2009-02-12 06:59:41 CET
2009-02-12 07:00:44 CET
REGULATED INFORMATION
Comptel - Financial Statement Release
COMPTEL CORPORATION'S FINANCIAL STATEMENTS FOR 2008
COMPTEL Financial statement release 12 February 2009 at 8.00 am COMPTEL CORPORATION'S FINANCIAL STATEMENTS FOR 2008 October-December net sales on the previous year level, order backlog good. Key Figures for the Fourth Quarter Net sales EUR 23.2 million (October-December 2007: 24.0) Operating profit EUR 2.9 million (7.5) Earnings per share EUR 0.02 (0.05) Order backlog EUR 38.8 million (35.1) Financial position remains solid Based on 2008 earnings, the Board of Directors proposes a dividend of EUR 0.04 (0.06) per share be paid. The financial information in this stock exchange release is based on the company's audited financial statements. The auditor's report was issued on 11 February 2009. Sami Erviö, President and CEO: ”During the last quarter of the year, Comptel's business performance was satisfactory while the net sales reached a similar level to the previous year, which had included a significant deal with IBM India. Notably the growth in the Middle East and Africa compensated the poor performance in Europe. However, the operating profit decreased significantly from the previous year due to Axiom Systems and increased costs. In October-December, Comptel sold nine new core licenses in Europe, Middle East and Africa and in Asia Pacific. The order backlog grew by approximately 10 per cent from the previous year mainly as a result of Axiom Systems. We completed the integration of Axiom Systems, which was acquired in the first half of 2008. Further, in accordance with the strategy, we strengthened our local presence by establishing a customer service centre in Bulgaria. In 2008, the growth of net sales remained low as a result of a weak order intake in Europe. Profitability decreased from the previous year due to the consolidation of Axiom Systems. However, thanks to the acquisition and significant R&D investments we extended our solution offering remarkably during 2008 and simultaneously strengthened our strategic position.” Summary of January-December 2008 Net sales EUR 84.8 million (2007: 82.4) Operating profit EUR 11.4 million (16.5) Earnings per share EUR 0.06 (0.10) Number of employees at the year end 653 (554) The net sales of Comptel Group were EUR 84.8 million in 2008 (82.4). Net sales grew by 3.0 per cent (2.4) compared to the previous year. The growth of net sales was smaller than expected due to decreased net sales in Europe. The Group's operating profit was EUR 11.4 million (16.5), being 13.4 per cent (20.0) of the net sales. The operating profit excluding approximately EUR 1.1 million one-off items, mainly related to the integration of Axiom Systems, was EUR 12.5 million corresponding 14.7 per cent of the net sales. In the fourth quarter, operating profit was EUR 2.9 million (7.5), which corresponds 12.3 per cent (31.2) of the net sales. EUR 0.2 million of bad debts from trade receivables were recorded during the last quarter of the year (1.2). Bad debts consist of several small receivables older than one year. Net financial items were EUR 0.9 million negative (0.2 negative). The Group's profit before taxes was EUR 10.6 million (16.4), representing 12.5 per cent (19.9) of the net sales. Group net profit was EUR 6.6 million (10.9). Earnings per share for the financial period were EUR 0.06 (0.10). The tax rate for the year was 37.5 per cent (33.8), which was impacted by a double taxation due to withholding taxes amounting to approximately EUR 1.5 million (1.1). Ministry of Finance notified that it had reached an agreement in its negotiations with Greece, Malaysia and Romania. With regard to these countries, Comptel booked a tax receivable amounting to EUR 0.7 million for the years 2004-2008. Comptel expects to receive the tax refund within a short period of time. With regard to other countries, the application submitted by Comptel to prevent double taxation is still pending with the Ministry of Finance. The company believes the treatment of its withholding taxation will be changed. During the last quarter, tax expenses were reduced by the tax receivables booked for withholding taxes and a tax credit received by Axiom Systems based on its R&D investments. The Group's order backlog increased from the previous year as a result of Axiom Systems and was EUR 38.8 million at the end of the period under review (35.1). Compared to the previous quarter, order backlog grew by 29.3 per cent (30 September 2008: 30.0) mainly due to a stronger stock of maintenance agreements. In April, Comptel strengthened its position as a leading provider of service fulfillment solutions by acquiring Axiom Systems, a UK-based software product company. The acquisition gives Comptel a strong position to capitalize the growing investments of telecom service providers to new IP-based services, like VoIP and IPTV. Axiom is specialised in the broadband market and has a good market position in Europe as well as key customers in Asia-Pacific. The integration of Axiom System was completed during the last quarter of the year. Business Areas -------------------------------------------------------------------------------- | Net sales, EUR | 1-12 | 1-12 | Change | 10-12 | 10-12 | Change | | million | 2008 | 2007 | % | 2008 | 2007 | % | -------------------------------------------------------------------------------- | Europe | 40.8 | 48.5 | -15.9 | 9.8 | 12.6 | -22.4 | -------------------------------------------------------------------------------- | Middle East and | 15.3 | 9.8 | 56.1 | 5.0 | 2.9 | 75.7 | | Africa | | | | | | | -------------------------------------------------------------------------------- | Americas | 7.9 | 7.2 | 9.5 | 2.4 | 1.8 | 32.5 | -------------------------------------------------------------------------------- | Asia-Pacific | 20.9 | 16.9 | 23.6 | 5.9 | 6.7 | -12.3 | -------------------------------------------------------------------------------- | Total | 84.8 | 82.4 | 3.0 | 23.2 | 24.0 | -3.6 | -------------------------------------------------------------------------------- | Operating profit by | | | | | | | | market area, EUR | | | | | | | | million | | | | | | | -------------------------------------------------------------------------------- | Europe | 20.9 | 28.3 | -26.1 | 3.3 | 7.1 | -53.2 | -------------------------------------------------------------------------------- | Middle East and | 8.9 | 5.7 | 56.6 | 3.1 | 1.7 | 87.8 | | Africa | | | | | | | -------------------------------------------------------------------------------- | Americas | 4.2 | 3.9 | 7.6 | 1.3 | 0.7 | 89.3 | -------------------------------------------------------------------------------- | Asia-Pacific | 9.3 | 9.5 | -1.9 | 1.3 | 4.5 | -71.7 | -------------------------------------------------------------------------------- | Unallocated costs | -32.0 | -30.9 | 3.5 | -6.2 | -6.4 | - | -------------------------------------------------------------------------------- | Total | 11.4 | 16.5 | -31.1 | 2.9 | 7.5 | -61.9 | -------------------------------------------------------------------------------- | Operating profit, as | | | | | | | | per cent of net | | | | | | | | sales | | | | | | | -------------------------------------------------------------------------------- | Europe | 51.3 | 58.3 | - | 33.9 | 56.3 | - | -------------------------------------------------------------------------------- | Middle East and | 58.6 | 58.4 | - | 62.4 | 58.4 | - | | Africa | | | | | | | -------------------------------------------------------------------------------- | Americas | 53.1 | 54.1 | - | 53.8 | 37.7 | - | -------------------------------------------------------------------------------- | Asia-Pacific | 44.8 | 56.5 | - | 21.4 | 66.2 | - | -------------------------------------------------------------------------------- | Total | 13.4 | 20.0 | - | 12.3 | 31.2 | - | -------------------------------------------------------------------------------- In 2008, net sales grew significantly in the Middle East and Africa and in Asia-Pacific. In Europe, net sales decreased as a result of a decelerating market and a lower demand of the customer specific solutions offered in Finland and Norway during the second half of the year. The proportional profitability remained good in the Middle East and Africa; in Europe and Asia-Pacific profitability was hit by the consolidation of Axiom Systems. In 2008, Comptel sold a total of 21 (28) new core licenses of which eight were Comptel Provisioning and Activation Solutions, eight Comptel Mediation and Charging Solutions, two Comptel Interconnect Billing Solutions, one Comptel Fulfillment Solution, one Comptel Inventory Solution, and one Comptel Service Repository Solution. Nine licenses were sold in Europe, three in the Middle East and Africa, eight in Asia-Pacific and one in the Americas. In October-December, Comptel sold nine (15) new core licenses of which four were Comptel Provisioning and Activation Solutions, two Comptel Mediation and Charging Solutions, one Comptel Inventory Solution, one Comptel Service Repository Solution and one Comptel Interconnect Billing Solution. Four licenses were sold in Asia-Pacific, three in Europe and two in the Middle East and Africa. -------------------------------------------------------------------------------- | Net sales breakdown | 1-12 | 1-12 | Change | 10-12 | 10-12 | Change | | by type, EUR million | 2008 | 2007 | % | 2008 | 2007 | % | -------------------------------------------------------------------------------- | Licenses | 27.4 | 27.8 | -1.4 | 8.1 | 10.1 | -19.3 | -------------------------------------------------------------------------------- | Services and | 57.5 | 54.6 | 5.2 | 15.0 | 14.0 | 7.7 | | Maintenance | | | | | | | -------------------------------------------------------------------------------- | Total | 84.8 | 82.4 | 3.0 | 23.2 | 24.0 | -3.6 | -------------------------------------------------------------------------------- There were no significant changes in the breakdown of net sales. -------------------------------------------------------------------------------- | Net sales by sales | 1-12 | 1-12 | Change | 10-12 | 10-12 | Change% | | channel, EUR million | 2008 | 2007 | % | 2008 | 2007 | | -------------------------------------------------------------------------------- | Direct Sales | 60.4 | 60.6 | -0.4 | 16.4 | 15.0 | 8.7 | -------------------------------------------------------------------------------- | Partner Sales | 24.5 | 21.8 | 12.5 | 6.8 | 9.0 | -24.3 | -------------------------------------------------------------------------------- | Total | 84.8 | 82.4 | 3.0 | 23.2 | 24.0 | -3.6 | -------------------------------------------------------------------------------- The share of partner sales was increased due to the consolidation of Axiom Systems and the significant agreement with IBM India to deliver and maintain Comptel Convergent Charging Solution for an Indian telecom operator. Financial Position -------------------------------------------------------------------------------- | EUR million | 31 Dec 2008 | 31 Dec 2007 | Change % | -------------------------------------------------------------------------------- | Balance sheet total | 83.0 | 73.6 | 12.7 | -------------------------------------------------------------------------------- | Liquid assets | 6.1 | 14.7 | -58.3 | -------------------------------------------------------------------------------- | Trade receivables | 27.6 | 27.1 | 2.0 | -------------------------------------------------------------------------------- | Accrued income | 9.2 | 8.6 | 6.9 | -------------------------------------------------------------------------------- | Deferred income related to partial | 1.8 | 2.7 | -33.8 | | debiting | | | | -------------------------------------------------------------------------------- | Interest-bearing debt | 5.1 | 0.0 | - | -------------------------------------------------------------------------------- | Equity ratio, % | 67.4 | 77.6 | - | -------------------------------------------------------------------------------- The balance sheet total on 31 December 2008 was EUR 83.0 million (73.6), of which liquid assets amounted to EUR 6.1 million (14.7). Liquid assets were reduced by the acquisition of Axiom Systems and the investments in product development. The operating cash flow was EUR 7.9 million (12.8), the paid dividends were EUR 6.4 million (5.4) and the net investments were EUR 15.3 million (4.9) in January-December. The operating cash flow was decreased by a lower operational profitability and a decelerating turnover of trade receivables. Trade receivables at the end of the period were EUR 27.6 million (27.1). Accrued income was EUR 9.2 million (8.6). Deferred income related to partial debiting was EUR 1.8 million (2.7). The Group had EUR 5.1 million of interest-bearing debt at the date of the financial statements (0.0). Comptel has in force a revolving credit facility of EUR 15.0 million maturing in the year 2013, of which EUR 10.0 million is still to be withdrawn. Equity ratio was 67.4 per cent (77.6) and the gearing ratio was 2.1 negative (28.2 negative). Investments, Research and Development (R&D) -------------------------------------------------------------------------------- | EUR million | 1-12 | 1-12 | Change | 10-12 | 10-12 | Change | | | 2008 | 2007 | % | 2008 | 2007 | % | -------------------------------------------------------------------------------- | Gross investments in | 10.9 | 1.9 | 472.3 | 0.4 | 0.2 | 118.5 | | property, plant and | | | | | | | | equipment and | | | | | | | | intangible assets | | | | | | | -------------------------------------------------------------------------------- | Direct R&D | 14.0 | 10.3 | 35.6 | 3.8 | 2.9 | 28.1 | | expenditure and | | | | | | | | investments | | | | | | | -------------------------------------------------------------------------------- | Capitalisation of | 4.6 | 2.9 | 56.3 | 1.0 | 1.0 | -5.9 | | R&D expenditure | | | | | | | | according to IAS 38 | | | | | | | -------------------------------------------------------------------------------- Comptel Corporation acquired Axiom Systems for GBP 7.0 million (EUR 8.9 million) on 21 April 2008. The acquisition was financed through Comptel Corporation's liquid assets and by raising a debt. In accordance with the agreement, no additional purchase price will be paid since the net sales of Axiom Systems were below EUR 13.5 million in 2008. Excluding the acquisition, the gross investments in tangible and intangible assets were EUR 1.5 million (1.9) in 2008 and comprised of investments in devices, software and furnishing. The investments were funded through cash flow from operations. The increase in the direct R&D expenditure and investments was due to the effect of the Axiom acquisition and further investments in product development in Kuala Lumpur, Malaysia. To meet the requirements of IAS 38, Comptel has modified its accounting principles for the capitalisation of development costs and of costs related to internal projects. A share of the fixed costs defined separately, is included in the cost of development and internal projects to which they are related. In the review period, these costs amounted to EUR 0.5 million. The change has a positive impact on the operating profit. Comptel's R&D expenditure and investments were mainly targeted to develop new dynamic end-to-end solutions, which shorten time-to-market for new services and enable service providers to charge for them. Personnel -------------------------------------------------------------------------------- | | 31 Dec | 31 Dec | Change % | | | 2008 | 2007 | | -------------------------------------------------------------------------------- | Number of employees at the end of | 653 | 554 | 17.9 | | period | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 1-12 2008 | 1-12 2007 | Change % | -------------------------------------------------------------------------------- | Average number of personnel | 606 | 555 | 9.2 | | during the period | | | | -------------------------------------------------------------------------------- Number of employees grew significantly following the acquisition of Axiom Systems. In addition, Comptel strengthened its regional organisation with new experts. The personnel expenses in October-December were 42.9 per cent of net sales (35.5) and in January-December 45.9 per cent of net sales (41.2). At the end of the year 46.2 per cent (60.3) of the personnel were located in Finland, 13.5 per cent (17.7) in Norway, 15.0 per cent (10.3) in Malaysia and 10.9 per cent (0.7) in the United Kingdom. Comptel's Share The closing price of the year 2008 was 0.69 euros (1.42). Comptel's market value at the end of the year was EUR 73.8 million (151.7). -------------------------------------------------------------------------------- | Comptel share | 1-12 | 1-12 | Change | 10-12 | 10-12 | Change % | | | 2008 | 2007 | % | 2008 | 2007 | | -------------------------------------------------------------------------------- | Shares traded, | 30.5 | 57.5 | -47.0 | 7.3 | 16.9 | -57.1 | | million | | | | | | | -------------------------------------------------------------------------------- | Shares traded, | 39.7 | 106.0 | -62.6 | 6.9 | 25.9 | -73.3 | | EUR million | | | | | | | -------------------------------------------------------------------------------- | Highest price, | 1.58 | 2.29 | -31.0 | 1.29 | 1.97 | -34.5 | | EUR | | | | | | | -------------------------------------------------------------------------------- | Lowest price, EUR | 0.60 | 1.36 | -55.9 | 0.60 | 1.36 | -55.9 | -------------------------------------------------------------------------------- Of Comptel's outstanding shares, 6.7 per cent were nominee registered or held by foreign shareholders at the end of the review period. Of the share options 2006C distributed during the year 2008, a total of 1,292,000 are held by the key personnel of Comptel Corporation. The current share subscription price for option 2006C is EUR 1.48, which corresponds to the trade volume weighted average quotation of the Comptel Corporation share on the Helsinki stock exchange during 1 April - 30 April 2008. During the year, also a number of 210,000 share options 2006B were distributed. Of the share options 2006B, a total of 1,248,000 are held by the key personnel of Comptel Corporation. The current share subscription price for option 2006B is EUR 1.93, which corresponds to the trade volume weighted average quotation of the Comptel Corporation share on the Helsinki stock exchange during 1 April - 30 April 2007 deducted by the dividend paid for the year 2007. Comptel Corporation's 2006A share options were listed on Helsinki stock exchange commencing from 3 November 2008. The trading code for the share options 2006A is CTL1VEW106 and ISIN code is FI0009652390. The current share subscription price is EUR 1.73 which corresponds to the trade volume weighted average quotation of the Comptel share on the Helsinki stock exchange during 1 April - 30 April 2006 deducted by the dividends paid. The share subscription period of all Comptel Corporation 2001 share options expired on 31 December 2008. During the subscription period no shares were subscribed. During the year 2008, Comptel Corporation disposed gratuitously 110,463 shares to persons involved in the 2007 share-based incentive program and 45,871 shares to the members of the Board of Directors as a part of their annual compensation. The company held 92,654 of its own shares at the end of the period under review, which is 0.09 per cent of the total number of its shares. The total counter-book value of the shares held by the company was EUR 1,853. Corporate Governance Mr. Gareth Senior was nominated as a member of Comptel Group's Executive Board starting from 21 April 2008. He acts as CTO of Comptel Group. CFO of Comptel Corporation, Mr. Veli Matti Salmenkylä, gave his resignation on 15 December 2008. He will continue to be employed by Comptel during his notice period until 15 March 2009. Comptel started the recruitment of a new CFO immediately. Subsequent Events Comptel developed further its organisational structure in January 2009 by combining the European sales and customer service units and by establishing a unit concentrating on Alliances and Sales Development and a unit for Strategic Marketing. The new organisation accomplishes the organisational change implemented in the beginning of 2008, which improved business management close to customers and combined the product units. Starting from the beginning of 2009, the Group Executives are Mr. Sami Erviö, President and CEO, the business area leaders Mr. Harri Palviainen (Europe), Mr. Youssef Kermoury (Middle East and Africa), Mr. Mika Korpinen (Asia-Pacific) and Mr. Ricardo Carreon (Americas), Mr. Minesh Patel responsible for Alliances and Sales Development, Ms. Arnhild Schia responsible for Strategic Marketing, Mr. Simo Sääskilahti responsible for Products and Solutions, Mr. Gareth Senior, CTO, Mr. Veli Matti Salmenkylä, CFO responsible for Administration, Ms. Niina Pesonen, responsible for Human Resources, and Mr. Markku Järvenpää responsible for Global Operations Support. In January-February 2009, Comptel was engaged in personnel negotiations. As a result of these negotiations the company decided to make 45 people redundant on financial and production grounds. Comptel Corporation's subsidiaries in Norway and United Kingdom also took actions to downsize the amount of personnel under the local legal requirements and collective agreements. The annual cost reduction expected is EUR 2.3 million in Norway. In the United Kingdom, the actions taken will lead to annual cost savings of EUR 1.0 million. With these measures the Group will reach annual cost savings of approximately EUR 7 million out of which EUR 2 million are estimated to be realised in 2009. By reducing costs and renewing the organisation Comptel aims to ensure the Group's long-term profitability and competitiveness. In January 2009, the Board of Directors of Comptel Corporation approved a new share-based incentive plan for the key personnel of Comptel Group. The aim of the plan is to combine the objectives of the shareholders and the key personnel in order to increase the value of the company, to commit the key personnel to the company, and to offer them a competitive reward plan based on holding the company shares. Near-term Risks and Uncertainties The rapid weakening of world economy and credit facility combined with an exceptional fluctuation in exchange rates has led to a strong decrease of demand in many industries. The growth has decelerated also in the Operations Support Systems market especially in Europe. In other regions, any strong decelerating of the markets has not been perceived yet. Comptel develops dynamic end-to-end solutions for leading operators in the telecom field. This requires Comptel to understand correctly the trends taking place in its business environment and the needs of its customers and resellers. Failure to identify market conditions, address customers' needs and develop its products in a timely way may significantly undermine the growth and profitability of Comptel's business. Comptel operates globally so it is exposed to risks arising from different currency positions. Exchange rate changes between the euro, which is the company's reporting currency, and the US dollar, UK pound sterling and Norwegian krone affect the company's net sales, expenses and net profit. Comptel renewed its organisation in January 2009. The company's global success is based on skilled personnel and a responsive customer-oriented organisation. Due to a weakened profitability the company has to reduce costs in Europe simultaneously when implementing the new organisation. The organisational change may have a harmful effect on Comptel's business and especially on its profitability. The success requires skilful change management, retaining competent employees and developing their skills further. The application submitted by Comptel to prevent double taxation is still pending with the Ministry of Finance. The company believes the treatment of its withholding taxation will be changed also concerning the countries where the issue is still unsolved. However, double taxation may have an impact on the company's earnings per share. The risks related to operations of the company will be described further as a part of the financial statements and report of the board of directors for 2008. Outlook for 2009 The worldwide economic situation has raised further uncertainty and weakened the visibility also in the global Operations Support Systems markets. In 2009, the markets are expected to remain at the previous year level or to decline slightly in Europe. In other regions the markets are expected to remain at the previous year level or to grow slightly. The company's order backlog is at a higher level than in the previous year, mainly as a result of a strong stock of maintenance agreements. It is estimated that Comptel's net sales will remain at the previous year level or to decline slightly in 2009. Comptel's operating profit is estimated not to reach the previous year's level. In early 2009, the profitability will remain especially low due to the one-off items related to personnel reductions. The impact of these measures will follow only later. Board of Directors' Proposal for the Disposal of Profits The Group parent company's distributable equity on 31 December 2008 was EUR 35,326,977.62 (37,474,272.96). The Board of Directors proposes to the General Meeting that a dividend of EUR 0.04 (0.06) per share be paid, totalling EUR 4,278,486.24 (6,408,868.14). Helsinki, 11 February 2009 Board of Directors Sami Erviö President and CEO TABLE PART The financial information in this stock exchange release is based on the company's audited financial statements. The auditor's report was issued on 11 February 2009. All figures in the financial report have been rounded and consequently the sum of the individual figures can deviate from the sum figure. -------------------------------------------------------------------------------- | Consolidated Income Statement | 1 Jan - | 1 Jan - | 1 Oct - | 1 Oct- | | (EUR 1,000) | 31 Dec | 31 Dec | 31 Dec 2008 | 31 Dec | | | 2008 | 2007 | | 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 84,849 | 82,399 | 23,161 | 24,032 | -------------------------------------------------------------------------------- | Other operating income | 81 | 57 | 13 | 46 | -------------------------------------------------------------------------------- | Materials and services | -6,906 | -7,973 | -2,076 | -1,385 | -------------------------------------------------------------------------------- | Employee benefits | -38,930 | -33,989 | -9,936 | -8,523 | -------------------------------------------------------------------------------- | Depreciation, amortisation and | -4,881 | -4,340 | -1,129 | -1,071 | | impairment charges | | | | | -------------------------------------------------------------------------------- | Other operating expenses | -22,830 | -19,635 | -7,175 | -5,590 | -------------------------------------------------------------------------------- | | -73,547 | -65,938 | -20,316 | -16,569 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | 11,383 | 16,518 | 2,858 | 7,509 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial income | 1,992 | 933 | 1,151 | 455 | -------------------------------------------------------------------------------- | Financial expenses | -2,913 | -1,169 | -1,794 | -412 | -------------------------------------------------------------------------------- | Share of result of associated | 136 | 113 | 136 | 113 | | companies | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit before income taxes | 10,597 | 16,396 | 2,352 | 7,665 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Income taxes | -3,972 | -5,542 | 225 | -2,640 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period | 6,625 | 10,854 | 2,576 | 5,025 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | | -------------------------------------------------------------------------------- | Equity holders of the parent | 6,625 | 10,848 | 2,576 | 5,019 | | company | | | | | -------------------------------------------------------------------------------- | Minority interests | - | 6 | - | 6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders of the parent | | | | | | company: | | | | | -------------------------------------------------------------------------------- | Earnings per share, EUR | 0.06 | 0.10 | 0.02 | 0.05 | -------------------------------------------------------------------------------- | Earnings per share, diluted, | 0.06 | 0.10 | 0.02 | 0.05 | | EUR | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consolidated Balance Sheet (EUR 1,000) | 31 Dec 2008 | 31 Dec 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | | | -------------------------------------------------------------------------------- | Non-current assets | | | -------------------------------------------------------------------------------- | Goodwill | 19,027 | 10,832 | -------------------------------------------------------------------------------- | Other intangible assets | 11,978 | 8,312 | -------------------------------------------------------------------------------- | Tangible assets | 2,595 | 2,400 | -------------------------------------------------------------------------------- | Investments in associates | 649 | 513 | -------------------------------------------------------------------------------- | Available-for sale financial assets | 87 | 87 | -------------------------------------------------------------------------------- | Deferred tax assets | 1,153 | 782 | -------------------------------------------------------------------------------- | Other non-current assets | 244 | - | -------------------------------------------------------------------------------- | | 35,734 | 22,926 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | -------------------------------------------------------------------------------- | Trade and other receivables | 39,101 | 35,927 | -------------------------------------------------------------------------------- | Current tax assets | 2,005 | 70 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 6,135 | 14,708 | -------------------------------------------------------------------------------- | | 47,241 | 50,705 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total assets | 82,975 | 73,631 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity and liabilities | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity attributable to equity holders | | | | of the parent company | | | -------------------------------------------------------------------------------- | Share capital | 2,141 | 2,141 | -------------------------------------------------------------------------------- | Fund of invested non-restricted equity | 7,433 | 7,368 | -------------------------------------------------------------------------------- | Translation difference | -2,500 | -817 | -------------------------------------------------------------------------------- | Retained earnings | 44,502 | 43,338 | -------------------------------------------------------------------------------- | | 51,576 | 52,030 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Minority interest | - | 116 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total equity | 51,576 | 52,147 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current liabilities | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 4,902 | 2,660 | -------------------------------------------------------------------------------- | Provisions | 2,937 | 776 | -------------------------------------------------------------------------------- | Non-current financial liabilities | 12 | - | -------------------------------------------------------------------------------- | | 7,851 | 3,437 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current liabilities | | | -------------------------------------------------------------------------------- | Trade and other current liabilities | 18,331 | 17,912 | -------------------------------------------------------------------------------- | Current tax liabilities | 176 | 136 | -------------------------------------------------------------------------------- | Current financial liabilities | 5,040 | - | -------------------------------------------------------------------------------- | | 23,548 | 18,048 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total liabilities | 31,399 | 21,485 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total equity and liabilities | 82,975 | 73,631 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consolidated statement of cash flows | 1 Jan -31 Dec | 1 Jan -31 Dec 2007 | | (EUR 1,000) | 2008 | | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Cash flows from operating activities | | | -------------------------------------------------------------------------------- | Profit for the period | 6,625 | 10,854 | -------------------------------------------------------------------------------- | Adjustments: | | | -------------------------------------------------------------------------------- | Transactions without cash flow effect | 6,596 | 5,131 | -------------------------------------------------------------------------------- | Interest and other financial expenses | 159 | 26 | -------------------------------------------------------------------------------- | Interest income | -274 | -357 | -------------------------------------------------------------------------------- | Income taxes | 3,972 | 5,542 | -------------------------------------------------------------------------------- | Change in working capital: | | | -------------------------------------------------------------------------------- | Change in trade and other receivables | 1,277 | -2,508 | -------------------------------------------------------------------------------- | Change in inventories | - | 18 | -------------------------------------------------------------------------------- | Change in trade and other current | -4,713 | -2,115 | | liabilities | | | -------------------------------------------------------------------------------- | Change in provisions | -511 | 588 | -------------------------------------------------------------------------------- | Interest paid | -157 | -26 | -------------------------------------------------------------------------------- | Interest received | 262 | 301 | -------------------------------------------------------------------------------- | Income taxes paid | -5,345 | -4,638 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net cash from operating activities | 7,893 | 12,816 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Cash flows from investing activities | | | -------------------------------------------------------------------------------- | Acquisition of subsidiaries, net of | -9,333 | - | | cash | | | -------------------------------------------------------------------------------- | Investments in tangible assets | -1,273 | -1,441 | -------------------------------------------------------------------------------- | Investments in intangible assets | -93 | -523 | -------------------------------------------------------------------------------- | Investments in development projects | -4,566 | -2,921 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net cash used in investing activities | -15,265 | -4,885 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flows from financing activities | | | -------------------------------------------------------------------------------- | Dividends paid | -6,415 | -5,365 | -------------------------------------------------------------------------------- | Acquisition of Corporation's own | - | -792 | | shares | | | -------------------------------------------------------------------------------- | Proceeds from borrowings | 8,000 | - | -------------------------------------------------------------------------------- | Repayments of borrowing | -3,000 | - | -------------------------------------------------------------------------------- | Change in liabilities | -35 | - | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net cash used in financing activities | -1,450 | -6,156 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net change in cash and cash | -8,822 | 1,774 | | equivalents | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash and cash equivalents at the | 14,708 | 12,934 | | beginning of the period | | | -------------------------------------------------------------------------------- | Effects of changes in foreign | -249 | - | | exchange rates | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at the end | 6,135 | 14,708 | | of the period | | | -------------------------------------------------------------------------------- | Change | -8,822 | 1,774 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consolidated statement of changes in equity | | | -------------------------------------------------------------------------------- | Equity attributable to equity holders | | | | | of the parent company | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1,000 | Share | Other | Translati | Fair value | | | | capital | reserves | on | reserve | | | | | | differenc | | | | | | | es | | | -------------------------------------------------------------------------------- | Equity at 31 | 2,141 | 7,368 | -674 | -37 | | | Dec 2006 | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | | | | | hedges: | | | | | | -------------------------------------------------------------------------------- | gains and | | | | 115 | | | losses | | | | | | | taken to equity | | | | | | -------------------------------------------------------------------------------- | Translation | | | -143 | | | | difference | | | | | | -------------------------------------------------------------------------------- | Profit for the | | | | | | | period | | | | | | -------------------------------------------------------------------------------- | Total | - | - | -143 | 115 | | | recognized | | | | | | | income and | | | | | | | expense for the | | | | | | | period | | | | | | -------------------------------------------------------------------------------- | Dividends | | | | | | -------------------------------------------------------------------------------- | Acquisition of | | | | | | | Corporation's | | | | | | | own shares | | | | | | -------------------------------------------------------------------------------- | Transfer of | | | | | | | treasury shares | | | | | | -------------------------------------------------------------------------------- | Share-based | | | | | | | compensation | | | | | | -------------------------------------------------------------------------------- | Equity at 31 | 2,141 | 7,368 | -817 | 78 | | | Dec 2007 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | | | | Minority | Equity | | | | | | interest | total | -------------------------------------------------------------------------------- | EUR 1,000 | Treasur | Retained | Total | | | | | y | earnings | | | | | | shares | | | | | -------------------------------------------------------------------------------- | Equity at 31 | - | 37,818 | 46,616 | 145 | 46,761 | | Dec 2006 | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | | | | | hedges: | | | | | | -------------------------------------------------------------------------------- | gains and | | | 115 | | 115 | | losses taken | | | | | | | to equity | | | | | | -------------------------------------------------------------------------------- | Translation | | | -143 | | -143 | | difference | | | | | | -------------------------------------------------------------------------------- | Profit for the | | 10,848 | 10,848 | 6 | 10,854 | | period | | | | | | -------------------------------------------------------------------------------- | Total | - | 10,848 | 10,820 | 6 | 10,826 | | recognized | | | | | | | income and | | | | | | | expense for the | | | | | | | period | | | | | | -------------------------------------------------------------------------------- | Dividends | | -5,332 | -5,332 | -34 | -5,367 | -------------------------------------------------------------------------------- | Acquisition of | -792 | | -792 | | -792 | | Corporation's | | | | | | | own shares | | | | | | -------------------------------------------------------------------------------- | Transfer of | 365 | -365 | - | | - | | treasury shares | | | | | | -------------------------------------------------------------------------------- | Share-based | | 717 | 717 | | 717 | | compensation | | | | | | -------------------------------------------------------------------------------- | Equity at 31 | -427 | 43,686 | 52,031 | 116 | 52,147 | | Dec 2007 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consolidated statement of changes in equity | | | -------------------------------------------------------------------------------- | Equity attributable to equity holders | | | | | of the parent company | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1,000 | Share | Other | Translati | Fair value | | | | capital | reserves | on | reserve | | | | | | differenc | | | | | | | es | | | -------------------------------------------------------------------------------- | Equity at 31 | 2,141 | 7,368 | -817 | 78 | | | Dec 2007 | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | | | | | hedges: | | | | | | -------------------------------------------------------------------------------- | gains and | | | | 6 | | | losses | | | | | | | taken to equity | | | | | | -------------------------------------------------------------------------------- | Translation | | | -1,683 | | | | difference | | | | | | -------------------------------------------------------------------------------- | Profit for the | | | | | | | period | | | | | | -------------------------------------------------------------------------------- | Total | - | - | -1,683 | 6 | | | recognized | | | | | | | income and | | | | | | | expense for the | | | | | | | period | | | | | | -------------------------------------------------------------------------------- | Dividends | | | | | | -------------------------------------------------------------------------------- | Transfer of | | 65 | | | | | treasury shares | | | | | | -------------------------------------------------------------------------------- | Share-based | | | | | | | compensation | | | | | | -------------------------------------------------------------------------------- | Change in group | | | | | | | structure1) | | | | | | -------------------------------------------------------------------------------- | Equity at 31 | 2,141 | 7,433 | -2,500 | 85 | | | Dec 2008 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | | | | Minority | Equity | | | | | | interest | total | -------------------------------------------------------------------------------- | EUR 1,000 | Treasur | Retained | Total | | | | | y | earnings | | | | | | shares | | | | | -------------------------------------------------------------------------------- | Equity at 31 | -427 | 43,686 | 52,031 | 116 | 52,147 | | Dec 2007 | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | | | | | hedges: | | | | | | -------------------------------------------------------------------------------- | gains and | | | 6 | | 6 | | losses taken | | | | | | | to equity | | | | | | -------------------------------------------------------------------------------- | Translation | | | -1,683 | | -1,683 | | difference | | | | | | -------------------------------------------------------------------------------- | Profit for the | | 6,625 | 6,625 | - | 6,625 | | period | | | | | | -------------------------------------------------------------------------------- | Total | - | 6,625 | 4,948 | - | 4,948 | | recognized | | | | | | | income and | | | | | | | expense for the | | | | | | | period | | | | | | -------------------------------------------------------------------------------- | Dividends | | -6,415 | -6,415 | - | -6,415 | -------------------------------------------------------------------------------- | Transfer of | 302 | -302 | 65 | | 65 | | treasury shares | | | | | | -------------------------------------------------------------------------------- | Share-based | | 947 | 947 | | 947 | | compensation | | | | | | --------------------------------------------------------------------------------| Change in group | | | | -116 | -116 | | structure1) | | | | | | -------------------------------------------------------------------------------- | Equity at 31 | -125 | 44,541 | 51,576 | - | 51,576 | | Dec 2008 | | | | | | -------------------------------------------------------------------------------- 1) The shares of Business Tools Oy transferred to Comptel Corporation's direct holding and liquidation of Probatus Oy Notes 1. Changes in accounting principles To meet the requirements of IAS 38, Comptel has modified its accounting principles for the capitalisation of development costs and of costs related to internal projects. A share of the fixed costs defined separately, is included in the cost of development and internal projects to which they are related. The impact of the change in accounting principles was 457 thousand euro in 2008. 2. Net sales and operating profit by segment Net sales by segment -------------------------------------------------------------------------------- | EUR 1,000 | 1 Jan - 31 | 1 Jan - 31 | 1 Oct - 31 | 1 Oct - 31 | | | Dec 2008 | Dec 2007 | Dec 2008 | Dec 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Europe | 40,768 | 48,481 | 9,771 | 12,587 | -------------------------------------------------------------------------------- | Middle East and | 15,279 | 9,791 | 5,047 | 2,872 | | Africa | | | | | -------------------------------------------------------------------------------- | Americas | 7,941 | 7,250 | 2,436 | 1,839 | -------------------------------------------------------------------------------- | Asia-Pacific | 20,861 | 16,878 | 5,907 | 6,734 | -------------------------------------------------------------------------------- | Total | 84,849 | 82,399 | 23,161 | 24,032 | -------------------------------------------------------------------------------- Operating profit by segment -------------------------------------------------------------------------------- | EUR 1,000 | 1 Jan - 31 | 1 Jan - 31 | 1 Oct - 31 | 1 Oct - 31 | | | Dec 2008 | Dec 2007 | Dec 2008 | Dec 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Europe | 20,898 | 28,286 | 3,317 | 7,082 | -------------------------------------------------------------------------------- | Middle East and | 8,946 | 5,713 | 3,148 | 1,676 | | Africa | | | | | -------------------------------------------------------------------------------- | Americas | 4,219 | 3,922 | 1,312 | 693 | -------------------------------------------------------------------------------- | Asia-Pacific | 9,348 | 9,529 | 1,262 | 4,461 | -------------------------------------------------------------------------------- | Group unallocated | -32,028 | -30,933 | -6,181 | -6,404 | | expenses | | | | | -------------------------------------------------------------------------------- | Total | 11,383 | 16,518 | 2,858 | 7,509 | -------------------------------------------------------------------------------- 3. Business combinations On 21 April 2008, Comptel Corporation acquired all the shares of Axiom Systems Holdings Limited. UK-based Axiom Systems is specialised in the broadband fulfillment market. The acquisition puts Comptel in a strong position to capitalize on the growing investments being made by service providers in new IP-based services, like VoIP and IPTV. The purchase price of GBP 7.0 million (EUR 8.9 million) was paid in cash. In accordance with the agreement, no additional purchase price will be paid since the net sales of Axiom Systems were below EUR 13.5 million in 2008. As at the time of acquisition it was not possible to measure the additional purchase price reliably, it was not included in the calculation of the goodwill. The actual purchase price of EUR 8.9 million, costs directly attributable to the acquisition are EUR 0.7 million and the fair value of allocations to the identifiable net assets is EUR 3.0, therefore the goodwill according to IFRS 3 is EUR 9.7 million. EUR 3.0 million was allocated to intangible assets, which are amortised over 5 years. The goodwill is attributable to the synergies expected to arise subsequent to the acquisition. The acquisition is in line with Comptel's long-term growth strategy to become world's leading supplier of telecom software. According to the Comptel management, the goodwill is mainly based on the fact that Axiom's solutions for IP services will complement Comptel's existing portfolio, the common sales network will enable cross selling to Axiom's and Comptel's customers, and the combined R&D will strengthen the operations. The professionally skilled workforce is also part of the goodwill. Axiom Group's loss for the period 21 April to 31 December 2008, EUR 1.3 million, is included in the Comptel Group result. Comptel Group net sales for January - December would have been EUR 87.5 million and profit EUR 5.7 million if Axiom had been consolidated from the beginning of the year 2008. The values of the assets and liabilities arising from the acquisition were as follows: -------------------------------------------------------------------------------- | EUR 1,000 | Recognised fair values | Pre-acquisition carrying | | | on acquisition | amounts | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Technology (incl. in | 3,001 | - | | intangible assets) | | | -------------------------------------------------------------------------------- | Machinery and equipment | 289 | 289 | -------------------------------------------------------------------------------- | Deferred tax assets | 233 | 233 | -------------------------------------------------------------------------------- | Trade receivables and | 4,246 | 4,246 | | other receivables | | | -------------------------------------------------------------------------------- | Cash and cash | 124 | 124 | | equivalents | | | -------------------------------------------------------------------------------- | Total assets | 7,894 | 4,892 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Deferred tax | 901 | - | | liabilities | | | -------------------------------------------------------------------------------- | Other non-interest | 7,195 | 7,195 | | bearing liabilities | | | -------------------------------------------------------------------------------- | Interest bearing | 89 | 89 | | liabilities | | | -------------------------------------------------------------------------------- | Total liabilities | 8,184 | 7,284 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net assets | -291 | -2,392 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Acquisition cost | 9,457 | | -------------------------------------------------------------------------------- | Goodwill | 9,748 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Purchase price paid in | 9,457 | | | cash | | | -------------------------------------------------------------------------------- | Cash and cash | -124 | | | equivalents in acquired | | | | subsidiary | | | -------------------------------------------------------------------------------- | Total net cash outflow | 9,333 | | | on the acquisition | | | -------------------------------------------------------------------------------- The goodwill calculation is in GBP, so the goodwill will change according to the exchange rates. On 31 December 2008, the goodwill was EUR 8.2 million. 4. Income tax expense Tax rate according to the income statement for the period was 37.5% (33.8%). The tax rate is quite high due to double taxation. In 2006 Adjustment of the Tax Office for Major Corporations refused to accept the crediting of taxes withheld at source in taxation of 2004 and 2005. The issue has been transferred to the Ministry of Finance. The Ministry of Finance has now come to an agreement with Greece, Malaysia and Romania. Relating to these countries, Comptel has booked EUR 0.7 million tax receivables. For other countries the issue of double taxation remains to be decided by the Ministry of Finance. Comptel believes the treatment of its withholding taxation will be changed. According to the Board of Adjustment's decision currently in force, Comptel Corporation has expensed taxes withheld at source amounting to EUR 1,499 thousand in January - December (EUR 1,098 thousand). 5. Tangible assets -------------------------------------------------------------------------------- | EUR 1,000 | 1 Jan - 31 Dec | 1 Jan - 31 Dec | | | 2008 | 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Additions | 1,351 | 1,460 | -------------------------------------------------------------------------------- | Business combinations | 289 | - | -------------------------------------------------------------------------------- | Disposals | -9 | -36 | -------------------------------------------------------------------------------- 6. Related party transactions The Comptel Group has a related party relationship with its associates, the Board of Directors, CEO, deputy CEO, the members of the Executive Board and also with people and companies under Comptel management's influence. Transactions, which have been entered into with related parties are as follows: -------------------------------------------------------------------------------- | EUR 1,000 | 1 Jan - 31 Dec | 1 Jan - 31Dec | | | 2008 | 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Associates | | | -------------------------------------------------------------------------------- | Purchases of goods and services | 1,318 | 2,515 | -------------------------------------------------------------------------------- | Interest income | 11 | 29 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Companies under management's influence | | | -------------------------------------------------------------------------------- | Purchases of goods and services | 28 | 65 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1,000 | 31 Dec 2008 | 31 Dec 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Associates | | | -------------------------------------------------------------------------------- | Trade and other current receivables | 191 | 179 | -------------------------------------------------------------------------------- | Trade and other current liabilities | 197 | 416 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Companies under management's influence | | | -------------------------------------------------------------------------------- | Trade and other current liabilities | 1 | 7 | -------------------------------------------------------------------------------- Remuneration to key management The key management personnel compensation includes the employee benefits of the CEO, deputy CEO, the members and deputy members of the Board of Directors and the members of the Executive Board. -------------------------------------------------------------------------------- | EUR 1,000 | 1 Jan - 31 Dec | 1 Jan - 31 Dec | | | 2008 | 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Salaries and other short-term employee | 1,854 | 1,605 | | benefits | | | -------------------------------------------------------------------------------- | Share-based payments | 415 | 552 | -------------------------------------------------------------------------------- | Total | 2,268 | 2,157 | -------------------------------------------------------------------------------- 7. Commitments Minimum lease payments on non-cancellable office facilities and other operating leases are payable as follows: -------------------------------------------------------------------------------- | EUR 1,000 | 31 Dec 2008 | 31 Dec 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Less than one year | 4,234 | 3,411 | -------------------------------------------------------------------------------- | Between one and five years | 12,136 | 11,560 | -------------------------------------------------------------------------------- | More than five years | 3,282 | 4,595 | -------------------------------------------------------------------------------- | Total | 19,652 | 19,567 | -------------------------------------------------------------------------------- The group has no material capital commitments for the purchase of tangible assets as at 31 December 2008. 8. Contingent liabilities -------------------------------------------------------------------------------- | EUR 1,000 | 31 Dec 2008 | 31 Dec 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Bank guarantees | 1,047 | 1,132 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 9. Subsequent Events Comptel developed further its organisational structure in January 2009 by combining the European sales and customer service units and by establishing a unit concentrating on Alliances and Sales Development and a unit for Strategic Marketing. The new organisation accomplishes the organisational change implemented in the beginning of 2008, which improved business management close to customers and combined the product units. Starting from the beginning of 2009, the Group Executives are Mr. Sami Erviö, President and CEO, the business area leaders Mr. Harri Palviainen (Europe), Mr. Youssef Kermoury (Middle East and Africa), Mr. Mika Korpinen (Asia-Pacific) and Mr. Ricardo Carreon (Americas), Mr. Minesh Patel responsible for Alliances and Sales Development, Ms. Arnhild Schia responsible for Strategic Marketing, Mr. Simo Sääskilahti responsible for Products and Solutions, Mr. Gareth Senior, CTO, Mr. Veli Matti Salmenkylä, CFO responsible for Administration, Ms. Niina Pesonen, responsible for Human Resources, and Mr. Markku Järvenpää responsible for Global Operations Support. In January-February 2009, Comptel was engaged in personnel negotiations. As a result of these negotiations the company decided to make 45 people redundant on financial and production grounds. Comptel Corporation's subsidiaries in Norway and United Kingdom also took actions to downsize the amount of personnel under the local legal requirements and collective agreements. The annual cost reduction expected is EUR 2.3 million in Norway. In the United Kingdom, the actions taken will lead to annual cost savings of EUR 1.0 million. With these measures the Group will reach annual cost savings of approximately EUR 7 million out of which EUR 2 million are estimated to be realised in 2009. By reducing costs and renewing the organisation Comptel aims to ensure the Group's long-term profitability and competitiveness. In January 2009, the Board of Directors of Comptel Corporation approved a new share-based incentive plan for the key personnel of Comptel Group. The aim of the plan is to combine the objectives of the shareholders and the key personnel in order to increase the value of the company, to commit the key personnel to the company, and to offer them a competitive reward plan based on holding the company shares. 10. Key figures -------------------------------------------------------------------------------- | Financial summary | 1 Jan - 31 Dec | 1 Jan - 31 Dec | | | 2008 | 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales, EUR 1,000 | 84,849 | 82,399 | -------------------------------------------------------------------------------- | Net sales, change % | 3.0 | 2.4 | -------------------------------------------------------------------------------- | Operating profit, EUR 1,000 | 11,383 | 16,518 | -------------------------------------------------------------------------------- | Operating profit, change % | -31.1 | 47.1 | -------------------------------------------------------------------------------- | Operating profit, as % of net sales | 13.4 | 20.0 | -------------------------------------------------------------------------------- | Profit before taxes, EUR 1,000 | 10,597 | 16,396 | -------------------------------------------------------------------------------- | Profit before taxes, as % of net | 12.5 | 19.9 | | sales | | | -------------------------------------------------------------------------------- | Return on equity, % | 12.8 | 21.9 | -------------------------------------------------------------------------------- | Return on investment, % | 19.1 | 32.9 | -------------------------------------------------------------------------------- | Equity ratio, % 1) | 67.4 | 77.6 | -------------------------------------------------------------------------------- | Gross investments in tangible and | 10,919 | 1,908 | | intangible assets, EUR 1,000 2) | | | -------------------------------------------------------------------------------- | Gross investments in tangible and | 12.9 | 2.3 | | intangible assets, as % of net sales | | | -------------------------------------------------------------------------------- | Capitalisations according to IAS 38 | 4,566 | 2,921 | | to intangible assets | | | -------------------------------------------------------------------------------- | Research and development expenditure, | 14,007 | 10,333 | | EUR 1,000 | | | -------------------------------------------------------------------------------- | Research and development expenditure, | 16.5 | 12.5 | | as % of net sales | | | -------------------------------------------------------------------------------- | Order backlog, EUR 1,000 3) | 38,846 | 35,051 | -------------------------------------------------------------------------------- | Average number of employees during | 606 | 555 | | the period | | | -------------------------------------------------------------------------------- | Interest-bearing net liabilities, EUR | -1,083 | -14,708 | | 1,000 | | | -------------------------------------------------------------------------------- | Gearing ratio, % | -2.1 | -28.2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1) When calculating the equity ratio for 2007, those deferred income items | | recognised on the basis of the percentage of completion method as well as | | deferred income arising from sales accruals were accounted for as advances | | received. | -------------------------------------------------------------------------------- | 2) Includes acquisition of Axiom Systems in 2008. Gross investments | | excluding the acquisition were EUR 1,461 thousand which amount to 1.7 | | percent of net sales. | -------------------------------------------------------------------------------- | 3) The order book may vary significantly during the financial period. | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Per share data | 1 Jan - 31 Dec | 1 Jan - 31 Dec | | | 2008 | 2007 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share (EPS), EUR | 0.06 | 0.10 | -------------------------------------------------------------------------------- | EPS diluted, EUR | 0.06 | 0.10 | -------------------------------------------------------------------------------- | Equity per share, EUR | 0.48 | 0.49 | -------------------------------------------------------------------------------- | Dividend per share, EUR 4) | 0.04 | 0.06 | -------------------------------------------------------------------------------- | Dividend per earnings, % 4) | 64.6 | 59.1 | -------------------------------------------------------------------------------- | Effective dividend yield, % 4) | 5.8 | 4.2 | -------------------------------------------------------------------------------- | P/E ratio | 11.1 | 14.0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Adjusted number of shares at the end of | 107,054,810 | 107,054,810 | | the period | | | -------------------------------------------------------------------------------- | - of which the number of treasury shares | 92,654 | 240,341 | -------------------------------------------------------------------------------- | Outstanding shares | 106,962,156 | 106,814,469 | | Adjusted average number of shares during | 106,938,539 | 106,848,199 | | the period | | | -------------------------------------------------------------------------------- | Average number of shares, dilution | 106,938,539 | 106,848,199 | | included | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 4) The Board's proposal | -------------------------------------------------------------------------------- 11. Definition of key figures -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating margin % | = | Operating profit/loss | x 100 | -------------------------------------------------------------------------------- | | | Net sales | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit margin (before | = | Profit/loss before taxes | x 100 | | income taxes) % | | | | -------------------------------------------------------------------------------- | | | Net sales | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on equity % (ROE) | = | Profit/loss | x 100 | -------------------------------------------------------------------------------- | | | Shareholders' equity (average | | | | | during year) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on investment % | = | Profit/loss before taxes + | x 100 | | (ROI) | | financial expenses | | -------------------------------------------------------------------------------- | | | Shareholders' equity + interest | | | | | bearing liabilities | | | | | (average during the year) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity ratio % | = | Shareholders' equity | x 100 | -------------------------------------------------------------------------------- | | | Balance sheet total - advances | | | | | received | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Gross investments in | = | Gross investments in tangible and | x 100 | | tangible and intangible | | intangible assets | | | assets, as % of net | | | | | sales | | | | -------------------------------------------------------------------------------- | | | Net sales | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Research and development | = | Research and development | x 100 | | expenditure, as % of net | | expenditure | | | sales | | | | -------------------------------------------------------------------------------- | | | Net sales | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Gearing ratio % | = | Interest-bearing liabilities - | x 100 | | | | cash and cash equivalents | | -------------------------------------------------------------------------------- | | | Shareholders' equity | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share (EPS) | = | Net profit for the financial year | | | | | attributable to equity | | | | | shareholders | | -------------------------------------------------------------------------------- | | | Average number of outstanding | | | | | shares for the financial year | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity per share | = | Equity attributable to the equity | | | | | holders of the parent company | | -------------------------------------------------------------------------------- | | | Adjusted number of outstanding | | | | | shares at balance sheet date | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Dividend per share | = | Dividend | | -------------------------------------------------------------------------------- | | | Adjusted number of outstanding | | | | | shares at balance sheet date | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Dividend per earnings % | = | Dividend per share | x 100 | -------------------------------------------------------------------------------- | | | Earnings per share (EPS) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Effective dividend yield | = | Dividend per share | x 100 | | % | | | | -------------------------------------------------------------------------------- | | | Share closing price at balance | | | | | sheet date | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | P/E ratio | = | Share closing price at balance | | | | | sheet date | | -------------------------------------------------------------------------------- | | | Earnings per share (EPS) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- COMPTEL CORPORATION Board of Directors Additional information: Mr. Sami Erviö, President and CEO, tel. +358 9 700 1131 Mr. Veli Matti Salmenkylä, CFO, tel. +358 50 2813 Mr. Samppa Seppälä, Director, IR and Corporate Communications, tel. +358 50 568 0533 Distribution: NASDAQ OMX Helsinki Major media
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