2008-02-13 07:11:28 CET
2008-02-13 07:12:28 CET
REGULATED INFORMATION
Comptel - Financial Statement Release
COMPTEL CORPORATION'S FINANCIAL STATEMENTS FOR 2007
Comptel Corporation Stock Exchange Release 13 February 2008 at 8.10 am COMPTEL CORPORATION'S FINANCIAL STATEMENTS FOR 2007 Net sales and operating profit on a record-high level in the last quarter Key Figures for the Fourth Quarter Net sales EUR 24.0 million (October-December 2006: 22.8) Operating profit EUR 7.5 million (4.8) Earnings per share EUR 0.05 (0.01) Order backlog EUR 35.1 million (29.5) Based on 2007 earnings, the Board of Directors proposes a dividend of EUR 0.06 (0.05) 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 12 February 2008. Sami Erviö, President and CEO: ”During the fourth quarter, Comptel's business proceeded excellently and net sales were the highest in the company's history. We concluded several projects, which were under delivery during the year, and we signed new orders. Net sales grew by five per cent from the previous year's last quarter. Operating profit increased to EUR 7.5 million corresponding 31 per cent of the net sales. In October-December, Comptel sold a record-breaking 15 new core licenses in Europe and in the Middle East and Africa. Remarkable was that we sold several new products like Comptel Inventory Solution, Comptel Interconnect Solution and the first Comptel Data Retention Solution. Our prospects remained favourable also in the developing markets of Asia-Pacific. We signed a significant license upgrade with IBM India and made a long-term maintenance agreement. Order backlog grew by 19 per cent from the previous year mainly as a result of a stronger stock of maintenance agreements. In accordance with our strategy, we strengthened our local presence by establishing a representative office in Moscow in December. In 2007, the growth of net sales remained low partly due to the weakened US dollar rate. However, our profitability developed favourably and the operating profit increased to 20 per cent of net sales, which is our long-term target. During the year we extended our solution offering with major new products and strengthened our sales channel and delivery capability. We are strongly targeting our offering from point products towards dynamic end-to-end solutions, which will enhance the operations of telecom service providers, promote innovation of new services and accelerate their time to market”. Summary of January-December 2007 Net sales EUR 82.4 million (2006: 80.4) Operating profit EUR 16.5 million (11.2) Earnings per share EUR 0.10 (0.05) Number of employees at the year end 554 (547) The net sales of Comptel Group were EUR 82.4 million in 2007 (80.4). Net sales grew by 2.4 per cent (21.8) compared to the previous year. The growth of net sales was smaller than expected due to the constant weakening of the US dollar and the unexpectedly long sales cycle for the Inventory and Convergent Charging solutions. The growth in 2006 was mainly due to the acquisition of EDB Telecom. The Group's operating profit grew by 47.1 per cent to EUR 16.5 million (11.2), being 20.0 per cent (14.0) of the net sales. In the fourth quarter, operating profit increased to EUR 7.5 million (4.9) corresponding 31.2 per cent (21.4) of the net sales. EUR 1.2 million of bad debts from trade receivables were recorded during the last quarter of the year mainly due to a customer operating in war zone. Net financial items were EUR 0.24 million negative (0.03). The Group's profit before taxes was EUR 16.4 million (11.2), being 19.9 per cent (13.9) of the net sales. Group net profit was EUR 10.9 million (5.8). Earnings per share for the financial period were EUR 0.10 (0.05). The result was reduced by the impact of double withholding taxation, which amounted to some EUR 1.1 million. Due to this the tax rate for the year was 33.8 per cent. The application submitted by Comptel to prevent double withholding taxation is still pending in the Ministry of Finance. The company believes that it can change the treatment of its withholding taxes. The Group's order backlog rose significantly, mainly as a result of a stronger stock of maintenance agreements and was EUR 35.1 million at the end of the period under review (29.5). From the previous quarter, order backlog grew by 53.6 per cent (30 September 2007: 22.8). Business Areas -------------------------------------------------------------------------------- | Net sales, EUR | 10-12 | 10-12 | Change | 1-12 | 1-12 | Change | | million | 2007 | 2006 | % | 2007 | 2006 | % | -------------------------------------------------------------------------------- | Europe | 12.6 | 13.2 | -4.7 | 48.5 | 47.6 | 1.8 | -------------------------------------------------------------------------------- | Middle East and | 2.9 | 2.9 | -2.4 | 9.8 | 12.0 | -18.7 | | Africa | | | | | | | -------------------------------------------------------------------------------- | America | 1.8 | 2.5 | -24.5 | 7.2 | 8.2 | -11.2 | -------------------------------------------------------------------------------- | Asia-Pacific | 6.7 | 4.2 | 59.8 | 16.9 | 12.6 | 34.2 | -------------------------------------------------------------------------------- | Total | 24.0 | 22.8 | 5.4 | 82.4 | 80.4 | 2.4 | -------------------------------------------------------------------------------- | Operating profit by | | | | | | | | market area, EUR | | | | | | | | million | | | | | | | -------------------------------------------------------------------------------- | Europe | 7.1 | 5.7 | 24.5 | 28.3 | 23.0 | 23.2 | -------------------------------------------------------------------------------- | Middle East and | 1.7 | 1.6 | 5.6 | 5.7 | 7.2 | -20.8 | | Africa | | | | | | | -------------------------------------------------------------------------------- | America | 0.7 | 1.4 | -49.9 | 3.9 | 4.5 | -12.5 | -------------------------------------------------------------------------------- | Asia-Pacific | 4.5 | 2.9 | 52.8 | 9.5 | 6.4 | 49.8 | -------------------------------------------------------------------------------- | Unallocated costs | -6.4 | -6.8 | -4.4 | -30.9 | -29.8 | 3.9 | -------------------------------------------------------------------------------- | Total | 7.5 | 4.8 | 53.9 | 16.5 | 11.2 | 47.1 | -------------------------------------------------------------------------------- | Operating profit, as | | | | | | | | per cent of net | | | | | | | | sales | | | | | | | -------------------------------------------------------------------------------- | Europe | 56.3 | 43.0 | - | 58.3 | 48.2 | - | -------------------------------------------------------------------------------- | Middle East and | 58.4 | 54.0 | - | 58.4 | 59.9 | - | | Africa | | | | | | | -------------------------------------------------------------------------------- | America | 37.7 | 56.8 | - | 54.1 | 54.9 | - | -------------------------------------------------------------------------------- | Asia-Pacific | 66.2 | 69.3 | - | 56.5 | 50.6 | - | -------------------------------------------------------------------------------- | Total | 31.2 | 21.4 | - | 20.0 | 14.0 | - | -------------------------------------------------------------------------------- In 2007, net sales grew significantly in Asia-Pacific. In other regions net sales did not developed according to expectations. Operating profit increased in Europe and Asia-Pacific. The proportional profitability was good in all regions. In 2007, Comptel sold a total of 28 (29) new core licenses of which 11 were Comptel Mediation and Charging Solutions, 10 Comptel Provisioning and Activation Solutions, two Comptel Inventory Solutions, two Comptel TETRA Solutions, two Comptel Interconnect Billing Solution and one Comptel Data Retention Solution. Comptel Interconnect Billing and Comptel Data Retention are new solutions which the company launched in the market during the year under review. 14 licenses were sold in Europe, 10 in the Middle East and Africa, three in Asia-Pacific and one in America. In October-December, Comptel sold 15 new core licenses of which six were Comptel Mediation and Charging Solutions, four Comptel Provisioning and Activation Solutions, one Comptel Inventory Solution, two Comptel TETRA Solutions, one Comptel Interconnect Billing Solution and one Comptel Data Retention Solution. Eight licenses were sold in Europe and seven in the Middle East and Africa. -------------------------------------------------------------------------------- | Net sales breakdown | 10-12 | 10-12 | Change | 1-12 | 1-12 | Change% | | by type, EUR million | 2007 | 2006 | % | 2007 | 2006 | | -------------------------------------------------------------------------------- | Licenses | 10.1 | 7.4 | 36.0 | 27.8 | 25.8 | 7.6 | -------------------------------------------------------------------------------- | Services and | 14.0 | 15.4 | -9.3 | 54.6 | 54.6 | 0.1 | | Maintenance | | | | | | | -------------------------------------------------------------------------------- | Total | 24.0 | 22.8 | 5.4 | 82.4 | 80.4 | 2.4 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales by sales | 10-12 | 10-12 | Change | 1-12 | 1-12 | Change | | channel, EUR million | 2007 | 2006 | % | 2007 | 2006 | % | -------------------------------------------------------------------------------- | Direct Sales | 15.0 | 16.9 | -11.0 | 60.6 | 62.8 | -3.4 | -------------------------------------------------------------------------------- | Partner Sales | 9.0 | 5.9 | 52.4 | 21.8 | 17.6 | 23.6 | -------------------------------------------------------------------------------- | Total | 24.0 | 22.8 | 5.4 | 82.4 | 80.4 | 2.4 | -------------------------------------------------------------------------------- License and partner sales grew mainly due to a significant license upgrade and maintenance agreement signed with IBM India. The agreement includes both Comptel Provisioning and Activation Solution and Comptel Convergent Mediation Solution which have been delivered to a mobile operator customer of IBM in India. Financial Position -------------------------------------------------------------------------------- | EUR million | 31 Dec 2007 | 31 Dec 2006 | Change % | -------------------------------------------------------------------------------- | Balance sheet total | 73.6 | 68.8 | 7.0 | -------------------------------------------------------------------------------- | Liquid assets | 14.7 | 12.9 | 13.7 | -------------------------------------------------------------------------------- | Trade receivables | 27.1 | 28.2 | -3.9 | -------------------------------------------------------------------------------- | Accrued income | 8.6 | 4.9 | 75.2 | -------------------------------------------------------------------------------- | Deferred income related to partial | 2.7 | 1.5 | 77.5 | | debiting | | | | -------------------------------------------------------------------------------- | Equity ratio, % | 77.6 | 74.6 | - | -------------------------------------------------------------------------------- The balance sheet total on 31 December 2007 was EUR 73.6 million (68.8), of which liquid assets amounted to EUR 14.7 million (12.9). The growth in liquid assets between January-December was EUR 1.8 million (3.3). The operating cash flow was EUR 12.8 million (EUR 8.3 million), the paid dividends were EUR 5.4 million euros (4.3) and the net investments were EUR 4.9 million (0.7) in January-December. Trade receivables at the end of the period were EUR 27.1 million (28.2). Accrued income was EUR 8.6 million (4.9). Deferred income related to partial debiting was EUR 2.7 million (1.5). Equity ratio was 77.6 per cent (74.6) and the gearing ratio was 28.2 negative (27.7 negative). The Group had no interest-bearing debt at the date of the financial statements. In January 2007 Comptel Corporation signed a lease on business premises with AC Salmisaari Oy. With the lease, Comptel integrated its operations in Finland from three premises into a single new building, which is situated in Ruoholahti, Helsinki. The Group's rental and leasing liabilities on 31 December 2007 were EUR 19.6 million. Investments, Research and Development (R&D) -------------------------------------------------------------------------------- | EUR million | 10-12 | 10-12 | Change | 1-12 | 1-12 | Change | | | 2007 | 2006 | % | 2007 | 2006 | % | -------------------------------------------------------------------------------- | Gross investments in | 0.2 | 0.3 | -39.0 | 1.9 | 1.5 | 27.2 | | property, plant and | | | | | | | | equipment and | | | | | | | | intangible assets | | | | | | | -------------------------------------------------------------------------------- | Direct R&D | 2.9 | 3.0 | -0.7 | 10.3 | 11.1 | -6.9 | | expenditure and | | | | | | | | investments | | | | | | | -------------------------------------------------------------------------------- | Capitalisation of | 1.0 | 1.0 | 2.5 | 2.9 | 1.7 | 69.2 | | R&D expenditure | | | | | | | | according to IAS 38 | | | | | | | -------------------------------------------------------------------------------- Gross investments in tangible and intangible assets increased to EUR 1.9 million (1.5). Gross investments mainly comprised of investments in devices and software, and investments in the new premises in Finland. R&D expenditure and investments were mainly targeted to develop new dynamic end-to-end solutions. The investments were funded through cash flow from operations. Personnel -------------------------------------------------------------------------------- | | 31 Dec | 31 Dec | Change % | | | 2007 | 2006 | | -------------------------------------------------------------------------------- | Number of employees at the end of | 554 | 547 | 1.3 | | period | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 1-12 2007 | 1-12 2006 | Change % | -------------------------------------------------------------------------------- | Average number of personnel | 555 | 561 | -1,1 | | during the period | | | | -------------------------------------------------------------------------------- There were no significant changes in number or average number of personnel compared to previous year. The personnel expenses in October-December were 35.5 per cent of net sales (37.0) and in January-December 41.2 per cent of net sales (45.2). At the end of the year 60.3 per cent (58.7) of the personnel were located in Finland and 17.7 per cent (21.9) in Norway. Comptel's share The closing price of the year 2007 was 1.42 euros (1.80). Comptel's market value at the end of the year was EUR 151.7 million (192.7). -------------------------------------------------------------------------------- | Comptel share | 10-12 | 10-12 | Change | 1-12 | 1-12 | Change % | | | 2007 | 2006 | % | 2007 | 2006 | | -------------------------------------------------------------------------------- | Shares traded, | 16.9 | 11.9 | 42.6 | 57.5 | 49.8 | 15.5 | | million | | | | | | | -------------------------------------------------------------------------------- | Shares traded, | 25.9 | 20.6 | 25.5 | 106.0 | 85.0 | 24.6 | | EUR million | | | | | | | -------------------------------------------------------------------------------- | Highest price, | 1.97 | 1.88 | 4.8 | 2.29 | 2.01 | 13.9 | | EUR | | | | | | | -------------------------------------------------------------------------------- | Lowest price, EUR | 1.36 | 1.49 | -8.7 | 1.36 | 1.44 | -5.6 | -------------------------------------------------------------------------------- Of Comptel's outstanding shares, 7.1 per cent were nominee registered or held by foreign shareholders at the end of the review period. Of the B warrants of the warrant program 2006, which were issued in 2007, 1,230,000 warrants were held by the Comptel Group's key personnel. The share subscription price for warrant 2006B is EUR 1.99 per share, which corresponds to the trade volume weighted average quotation of the Comptel Corporation share on the OMX Nordic Exchange Helsinki during 1 April-30 April 2007. The Board of Directors of Comptel Corporation has been authorised, until 30 June 2008, to purchase a maximum of 10,700,000 of the company's own shares. Under this authorisation the company purchased a total of 410,000 of its own shares and disposed of 189,241 of the shares to persons included in the share-based incentive programme of 2006. The company held 240,341 of its own shares at the end of the period under review, which is 0.2 per cent of the total number of its shares. The total counter-book value of the shares held by the company was EUR 4,807. Corporate Governance Niina Pesonen (M.Sc.Educ.) started as Senior Vice President, Human Resources, and member of the Executive Board on 1 December 2007. Subsequent Events Comptel reorganised its operation in January 2008 by combining its sales and customer services units into regional businesses and by consolidating its four separate product units. The business is supported by the Group's global operations, administration and the human resources unit. The target of the new organisation is to improve business management by increasing decision-making close to customers and by enhancing the sales of end-to-end solutions. Comptel Group's Executive Board comprises the following persons as of 8 January 2008: Mr. Sami Erviö, President and CEO, Mr. Harri Palviainen, Executive Vice President, and Ms. Arnhild Schia, Senior Vice President, to whom the four geographical areas report, Mr. Simo Sääskilahti, Senior Vice President, Products and Solutions, Mr. Markku Järvenpää, Senior Vice President, Global Operations Support, Mr. Veli Matti Salmenkylä, CFO, Administration, and Ms. Niina Pesonen, Senior Vice President, Human Resources. Near-term Risks and Uncertainties Comptel's main business currencies are euro and US dollar. Changes in exchange rates may affect the price level of the markets. Comptel hedges the cash flows from orders. A further weakening of the dollar rate may reflect to net sales and profitability. Labour costs have increased and are increasing considerably in Finland. The trend may have a major adverse effect on Comptel's business, especially profitability, if the company cannot globally control the costs connected with its products and operation. The Middle East, Africa and Asia are increasingly important market areas for Comptel. The company is operating in several countries where the political and social situation is unstable. Impairing of the situation in these areas may hinder Comptel's business and undermine its profitability. The value of a single delivery project can well be several million euros. Thus a single delivery project or customer may involve a significant risk. The application submitted by Comptel to prevent double withholding taxation is still pending in the Ministry of Finance. The company believes that it can change the treatment of its withholding taxes. However, double withholding taxation may have an impact on the company's earnings per share. Outlook for 2008 The global OSS market and Comptel's business prospects are expected to develop favourably. However, the USD rate remaining below the level recorded in the previous year or its weakening from the current level will slow down the growth of net sales in euro terms. A significant part of Comptel's business will continue to comprise customer specific solutions for Elisa and Telenor. Its share of the Group's net sales is not predicted to grow. The order backlog is on the good level, mainly as a result of a strong stock of maintenance agreements. During the current year Comptel will further invest in developing end-to-end solutions and strengthening its sales organisation. It is estimated that Comptel's net sales will increase moderately in 2008. Comptel's operating profit is expected to be slightly below the company's long-term target of 20 per cent of net sales. An increasing portion of Comptel's business will come from service for existing customers, which, for its part, lessens the fluctuation from one quarter to another. Single business contracts or delivery projects may continue to have a significant influence on a quarter's result. Helsinki, 12 February 2008 Board of Directors Sami Erviö President and CEO All figures in the financial report have been rounded and consequently the sum of the individual figures can deviate from the sum figure. The financial information in this stock exchange release is based on the company's audited financial statements. The auditor's report was issued on 12 February 2008. -------------------------------------------------------------------------------- | Consolidated Income Statement | 1Jan - | 1 Jan - | 1 Oct - | 1 Oct- | | (EUR 1,000) | 31 Dec | 31 Dec | 31 Dec | 31 Dec | | | 2007 | 2006 | 2007 | 2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 82,399 | 80,439 | 24,032 | 22,803 | -------------------------------------------------------------------------------- | Other operating income | 57 | 109 | 46 | -25 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Materials and services | -7,973 | -7,929 | -1,385 | -2,122 | -------------------------------------------------------------------------------- | Employee benefits | -33,98 | -36,391 | -8,523 | -8,426 | | | 9 | | | | -------------------------------------------------------------------------------- | Depreciation | -4,340 | -4,549 | -1,071 | -1,170 | -------------------------------------------------------------------------------- | Other operating expenses | -19,63 | -20,448 | -5,590 | -6,182 | | | 5 | | | | -------------------------------------------------------------------------------- | | -69,93 | -69,316 | -16,569 | -17,900 | | | 8 | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | 16,518 | 11,232 | 7,509 | 4,878 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial income | 933 | 786 | 455 | 488 | -------------------------------------------------------------------------------- | Financial expenses | -1,169 | -758 | -412 | -613 | -------------------------------------------------------------------------------- | Share of result of associated | 113 | -54 | 113 | - | | companies | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit before income taxes | 16,396 | 11,206 | 7,665 | 4,753 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Income taxes | -5,542 | -5,408 | -2,640 | -3,538 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period | 10,854 | 5,798 | 5,025 | 1,215 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | | | -------------------------------------------------------------------------------- | Equity holders of the parent | 10,848 | 5,765 | 5,019 | 1,212 | | company | | | | | -------------------------------------------------------------------------------- | Minority interests | 6 | 33 | 6 | 3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders of the parent | | | | | | company: | | | | | -------------------------------------------------------------------------------- | Earnings per share, EUR | 0.10 | 0.05 | 0.05 | 0.01 | -------------------------------------------------------------------------------- | Earnings per share, diluted, | 0.10 | 0.05 | 0.05 | 0.01 | | EUR | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consolidated Balance Sheet | 31 Dec 2007 | 31 Dec 2006 | | (EUR 1,000) | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | | | -------------------------------------------------------------------------------- | Non-current assets | | | -------------------------------------------------------------------------------- | Other intangible assets | 8,312 | 7,875 | -------------------------------------------------------------------------------- | Goodwill | 10,832 | 10,832 | -------------------------------------------------------------------------------- | Property, plant and equipment | 2,400 | 2,292 | -------------------------------------------------------------------------------- | Investments in associates | 513 | 400 | -------------------------------------------------------------------------------- | Available-for sale financial assets | 87 | 87 | -------------------------------------------------------------------------------- | Deferred tax assets | 782 | 714 | -------------------------------------------------------------------------------- | | 22,926 | 22,201 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | -------------------------------------------------------------------------------- | Inventories | - | 18 | -------------------------------------------------------------------------------- | Trade and other receivables | 35,927 | 33,692 | -------------------------------------------------------------------------------- | Current tax assets | 70 | - | | Cash and cash equivalents | 14,708 | 12,934 | -------------------------------------------------------------------------------- | | 50,705 | 46,643 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total assets | 73,631 | 68,844 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity and liabilities | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity attributable to equity holders | | | | of the parent company | | | -------------------------------------------------------------------------------- | Share capital | 2,141 | 2,141 | -------------------------------------------------------------------------------- | Fund of invested non-restricted equity | 7,368 | 7,368 | -------------------------------------------------------------------------------- | Translation difference | -817 | -674 | -------------------------------------------------------------------------------- | Retained earnings | 43,338 | 37,782 | -------------------------------------------------------------------------------- | | 52,030 | 46,617 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Minority interest | 116 | 145 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total equity | 52,147 | 46,761 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current liabilities | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 2,660 | 1,604 | -------------------------------------------------------------------------------- | Provisions | 766 | 188 | -------------------------------------------------------------------------------- | Other liabilities | - | 169 | -------------------------------------------------------------------------------- | | 3,437 | 1,961 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current liabilities | | | -------------------------------------------------------------------------------- | Trade and other payables | 17,912 | 18,831 | -------------------------------------------------------------------------------- | Current tax liabilities | 136 | 1,291 | | | 18,048 | 20,121 | -------------------------------------------------------------------------------- | Total liabilities | 21,485 | 22,083 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total shareholders' equity and | 73,631 | 68,844 | | liabilities | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consolidated statement of cash flows | 1 Jan - | 1 Jan - | | (EUR 1,000) | 31 Dec 2007 | 31 Dec 2006 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Cash flows from operating activities | | | -------------------------------------------------------------------------------- | Profit for the period | 10,854 | 5,798 | -------------------------------------------------------------------------------- | Adjustments: | | | -------------------------------------------------------------------------------- | Transactions without cash flow effect | 5,131 | 5,414 | -------------------------------------------------------------------------------- | Interest and other financial expenses | 26 | 582 | -------------------------------------------------------------------------------- | Interest income | -357 | -590 | -------------------------------------------------------------------------------- | Income taxes | 5,542 | 5,408 | -------------------------------------------------------------------------------- | Change in working capital: | | | -------------------------------------------------------------------------------- | Change in trade and other receivables | -2,508 | -4,090 | -------------------------------------------------------------------------------- | Change in inventories | 18 | -18 | -------------------------------------------------------------------------------- | Change in trade and other payables | -2,115 | -507 | -------------------------------------------------------------------------------- | Change in provisions | 588 | -1,383 | -------------------------------------------------------------------------------- | Interest paid | -26 | -582 | -------------------------------------------------------------------------------- | Interest received | 301 | 583 | -------------------------------------------------------------------------------- | Income taxes paid | -4,638 | -2,280 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net cash from operating activities | 12,816 | 8,335 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- | Cash flows from investing activities | | | -------------------------------------------------------------------------------- | Acquisition of business operations | - | 2,294 | | (asset transaction), net of cash | | | -------------------------------------------------------------------------------- | Acquisition of property, plant and | -1,441 | -1,041 | | equipment | | | -------------------------------------------------------------------------------- | Acquisition of intangible assets | -523 | -464 | -------------------------------------------------------------------------------- | Capitalised development expenditure | -2,921 | -1,727 | -------------------------------------------------------------------------------- | Proceeds from disposal of property, | - | 237 | | plant and equipment | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net cash used in investing activities | -4,885 | -700 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flows from financing activities | | | -------------------------------------------------------------------------------- | Dividends paid | -5,365 | -4,333 | -------------------------------------------------------------------------------- | Acquisition of treasury shares | -792 | - | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net cash used in financing activities | -6,156 | -4,333 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net change in cash and cash | 1,774 | 3,302 | | equivalents | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash and cash equivalents in the | 12,934 | 9,632 | | beginning of the period | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at the end | 14,708 | 12,934 | | of the period | | | -------------------------------------------------------------------------------- | Change | 1,774 | 3,302 | -------------------------------------------------------------------------------- | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consolidated statement of changes in equity | | | -------------------------------------------------------------------------------- | Equity attributable to equity holders | | | | | of the parent company | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1,000 | Share | Share | Other | Translation | Fair value | | | capital | premium | reserves | differences | reserve | -------------------------------------------------------------------------------- | Shareholders' | 2,141 | 7,368 | - | -621 | -120 | | equity at 31 | | | | | | | December 2005 | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | | | | | hedges: | | | | | | -------------------------------------------------------------------------------- | gains and | | | | | 83 | | losses | | | | | | | taken to equity | | | | | | -------------------------------------------------------------------------------- | Translation | | | | -53 | | | difference | | | | | | -------------------------------------------------------------------------------- | Profit for the | | | | | | | period | | | | | | -------------------------------------------------------------------------------- | Total | - | - | - | -53 | 83 | | recognized | | | | | | | income and | | | | | | | expense for the | | | | | | | period | | | | | | -------------------------------------------------------------------------------- | Transfer | | -7,368 | 7,368 | | | | between | | | | | | | reserves | | | | | | -------------------------------------------------------------------------------- | Dividends | | | | | | -------------------------------------------------------------------------------- | Share-based | | | | | | | compensation | | | | | | -------------------------------------------------------------------------------- | Shareholders' | 2,141 | - | 7,368 | -674 | -37 | | equity at 31 | | | | | | | December 2006 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | | | | Minority | Equity | | | | | | interest | total | -------------------------------------------------------------------------------- | EUR 1,000 | Treasur | Retained | Total | | | | | y | earnings | | | | | | shares | | | | | -------------------------------------------------------------------------------- | Shareholders' | - | 35,937 | 44,705 | 164 | 44,869 | | equity at 31 | | | | | | | December 2005 | | | | | | -------------------------------------------------------------------------------- | Cash flow | | | | | | | hedges: | | | | | | -------------------------------------------------------------------------------- | gains and | | | 83 | | 83 | | losses taken | | | | | | | to equity | | | | | | -------------------------------------------------------------------------------- | Translation | | | -53 | | -53 | | difference | | | | | | -------------------------------------------------------------------------------- | Profit for the | | 5,766 | 5,766 | 33 | 5,798 | | period | | | | | | -------------------------------------------------------------------------------- | Total | - | 5,766 | 5,796 | 33 | 5,829 | | recognized | | | | | | | income and | | | | | | | expense for the | | | | | | | period | | | | | | -------------------------------------------------------------------------------- | Transfer | | | - | | - | | between | | | | | | | reserves | | | | | | -------------------------------------------------------------------------------- | Dividends | | -4,282 | -4,282 | -52 | -4,334 | -------------------------------------------------------------------------------- | Share-based | | 397 | 397 | | 397 | | compensation | | | | | | -------------------------------------------------------------------------------- | Shareholders' | - | 37,818 | 46,616 | 145 | 46,761 | | equity at 31 | | | | | | | December 2006 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Consolidated statement of changes in equity | | | -------------------------------------------------------------------------------- | Equity attributable to equity holders | | | | | of the parent company | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1,000 | Share | Share | Other | Translatio | Fair value | | | capital | premium | reserves | n | reserve | | | | | | difference | | | | | | | s | | -------------------------------------------------------------------------------- | Shareholders' | 2,141 | - | 7,368 | -674 | -37 | | equity at 31 | | | | | | | December 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 | | | | | | | treasury shares | | | | | | -------------------------------------------------------------------------------- | Transfer of | | | | | | | treasury shares | | | | | | -------------------------------------------------------------------------------- | Share-based | | | | | | | compensation | | | | | | -------------------------------------------------------------------------------- | Shareholders' | 2,141 | - | 7,368 | -817 | 78 | | equity at 31 | | | | | | | December 2007 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | | | | Minority | Equity | | | | | | interest | total | -------------------------------------------------------------------------------- | EUR 1,000 | Treasur | Retained | Total | | | | | y | earnings | | | | | | shares | | | | | -------------------------------------------------------------------------------- | Shareholders' | - | 37,818 | 46,616 | 145 | 46,761 | | equity at 31 | | | | | | | December 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 | | treasury shares | | | | | | -------------------------------------------------------------------------------- | Transfer of | 365 | -365 | - | | - | | treasury shares | | | | | | -------------------------------------------------------------------------------- | Share-based | | 717 | 717 | | 717 | | compensation | | | | | | -------------------------------------------------------------------------------- | Shareholders' | -427 | 43,686 | 52,031 | 116 | 52,147 | | equity at 31 | | | | | | | December 2007 | | | | | | -------------------------------------------------------------------------------- Notes 1. 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 2007 | Dec 2006 | Dec 2007 | Dec 2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Europe | 48,481 | 47,645 | 12,587 | 13,212 | -------------------------------------------------------------------------------- | Middle East and | 9,791 | 12,049 | 2,872 | 2,943 | | Africa | | | | | -------------------------------------------------------------------------------- | America | 7,250 | 8,165 | 1,839 | 2,435 | -------------------------------------------------------------------------------- | Asia Pacific | 16,878 | 12,580 | 6,734 | 4,213 | -------------------------------------------------------------------------------- | Total | 82,399 | 80,439 | 24,032 | 22,803 | -------------------------------------------------------------------------------- Operating profit by segment -------------------------------------------------------------------------------- | EUR 1,000 | 1 Jan - 31 | 1 Jan - 31 | 1 Oct - 31 | 1 Oct-31 | | | Dec 2007 | Dec 2006 | Dec 2007 | Dec 2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Europe | 28,286 | 22,956 | 7,082 | 5,686 | -------------------------------------------------------------------------------- | Middle East and | 5,713 | 7,216 | 1,676 | 1,588 | | Africa | | | | | -------------------------------------------------------------------------------- | America | 3,922 | 4,481 | 693 | 1,383 | -------------------------------------------------------------------------------- | Asia Pacific | 9,529 | 6,362 | 4,461 | 2,920 | -------------------------------------------------------------------------------- | Group unallocated | -30,933 | -29,784 | -6,404 | -6,698 | | expenses | | | | | -------------------------------------------------------------------------------- | Total | 16,518 | 11,232 | 7,509 | 4,880 | -------------------------------------------------------------------------------- 2. Income tax expense Tax rate according to the income statement for the period was 33.8% (48.3%). The tax rate is relatively high due to double taxation. In 2006 Adjustment of the Tax Office for Major Corporations refused crediting of taxes withheld at source in taxation of 2004 and 2005. The issue has been transferred to the Ministry of Finance. Comptel believes to have the treatment of its withholding taxation changed. 3. Property, plant and equipment -------------------------------------------------------------------------------- | EUR 1,000 | 1 Jan - | 1 Jan - | | | 31 Dec 2007 | 31 Dec 2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Additions | 1,460 | 1,041 | -------------------------------------------------------------------------------- | Disposals | -36 | -52 | -------------------------------------------------------------------------------- 4. Related party transactions The Comptel Group has a related party relationship with its associates, the Board of Directors, CEO and deputy CEO and the members of the Executive Board. Transactions, which have been entered into with related parties (associates), are as follows: -------------------------------------------------------------------------------- | EUR 1,000 | 1 Jan - 31 Dec | 1 Jan - 31 Dec | | | 2007 | 2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Purchases of goods and services | 2,515 | 2,126 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR 1,000 | 31 Dec 2007 | 31 Dec | | | | 2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Trade receivables and other current | 179 | 150 | | receivables | | | -------------------------------------------------------------------------------- | Trade payables and other current | 416 | 798 | | liabilities | | | -------------------------------------------------------------------------------- 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 | | | 2007 | 2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Salaries and other short-term employee | 1,605 | 1,364 | | benefits | | | -------------------------------------------------------------------------------- | Share-based payments | 552 | 407 | -------------------------------------------------------------------------------- 5. Commitments Minimum lease payments on non-cancellable office facilities and other operating leases are payable as follows: -------------------------------------------------------------------------------- | EUR 1,000 | 31 Dec 2007 | 31 Dec 2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Less than one year | 3,411 | 3,518 | -------------------------------------------------------------------------------- | Between one and five years | 11,560 | 7,561 | -------------------------------------------------------------------------------- | More than five years | 4,595 | 1,253 | -------------------------------------------------------------------------------- | Total | 19,567 | 12,332 | -------------------------------------------------------------------------------- The group has no material capital commitments for the purchase of property, plant and equipment as at 31 December 2007. 6. Contingent liabilities -------------------------------------------------------------------------------- | EUR 1,000 | 31 Dec 2007 | 31 Dec 2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Bank guarantees | 1,132 | 775 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 7. Subsequent events Comptel reorganised its operation in January 2008 by combining its sales and customer services units into regional businesses and by consolidating its four separate product units. The business is supported by the Group's global operations, administration and the human resources unit. The target of the new organisation is to improve business management by increasing decision-making close to customers and by enhancing the sales of end-to-end solutions. Comptel Group's Executive Board comprises the following persons as of 8 January 2008: Mr. Sami Erviö, President and CEO, Mr. Harri Palviainen, Executive Vice President, and Ms. Arnhild Schia, Senior Vice President, to whom the four geographical areas report, Mr. Simo Sääskilahti, Senior Vice President, Products and Solutions, Mr. Markku Järvenpää, Senior Vice President, Global Operations Support, Mr. Veli Matti Salmenkylä, CFO, Administration, and Ms. Niina Pesonen, Senior Vice President, Human Resources. 8. Key figures -------------------------------------------------------------------------------- | Financial summary | 1 Jan - 31 Dec | 1 Jan - 31 Dec | | | 2007 | 2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales, EUR 1,000 | 82,399 | 80,439 | -------------------------------------------------------------------------------- | Net sales, change % | 2.4 | 21.8 | -------------------------------------------------------------------------------- | Operating profit, EUR 1,000 | 16,518 | 11,232 | -------------------------------------------------------------------------------- | Operating profit, change % | 47.1 | 6.8 | -------------------------------------------------------------------------------- | Operating profit, as % of net sales | 20.0 | 14.0 | -------------------------------------------------------------------------------- | Profit before taxes, EUR 1,000 | 16,396 | 11,206 | -------------------------------------------------------------------------------- | Profit before taxes, as % of turnover | 19.9 | 13.9 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on equity, % | 21.9 | 12.7 | -------------------------------------------------------------------------------- | Return on investment, % | 32.9 | 25.3 | -------------------------------------------------------------------------------- | Equity ratio, % 1) | 77.6 | 74.6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Gross investments in property, plant and | 1,908 | 1,477 | | equipment and intangible assets, EUR | | | | 1,000 | | | -------------------------------------------------------------------------------- | Gross investments in property, plant and | 2.3 | 1.8 | | equipment and intangible assets, as % of | | | | net sales | | | -------------------------------------------------------------------------------- | Capitalisations according to IAS 38 to | 2,921 | 1,727 | | intangible assets 2) | | | -------------------------------------------------------------------------------- | Research and development expenditure, | 10,333 | 11,079 | | EUR 1,000 | | | -------------------------------------------------------------------------------- | Research and development expenditure, as | 12.5 | 13.8 | | % of net sales | | | -------------------------------------------------------------------------------- | Order backlog, EUR 1,000 3) | 35,051 | 29,483 | -------------------------------------------------------------------------------- | Average number of employees during the | 555 | 561 | | period | | | -------------------------------------------------------------------------------- | Interest-bearing net liabilities, EUR | -14,708 | -12,934 | | 1,000 | | | -------------------------------------------------------------------------------- | Gearing ratio, % | -28.2 | -27.7 | -------------------------------------------------------------------------------- | 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 have been accounted for as | | advances received. The comparative information has been restated. | -------------------------------------------------------------------------------- | 2) Includes EUR 145 thousand of capitalized costs from internal systems | | development in 2006. | -------------------------------------------------------------------------------- | 3) The order book may vary significantly during the financial period. | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Per share data | 1 Jan - 31 Dec | 1 Jan - 31 Dec | | | 2007 | 2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share (EPS), EUR | 0.10 | 0.05 | -------------------------------------------------------------------------------- | EPS diluted, EUR | 0.10 | 0.05 | -------------------------------------------------------------------------------- | Equity per share, EUR | 0.49 | 0.44 | -------------------------------------------------------------------------------- | Dividend per share, EUR 4) | 0.06 | 0.05 | -------------------------------------------------------------------------------- | Dividend per earnings, % 4) | 59.1 | 92.8 | -------------------------------------------------------------------------------- | Effective dividend yield, % 4) | 4.2 | 2.8 | -------------------------------------------------------------------------------- | P/E ratio | 14.0 | 33.4 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Adjusted number of shares at the end of | 107,054,810 | 107,054,810 | | the period | | | -------------------------------------------------------------------------------- | - of which held by Comptel | 240,341 | - | -------------------------------------------------------------------------------- | Adjusted average number of shares during | 106,848,199 | 107,054,810 | | the period | | | -------------------------------------------------------------------------------- | Average number of shares, dilution | 106,848,199 | 107,054,810 | | included | | | | 4) The Board's proposal | | | -------------------------------------------------------------------------------- 9. Definition of key figures -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on equity % (ROE) | = | Profit for the year | x 100 | -------------------------------------------------------------------------------- | | | Shareholders' equity (average | | | | | during year) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on investment % | = | Profit before taxes + financial | x 100 | | (ROI) | | expenses | | -------------------------------------------------------------------------------- | | | Balance sheet total - | | | | | non-interest-bearing liabilities | | | | | (average during the year) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity ratio % | = | Shareholders' equity | x 100 | -------------------------------------------------------------------------------- | | | Balance sheet total - advances | | | | | received | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share (EPS) | = | Net profit for the financial year | | | | | attributable to equity | | | | | shareholders | | -------------------------------------------------------------------------------- | | | Adjusted average number of shares | | | | | for the financial year | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Dividend per share | = | Dividend | | -------------------------------------------------------------------------------- | | | Adjusted average number of shares | | | | | for the financial year | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 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) | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity per share | = | Equity attributable to the equity | | | | | holders of the parent company | | -------------------------------------------------------------------------------- | | | Adjusted number of shares at | | | | | balance sheet date | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Gearing ratio % | = | Interest-bearing liabilities - | x 100 | | | | cash and cash equivalents | | -------------------------------------------------------------------------------- | | | Shareholders' equity | | -------------------------------------------------------------------------------- COMPTEL CORPORATION 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: OMX Nordic Exchange in Helsinki Major media
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