2015-10-29 07:30:01 CET
2015-10-29 07:30:10 CET
BIRTINGARSKYLDAR UPPLÝSNINGAR
Teleste - Interim report (Q1 and Q3)
TELESTE CORPORATION INTERIM REPORT 1 JAN TO 30 SEP 2015: RECORD NET SALES AND OPERATING PROFIT IN THE THIRD QUARTER
Turku, Finland, 2015-10-29 07:30 CET (GLOBE NEWSWIRE) -- TELESTE CORPORATION
INTERIM REPORT 29.10.2015 AT 08:30
TELESTE CORPORATION INTERIM REPORT 1 JAN TO 30 SEP 2015
RECORD NET SALES AND OPERATING PROFIT IN THE THIRD QUARTER
July to September 2015
- Net sales amounted to EUR 66.2 (50.4) million, an increase of 31.4%
- Operating profit amounted to EUR 5.9 (4.9) million, an increase of 20.0%
- Undiluted result per share stood at EUR 0.23 (0.20) per share, an increase of
15.5%
- Orders received totalled EUR 62.0 (49.0) million, an increase of 26.6%
- Operating cash flow was EUR 4.8 (-0.0) million
January to September 2015
- Net sales amounted to EUR 179.4 (143.3) million, an increase of 25.2%
- Operating profit amounted to EUR 11.0 (7.6) million, an increase of 44.9%
- Undiluted earnings per share were EUR 0.45 (0.31), an increase of 47.1%
- Orders received totalled EUR 183.1 (146.3) million, an increase of 25.2%
- Cash flow from operations was EUR 1.5 (1.8) million, a decrease of 17.0%
Outlook for 2015
We estimate that net sales and operating profit for 2015 will exceed the 2014
level.
Comments on the third quarter of 2015 by CEO Jukka Rinnevaara:"In the third quarter we managed to achieve the highest net sales and operating
profit in Teleste's history. Along with the Mitron business these were
especially improved by increased volumes of product deliveries.
As to Video and Broadband Solutions, in particular, the demand for access
network products remained at a high level. The demand for products complying
with the new Docsis 3.1 standard continued strong. At the end of September we
won a multi-year frame agreement from the Norwegian Telenor Group. Net sales of
the business area rose by 51% over the comparative period, which stands for the
highest ever net sales in a single quarter. Net sales were boosted, in
particular, by access network products and the Mitron acquisition. Orders
received and sales increased most in the Netherlands, Belgium and Poland. The
operating profit was boosted by growth in the sales volume of access network
products, project deliveries to Poland and the Mitron acquisition.
As to Network Services, the year-on-year net sales and operating profit
improved. In Germany, we managed to improve profitability after the difficult
second quarter. We continued to develop our new services business in the UK,
where the net sales increased but the operating profit remained negative."
Teleste Group in July to September 2015
Key figures (M€)
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7-9/2015 7-9/2014 Change
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Orders received 62.0 49.0 26.6%
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Net sales 66.2 50.4 31.4%
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EBIT 5.9 4.9 20.0%
------------------------------------------------------------
Operating profit, % of net sales 8.9% 9.8%
------------------------------------------------------------
Profit for the period 4.2 3.6 17.6%
------------------------------------------------------------
------------------------------------------------------------
Earnings per share, € 0.23 0.20 15.5%
------------------------------------------------------------
Cash flow from operations 4.8 -0.0
------------------------------------------------------------
In the third quarter, orders received by the Group amounted to EUR 62.0 (49.0)
million, up 26.6% on last year's comparative period. Order backlog grew by
165.7% to EUR 42.6 (16.0) million.
Net sales grew by 31.4% amounting to EUR 66.2 (50.4) million. Most of this
increase in net sales stemmed from Video and Broadband Solutions both
organically and through acquisition. Compared to the same period in the
previous year, operating profit increased by 20.0% standing at EUR 5.9 (4.9)
million, which is 8.9% (9.8%) of the net sales. Operating profit increased for
both Video and Broadband Solutions and Network Services. Personnel expenses
amounted to EUR 17.1 (13.7) million. Personnel expenses increased as a result
of both organic growth but, in particular, an acquisition. Financial expenses
increased over the comparative period improved by foreign exchange gains.
Undiluted earnings per share stood at EUR 0.23 (EUR 0.20).
Operating cash flow stood at EUR 4.8 (-0.0) million. Despite the increase in
working capital this good quarterly result turned cash flow positive.
Teleste Group in January to September 2015
Key figures (M€)
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1-9/2015 1-9/2014 Change % 1- 12/2014
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Orders received 183.1 146.3 25.2% 199.3
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Net sales 179.4 143.3 25.2% 197.2
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EBIT 11.0 7.6 44.9% 11.1
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EBIT % 6.1% 5.3% 5.6%
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Profit for the period 8.1 5.4 50.6% 8.5
-------------------------------------------------------------------
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Earnings per share, € 0.45 0.31 47.1% 0.48
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Cash flow from operations 1.5 1.8 -17.0% 9.2
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Net gearing, % 29.0% 19.6% 9.5%
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Equity ratio, % 46.8% 52.6% 53.4%
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Personnel at period-end 1,496 1,318 13.5% 1,343
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Orders received by the Group improved by 25.2% standing at EUR 183.1 (146.3)
million. Net sales increased 25.2% equalling EUR 179.4 (143.3) million.
Operating profit grew by 44.9% standing at EUR 11.0 (7.6) million. Personnel
expenses amounted to EUR 52.4 (43.1) million. Financial expenses equalled EUR
0.2 (0.1) million. Taxes for the Group amounted to EUR 2.7 (2.1) million while
the Group's tax rate stood at 25.1% (28.0%). Undiluted result per share
increased by 47.1% to EUR 0.45 (0.31). Operating cash flow stood at EUR 1.5
(1.8) million.
Video and Broadband Solutions in July to September 2015
Key figures (1,000 €) 7-9/2015 7-9/2014 Change
-------------------------------------------------
Orders received 39,616 27,571 43.7%
-------------------------------------------------
Net sales 43,760 28,909 51.4%
-------------------------------------------------
EBIT 5,113 4,421 15.7%
-------------------------------------------------
EBIT % 11.7% 15.3%
-------------------------------------------------
Orders received totalled EUR 39.6 (27.6) million, an increase of 43.7% from the
comparative period. Order backlog increased by 165.7% to EUR 42.6 (16.0)
million. The order backlog was especially improved by higher orders in the
access network products and the order book received in the Mitron acquisition.
Net sales grew by 51.4% amounting to EUR 43.8 (28.9) million. Deliveries of
access network products, deliveries of solutions in Poland and the Mitron
business increased net sales significantly higher than that of the comparative
period. Operating profit increased by 15.7% to EUR 5.1 (4.4) million,
representing 11.7% (15.3%) of the net sales. The operating profit was increased
by growth in the sales volume of access network products, project deliveries to
Poland and Mitron.
R&D expenses for the business area amounted to EUR 2.0 (2.1) million making
4.6% (7.4%) of the net sales. Product development projects focused on network
products complying with the Docsis 3.1 standard, video security and information
solutions, as well as customer-specific projects. Capitalized R&D expenses
amounted to EUR 0.3 (0.1) million. Depreciation on capitalized R&D expenses
equalled EUR 0.2 (0.3) million.
Video and Broadband Solutions in January to September 2015
Key figures (1,000 €) 1-9/2015 1-9/2014 Change 1-12/2014
------------------------------------------------------------
Orders received 114,532 80,365 42.5% 109,007
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Net sales 110,812 77,401 43.2% 106,901
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EBIT 10,115 7,057 43.3% 9,673
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EBIT % 9.1% 9.1% 9.0%
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Orders received increased by 42.5% to EUR 114.5 (80.4) million. Net sales grew
by 43.2% amounting to EUR 110.8 (77.4) million. Operating profit increased
43.3% equalling EUR 10.1 (7.1) million. The operating profit percentage was
9.1% (9.1%).
Product development expenses equalled EUR 7.8 (7.7), i.e. 7.0% (10.0%) of the
net sales. Activated R&D expenses stood at EUR 0.9 (0.7) million while
depreciation on product development expenses equalled EUR 0.7 (0.9) million.
Product development projects focused on network products complying with the
Docsis 3.1 standard, a network management system, distributed access
architecture, video security and information solutions, as well as
customer-specific projects.
Network Services in July to September 2015
Key figures (1,000 €) 7-9/2015 7-9/2014 Change
-------------------------------------------------
Orders received 22,432 21,455 4.6%
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Net sales 22,432 21,455 4.6%
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EBIT 811 516 57.2%
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EBIT % 3.6% 2.4%
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Net sales for the third quarter stood at EUR 22.4 (21.5) million, which is 4.6%
higher than in the comparison period. Net sales grew in the UK and Switzerland.
Operating profit stood at EUR 0.8 (0.5) million, up 57.2% from the comparative
period. Operating profit was 3.6% (2.4%) of net sales. Operating profit
improved in Germany and Switzerland. In the UK, operating profit was a loss.
The investment designed to expand our business in the UK will be continued. We
expect operating profit to turn positive in the course of the next year.
Network Services in January to September 2015
Key figures (1,000 €) 1-9/2015 1-9/2014 Change 1-12/2014
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Orders received 68,554 65,908 4.0% 90,275
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Net sales 68,554 65,908 4.0% 90,275
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EBIT 914 554 65.0% 1,463
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EBIT % 1.3% 0.8% 1.6%
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Net sales grew by 4.0% amounting to EUR 68.6 (65.9) million. Net sales
increased in Switzerland and the UK. Operating profit equalled EUR 0.9 (0.6)
million. Operating profit increased in Switzerland. Investments in the
expansion of the UK services business burdened the operating profit.
Personnel and Organization in January to September 2015
In the period under review, the Group had an annual average of 1,485 people
(1,292/2014, 1,324/2013), of whom 694 (564) were employed by Video and
Broadband Solutions, and 791 (728) by Network Services. At the end of the
reporting period, the Group employed 1,496 (1,318/2014, 1,283/2013) people, of
whom Video and Broadband Solutions accounted for 704 (554) and Network Services
for 792 (763). At the end of the reporting period, 68% (72%/2014, 72%/2013)
worked abroad. 3% of the Group's employees were working outside Europe.
Personnel costs amounted to EUR 52.4 million (43.1/2014, 41.7/2013). This
increase in personnel expenses was due to the acquisition of Mitron, as well as
the increased number of employees working for Network Services.
The ability to deliver of our Finnish production was improved by using, inter
alia, rented workforce, particularly in the third quarter. At the end of the
period, the number of rented workforce in our Finnish production was 44 people.
Investments and Product Development in January to September 2015
Investments by the Group in the period under review totalled EUR 14.6 (2.9)
million accounting for 8.1% (2.0%) of the net sales. EUR 11.5 million of these
investments involved the acquisition of Mitron. Investments in product
development equalled EUR 0.8 (0.7) million. Investments of EUR 0.2 (0.3)
million were carried out under financial lease arrangements.
Product development projects focused on network products complying with the
Docsis 3.1 standard, a network management system, distributed access
architecture, video security and information solutions, as well as
customer-specific projects.
Financing and Capital Structure in January to September 2015
Operating cash flow stood at EUR 1.5 (1.8) million. This decline in the
operating cash flow over the comparative period was caused by increased working
capital.
In January, Teleste Corporation signed new overdraft and revolving credit
facilities with a total value of EUR 45.0 million. These new agreements
replaced the corresponding previous funding agreements. These credit limits are
valid until the end of March 2018. At the end of the reporting period, the
amount of unused binding stand-by credit facilities at the Group's disposal
equalled EUR 11.1 (16.0) million. On 30 September 2015, the Group's interest
bearing debt stood at EUR 36.7 (25.5) million.
The Group's equity ratio equalled 46.8% (52.6%) and net gearing was 29.0%
(19.6%).
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 organizations 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
safety and information systems for the rail transport segment 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.
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 situation in the European financial markets may slow
down 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. Availability of components is
subject to natural phenomena, such as floods and earthquakes. Correct
technological choices and their timing are vital for our success. 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 competences in Teleste's own personnel as
well as those of our subcontractors. In addition, Teleste's ability to deliver
and compete may be constrained by the adequacy of our own personnel and our
sub-contractor network capacity. 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 our products' manufacturing and delivery costs. 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. On 7 January 2015,
the parent company acquired the entire share capital of Mitron Group Oy Ltd. On
15 May 2015, the parent company bought the entire share capital of Teleste
Management II Oy to acquire its holding of Teleste Corporation's shares.
Shares and Changes in Share Capital
On 30 September 2015, 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 5.32 (4.25)
while the highest was EUR 8.14 (5.14). Closing price on 30 September 2015 stood
at EUR 7.60 (5.00). According to Euroclear Finland Ltd the number of
shareholders at the end of the period under review was 5,102 (4,931). Foreign
ownership accounted for 7.2% (4.9%). The value of shares traded on the NASDAQ
Helsinki on 1 January to 30 September 2015 was EUR 18.2 (7.6) million. In the
period under review, 2.6 (1.7) million Teleste shares were traded on the stock
exchange.
On 30 September 2015, 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% (6.3%).
In January, the Company transferred 56,924 shares as part of the purchase price
in the context of the acquisition of the entire share capital of Mitron Group
Oy Ltd by Teleste Corporation. In February, the Company transferred 73,644
shares in a directed free share issue constituting part of Teleste
Corporation's 2012 long-term incentive plan. In May, the Company transferred
195,133 shares when purchasing the entire share capital of Teleste Management
II Oy.
On 30 September 2015, the registered share capital of Teleste stood at EUR
6,966,932.80 divided in 18,985,588 shares.
Valid authorizations at the end of the review period:
- Purchases of own shares: maximum 1,200,000 of the Company's own shares, valid
until 8 October 2016.
- 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 authorization is valid until 31 March 2017.
Decisions by the Annual General Meeting
The Annual General Meeting (AGM) of Teleste Corporation on 09 April 2015
confirmed the financial statements for 2014 and discharged the Board of
Directors and the CEO from liability for the financial period. The AGM
confirmed the dividend of EUR 0.20 per share as proposed by the Board. The
dividend was paid out on 20 April 2015.
The AGM decided that the Board of Directors consists of six members. Mr. Pertti
Ervi, Ms. Jannica Fagerholm, Mr. Esa Harju, Ms. Marjo Miettinen, Mr. Kai
Telanne and Mr. Petteri Walldén were re-elected as members of Teleste
Corporation's Board of Directors. Ms. Marjo Miettinen was elected Chair of the
Board in the organizational meeting held immediately after the AGM.
Authorized Public Accountants KPMG Oy Ab continue as the auditor until the next
AGM. Mr. Esa Kailiala, accountant authorized by the Central Chamber of Commerce
of Finland, was chosen auditor-in-charge.
The Annual General Meeting decided to authorize the Board of Directors to
decide on repurchasing the Company's own shares as proposed by the Board. Based
on this authorization, 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
regulated market on NASDAQ OMX Helsinki Ltd at the market price prevailing at
the time of acquisition. This authorization of purchasing is valid for 18
months from the date of the decision.
Outlook for 2015
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 increase
driven by the new broadband and video services provided by the operators. 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 video security and passenger information markets will continue, but the
public sector decisions concerning initiation of projects may be delayed by the
current economic situation. In addition to organic growth, we estimate the
Mitron acquisition to increase our net sales by more than EUR 22 million and
its impact on our operating profit to be positive.
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 line with this objective, we will continue
to expand the new services business in the UK. 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 2015 will exceed the 2014
level.
28 October 2015
Teleste Corporation Jukka Rinnevaara
Board of DirectorsPresident and CEO
This interim 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. The data stated in this report is unaudited.
STATEMENT OF COMPREHENSIVE INCOME 7-9/ 7-9/ Change % 1-12/
(tEUR) 2015 2014 2014
Net Sales 66,192 50,365 31.4 % 197,176
Other operating income 137 281 -51.1 % 2,536
Materials and services -34,611 -24,368 42.0 % -97,561
Personnel expenses -17,102 -13,743 24.4 % -59,497
Other operating expenses -7,536 -6,508 15.8 % -27,309
Depreciation -1,157 -1,089 6.2 % -4,211
Operating profit 5,924 4,937 20.0 % 11,135
Financial income and expenses -390 90 n/a -301
Profit after financial items 5,534 5,027 10.1 % 10,835
Profit before taxes 5,534 5,027 10.1 % 10,835
Taxes -1,341 -1,462 -8.3 % -2,353
Net profit 4,193 3,565 17.6 % 8,482
Attributable to:
Equity holders of the parent 4,193 3,565 17.6 % 8,482
Earnings per share for result of the year attributable to the equity holders of
the parent
(expressed in € per share)
Basic 0.23 0.20 15.5 % 0.48
Diluted 0.23 0.20 15.5 % 0.48
Total comprehensive income for the period (tEUR)
Net profit 4,193 3,565 17.6 % 8,482
Possible items with future net profit effect
Translation differences -362 -126 187.3 % -465
Fair value reserve 8 -33 n/a -25
Total comprehensive income for the 3,839 3,406 12.7 % 7,992
period
Attributable to:
Equity holders of the parent 3,839 3,406 12.7 % 7,992
STATEMENT OF COMPREHENSIVE INCOME 1-9/ 1-9/ Change % 1-12/
(tEUR) 2015 2014 2014
Net Sales 179,365 143,310 25.2 % 197,176
Other operating income 1,853 784 136.4 % 2,536
Materials and services -91,052 -70,631 28.9 % -97,561
Personnel expenses -52,449 -43,091 21.7 % -59,497
Other operating expenses -23,126 -19,647 17.7 % -27,309
Depreciation -3,562 -3,114 14.4 % -4,211
Operating profit 11,029 7,611 44.9 % 11,135
Financial income and expenses -199 -128 55.7 % -301
Profit after financial items 10,830 7,483 44.7 % 10,835
Profit before taxes 10,830 7,483 44.7 % 10,835
Taxes -2,717 -2,094 29.7 % -2,353
Net profit 8,114 5,389 50.6 % 8,482
Attributable to:
Equity holders of the parent 8,114 5,389 50.6 % 8,482
Earnings per share for result of the year attributable to
the equity holders of the parent
(expressed in € per share)
Basic 0.45 0.31 47.1 % 0.48
Diluted 0.45 0.30 48.1 % 0.48
Total comprehensive income for the period (tEUR)
Net profit 8,114 5,389 50.6 % 8,482
Possible items with future net
profit effect
Translation differences -33 -175 -81.1 % -465
Fair value reserve 20 -32 n/a -25
Total comprehensive income for the 8,101 5,182 56.3 % 7,992
period
Attributable to:
Equity holders of the parent 8,101 5,182 56.3 % 7,992
STATEMENT OF FINANCIAL POSITION (tEUR) 30/09/ 30/09/ Change % 31/12/
2015 2014 2014
Non-current assets
Property,plant,equipment 10,554 9,906 6.5 % 9,627
Goodwill 38,211 33,444 14.3 % 33,121
Other intangible assets 6,317 3,843 64.4 % 3,891
Deferred tax assets 1,929 1,966 -1.9 % 1,698
Available-for-sale investments 694 694 0.0 % 701
57,705 49,853 15.8 % 49,037
Current assets
Inventories 31,710 21,629 46.6 % 20,483
Trade and other receivables 57,428 45,395 26.5 % 45,276
Cash and cash equivalents 15,179 12,000 26.5 % 17,672
104,317 79,024 32.0 % 83,430
Total assets 162,022 128,877 25.7 % 132,467
Shareholder's equity and liabilities
Share capital 6,967 6,967 0.0 % 6,967
Other equity 67,306 60,319 11.6 % 63,227
Non-controlling interest 0 483 n/a 487
74,274 67,769 9.6 % 70,682
Non-current liabilities
Provisions 1,341 598 124.4 % 1,238
Deferred tax liabilities 1,657 1,143 44.9 % 1,327
Non interest bearing liabilities 3,511 2,621 34.0 % 31
Interest bearing liabilities 35,997 655 n/a 595
42,506 5,017 747.3 % 3,192
Current liabilities
Trade payables and other liabilities 42,171 29,743 41.8 % 33,536
Current tax payable 1,502 648 131.8 % 793
Provisions 828 863 -4.0 % 480
Interest bearing liabilities 741 24,838 -97.0 % 23,784
45,242 56,091 -19.3 % 58,593
Total shareholder's equity and liabilities 162,022 128,877 25.7 % 132,467
CONSOLIDATED CASH FLOW STATEMENT (tEUR) 1-9/ 1-9/ Change % 1-12/
2015 2014 2014
Cash flows from operating activities
Profit for the period 8,114 5,389 50.6 % 8,482
Adjustments 6,477 5,336 21.4 % 4,211
Interest and other financial expenses -199 -128 55.7 % -301
and incomes
Paid Taxes -2,328 -2,652 -12.2 % -2,717
Change in working capital -10,598 -6,179 71.5 % -448
Cash flow from operating activities 1,466 1,766 -17.0 % 9,227
Cash flow from investing activities
A conditional supplementary contract -1,147 0 n/a 0
price for prior subsidiary acquisitions
Purchases of property, plant and -997 -1,439 -30.7 % -1,782
equipment (PPE)
Proceeds from sales of PPE 17 0 n/a 64
Purchases of intangible assets -873 -725 20.4 % -1,077
Acquisition of subsidiary, net of cash -6,826 0 n/a 0
acquired
Acquisition of assest available for sale 0 -407 n/a -407
Net cash used in investing activities -9,826 -2,571 282.2 % -3,202
Cash flow from financing activities
Proceeds from borrowings 40,300 1,000 3930.0 % 1,000
Payments of borrowings -29,324 -284 n/a -1,255
Dividends paid -3,694 -3,462 6.7 % -3,360
Purchases and proceeds of own shares -1,382 497 n/a 497
Net cash used in financing activities 5,900 -2,249 n/a -3,118
Change in cash
Cash in the beginning 17,672 15,229 16.0 % 15,229
Change in cash during period -2,460 -3,054 -19.4 % 2,907
Effect of currency changes -33 -175 -81.1% -465
Cash at the end 15,179 12,000 26.5 % 17,672
KEY FIGURES 1-9/ 1-9/ Change % 1-12/
2015 2014 2014
Earnings per share, EUR 0.45 0.31 47.1 % 0.48
Earnings per share fully diluted, EUR 0.45 0.30 48.1 % 0.48
Shareholders' equity per share, EUR 4.10 3.78 8.4 % 3.94
Return on equity 14.9 % 10.8 % 38.2 % 12.5 %
Return on capital employed 15.0 % 11.4 % 31.7 % 12.2 %
Equity ratio 46.8 % 52.6 % -11.0 % 53.4 %
Gearing 29.0 % 19.6 % 47.8 % 9.5 %
Investments, tEUR 14,582 2,875 407.2 % 3,676
Investments % of net sales 8.1 % 2.0 % 1.9 %
Order backlog, tEUR 42,605 16,033 165.7 % 15,206
Personnel, average 1,485 1,292 14.9 % 1,302
Number of shares (thousands) 18,986 18,910 0.4 % 18,918
including own shares
Highest share price, EUR 8.14 5.14 58.4 % 5.29
Lowest share price, EUR 5.32 4.25 25.2 % 4.25
Average share price, EUR 6.98 4.53 54.1 % 4.67
Turnover, in million shares 2.6 1.7 54.8 % 2.3
Turnover, in MEUR 18.2 7.6 138.6 % 10.9
Treasury shares
Number % of % of
of shares shares votes
Possession of company's own shares 863,953 4.55% 4.55%
30.9.2015
Contingent liabilities and pledged assets
(tEUR)
Leasing and rent liabilities 7,995 6,179 29.4 % 5,559
Derivative instruments (tEUR
Value of underlying forward contracts 30,815 5,217 490.7 % 13,141
Market value of forward contracts -102 34 n/a 65
Interest rate swap 11,000 11,000 0.0 % 11,000
Market value of interest swap -10 -38 -73.0 % -31
Taxes are computed on the basis of the tax on the profit for the period.
OPERATING SEGMENTS (tEUR) 1-9/ 1-9/ Change % 1-12/
2015 2014 2014
Video and Broadband Solutions
Orders received 114,532 80,365 42.5 % 109,007
Net sales 110,812 77,401 43.2 % 106,901
EBIT 10,115 7,057 43.3 % 9,673
EBIT% 9.1 % 9.1 % 9.0 %
Network Services
Orders received 68,554 65,908 4.0 % 90,275
Net sales 68,554 65,908 4.0 % 90,275
EBIT 914 554 65.0 % 1,463
EBIT% 1.3 % 0.8 % 1.6 %
Total
Orders received 183,086 146,273 25.2 % 199,282
Net sales 179,365 143,310 25.2 % 197,176
EBIT 11,029 7,611 44.9 % 11,135
EBIT% 6.1 % 5.3 % 5.6 %
Financial items -199 -128 n/a -301
Operating segments net profit before 10,830 7,483 44.7 % 10,835
taxes
Information per quarter 7-9/15 4-6/15 1-3/15 10-12/14 7-9/14 10/2014-
(tEUR) 9/2015
Video and Broadband Solutions
Orders received 39,616 40,926 33,990 28,642 27,571 143,174
Net sales 43,760 36,519 30,532 29,500 28,909 140,311
EBIT 5,113 2,999 2,003 2,616 4,421 12,731
EBIT % 11.7 % 8.2 % 6.6 % 8.9 % 15.3 % 9.1 %
Network Services
Orders received 22,432 23,211 22,911 24,367 21,455 92,921
Net sales 22,432 23,211 22,911 24,367 21,455 92,921
EBIT 811 -492 595 909 516 1,822
EBIT % 3.6 % -2.1 % 2.6 % 3.7 % 2.4 % 2.0 %
Total
Orders received 62,048 64,137 56,901 53,009 49,026 236,094
Net sales 66,192 59,730 53,443 53,867 50,365 233,232
EBIT 5,924 2,507 2,598 3,525 4,937 14,554
EBIT % 8.9 % 4.2 % 4.9 % 6.5 % 9.8 % 6.2 %
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
A B C D E F G H I
Shareholder's 6,967 1,504 -339 58,139 3,954 -31 70,194 487 70,682
equity 1.1.2015
Total -33 8,114 0 20 8,101 0 8,101
comprehensive
income for the
period
Purchase of own -814 -814 0 -814
shares
Paid dividend -3,802 0 0 -3,802 108 -3,694
Interest, non 10 0 0 10 -10 0
controll party
Equity-settled 585 0 0 585 -585 0
share-based
payments
Shareholder's 6,967 1,504 -372 63,046 3,140 -11 74,274 0 74,274
equity 30.9.2015
Shareholder's 6,967 1,504 126 53,079 3,457 -6 65,127 425 65,552
equity 1.1.2014
Total 0 0 -175 5,389 0 -32 5,182 0 5,182
comprehensive
income for the
period
Used options 0 0 0 0 497 0 497 0 497
Paid dividend 0 0 0 -3,564 0 0 -3,564 102 -3,462
Interest, non 0 0 0 44 0 0 44 -44 0
controll party
Shareholder's 6,967 1,504 -49 54,948 3,954 -38 67,286 483 67,769
equity 30.9.2014
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 30.9.2015 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 963,860 5.08
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
FIM Fenno Equity fund 324,279 1.71
Teleste Oyj 321,953 1.70
Danske Invest Finnish Small Cap Fund 290,000 1.53
Shareholders by sector Number of % of Number of Number of
30.9.2015 shareholders Owners shares shares %
Households 4,775 93.59 4,701,287 24.8
Public sector 3 0.06 1,985,010 10.5
institutions
Financial and insurance 17 0.33 3,470,977 18.3
institutions
Corporations 244 4.78 7,054,719 37.2
Non-profit institutions 29 0.57 408,522 2.2
Foreign and nominee 34 0.67 1,365,073 7.2
registered owners
Total 5,102 100.00 18,985,588 100.0
Number of shares Number of % of Number of
30.9.2015 shareholders shareholders shares
1 - 100 1,192 23.4 78,157
101 - 500 2,227 43.6 602,709
501 - 1,000 758 14.9 619,499
1001 - 5,000 742 14.5 1,636,864
5001 - 10,000 87 1.7 628,219
10,001 - 50,000 65 1.3 1,404,509
50,001 - 100,000 8 0.2 615,246
100,001 - 500,000 16 0.3 3,853,061
500,001 - 7 0.1 9,547,324
Total 5,102 100.0 18,985,588
of which nominee 1,147,302
registered
The following assets are liabilities were preliminary recognised in the
acquisition of Mitron:
1 000 € Recognised fair values on
acquisition
Fair values used in consolidation
Trade marks (inc. in intangible assets) 746
Customer relationship (inc. in intangible 585
assets)
Technology (inc. in intangible assets) 1,362
Inventories 4,983
Trade receivables 8,514
Book values used in consolidation
Tangible assets 944
Intangible assets 537
Shares and immaterial rights 29
Accrued income 1,315
Other receivables 425
Cash and cash equivalents 874
Total assets 20,314
Book values used in consolidation
Interest-bearing liabilities 1,174
Trade payables 5,672
Deferred tax liabilities 539
Advances received 2,984
Other liabilities 3,300
Total liabilities 13,669
Net identifiable assets and liabilities 6,645
Total consideration 11,500
Goodwill on acquisition 4,855
Consideration paid in cash -7,700
Cash and cash equivalents in acquired 874
subsidiary
Total net cash outflow on the acquisition -6,826
ADDITIONAL INFORMATION:
CEO Jukka Rinnevaara, phone +358 2 2605 866 or +358 400 747 488
DISTRIBUTION:
Nasdaq Helsinki
Main Media
www.teleste.com
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