2007-04-25 08:00:00 CEST
2007-04-25 08:00:00 CEST
REGULATED INFORMATION
Solteq Oyj - Quarterly report
SOLTEQ PLC'S INTERIM REPORT 1.1.-31.3.2007
SOLTEQ PLC'S INTERIM REPORT 1.1.-31.3.2007
- Turnover increased by 10,4% and totalled 6,4 million
euros (5,8 million euros)
- Operating result was 0,1 million euros (0,2 million
euros)
- Instead of the earlier estimate that the company's
turnover isgoing to increase over 15 % on a yearly
basis the company now estimates turnover to increase
over 20 % on a yearly basis and the operating result
to improve substantially.
KEY FIGURES
Turnover by operation:
% 1-03/07 1-03/06 1-12/06
Services 61 62 60
Licences 28 26 26
Hardware 11 12 14
Turnover by segment:
Me 1-03/07 1-03/06 Change
Trade 4,1 4,1 +0,0
Industry and services 2,3 1,7 +0,6
Total 6,4 5,8 +0,6
Operating result by segment:
Me 1-03/07 1-03/06 Change
Trade 0,1 0,1 +0,0
Industry and services 0,0 0,1 -0,1
Total 0,1 0,2 -0,1
Managing Director Hannu Ahola:
”The year 2007 has been started as planned. During the first
quarter the new sales of the ERP and added value products
has been exceptionally active in comparison with the
previous years. The financial impacts in connection with the
sales concluded during the first quarter will be shown
mainly in the next quarter's figures. The sales of IT
services to the existing customers have also continued
strong.
Along with the previously announced acquisition of Fulmentum
Oy the solution offering has expanded and the company has
now even better possibilities to fulfil its growth and
profitableness objectives”.
BUSINESS ENVIRONMENT AND BUSINESS DEVELOPMENT
Solteq is focused on to serve the trade and industrial
companies. It is essential in Solteq's strategy that the
company can offer the best solution to the customer's
prevailing need and to support the customer's whole value
chain whether it is vehicle retailing, chain stores,
wholesale trade, individual speciality stores or industry in
question. This is fulfilled by combining the company's own
and its partner's product and service providing in a best
possible way for the solution that the customer gets. To
develop the comprehensive solution Solteq invests both own
product development and widening its partner range.
TRADE
Business environment
There has been high demand for store systems during the
review period. The requirements for rationalizing activities
are speeding up the demand for store systems. The customers
are looking for solutions that among other things quicken
pricing of products, improve reporting and inventory
management.
The customers in the retail business require reliability,
effectiveness and fast access to the information from the
store systems. The store system has to manage safely the
verification of bank and credit card transactions and yield
information into the regular-customer systems.
In the chain stores there is a special challenge to combine
the store systems into background systems. With those
background systems the store systems can be linked up with
logistics centers, make more effective purchasing management
and ensure the flexibility of business. Speciality store
chains are seeking the real time management of inventories
and optimization of purchases among others with the help of
automatic purchase proposals.
Accomplishment of those objectives requires smoothly
workable message communications in the ERP systems of the
chain. In the integration of trade business value chain
Solteq has especially invested in the message
communications. The harmonization projects in which the
databases of various trade chains are cleaned up and
standardized are anticipated to increase substantially in
the future.
The operational environment of the car sales unit remained
stabile during the review period. The markets of delivering
ERP-systems in the car sales are fairly saturated and there
is not large growth in sales to be expected. Some large
actors in the branch that acquire new systems as part of
their development projects make an exception. On the other
hand the demand of value added products in the car trade is
constant.
In the companies acting in the trade the growing demand of
integration projects in which the store systems are
integrated to background systems are expected to continue.
Business development
Deliveries made by the trade unit concentrated mainly on
sales of advisory services and demand was even greater than
expected. Also new store systems were delivered and existing
systems were both expanded and their operations developed
further.
Development of chained and wholesale trade is focused on
expanding the functionality of present systems and joining
new units to the present operations. There is increasing
determination need for picking based on voice recognition,
procurement optimising and harmonisation of product
information.
Solution for specialised stores will be exported to
international markets together with Wincor Nixdorf Oy. In
addition to the store system developed together by the two
companies, the complete solution includes both an
integration product developed by Solteq. Solteq's
integration solution automatizes and governs message
transmission between different ERP systems such as SAP and
Solteq TP.net. This comprehensive solution is complemented
by extensive project, maintenance and customer support
services offered by Wincor Nixdorf's international
organisation.
The offering and knowledge in trade has been expanded with
own and Sap's products as well as Microsoft's Dynamics
corporate software.
The sales and result of the car trade unit were as planned
in the first quarter. The demand was emphasized in the sales
of such services in which the customer's pre-existing
systems were developed. The service sales to the customers
of car trade unit remained stabile.
In January Solteq made a contract to integrate the IT-
systems of Automaa that is a vehicle retailing chain and
belongs to Maan Auto concern in the S-Group. During the
present year Solteq is going to deliver car trade
specialised ERP-system to seven Peugeot -agencies of
Automaa. In addition to the ERP-system the solution complex
that Solteq will deliver to Automaa includes eCar -tool for
car dealer and HuVan that is system of appointment for
service.
Solteq will deliver to Renault interfaces to Solteq CD ERP-
system. By the means of this system the retail dealers of
Renault make orders for cars and spare parts. The
segregation of Volvo's and Renault's importers in the
beginning of the year 2008 is in the background of this
venture. Solteq CD -system provides direct connections for
the retail dealers to the Renault factories in France.
INDUSTRY AND SERVICES
Business environment
The structural change in the industrial markets in Finland
remained strong. The companies acquired knowledge, founded
divisions abroad and re-arranged domestic structures. This
development is reflected in the demand of the data systems.
The demand of data systems has indicated to liven up in the
end of 2006 and remained strong also in the last quarter.
According to the market researcher Market-Visio the
development of operative applications is one of the growing
focus areas during year 2007.
The data systems have essential role in different kinds of
arrangements made by companies and standardization of ways
of operation in different company locations all around the
world. Companies are even more than before seeking for
efficiency from data systems.
Business development
The reorganization of Artekus Oy that was formerly a
subsidiary of Solteq Plc and Fulmentum Oy to form
Maintenance and harmonization unit was most significant own
development project in the industry and services area during
the review period. This aforementioned change is a part of
Solteq's strategy to seek for widening the service range.
During the first quarter the industry and services reached
its setting of financial objectives mainly because of
increasing demand of services and maintenance- and
harmonization projects. The demands for large IT-system
projects remained low, even if there have been signs of
emergent growth.
Especially the continuance of implementation of IDO's
Sanitec -unit's SAP ERP-system has been financially
significant in the large IT-system projects. There has been
many project start-ups in connection with the
rationalization of controlling the delivery processes. The
rationalization and acceleration of the delivery process of
Honkarakenne included for example building up an electronic
invoice system.
The knowledge of Maintenance and harmonization unit is still
strengthening when the board of directors of Solteq Plc made
a decision to buy Fulmentum Oy. Fulmentum was founded year
2000 and it is consulting and service organization that is
specialized in the harmonization of master data (product,
customer and supplier data). The harmonization of data means
harmonizing, standardizing and completing the company's data
to accurate and real time. In connection with the harmonized
data the overlaps are deleted from ERP-systems and for
example one physical item in the system is corresponding to
only one product code. This makes among others company's
purchase, sales, materials management and inventory
management more effective and reduces costs.
Along with the acquisition of Fulmentum Solteq can even
better than before offer to customers solutions and services
that cover the whole value chain of customer. The
harmonization of master data brings significant competitive
advantage to companies and it is estimated to be risen one
of the most important way of action to make the information
flows in business processes more effective.
In the data collection solutions contracts were made with
UPM and Metso to deliver data collection systems for
investment projects. The financial effects of these ventures
are shown during the year-end 2007. The demand is increased
by the requirements for industrial manufacturing companies,
for example paper industry, to include the information of
projects for the maintenance systems already during planning
and building projects.
The Maintenance and harmonization unit's efforts in
exportation to Russia have proceeded as planned.
The first phase of the delivery of an ERP system for
maintenance and materials management that was started in the
end of year 2006 to water purification plant belonging to
waterworks of the city of St Petersburg has been delivered
according to plan. At the present moment negotiations
regarding to other projects are underway.
TURNOVER AND RESULT
Turnover increased 10,4% compared to the previous year and
totalled 6.378 thousand euros (5.778 thousand euros). The
growth resulted from the acquisitions during the previous
financial year.
Turnover consists of several individual customerships. At
the most, one client corresponds to a less than five
percentages from the turnover.
The operating profit for the review period totalled 127
thousand euros (233 thousand euros), result before taxes was
102 thousand euros (359 thousand euros) and the profit for
the review period 154 thousand euros (266 thousand euros).
BALANCE SHEET AND FINANCING
The total assets amounted to 18.320 thousand euros (18.451
thousand euros). Liquid assets totalled 114 thousand euros
(1.638 thousand euros). The decrease of liquid assets is
mainly consequence of the acquisitions that have been made.
The amount of interest bearing liabilities totalled 3.465
thousand euros (500 thousand euros).
The company's equity ratio was 53,9 % (51,7%).
INVESTMENTS, RESEARCH AND DEVELOPMENT
Gross investments during the review period were 0.033
thousand euros (4.243 thousand euros). For the most part
these consisted of the investments in equipment during the
review period.
Solteq announced on 13.3.2007 that it is acquiring Fulmentum
Oy specialising in global master data (product, customer and
supplier data) harmonising and maintenance projects.
Fulmentum was transferred to Solteq's ownership and become a
part of the Group from 16.4.2007 onwards. Solteq pays the
sales price in cash. The price consists of a basic price of
1.500 thousand euros and an additional price of 1.400
thousand euros at the maximum.
Research and development
Solteq's research and development costs consist mainly of
personnel costs. When developing basic products, it is
Solteq's strategy to co-operate with global actors such as
SAP and Wincor-Nixdorf and utilize their resources and
distribution channels. Own development efforts are focused
on added value products and developing tailored service
concepts.
Development costs under IFRS have not been capitalized
during the review period. Two development projects have been
completed during the previous financial year and the
depreciation according to plan have been started for the
capitalized amount. Two other development projects are still
unfinished and the depreciation according to plan will be
started along with the commercial implementation of the
projects.
PERSONNEL
The number of permanent employees at the end of the review
period was 239 (242). Average number of personnel during the
review period was 243 (223). At the end of the review period
the number of personnel divided as follows: trade 121,
industry and services 77 and shared functions 41.
SHARES AND SHAREHOLDERS
Solteq Plc's equity on 31.3.2007 was 993.654,69 euros which
was represented by 12 038 229 shares. The shares have no
nominal value.
Exchange and rate
During the review period, the exchange of Solteq's shares in
the Helsinki Stock Exchange was 0,8 million shares (1,8
million shares) and 1,1 million euros (3,6 million euros).
Highest rate during the review period was 1,63 euros and
lowest rate 1,28 euros. Weighted average rate of the share
was 1,45 euros and end rate 1,48 euros. The market value of
the company's shares at the end of the review period
totalled 17,5 million euros (21,5 million euros).
Ownership
In March 2007, Solteq had a total of 2.423 shareholders
(2.750 shareholders). Solteq's 10 largest shareholders owned
7.162 thousand shares i.e. they owned 59,5 per cent of the
company's shares and votes.
Solteq Plc's members of the board owned a total of 4.862
thousand shares which equals 40,4 per cent of the company's
shares and votes.
ANNUAL GENERAL MEETING
Solteq Plc's annual general meeting on 23.3.2007 adopted the
financial statements for 2006 and the members of the board
and the managing director were discharged from liability for
the financial year 2006.
The annual general meeting decided in accordance with the
board's proposal to authorize the board of directors to
decide on dividend distribution or other distribution of
funds from the distributable equity fund. The board of
directors is authorized to decide on dividend distribution
or other distribution of funds from the distributable equity
fund or both, totalling altogether a maximum of 0,10 euros
per share. The authorization is valid until the beginning of
the next annual general meeting.
The annual general meeting decided that the equity account
formed in the extraordinary general meeting on 9.9.2005 and
governed by the general meeting of shareholders, an amount
of 5.962.338,50 euros is transferred to the distributable
equity fund. The distributable equity fund is a fund based
on the new Finnish Companies Act and may be used among other
things to dividend distribution or other distribution of
funds.
The annual general meeting decided that the company's share
capital is increased from 993.654,69 euros to one million
(1.000.000) euros by transferring the respective amount from
the distributable equity fund.
The annual general meeting decided to authorize the board of
directors to decide on acquiring the company's own shares so
that the amount in the possession of the company does not
exceed 10 percent of the company's total shares at that
moment. The shares can be acquired in order to develop the
company's capital structure, finance and execute
acquisitions or similar arrangements or used as part of the
incentive scheme of the personnel or convey otherwise or be
invalidated. The shares can be acquired in other proportion
than the shareholders' holdings. The shares are to be
acquired through public trading and at market price. The
acquiring is to be done with the unrestricted shareholders'
equity. The authorization is valid until the beginning of
the next annual general meeting.
The annual general meeting decided to authorize the board of
directors to give or convey company's own shares, maximum
amount being 3.000.000 shares. The shares can be given or
conveyed in order to finance and fulfill terms of an
acquisition or similar or develop company's capital
structure or be used as part of the incentive scheme of the
personnel or otherwise develop the company's business
operations. The authorization includes a right to deviate
from the shareholders' pre-emptive right of subscription if
there is a weighty financial reason for the company. The
authorization includes that the board of directors may
decide the terms and other matters concerning the share
issue according to the instructions of the Finnish Companies
Act. The authorization is valid for five years starting from
the decision.
The annual general meeting decided that the funds in the
share premium account at the time of the annual general
meeting totalling 2.164.197,45 euros are transferred to the
distributable equity fund.
BOARD OF DIRECTORS AND AUDITORS
Five members were elected to the board of directors. Seppo
Aalto, Ari Heiniö, Veli-Pekka Jokiniva, Ali Saadetdin and
Jukka Sonninen will continue as members of the board. The
board elected Ali Saadetdin to act as the chairman of the
board.
KPMG Oy Ab, Authorised Public Accountants, were re-elected
as Solteq's auditors. Frans Kärki, APA, acts as the lead
partner.
EVENTS AFTER THE BALANCE SHEET DATE
After the review period Solteq and Ruukki (Rautaruukki Oyj)
have undersigned a contract that comprises one of the most
extensive deliveries of maintenance information systems in
Finland. During the first phase of the contract Solteq
delivers systems to manufacturing plants in Raahe. Within
the limits of this group contract the maintenance
information systems can be replaced in all of the Ruukki's
manufacturing plants both Finland and abroad during the next
years. The system is going to have more than 2000 end users.
PROSPECTS
In the Solteq Plc's financial statements bulletin the
company has estimated that the turnover is going to increase
over 15 % on a yearly basis and the operating result to
improve substantially.
The present contract basis, sales prospects and the business
acquisitions that are made give company a reason to change
the growth estimate so that the turnover is going to
increase over 20 % on a yearly basis. The operating result
is estimated still to improve substantially.
According to the present outlook, the company's growth in
the coming few years will be at the same level as the growth
anticipated for 2007. The Board of Directors will define the
strategic objectives for 2008 - 2010 in the interim report
for the second quarter.
The Board of Directors has decided to discuss the use and
timing of the authorisation granted by the annual general
meeting regarding dividend distribution or other equity
return not exceeding 0,10 euros in its meeting 7.8.2007. The
related decisions will be informed in connection with the
interim report for the second quarter.
GROUP PROFIT AND LOSS 1.1.- 1.1.- 1.1.-
ACCOUNT (TEUR) 31.3.07 31.3.06 31.12.06
NET TURNOVER 6 378 5 778 23 166
Other operating income 35 6 42
Raw materials and -1 344 -1 186 -5 378
services
Staff expenses -3 449 -3 111 -12 831
Depreciation -181 -151 -698
Other operating expenses -1 312 -1 103 -4 799
OPERATING RESULT 127 233 -498
Financial income and -25 126 19
expenses
PROFIT BEFORE
APPROPRIATION
AND TAXES 102 359 -479
Income taxes 52 -93 602
PROFIT/LOSS FOR THE 154 266 123
PERIOD
Earnings / share, e 0,01 0,02 0,01
(undiluted)
Earnings / share, e 0,01 0,02 0,01
(diluted)
GROUP BALANCE SHEET 31.3.07 31.3.06 31.12.06
(TEUR)
ASSETS
NON-CURRENT ASSETS
Intangible assets
Intangible rights 2 103 1 446 2 140
Goodwill 6 664 5 841 6 600
Tangible assets 2 988 3 153 3 019
Investments
Other shares and sim. 81 89 81
rights of ownership
Other long-term debtors 0 140 0
Deferred tax assets 782 90 663
Total non-current assets 12 618 10 579 12 503
CURRENT ASSETS
Short-term debtors 5 588 5 830 5 619
Investments 0 224 1 579
Cash in hand and at 114 1 638 646
banks
Total current assets 5 702 7 692 7 844
TOTAL ASSETS 18 320 18 451 20 347
EQUITY AND LIABILITIES
CAPITAL AND RESERVES ATTRIBUTABLE TO THE
SHAREHOLDERS
OF THE PARENT COMPANY
Share capital 994 992 994
Share issue 8 0 0
Share premium account 2 164 2 151 2 164
Equity account 0 5 962 5 962
Unrestricted equity 6 254 0 298
fund
Retained earnings 298 168 173
(loss)
Profit for the 154 266 123
financial year
Total equity 9 872 9 539 9 714
LIABILITIES
Non-current liabilities 163 163 163
Current liabilities 8 285 8 749 10 470
Total liabilities 8 448 8 912 10 633
TOTAL EQUITY AND 18 320 18 451 20 347
LIABILITIES
FINANCIAL PERFORMANCE 1-03/07 1-03/06 1-12/06
INDICATORS
Net turnover MEUR 6,38 5,78 23,2
Change in net turnover 10,38 % 15,14 % 7,4 %
Operating result MEUR 0,13 0,23 -0,5
% of turnover 2,00 % 4,04 % -2,2 %
Result before taxes MEUR 0,10 0,36 -0,5
% of turnover 1,60 % 6,22 % -2,1 %
Equity ratio, % 53,89 51,70 47,7
Gearing, % 38,90 % -6,80 % 15,8 %
Gross investments in non- 0,03 4,24 7,7
current assets MEUR
Return on equity, % 6,43 % 11,25 % 1,2 %
Return on investment, % 4,64 % 14,32 % -2,4 %
Personnel at end of 239 242 234
period
Personnel average for 243 223 240
period
KEY INDICATORS PER SHARE
Earnings / share, e 0,01 0,02 0,01
Earnings / share, e 0,01 0,02 0,01
(diluted)
Equity / share, e 0,82 0,81 0,81
QUARTERLY KEY INDICATORS
(MEUR)
2Q/05 3Q/05 4Q/05 1Q/06 2Q/06 3Q/06 4Q/06 1Q/07
Net turnover 5,91 4,58 6,06 5,78 6,16 4,65 6,58 6,38
Operating 0,33 0,35 0,46 0,22 -0,04 -0,70 0,02 0,13
result
Result before 0,32 0,46 0,46 0,35 -0,07 -0,73 -0,03 0,10
taxes
CASH FLOW STATEMENT (MEUR) 1-03/07 1-03/06 1-12/06
Cash flow from business 0,12 0,93 0,25
operations
Cash flow from capital -2,12 -0,02 1,86
expenditure
Cash flow from financing
activities
Income from issued shares 0,00 0,00 0,02
Return of equity (paid) 0,00 0,00 -3,53
Loan agreement 0,00 0,50 3,27
Cash flow from financing 0,00 0,50 -0,24
activities
Change in cash and cash -2,00 1,41 1,87
equivalents
LIABILITIES (MEUR) 31.3.07 31.3.06 31.12.06
Perfomance bonds 0,05 0,05 0,05
Lease contracts, machinery & 0,74 1,01 0,71
equipment
Lease liability, premises 3,31 3,54 3,42
The company has given collateral of EUR 1.178 thousand on
company quarantees
against credit limits of EUR 3.505 thousand. Credit limits of
EUR 2.465 thousand are in use at the end of the review period.
The Group has no liabilities from derivative instruments.
STATEMENT OF CHANGES IN GROUP EQUITY (TEUR)
Share Shar Share Equity Unrest Ret. Total
Capital issue Prem. Account Equity Earn
account fund
EQUITY 908 0 234 9 500 0 167 10 809
1.1.2006
Granted option 1 1
rights
Result for the 266 266
period
Total gains 266 266
and losses
Directed issue 83 83
Emission gain 1 917 1 917
Return of -3 538 -3 538
equity
EQUITY 992 0 2 151 5 962 0 434 9 539
31.3.2006
EQUITY 994 0 2 164 5 962 298 296 9 714
1.1.2007
Granted option 2 2
rights
Result for the 154 154
period
Total gains 154 154
and losses
Subscription 2 2
issue
Transfer 6 -5 962 5 956 0
between equity
accounts
EQUITY 994 8 2 164 0 6 254 452 9 872
31.3.2007
Taxes corresponding to the result have been presented as taxes
for review period.
The Financial Statements is unaudited.
Financial reporting in 2007
Solteq Plc will publish the next interim reports for 2007 as
follows:
January - June 8.8.2007
January - September 24.10.2007
More information for investors at Solteq's website at
www.solteq.com.
Additional information:
Managing Director Hannu Ahola
Telephone +358 20 1444 211 or +358 40 8444 211
E-mail hannu.ahola@solteq.com
CFO Antti Kärkkäinen
Telephone +358 20 1444 393 or +358 40 8444 393
E-mail antti.karkkainen@solteq.com
Distribution:
Helsinki Stock Exchange
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