the period 1-9/2013, see note 4 in the
table section in the interim report. 

Unless otherwise stated, all figures presented below are for the review period
1-9/2014 and the figures for comparison are for the corresponding period
1-9/2013. 

CEO Ilkka Raiskinen:
“The recently ended third quarter was a very concrete example of how
significant seasonal fluctuations are in our business: a weak second quarter
was followed by a historically strong third quarter. Net sales were the highest
ever, the adjusted operating profit was the best ever, and the order book for
our new products was strong, especially in the MEA region - in other words our
customers have confidence in our products and our knowhow. 

While demand for our new products is encouraging, we still have to admit,
however, that the company is still facing the same challenges. Capital is still
tied up in two major projects, so the company's ability to generate cash flow
is insufficient. Progress on two major projects has been positive, and
significant parts of the systems supplied have been taken into production use.
” 

Events after the end of period
Tecnotree announced on 30 September 2014 that it was starting statutory
employee negotiations in Finland concerning the redundancy of at most 17 people
on production-related and financial grounds. The negotiations affected all
personnel in Finland but the planned measures were mainly focused on the Value
Added Services unit.  The objective of these negotiations was to adjust the
level of costs so that they correspond to the current situation and to raise
the efficiency of the company's operations to meet market requirements. 

On 28 October 2014, the company announced that the co-operation negotiations
have been completed. The staff reduction will be in total 12 employees of which
8 via lay-offs and 4 via other voluntary measures. These measures will lead to
over one million Euros cost savings per annum. The related savings will in
major part be effective as of the beginning of the year 2015. 

Prospects in 2014
Tecnotree estimates that its net sales and operating result will improve from
2013. 

Variations in the quarterly figures will be considerable.

Financial information
Tecnotree is holding a conference for analysts, investors and the media to
announce its third quarter  results on 29th October 2014 at 10.00 am in the
Tapiola conference room at the Scandic Hotel Simonkenttä, Simonkatu 9,
Helsinki. The interim report  will be presented by CEO Ilkka Raiskinen and the
conference will be held in Finnish. The material to be presented at the press
conference will be available at www.tecnotree.com. 

TECNOTREE CORPORATION

Board of Directors

FURTHER INFORMATION
Ilkka Raiskinen, CEO, tel. +358 (0)45 311 3113
Tuomas Wegelius, CFO, tel. +358 400 433 228

DISTRIBUTION
NASDAQ OMX Helsinki Ltd.
Main media
www.tecnotree.com

About Tecnotree
Tecnotree is a global provider of telecom IT solutions for the management of
products, customers and revenue. Tecnotree helps communications service
providers to transform their business towards a marketplace of digital
services. Tecnotree empowers service providers to monetise on service bundles,
provide personalised user experiences and augment value throughout the customer
lifecycle. With over 1000 telecom experts, Tecnotree serves more than 100
service providers in over 70 countries. Tecnotree is listed on the main list of
NASDAQ OMX Helsinki with the trading code TEM1V. For more information on
Tecnotree, please visit www.tecnotree.com

Attachments:

Tecnotree Q3 2014 Interim Report Presentation.pdf

Tecnotree Q3 2014 Interim Report.pdf