2016-08-11 07:30:03 CEST
2016-08-11 07:30:03 CEST
REGULATED INFORMATION
Teleste - Half Year financial report
TELESTE CORPORATION HALF YEAR FINANCIAL REPORT JANUARY TO JUNE 2016
NET SALES AND PROFIT GREW CLEARLY
Turku, Finland, 2016-08-11 07:30 CEST (GLOBE NEWSWIRE) -- TELESTE CORPORATION
HALF YEAR FINANCIAL REPORT 11.8.2016 AT 08:30
TELESTE CORPORATION HALF YEAR FINANCIAL REPORT 1 JANUARY TO 30 JUNE 2016
NET SALES AND PROFIT GREW CLEARLY
April to June 2016
- Net sales amounted to EUR 67.5 (59.7) million, an increase of 13.0%
- Operating profit stood at EUR 3.9 (2.5) million, an increase of 54.4%
- Undiluted earnings per share stood at EUR 0.16 (0.10), an increase of 66.7%
- Orders received totalled EUR 67.2 (64.1) million, an increase of 4.8%
- Cash flow from operations stood at EUR 0.5 (-2.2) million.
January to June 2016
- Net sales amounted to EUR 128.1 (113.2) million, an increase of 13.2%
- Operating profit stood at EUR 6.5 (5.1) million, an increase of 26.8%
- Undiluted earnings per share stood at EUR 0.25 (0.22), an increase of 14.6%
- Orders received totalled EUR 126.5 (121.0) million, an increase of 4.5%
- Cash flow from operations stood at EUR 2.0 (-3.4) million.
Outlook for 2016
We estimate that net sales and operating profit for 2016 will exceed the 2015
level.
Comments on the second quarter of 2016 by CEO Jukka Rinnevaara:
”The demand for Teleste's products continued to grow during the second quarter.
Also, net sales increased, and we managed to improve our result clearly.
The demand for products by Video and Broadband Solutions remained at a good
level. As for video security and information systems, orders received
increased, in particular, in France, the United States and Switzerland. Net
sales grew significantly in access network products. The growing market areas
were, in particular, the Netherlands, the United Kingdom, and Belgium. The
growth of the operating profit was slowed down by price erosion and increased
costs, which were brought about, among other things, by the ramp-up of new
products. Investment outlook of the cable operators remained positive, but as
the quarter progressed, a number of customers transferred deliveries of access
network products entered in the order backlog over to 2017.
Network Services business area increased its net sales and profitability. In
Germany, net sales increased slightly and profitability improved clearly from
the previous year, although profitability was burdened by the starting up
expenses related to new services of our main customer in southern Germany. Our
Engineering Services business unit, launched in the UK in the previous year,
achieved a positive operating result. As for other countries, the profitability
of our services business remained at a good level."
Group Operations in April to June 2016
Key figures (M€) 4-6/2016 4-6/2015 Change, %
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Orders received 67.2 64.1 +4.8%
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Net sales 67.5 59.7 +13.0%
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Operating profit 3.9 2.5 +54.4%
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Operating profit, % 5.7% 4.2%
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Profit for the period 2.9 1.7 +67.5%
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Earnings per share, EUR 0.16 0.10 +66.7%
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Cash flow from operations 0.5 -2.2
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In the second quarter, orders received by the Group amounted to EUR 67.2 (64.1)
million, up 4.8% over last year's comparative period. Order backlog decreased
by 13.1% to EUR 40.6 (46.7) million. Net sales grew by 13.0% amounting to EUR
67.5 (59.7) million.
Compared to the same period in the previous year, operating profit increased by
54.4% standing at EUR 3.9 (2.5) million, which is 5.7% (4.2%) of the net sales.
Operating profit increased for both Video and Broadband Solutions and Network
Services. Personnel expenses totalled EUR 19.1 (18.4) million, an increase of
3.9%. Expenses related to material and manufacturing services increased by
13.9% to EUR 35.2 (30.9) million. Net financial expenses equalled EUR 0.2 (0.1)
million. Profit for the financial period increased 67.5% equalling EUR 2.9
(1.7) million. Undiluted earnings per share stood at EUR 0.16 (0.10) per share,
an increase of 66.7%.
Cash flow from operations stood at EUR 0.5 (-2.2) million. Cash flow was
improved by the operational result and changes in working capital.
Group Operations in January to June 2016
Key figures (M€) 1-6/2016 1-6/2015 Change, % 1-12/2015
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Orders received 126.5 121.0 +4.5% 251.3
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Net sales 128.1 113.2 +13.2% 247.8
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Operating profit 6.5 5.1 +26.8% 14.3
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Operating profit, % 5.1% 4.5% 5.8%
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Profit for the period 4.5 3.9 +15.7% 11.0
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Earnings per share, EUR 0.25 0.22 +14.6% 0.61
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Cash flow from operations 2.0 -3.4 4.9
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Net gearing,% 32.7% 35.3% 26.3%
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Equity ratio,% 48.8% 44.3% 48.3%
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Personnel at period-end 1,538 1,517 +1.4% 1,506
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Orders received by Teleste Group increased by 4.5% and stood at EUR 126.5
(121.0) million. Net sales increased 13.2% equalling EUR 128.1 (113.2) million.
Operating profit grew by 26.8% standing at EUR 6.5 (5.1) million. Personnel
expenses totalled EUR 36.7 (35.3) million, an increase of 3.9%. Expenses
related to material and manufacturing services increased by 18.4% to EUR 66.8
(56.4) million. Financial items totalled EUR -0.6 (0.2) million. In the
comparative period, financial items were brought up to positive by foreign
exchange gains. Taxes for the Group amounted to EUR 1.3 (1.4) million while the
Group's implicit tax rate equalled 22.5% (26.0%). Undiluted result per share
increased by 14.6% to EUR 0.25 (0.22).
Cash flow from operations stood at EUR 2.0 (-3.4) million. Cash flow from
operations increased from the comparative period as a result of improved
operating profit and changes in working capital.
Video and Broadband Solutions in April to June 2016
Key figures (1000 €) 4-6/2016 4-6/2015 Change, %
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Orders received 42,470 40,926 +3.8%
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Net sales 42,769 36,519 +17.1%
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Operating profit 3,180 2,999 +6.0%
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Operating profit, % 7.4% 8.2%
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Orders received totalled EUR 42.5 (40.9) million, an increase of 3.8% from the
comparative period. Orders for the video security and information systems
increased. Order backlog totalled EUR 40.6 (46.7) million. Net sales grew by
17.1% amounting to EUR 42.8 (36.5) million. Net sales grew in access network
products. Operating profit increased by 6.0% to EUR 3.2 (3.0) million,
representing 7.4% (8.2%) of the net sales. The growth of the operating profit
was slowed down by price erosion and increased costs, which were brought about,
among other things, by the ramp-up of new products.
R&D expenses for the business area amounted to EUR 3.0 (2.9) million making
7.0% (8.0%) of the net sales. Product development projects focused on network
products complying with the DOCSIS 3.1 standard, distributed access
architecture, video security and information solutions, as well as
customer-specific projects. Capitalized R&D expenses amounted to EUR 0.3 (0.2)
million. Depreciation on capitalised R&D expenses equalled EUR 0.3 (0.3)
million.
Video and Broadband Solutions in January to June 2016
Key figures (1000 €) 1-6/2016 1-6/2015 Change, % 1-12/2015
--------------------------------------------------------------
Orders received 78,862 74,916 +5.3% 157,951
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Net sales 80,462 67,052 +20.0% 154,396
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Operating profit 5,628 5,002 +12.5% 12,781
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Operating profit, % 7.0% 7.5% 8.3%
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Orders received totalled EUR 78.9 (74.9) million, an increase of 5.3% from the
comparative period. Orders for video security and information systems
increased. Net sales grew by 20.0% amounting to EUR 80.5 (67.1) million. Net
sales grew in the Network Products business. Operating profit increased 12.5%
equalling EUR 5.6 (5.0) million. Operating profit increased in access network
products as well as in video security and information systems.
Product development expenses equalled EUR 5.7 (5.8), in other words, 7.0%
(8.7%) of the net sales. Product development projects focused on network
products complying with the DOCSIS 3.1 standard, distributed access
architecture, video security and information solutions, as well as
customer-specific projects. Capitalized R&D expenses amounted to EUR 0.9 (0.6)
million. Depreciation on activated R&D expenses amounted to EUR 0.5 (0.5)
million.
Network Services in April to June 2016
Key figures (1000 €) 4-6/2016 4-6/2015 Change, %
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Orders received 24,719 23,211 +6.5%
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Net sales 24,719 23,211 +6.5%
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Operating profit 691 -492 N/A
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Operating profit, % 2.8% -2.1%
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Net sales for the second quarter stood at EUR 24.7 (23.2) million, which is
6.5% higher than that of the comparative period. Net sales grew in the UK and
Germany. Operating profit stood at EUR 0.7 (-0.5) million making 2.8% (-2.1%)
of the net sales. Operating profit improved in Germany and the UK, where our
new services business achieved a positive quarterly operating profit. The
business developed favourably also in other markets.
Network Services in January to June 2016
Key figures (1000 €) 1-6/2016 1-6/2015 Change, % 1-12/2015
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Orders received 47,642 46,122 +3.3% 93,362
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Net sales 47,642 46,122 +3.3% 93,362
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Operating profit 845 103 +723.5% 1,520
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Operating profit, % 1.8% 0.2% 1.6%
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The year-on-year net sales grew by 3.3% amounting to EUR 47.6 (46.1) million.
Operating profit stood at EUR 0.8 (0.1) million, up by 724% from the
comparative period. Operating profit improved particularly in the UK, where our
investments aimed at the expansion of the business achieved a positive result.
Profitability of our German services business has been burdened by our main
client’s starting up expenses of services in a new area in southern Germany.
Personnel and Organisation in January to June 2016
In the period under review, the Group had an annual average of 1,507 people
(1,477/2015, 1,275/2014), of whom 737 (682) were employed by Video and
Broadband Solutions, and 770 (795) by Network Services. At the end of the
review period, the figure totalled 1,538 (1,517/2015, 1,303/2014) of whom 65%
(66%/2015, 69%/2014) were stationed overseas. About 3% of the Group's employees
were working outside Europe.
Personnel costs amounted to EUR 36.7 million (35.3/2015, 29.3/2014). This
increase in the personnel expenses was brought about by the increased number of
employees in Video and Broadband Solutions as well as the general wage
development.
Investments and Product Development in January to June 2016
In the period under review, investments by the Group totalled EUR 2.3 (13.5)
million accounting for 1.8% (11.9%) of net sales. As for the year-on-year
investments, EUR 11.5 million involved an acquisition. Product development
investments amounted to EUR 0.9 (0.6) million while other investments equalled
EUR 1.4 (0.8) million.
Product development projects focused on network products complying with the
DOCSIS 3.1 standard, distributed access architecture, video security and
information solutions, as well as customer-specific projects.
Financing and Capital Structure in January to June 2016
Cash flow from operations stood at EUR 2.0 (-3.4) million. Cash flow from
operations increased from the comparative period as a result of improved
operating profit and changes in working capital.
The parent company has at its disposal financial and credit facilities
amounting to a total of EUR 45.0 million. These binding credit limits are valid
until the end of March 2018. At the end of the period under review, the amount
of unused binding credit facilities amounted to EUR 15.9 (8.1) million. On 30
June 2016, the Group's interest-bearing debt stood at EUR 35.2 (40.1) million.
The Group's equity ratio equalled 48.8% (44.3%) while net gearing was 32.7%
(35.3%).
According to forecasts, in the second half, the Group will have a positive
sterling-denominated net cash flow, which is hedged in line with the foreign
exchange hedging policy. The weakening of the pound sterling is expected to
have a negative impact on the Group, limited by the hedges.
Key Risks Faced by the Business Areas
Founded in 1954, Teleste is a technology and services company consisting of two
business areas – Video and Broadband Solutions and Network Services. With
Europe as the main market area, our clients include European cable operators
and specified organisations in the public sector.
As to Video and Broadband Solutions, client-specific and integrated deliveries
of solutions create favourable conditions for growth, even if the concerned
resource allocation and technical implementation pose a challenge involving,
therefore, also reasonable risks. In particular, deliveries of integrated
security and information solutions for the passenger transport may be large in
size, setting high demands for the project quotation calculation and management
and, consequently, there are risks involved. Our customers' network investments
vary based on the relevant need for upgrading and their financial structure.
A significant part of Teleste's competition comes from the USA so the exchange
rate of euro up against the US dollar affects our competitiveness. The exchange
rate development of the US dollar and the Chinese renminbi to the euro affects
our product costs. The company hedges against short-term currency exposure by
means of forward exchange contracts. The modest performance in terms of
economic growth and the financial challenges faced by the European public
sector may slow down the implementation of our customers' investment plans.
Furthermore, a weakening in the consumer purchasing power in Europe could slow
down the network investments by the cable operators. Competition increased by
the new service providers (OTT) may undermine the cable operators' ability to
invest. Consequences of natural phenomena or accidents such as fire, may reduce
the availability of components in the order-delivery chain of electronics
industry or suspend our own manufacturing operations. Correct technological
choices and their timing are vital to our success. A variety of technologies
are used in products and solutions, and the intellectual property rights
associated with the application of these technologies can be interpreted in
different ways by different parties. Such divergences can lead to costly
investigations or litigation. Regardless of careful planning and quality
assurance, complex products may fail in the customer's network and lead to
expensive repair obligations.
Net sales of Network Services comes, for the most part, from a small number of
large European customers, so a significant change in the demand for our
services by any one of them is reflected in the actual deliveries and
profitability. Improvements in customer satisfaction and productivity require
efficient control of service process management as well as innovative solutions
in processes, products, and logistics to ensure the quality of services and
cost effectiveness. Smooth operation of cable networks necessitates efficient
technical management of the networks and functional solutions for devices in
accordance with contractual obligations. This, in turn, demands continuous and
determined development of skills and competencies in Teleste's own personnel as
well as those of our subcontractors. In addition, adequacy and utilisation
rates of our own personnel and subcontractor network capacity affect the
Company's delivery capacity and profitability. Tender calculation and
management of larger projects with overall responsibility are complex and
risky. Severe weather conditions may affect the supply conditions of our
products and services.
Teleste’s strategy involves risks and uncertainties: new business opportunities
may fail to be identified or they cannot be acted upon successfully. The
business areas will have to keep an eye on market movements, such as
consolidations among the customers and competitors. Intensifying competition
may decrease the prices of products and solutions faster than we manage to
reduce the manufacturing and delivery costs of our products. Various
information systems are critical to the development, manufacturing and supply
of products to our customers. Maintenance of information systems and deployment
of new systems involve risks that may affect our ability to deliver products
and services. Information systems may also be subject to external threats, from
which we aim to protect ourselves. Acquisition of skilled personnel and
maintenance of their competence require encouragement, development, and
recruitment, which can fail.
The Board of Directors annually reviews any essential risks related to the
company operation and the management thereof. Risk management constitutes an
integral part of the strategic and operative practices of our business areas.
Risks are reported to the Board on a regular basis.
The company has covered any major risks of loss related to the business areas
through insurance policies. Insurance will also cover credit loss risks related
to sales receivables. In the period under review, no such legal proceedings or
judicial procedures were pending that would have had any essential significance
for the Group operation.
Group Structure
Parent company Teleste has branch offices in Australia, the Netherlands, and
Denmark with subsidiaries in 14 countries outside Finland.
Shares and Changes in Share Capital
On 30 June 2016, EM Group Oy was the largest single shareholder with a holding
of 23.2%.
In the period under review, the lowest company share price was EUR 7.29 (5.32)
while the highest was EUR 9.89 (7.79). Closing price on 30 June 2016 stood at
EUR 8.50 (7.30). According to Euroclear Finland Ltd, the number of shareholders
at the end of the period under review was 5,664 (5,028). Holdings of foreign
and nominee-registered owners accounted for 7.0% (4.8%) of the shares. From 1
January to 30 June 2016, trading with Teleste share at NASDAQ OMX Helsinki
amounted to EUR 14.7 (13.3) million. In the period under review, 1.7 (2.0)
million Teleste shares were traded on the stock exchange.
At the end of June 2016, the Group held 863,953 of its own shares, of which the
parent company Teleste Corporation had 321,953 shares and the Group companies
had 542,000 shares, respectively. At the end of the period, the Group's holding
of the total amount of shares amounted to 4.6% (4.6%).
On 30 June 2016, the registered share capital of Teleste stood at EUR
6,966,932.80 divided into 18,985,588 shares.
Valid authorisations at the end of the review period:
- Purchases of own shares: maximum 1,200,000 of the Company's own shares, valid
until 6 October 2017.
- Issue of new shares: maximum 4,000,000 shares, valid until 31 March 2017.
- Disposal of own shares in possession: maximum 1,800,000 shares, valid until
31 March 2017.
- Based on the special rights granted by the Company, the number of shares to
subscribe may not exceed 2,500,000 shares; these special rights are included in
the maximum warrants concerning new shares and the Group's own shares mentioned
above. This authorisation is valid until 31 March 2017.
Decisions by the Annual General Meeting
The Annual General Meeting (AGM) of Teleste Corporation on 7 April 2016
confirmed the financial statements for 2015 and discharged the Board of
Directors and the CEO from liability for the financial period. The AGM
confirmed the dividend of EUR 0.23 per share as proposed by the Board. The
dividend was paid to non-treasury shares on 18 April 2016.
The AGM decided that the Board of Directors consists of six members. Mr. Pertti
Ervi, Ms. Jannica Fagerholm, Mr. Esa Harju and Mr. Kai Telanne were re-elected
as members of Teleste Corporation's Board of Directors. New Members of the
Board were elected Messrs. Timo Luukkainen and Timo Miettinen. Mr. Timo
Miettinen was elected Chair of the Board in the organising meeting held
immediately after the AGM.
The Annual General Meeting decided that the number of auditors of Teleste
Corporation shall be one. KPMG Oy Ab, Authorised Public Accountants, was
elected as the auditor of the Company and KPMG Oy Ab has appointed Mr. Petri
Kettunen, APA, as the principally responsible auditor.
The Annual General Meeting decided to authorise the Board of Directors to
decide on repurchasing the Company's own shares. Based on this authorisation,
the Board of Directors may repurchase a maximum of 1,200,000 own shares of the
Company otherwise than in proportion to the holdings of the shareholders by
using the non-restricted equity through the regulated market on Nasdaq Helsinki
Ltd at the market price prevailing at the time of acquisition. The
authorisation to repurchase own shares is valid for 18 months from the
resolution of the Annual General Meeting.
Outlook for 2016
The business objective of Video and Broadband Solutions is to maintain its
strong market position in Europe and to strengthen this market position in
selected new markets outside Europe. Network capacity will continue to grow
driven by the new broadband and video services provided by the operators, even
if some cable operators have shifted their network investments scheduled for
2016 over to the next year. Our new products in line with the DOCSIS 3.1
communication standard allow the cable operators to increase their network
capacity competitively. Price erosion in the market continues. Changes in the
value of the euro, particularly against the US dollar and the Chinese renminbi,
affect Teleste’s competitiveness, on the one hand, and product manufacturing
costs, on the other. The positive trend in the markets for video security and
passenger information solutions will continue whereas the public sector
decisions concerning the initiation of projects may be delayed by the current
economic situation. The security solution for public areas introduced in Paris
provides new opportunities for other major cities of the world. Train
manufacturers and public transport operators benefit from Teleste's video
security and passenger information solutions.
As to Network Services, our business objective is to further develop the
operational efficiency and increase the share of those services that provide
our customers with higher value. In the UK, our aim is to improve the
profitability of the provided services. We estimate the demand for
all-inclusive network services in our key target markets to continue at least
at the previous year level.
We estimate that net sales and operating profit for 2016 will exceed the 2015
level.
10 August 2016
Teleste Corporation Jukka Rinnevaara
Board of Directors President and CEO
This half year financial report has been compiled in compliance with IAS 34, as
it is accepted within EU, using the recognition and valuation principles with
those used in the Annual Report. Teleste has prepared this report applying the
same accounting principles as those described in detail in its the consolidated
financial statements. The data stated in this report is unaudited. The changes
in IAS1, IFRS13 and IAS19 have been applied in this report and they do not have
any material impact on the financial reporting.
STATEMENT OF COMPREHENSIVE INCOME 4-6/ 4-6/ Change % 1-12/
(tEUR) 2016 2015 2015
Net Sales 67,488 59,730 13.0 % 247,758
Other operating income 405 1,269 -68.1 % 2,854
Materials and services -35,188 -30,904 13.9 % -128,300
Personnel expenses -19,087 -18,371 3.9 % -70,532
Other operating expenses -8,537 -8,021 6.4 % -32,604
Depreciation -1,210 -1,196 1.1 % -4,874
Operating profit 3,871 2,507 54.4 % 14,302
Financial income and expenses -208 -114 82.2 % -363
Profit after financial items 3,663 2,393 53.1 % 13,939
Profit before taxes 3,663 2,393 53.1 % 13,939
Taxes -790 -678 16.6 % -2,928
Net profit 2,873 1,715 67.5 % 11,011
Attributable to:
Equity holders of the parent 2,873 1,715 67.5 % 11,011
Earnings per share for result of the year attributable to the equity holders of
the parent
(expressed in € per share)
Basic 0.16 0.10 66.7 % 0.61
Diluted 0.16 0.10 66.7 % 0.61
Total comprehensive income for the period (tEUR)
Net profit 2,873 1,715 67.5 % 11,011
Possible items with future net profit effect
Translation differences -594 -69 761.5 % 240
Fair value reserve -54 8 n/a 31
Total comprehensive income for the 2,224 1,654 34.5 % 11,282
period
Attributable to:
Equity holders of the parent 2,224 1,654 34.5 % 11,282
STATEMENT OF COMPREHENSIVE INCOME 1-6/ 1-6/ Change % 1-12/
(tEUR) 2016 2015 2015
Net Sales 128,104 113,173 13.2 % 247,758
Other operating income 722 1,716 -57.9 % 2,854
Materials and services -66,825 -56,441 18.4 % -128,300
Personnel expenses -36,726 -35,347 3.9 % -70,532
Other operating expenses -16,394 -15,590 5.2 % -32,604
Depreciation -2,407 -2,405 0.1 % -4,874
Operating profit 6,473 5,105 26.8 % 14,302
Financial income and expenses -617 192 n/a -363
Profit after financial items 5,857 5,297 10.6 % 13,939
Profit before taxes 5,857 5,297 10.6 % 13,939
Taxes -1,320 -1,376 -4.0 % -2,928
Net profit 4,537 3,921 15.7 % 11,011
Attributable to:
Equity holders of the parent 4,537 3,921 15.7 % 11,011
Earnings per share for result of the year attributable to the equity holders of
the parent
(expressed in € per share)
Basic 0.25 0.22 14.6 % 0.61
Diluted 0.25 0.22 14.6 % 0.61
Total comprehensive income for the period (tEUR)
Net profit 4,537 3,921 15.7 % 11,011
Possible items with future net profit effect
Translation differences -598 329 n/a 240
Fair value reserve -203 12 n/a 31
Total comprehensive income for the 3,735 4,262 -12.4 % 11,282
period
Attributable to:
Equity holders of the parent 3,735 4,262 -12.4 % 11,282
STATEMENT OF FINANCIAL POSITION (tEUR) 30/06/ 30/06/ Change % 31/12/
2016 2015 2015
Non-current assets
Intangible assets 6,562 6,601 -0.6 % 6,653
Goodwill 37,448 38,572 -2.9 % 37,849
Tangible assets 11,385 10,332 10.2 % 11,648
Deferred tax asset 1,571 1,681 -6.5 % 1,843
Available-for-sale investments 694 694 0.0 % 704
57,659 57,879 -0.4 % 58,698
Current assets
Inventories 31,224 30,639 1.9 % 32,661
Trade and other receivables 62,042 58,552 6.0 % 60,422
Cash and cash equivalents 9,867 15,236 -35.2 % 12,677
103,132 104,427 -1.2 % 105,760
Total assets 160,791 162,306 -0.9 % 164,458
Shareholder's equity and liabilities
Share capital 6,967 6,967 0.0 % 6,967
Other equity 70,223 63,467 10.6 % 70,578
77,191 70,434 9.6 % 77,545
Non-current liabilities
Deferred tax liability 1,676 1,794 -6.6 % 1,662
Non-current liabilities, 32,625 39,399 -17.2 % 30,723
interest-bearing
Non-current interest-free liabilities 203 3,519 -94.2 % 2,730
Non-current provisions 1,034 1,294 -20.0 % 1,026
35,539 46,006 -22.8 % 36,141
Current liabilities
Current interest-bearing liabilities 2,558 750 241.1 % 2,315
Trade payables and other liabilities 43,962 43,452 1.2 % 46,505
Tax liability, income tax 998 993 0.5 % 1,062
Current provisions 544 671 -19.0 % 889
48,062 45,866 4.8 % 50,771
Total shareholder's equity and liabilities 160,791 162,306 -0.9 % 164,458
CONSOLIDATED CASH FLOW STATEMENT (tEUR) 1-6/ 1-6/ Change 1-12/
2016 2015 % 2015
Cash flows from operating activities
Profit for the period 4,537 3,921 15.7 % 11,011
Adjustments 4,344 3,589 21.0 % 7,056
Interest and other financial expenses and -617 192 n/a -363
incomes
Paid Taxes -1,385 -1,176 17.7 % -2,400
Change in working capital -4,858 -9,894 -50.9 % -10,384
Cash flow from operating activities 2,021 -3,369 n/a 4,920
Cash flow from investing activities
A conditional supplementary contract price -485 0 n/a -1,147
for prior subsidiary acquisitions
Purchases of property, plant and equipment -542 -689 -21.3 % -1,258
(PPE)
Proceeds from sales of PPE 7 0 n/a 17
Purchases of intangible assets -907 -569 59.4 % -1,644
Acquisition of subsidiary, net of cash 0 -6,826 n/a -6,826
acquired
Net cash used in investing activities -1,927 -8,084 -76.2 % -10,858
Cash flow from financing activities
Proceeds from borrowings 4,000 27,300 -85.3 % 44,300
Payments of borrowings -2,138 -13,536 -84.2 % -38,521
Dividends paid -4,168 -3,694 12.8 % -3,694
Purchases of own shares 0 -1,382 n/a -1,382
Net cash used in financing activities -2,306 8,688 n/a 703
Change in cash
Cash in the beginning 12,677 17,672 -28.3 % 17,672
Change in cash during period -2,212 -2,765 -20.0 % -5,235
Effect of currency changes -598 329 n/a 240
Cash at the end 9,867 15,236 -35.2 % 12,677
KEY FIGURES 1-6/ 1-6/ Change % 1-12/
2016 2015 2015
Earnings per share, EUR 0.25 0.22 14.6 % 0.61
Earnings per share fully diluted, EUR 0.25 0.22 14.6 % 0.61
Shareholders' equity per share, EUR 4.26 3.89 9.5 % 4.28
Return on equity 11.7 % 11.1 % 5.5 % 14.9 %
Return on capital employed 11.8 % 11.0 % 6.6 % 14.2 %
Equity ratio 48.8 % 44.3 % 10.1 % 48.3 %
Gearing 32.7 % 35.3 % -7.4 % 26.3 %
Investments, tEUR 2,304 13,468 -82.9 % 16,948
Investments % of net sales 1.8 % 11.9 % 6.8 %
Order backlog, tEUR 40,616 46,749 -13.1 % 42,150
Personnel, average 1,507 1,477 2.0 % 1,485
Number of shares (thousands) 18,986 18,986 0.0 % 18,986
including own shares
Highest share price, EUR 9.89 7.79 27.0 % 9.88
Lowest share price, EUR 7.29 5.32 37.0 % 5.32
Average share price, EUR 8.44 6.75 25.0 % 7.42
Turnover, in million shares 1.7 2.0 -11.9 % 3.3
Turnover, in MEUR 14.7 13.3 10.1 % 24.6
Treasury shares
Number % of % of
of shares shares votes
Possession of company's own shares 863,953 4.55% 4.55%
30.6.2016
Contingent liabilities and pledged assets (tEUR)
Leasing and rent liabilities 9,439 5,587 68.9 % 7,858
Derivative instruments (tEUR)
Value of underlying forward contracts 24,549 28,032 -12.4 % 24,599
Market value of forward contracts 631 -288 n/a -27
Interest rate swap 10,000 11,000 -9.1 % 10,000
Market value of interest swap -203 -19 968.4 % 0
Taxes are computed on the basis of the tax on the profit for the period.
OPERATING SEGMENTS (tEUR) 1-6/ 1-6/ Change % 1-12/
2016 2015 2015
Video and Broadband Solutions
Orders received 78,862 74,916 5.3 % 157,951
Net sales 80,462 67,052 20.0 % 154,396
EBIT 5,628 5,002 12.5 % 12,781
EBIT% 7.0 % 7.5 % 8.3 %
Network Services
Orders received 47,642 46,122 3.3 % 93,362
Net sales 47,642 46,122 3.3 % 93,362
EBIT 845 103 723.5 % 1,520
EBIT% 1.8 % 0.2 % 1.6 %
Total
Orders received 126,504 121,038 4.5 % 251,313
Net sales 128,104 113,173 13.2 % 247,758
EBIT 6,473 5,105 26.8 % 14,302
EBIT% 5.1 % 4.5 % 5.8 %
Financial items -617 192 n/a -363
Operating segments net profit before 5,857 5,297 10.6 % 13,939
taxes
Information per quarter 4-6/16 1-3/16 10-12/15 7-9/15 4-6/15 7/2015-
(tEUR) 6/2016
Video and Broadband Solutions
Orders received 42,470 36,392 43,419 39,616 40,926 161,897
Net sales 42,769 37,693 43,584 43,760 36,519 167,806
EBIT 3,180 2,449 2,666 5,113 2,999 13,407
EBIT % 7.4 % 6.5 % 6.1 % 11.7 % 8.2 % 8.0 %
Network Services
Orders received 24,719 22,923 24,809 22,432 23,211 94,883
Net sales 24,719 22,923 24,809 22,432 23,211 94,883
EBIT 691 154 607 811 -492 2,263
EBIT % 2.8 % 0.7 % 2.4 % 3.6 % -2.1 % 2.4 %
Total
Orders received 67,189 59,315 68,228 62,048 64,137 256,780
Net sales 67,488 60,616 68,393 66,192 59,730 262,689
EBIT 3,871 2,603 3,273 5,924 2,507 15,670
EBIT % 5.7 % 4.3 % 4.8 % 8.9 % 4.2 % 6.0 %
Attributable to equity holders of the parent (tEUR)
A Share capital
B Share premium
C Translation differences
D Retained earnings
E Invested free capital
F Other funds
G Total
H Share of non-controlling interest
I Total equity
(tEUR) A B C D E F G H I
Shareholder's 6,967 1,504 -99 66,034 3,140 0 77,545 0 77,545
equity 1.1.2016
Total -598 4,537 0 -203 3,735 0 3,735
comprehensive
income for the
period
Paid dividend -4,168 0 0 -4,168 0 -4,168
Equity-settled 77 0 0 77 0 77
share-based
payments
Shareholder's 6,967 1,504 -697 66,480 3,140 -203 77,191 0 77,191
equity 30.6.2016
Shareholder's 6,967 1,504 -339 58,139 3,954 -31 70,194 487 70,681
equity 1.1.2015
Total 329 3,921 12 4,262 0 4,262
comprehensive
income for the
period
Used options -814 -814 0 -814
Paid dividend -3,802 -3,802 108 -3,694
Interest, non 10 10 -10 0
controll party
Equity-settled 585 585 -585 0
share-based
payments
Shareholder's 6,967 1,504 -10 58,853 3,140 -19 70,434 0 70,434
equity 30.6.2015
CALCULATION OF KEY FIGURES
Return on Profit/loss for the financial period
equity: ------------------------------ * 100
Shareholders’ equity (average)
Return on Profit/loss for the period after financial items + financing
capital charges
employed: ------------------------------ * 100
Total assets - non-interest-bearing
liabilities (average)
Equity ratio: Shareholders' equity
----------------------------- * 100
Total assets - advances received
Gearing: Interest bearing liabilities - cash in hand and in bank -
interest bearing assets
----------------------------- * 100
Shareholders' equity
Earnings per Profit for the period attributable to equity holder of the
share: parent
----------------------------------------------
Weighted average number of ordinary shares outstanding during
the period
Earnings per Profit for the period attributable to equity holder of the
share, parent (diluted)
diluted: ----------------------------------------------- Average number
of shares - own shares + number of options at the period-end
Major shareholders at 30/6/2016 Number of shares % of share capital
EM Group Oy 4,409,712 23.23
Mandatum Life Insurance Company Limited 1,679,200 8.84
Ilmarinen Mutual Pension Insurance Company 1,084,475 5.71
Kaleva Mutual Insurance Company 824,641 4.34
Teleste Management II Oy 542,000 2.85
Varma Mutual Pension Insurance Company 521,150 2.74
The State Pension Fund 500,000 2.63
Teleste Oyj 321,953 1.70
Julius Tallberg Corp. 255,350 1.34
Nieminen Jorma Juhani 250,000 1.32
Shareholders by sector Number of % of Number of Number of
at 30/6/2016 shareholders Owners shares shares %
Households 5,315 93.84 4,850,548 25.5
Public sector 3 0.05 2,105,625 11.1
institutions
Financial and insurance 18 0.32 3,291,891 17.3
institutions
Corporations 253 4.47 7,258,403 38.2
Non-profit institutions 30 0.53 153,416 0.8
Foreign and nominee 45 0.79 1,325,705 7.0
registered owners
Total 5,664 100 18,985,588 100
Number of shares at Number of % of Number of
30/6/2016 shareholders shareholders shares
1 - 100 1,404 24.8 88,887
101 – 5,00 2,487 43.9 673,380
501 – 1,000 793 14.0 641,379
1,001 – 5,000 796 14.1 1,731,739
5,001 – 10,000 83 1.5 576,479
10,001 – 50,000 68 1.2 1,400,676
50,001 – 100,000 11 0.2 798,745
100,001 – 500,000 15 0.3 3,349,612
500,001 - 7 0.1 9,724,691
Total 5,664 100 18,985,588
of which nominee 8 0.1 1,139,198
registered
ADDITIONAL INFORMATION:
CEO Jukka Rinnevaara, phone +358 2 2605 611 or +358 400 747 488
DISTRIBUTION:
NASDAQ Helsinki
Main Media
www.teleste.com
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