Panostaja Oyj Stock Exchange Bulletin, 14th December 2007 PANOSTAJA GROUP FINANCIAL STATEMENTS REPORT, 1st NOVEMBER 2006-31st OCTOBER 2007 Panostaja Group's net turnover increased by 57.2%, standing at EUR 90.8 million (EUR 57.8 million). The Group's operating profit increased by 51.6% to EUR 8.3 million (EUR 5.5 million), while profit before taxes stood at EUR 7.5 million (EUR 4.9 million). Profit for the financial year was EUR 5.9 million (EUR 8.6 million), with EUR 5.6 million and EUR 0.3 million attributable to continuing and discontinued operations respectively. Profit attributable to parent company shareholders accounted for EUR 4.3 million (EUR 7.5 million). Diluted and basic earnings per share for continuing operations amounted to EUR 0.10 (EUR 0.09) and EUR 0.11 (EUR 0.09) respectively. The equity ratio stood at 34.9% (43.4%). The company's Board of Directors proposes a dividend of EUR 0.09 per share. GROUP FINANCIAL PERFORMANCE Panostaja Group's net turnover was EUR 90.8 million (EUR 57.8 million). Growth was the result of an increase in net turnover in almost all business segments and of completed acquisitions. The Group's operating profit increased by 51.6% from the previous year's EUR 5.5 million to EUR 8.3 million, while profit before taxes grew by 51.6% from EUR 4.9 million to EUR 7.5 million. Profit for the financial year was EUR 5.9 million (EUR 8.6 million), with EUR 5.6 million and EUR 0.3 million attributable to continuing and discontinued operations respectively. Profit from discontinued operations consisted of an additional purchase price for the disposal of Pajakulma Oy. The Group's average number of employees during the financial year was 571 (526). The payroll at year-end included 719 employees. INVESTMENTS AND FINANCING The Group's investments for the financial year amounted to EUR 21.9 million (EUR 4.8 million), with additions to property, plant and equipment accounting for EUR 10.6 million (EUR 1.7 million). The most important investments during the period were the acquisitions of the KL-Varaosat companies, Lahden Lämpökäsittely Oy, Heatmasters Oy, Tampereen Laatukoneistus Oy and the majority of shares in Suomen Helasto Oyj. In December 2006, the company distributed EUR 3.87 million in dividends to parent company shareholders for the 2005/2006 period (dividends paid to minority shareholders in subsidiaries during the period amounted to EUR 0.5 million). The amount of the Group's interest-bearing liabilities at year-end was EUR 32.6 million (EUR 9.4 million), excluding the convertible subordinated loan. Cash flow from operating activities remained at a good level throughout the period. The Group's equity ratio stood at 34.9% (43.4%), while its gearing ratio was 23.7% (3.05%). Return on equity was 18.6% (22.7%). Return on investment stood at 14.8% (16.1%). CHANGES TO THE GROUP STRUCTURE On 20th December 2006, the parent company of Annektor Group was demerged into Annektor Oy and Solikko Finance Oy. This had no impact on the Group's financial results and balance sheet. In April, Panostaja Oyj's subsidiary KL-Parts Oy purchased the entire share capital of the KL-Varaosat group of companies, specialising in the supply of OEM spare parts for Mercedes-Benz and BMW cars. The purchase price paid for KL-Varaosat Group companies was about EUR 5.1 million and 300,000 Panostaja Oyj new Class B shares. The total purchase price amounted to around EUR 5.5 million. In addition, the seller has an opportunity to receive an additional payment up to a maximum value of about EUR 1.4 million, payable within one year of the transaction date. Panostaja Oyj shaped the KL-Varaosat companies into a new business area focusing on supply of OEM car spare parts. On 30th May 2007, Panostaja Group acquired the majority of shares in Suomen Helasto Oyj, which specialises in locks and security as well as fittings and fastenings services and wholesale. The principal shareholders in Panostaja Oyj and in Suomen Helasto Oyj carried out a share exchange, whereby Panostaja acquired 68.77% of the share capital and the voting power in Suomen Helasto. As part of the private placement, the principal shareholders in Suomen Helasto received 7,450,933 new Panostaja Class B shares. As a result of the share exchange, Panostaja incurred an obligation under the Securities Markets Act Chapter 6 section 10 to launch a takeover bid to other Suomen Helasto shareholders. As part of the takeover bid, Panostaja offered an exchange of shares, where six Suomen Helasto shares were exchanged for five Panostaja B shares. As an alternative to the share exchange, Panostaja offered a full cash consideration to the value of EUR 1.27 per share. The closing prices for Panostaja's B share and Suomen Helasto's share on 29th May 2007 were EUR 1.52 and EUR 1.19 respectively. The takeover bid was valid from 3rd July 2007 until 6th August 2007, during which time shareholders in Suomen Helasto had the opportunity to accept the takeover bid. Upon completion of the takeover bid on 6th August 2007, Panostaja had acquired ownership of a total of 12,404,692 shares in Suomen Helasto, which represent approximately 95.41% of shares issued by Suomen Helasto and votes carried by them. As part of the related share issue, Panostaja offered shareholders in Suomen Helasto 2,829,175 Class B shares for subscription at a nominal price of EUR 0.12 each. Following transactions carried out according to the terms of the takeover bid, the percentage of Panostaja's holdings of the total amount of Suomen Helasto shares and voting rights carried by them exceeded nine tenths (9/10). On this basis, Panostaja incurred the right and, if demanded, the obligation under Chapter 18, section 1 of the Limited Liability Companies Act to redeem shares belonging to other Suomen Helasto shareholders at market value. This information was entered in the Trade Register on 21st August 2007. On 3rd September 2007, Panostaja was served with an application dated 28th August 2007, submitted by 2M Ventures Oy, a shareholder in Suomen Helasto, to the Redemption Committee of the Central Chamber of Commerce of Finland for appointment of an arbitrator to resolve the redemption obligation and price of Suomen Helasto shares. 2M Ventures Oy cancelled its application for redemption of shares in Suomen Helasto Oyj on 15th October 2007. On 27th September 2007, Panostaja announced its intention to convert Suomen Helasto Oyj into Takoma Oyj. The Extraordinary General Meeting of Suomen Helasto Oyj held on 17th October 2007 accepted the conversion of Suomen Helasto Oyj into a mechanical engineering parent company named Takoma Oyj and authorised the Board of Directors to sell its operating companies to Panostaja Oyj and to acquire the share capital in Hervannan Koneistus Oy and the business of Tampereen Laatukoneistus Oy on behalf of the new Takoma Oyj. Based on the authorisation granted to it, Suomen Helasto Oyj's Board of Directors sold the entire share capital in the subsidiaries owned by Suomen Helasto to Panostaja Oyj on 31st October 2007 for a total trade price of EUR 16.5 million. Separate Stock Exchange Bulletins relating to this matter were issued on 17th October 2007 and on 31st October 2007. Panostaja acquired the entire share capital in Lahden Lämpökäsittely Oy and Heatmasters Oy, companies specialising in heat treatment services and related technological development. Established in 1974, Lahden Lämpökäsittely is based in Lahti and Varkaus in Finland, offering metal heat treatment services to major industrial clients. The company also has operations in Sweden, Poland, Ukraine and Estonia. The company employs 55 people and its net turnover for 2006 amounted to EUR 4.5 million. Heatmasters focuses on computer-based heat-treatment technology, making use of computer and GSM technologies, for example. The company exports to more than 20 countries and net turnover for 2006 amounted to EUR 1.8 million. Lahden Lämpökäsittely Oy and Heatmasters Oy will form a new business area within Panostaja Group with a focus on heat treatment. The total purchase price for the companies amounts to about EUR 3.1 million. In addition, the sellers have an opportunity to receive a conditional additional payment up to a maximum value of about EUR 1.3 million, payable within one year of the transaction date. In addition, Panostaja acquired the entire share capital in Tampereen Laatukoneistus Oy, a company specialising in manufacturing hydraulic cylinders. Panostaja set up a new business area within the Group to specialise in hydraulics components. Tampereen Laatukoneistus manufactures individually designed hydraulic cylinders for the shipbuilding, lifting, wood processing, mining, metals and transportation industries, among others. It has a strong position in Finland as a supplier of large hydraulic cylinders. The company's turnover in 2006 amounted to some EUR 5.6 million. The total purchase price for the company amounts to about EUR 3.2 million. In addition, the sellers have an opportunity to receive a conditional additional payment up to a maximum value of about EUR 1.0 million, payable by the end of 2007. The balance sheets of the KL-Varaosat companies have been consolidated for the first time within the Group's interim report for the six months to 30th April 2007, while their income statements have been consolidated as from 1st May 2007. Suomen Helasto Oyj, the KL-Varaosat companies, Lahden Lämpökäsittely Oy, Heatmasters Oy and Tampereen Laatukoneistus Oy have been consolidated into the Group's financial statements as from 1st May 2007 in terms of both balance sheets and income statements. Consolidation of Suomen Helasto Oyj is based on a 95.4% holding. ADMINISTRATION AND ANNUAL GENERAL MEETINGS The Annual General Meeting was held on 15th December 2006. The AGM re-elected Mr. Olli Halmevuo and Mr. Matti Koskenkorva to Panostaja Oyj's Board of Directors. New members elected to the Board were Mr. Jukka Ala-Mello, Secretary of the Board of Kone Corporation, Mr. Eero Lehti, Chairman of the Board of the Federation of Finnish Enterprises, and Mr. Hannu Tarkkonen, Executive Vice President of Etera Mutual Pension Insurance Company. The AGM further elected Mr. Hannu Pellinen, APA, and PricewaterhouseCoopers Oy, APA, as auditors. Board member Eero Lehti was elected to the Finnish Parliament in the spring 2007 general election. Mr. Lehti resigned from Panostaja Oyj's Board of Directors on 10th April 2007. The company's CEO Olli Halmevuo resigned at his own request on 11th September 2007 and the Board of Directors appointed Mr. Juha Sarsama as new CEO on 14th September 2007. Mr. Halmevuo stayed on as a member of the Board of Directors. The Annual General Meeting adopted the financial statements presented for the financial year ended 31st October 2006 and the Board's proposal to transfer the profit for the period to retained earnings and to distribute EUR 0.13 per share in dividends was approved. The record date for dividend payment was 20th December 2006 and the payment date was as from 29th December 2006. In addition, the AGM discharged the Board of Directors and the Chief Executive Officer from liability. The Annual General Meeting authorised the Board of Directors to decide on an increase in share capital through one or more regular or bonus issues, such that a maximum of 30,000,000 new Class A shares and a maximum of 30,000,000 new Class B shares may be offered for subscription in the issue(s) at a nominal price of EUR 0.12 each, and that the share capital increase must not exceed EUR 7,200,000. In addition, the Board of Directors was authorised to decide on an increase in share capital by granting options and other rights referred to in Chapter 10, section 1 of the Limited Liability Companies Act, such that a maximum of 30,000,000 new Class A shares and a maximum of 30,000,000 new Class B shares may be offered for subscription in the issue(s), and that the share capital increase must not exceed EUR 7,200,000. The share issue authorisations did not exclude the Board's right to decide on private placements; such issues may disapply the shareholders' pre-emption rights laid down in Chapter 9, section 3 of the Limited Liability Companies Act. Furthermore, the Annual General Meeting authorised the Board of Directors to obtain a subordinated loan at a maximum of EUR 21,250,000 from domestic institutional investors, to decide on granting option rights to key personnel within the company and on acquisition and disposal of the company's own shares within the limits of acquiring a maximum of 1,725,659 Class A shares and a maximum of 1,247,797 Class B shares. During the financial year, the Board has exercised its authorisation to obtain a subordinated loan of EUR 21,250,000 from domestic institutional investors and to decide on granting option rights 2006A to key personnel within the company. The number of options granted was 460,000, which entitled holders to subscribe for 460,000 shares. The Board has also exercised its authorisation to increase share capital through one or more regular or bonus issues during the financial year. As part of a private placement, the seller of the KL-Varaosat companies, Kari Lindfors, subscribed for 300,000 new Panostaja Class B shares. In addition, the principal shareholders in Panostaja Oyj and in Suomen Helasto Oyj carried out a share exchange, whereby Panostaja acquired 68.77% of the share capital and the voting power in Suomen Helasto. As part of the private placement, the principal shareholders in Suomen Helasto received 7,450,933 new Panostaja Class B shares. As part of the takeover bid launched under the Securities Market Act to shareholders in Suomen Helasto Oyj between 3rd July and 6th August 2007, the Board of Directors exercised its authorisation and offered Suomen Helasto shareholders 2,829,175 Class B shares for subscription. In June, the Board of Directors launched a repurchase of Panostaja's own shares according to the authorisation granted at the company's Annual General Meeting on 15th December 2006. The maximum volumes to be acquired are 1,725,659 Class A shares and 1,247,797 Class B shares. The company will acquire its own shares in order to have them available to offer as part of possible business acquisitions or other restructuring measures or when purchasing assets as part of its business operations, to develop its capital structure, to cancel shares, or to implement an incentive scheme for key personnel. During the financial year, the company acquired a total of 1,217,400 of its own shares, comprising 347,500 Class A shares, 439,000 Class B shares and 430,900 new Class B shares. Based on the authorisation granted, Panostaja Oyj's Board of Directors decided on 23rd October 2007 to sell 400,000 new Class B shares held by the company. The transaction was carried out on the Helsinki Stock Exchange. The trade price was EUR 1.61 per share, totalling EUR 644,000, which resulted in a loss of EUR 11,890. The transaction was carried out in order to implement an incentive scheme for a key member of a Group subsidiary. At year-end, the company held 347,500 Class A shares and 469,900 Class B shares, amounting to a total nominal value of EUR 98,088. The number of acquired Class A shares was equivalent to 0.8% of the total number of shares at year-end and to 1.9% of the total number of votes carried by all shares. The number of Class B shares was equivalent to 1.0% and 0.1% of total numbers of shares and votes respectively. SHARE CAPITAL AND THE CONVERTIBLE SUBORDINATED LOAN At the end of the financial year, Panostaja Oyj's share capital amounted to EUR 5,424,081.60 and the number of shares was 45,200,680. The numbers of issued Class A and B shares amounted to 17,256,595 and 27,944,085 respectively. On 4th January 2007, the company sent notification to holders of 2004 convertible subordinated bonds to the effect that the company would exercise its right under the terms of the loan to repay the entire loan principal early at a nominal price, because the volume-weighted average price of Panostaja Oyj's Class B share had, since 2nd January 2006, exceeded the conversion price specified in the terms of the loan by more than 100% for 20 of 30 consecutive trading days on the Helsinki Stock Exchange. Repayment of the subordinated loan was cancelled, however, because all bond holders applied to convert their bonds into shares according to the terms of the loan. As a result of conversions, bond-holders subscribed for 3,358,000 Panostaja new Class B shares. The Board of Directors exercised the authorisation granted at the Annual General Meeting on 15th December 2006 to obtain a subordinated loan from domestic institutional investors. During the reporting period, the Board approved subscriptions for 2006 convertible subordinated bonds at a total of EUR 21,250,000. The interest rate is 6.5% and the loan period runs from 15th January 2007 to 1st March 2012. The bonds may be converted into a maximum of 12,500,000 Panostaja's new Class B shares and bond conversions may result in an increase of share capital at a maximum of EUR 1,500,000. The first loan disbursement, amounting to EUR 10,625,000, was made to Panostaja Oyj on 15th January 2007 and the remainder of the loan, also amounting to EUR 10,625,000, was paid on 15th May 2007. The amount of loan outstanding on the balance sheet date totalled EUR 18,700,000, entitling holders to subscribe for 11,000,000 new Class B shares. SHARE PERFORMANCE AND SHAREHOLDING The numbers of Panostaja Oyj Class A and B shares traded over the 2006/2007 period amounted to 1,646,454 and 4,317,106 shares respectively. The trading volume equated to 16.7% of the share capital. The company's total market capitalisation stood at EUR 75.9 million at the end of October. Over the period, prices of Class A and B shares varied between EUR 1.21 and EUR 1.83 and between EUR 1.20 and EUR 1.79 respectively. The year-end closing prices for A and B shares were EUR 1.69 and EUR 1.68 respectively. Major shareholders (numbers of Class A and B shares combined): -------------------------------------------------------------------------------- | | 21/10/2007 | 31/10/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Koskenkorva, Matti | 5,869,636 | 4,664,292 | -------------------------------------------------------------------------------- | Koskenkorva, Maija | 4,985,374 | 3,105,692 | -------------------------------------------------------------------------------- | Halmevuo, Olli | 2,594,321 | 2,739,184 | -------------------------------------------------------------------------------- | Koskenkorva, Mauno | 2,325,684 | 1,549,872 | -------------------------------------------------------------------------------- | Etera Mutual Pension Insurance | 1,500,000 | 0 | | Company | | | -------------------------------------------------------------------------------- | Fennia Mutual Insurance Company | 1,339,000 | 625,000 | -------------------------------------------------------------------------------- | Koskinen, Mikko | 1,280,447 | 1,674,172 | -------------------------------------------------------------------------------- | Koskenkorva, Mikko | 1,181,508 | 980,748 | -------------------------------------------------------------------------------- | Tampere District Co-operative Bank | 985,334 | 0 | -------------------------------------------------------------------------------- | Porkka, Harri | 985,000 | 1,000,000 | -------------------------------------------------------------------------------- BOARD PROPOSAL FOR DISTRIBUTION OF PROFITS Panostaja Oyj's Board of Directors has decided to propose to the Annual General Meeting that a dividend of EUR 0.09 per each Class A and B share issued be distributed for the last financial year. Panostaja Oyj's Annual General Meeting will be held in Tampere, Finland, on 18th December 2007. EVENTS SUBSEQUENT TO THE FINANCIAL YEAR Suomen Helasto Oyj, a subsidiary of Panostaja Oyj, became Takoma Oyj on 1st November 2007 and, according to a plan announced on 27th September 2007, the new company acquired the share capital in Hervannan Koneistus Oy and the business of Tampereen Laatukoneistus Oy on 1st November 2007. On the same date, Mr. Kimmo Korhonen conveyed the entire share capital in Hervannan Koneistus Oy to Takoma Oyj and received 2,662,925 new Takoma Oyj shares in exchange, accounting for 17% of all shares in Takoma Oyj. On the same occasion, Mr. Korhonen was appointed Takoma Oyj's Managing Director. On 1st November 2007, Takoma Oyj's subsidiary, Causatak Oy, purchased the business of Tampereen Laatukoneistus Oy, belonging to Panostaja Group, for a trade price of EUR 3.7 million. Assets outside the ordinary course of business, including the premises owned by the company, remained with the seller company as part of the business transaction. The EUR 159,775.50 increase in share capital decided by Takoma Oyj's Board of Directors on 1st November 2007 was entered in the Trade Register on 28th November 2007. Following this registration, the total number of Takoma Oyj shares amounts to 15,664,266 shares and Panostaja Oyj's holding in Takoma Oyj accounts for 79.19%. Upon registration of the share capital, Panostaja no longer has the right and obligation imposed on a majority shareholder in Chapter 18, section 1 of the Limited Liability Companies Act to redeem Takoma Oyj shares. The company has continued repurchasing its own shares and, as at 11th December 2007, the company held 475,000 Class A shares and 613,000 Class B shares, amounting to a total nominal value of EUR 130,560. On 11th December 2007, Panostaja Oyj's Board of Directors decided to start exploring the possibility of distributing Takoma Oyj shares as dividends to Panostaja Oyj shareholders. OUTLOOK FOR THE FORTHCOMING FINANCIAL YEAR Panostaja Group will continue to focus on the business idea in alignment with its core business strategy and on development of existing business areas. Creation of an entrepreneur-driven model in newly acquired business areas and companies is still partially incomplete. The retirement of the baby-boomers, combined with constantly increasing changes in the business environment that also affect companies operating exclusively on the domestic market, in particular internationalisation, will result in a large number of businesses becoming available for purchase over the next few years. Panostaja's operating conditions, available capital resources and liquid assets form a good foundation for intense expansion of operations. Increasing supply of SMEs operating in traditional industries will enable both further expansion into new business areas and growth in existing business areas. Domestically, the economic situation is expected to remain mostly favourable during the new financial year, even though economic growth is forecast to slow down. The economic outlook for the current business areas' industries is moderately positive. It is fair to expect the consolidated net turnover to grow and for results to remain at a healthy level, provided that there are no material changes in the economic situation. However, the increasing uncertainty in the construction industry cycle may affect the outlook for some business areas. Panostaja Oyj Board of Directors This stock exchange bulletin is a translation of the original Finnish stock exchange bulletin 11th December 2007 For further information, please contact Mr. Juha Sarsama, CEO, tel. +358 (0)3 263 4333 or mobile +358 (0)40 774 2099. Panostaja Oyj Juha Sarsama CEO All forecasts and estimates presented in this Interim Report are based on the current views of the management of the Group and the business areas on the economic environment and outlook and actual results may be significantly different. The data provided in these financial statements is audited. FINANCIAL INFORMATION CONSOLIDATED INCOME STATEMENT -------------------------------------------------------------------------------- | | 11/06-10/07 | 11/05-10/06 | -------------------------------------------------------------------------------- | (EUR 1,000) | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net turnover | 90,763 | 57,755 | -------------------------------------------------------------------------------- | Other operating income | 721 | 771 | -------------------------------------------------------------------------------- | Share of profit of associates | 0 | 86 | -------------------------------------------------------------------------------- | Raw materials and services | 46,270 | 26,940 | -------------------------------------------------------------------------------- | Staff expenses | 23,028 | 15,541 | -------------------------------------------------------------------------------- | Depreciation, amortisation and impairment | 2,110 | 1,209 | -------------------------------------------------------------------------------- | Other operating expenses | 11,777 | 9,448 | -------------------------------------------------------------------------------- | Operating profit | 8,299 | 5,476 | -------------------------------------------------------------------------------- | Financial income and expenses | -815 | -540 | -------------------------------------------------------------------------------- | Profit before taxes | 7,484 | 4,936 | -------------------------------------------------------------------------------- | Income taxes | -1,900 | -1,210 | -------------------------------------------------------------------------------- | Profit from continuing operations | 5,584 | 3,725 | -------------------------------------------------------------------------------- | Profit from discontinued operations | 350 | 4,903 | -------------------------------------------------------------------------------- | Profit for the financial year | 5,934 | 8,628 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to: | | | -------------------------------------------------------------------------------- | Equity holders of the parent company | 4,295 | 7,457 | -------------------------------------------------------------------------------- | Minority interest | 1,638 | 1,171 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share on continuing | 0.110 | 0.092 | | operations, EUR - basic | | | -------------------------------------------------------------------------------- | Earnings per share on continuing | 0.096 | 0.085 | | operations, EUR - diluted | | | -------------------------------------------------------------------------------- | Earnings per share on discontinued | 0.010 | 0.176 | | operations, EUR - basic | | | -------------------------------------------------------------------------------- | Earnings per share on discontinued | 0.007 | 0.157 | | operations, EUR - diluted | | | -------------------------------------------------------------------------------- | Earnings per share on continuing and | 0.120 | 0.268 | | discontinued operations, EUR - basic | | | -------------------------------------------------------------------------------- | Earnings per share on continuing and | 0.104 | 0.242 | | discontinued operations, EUR - diluted | | | -------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEET -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | (EUR 1,000) | 10/2007 | 10/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current assets | | | -------------------------------------------------------------------------------- | Goodwill | 12,839 | 1,976 | -------------------------------------------------------------------------------- | Other intangible assets | 460 | 234 | -------------------------------------------------------------------------------- | Property, plant and equipment | 17,826 | 9,654 | -------------------------------------------------------------------------------- | Interests in associates | 975 | 894 | -------------------------------------------------------------------------------- | Other non-current assets | 230 | 127 | -------------------------------------------------------------------------------- | Interest-bearing receivables | 15 | 15 | -------------------------------------------------------------------------------- | Total non-current assets | 32,345 | 12,900 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | -------------------------------------------------------------------------------- | Stocks | 21,100 | 7,941 | -------------------------------------------------------------------------------- | Trade and other non-interest-bearing receivables | 20,226 | 14,360 | -------------------------------------------------------------------------------- | Short-term investments | 16,289 | 2,222 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 24,985 | 10,208 | -------------------------------------------------------------------------------- | Total current assets | 82,600 | 34,730 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total assets | 114,945 | 47,631 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES | | | -------------------------------------------------------------------------------- | Equity attributable to equity holders of the parent company | -------------------------------------------------------------------------------- | Share capital | 5,424 | 3,568 | -------------------------------------------------------------------------------- | Share premium account | 4,647 | 2,683 | -------------------------------------------------------------------------------- | Currency translation differences | 35 | | -------------------------------------------------------------------------------- | Invested unrestricted equity fund | 14,219 | | -------------------------------------------------------------------------------- | Retained earnings | 10,945 | 11,909 | -------------------------------------------------------------------------------- | Total | 35,270 | 18,160 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Minority interest | 4,290 | 2,154 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total equity | 39,560 | 20,314 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 1,452 | 309 | -------------------------------------------------------------------------------- | Convertible loan | 18,074 | 2,316 | -------------------------------------------------------------------------------- | Non-current liabilities | 14,797 | 9,393 | -------------------------------------------------------------------------------- | Current liabilities | 41,062 | 15,299 | -------------------------------------------------------------------------------- | Total liabilities | 75,385 | 27,316 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total equity and liabilities | 114,945 | 47,631 | -------------------------------------------------------------------------------- CONSOLIDATED CASH FLOW STATEMENT -------------------------------------------------------------------------------- | | 10/2007 | 10/2006 | -------------------------------------------------------------------------------- | CASH FLOW FROM OPERATING ACTIVITIES | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit | 8,299 | 5,476 | -------------------------------------------------------------------------------- | Adjustments to operating profit | 2,188 | 1,209 | -------------------------------------------------------------------------------- | Change in net working capital | 201 | 792 | -------------------------------------------------------------------------------- | Interest paid | -1,585 | -408 | -------------------------------------------------------------------------------- | Dividends received | 0 | 68 | -------------------------------------------------------------------------------- | Interest received | 1,002 | 136 | -------------------------------------------------------------------------------- | Taxes | -1,488 | -1,210 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET CASH FROM OPERATING ACTIVITIES | 8,618 | 6,062 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | INVESTMENTS | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investments in tangible and intangible assets | -2,883 | -3,161 | -------------------------------------------------------------------------------- | Proceeds from disposal of tangible and intangible | 442 | 198 | | assets | | | -------------------------------------------------------------------------------- | Acquisition of subsidiaries, net of cash and cash | -8,749 | -1,626 | | equivalents | | | -------------------------------------------------------------------------------- | Disposal of business operations | 350 | 6,378 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET CASH FROM (USED IN) INVESTING ACTIVITIES | -10,840 | 1,788 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | FINANCING | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Proceeds from issue of share capital | 386 | 2,078 | -------------------------------------------------------------------------------- | Loans drawn | 45,410 | 4,000 | -------------------------------------------------------------------------------- | Loans repaid | -8,961 | -4,358 | -------------------------------------------------------------------------------- | Acquisition of own shares | -2,051 | 0 | -------------------------------------------------------------------------------- | Disposal of own shares | 656 | 0 | -------------------------------------------------------------------------------- | Dividends paid | -4,373, | -2,094 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | NET CASH from (USED IN) FINANCING ACTIVITIES | 31,067 | -374 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in cash and cash equivalents | 28,845 | 7,476 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash and cash equivalents at the beginning of the | 12,429 | 4,953 | | year | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at the end of the year | 41,274 | 12,429 | -------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF CHANGES IN EQUITY -------------------------------------------------------------------------------- | (EUR 1,000) | Shar | Own | Shar | Investe | Transl | Retai | Minor | Tota | | | e | shar | e | d | ation | ned | ity | l | | | capi | es | prem | unrestr | differ | earni | inter | | | | tal | | ium | icted | ences | ngs | est | | | | | | acco | equity | | | | | | | | | unt | fund | | | | | -------------------------------------------------------------------------------- | Shareholders | 3,29 | | 882 | | | 6,098 | 2,277 | 12,5 | | ' equity as | 1 | | | | | | | 48 | | at 31st Oct. | | | | | | | | | | 2005 | | | | | | | | | -------------------------------------------------------------------------------- | Profit for | | | | | | 7,457 | 1171 | 8,62 | | the | | | | | | | | 8 | | financial | | | | | | | | | | year | | | | | | | | | -------------------------------------------------------------------------------- | Dividends | | | | | | -1646 | -448 | -2,0 | | paid | | | | | | | | 94 | -------------------------------------------------------------------------------- | Items | | | | | | | | | | recognised | | | | | | | | | | directly in | | | | | | | | | | equity | | | | | | | | | -------------------------------------------------------------------------------- | Disposal of | | | | | | | | | | business | | | | | | | | | | operations | | | | | | | | | -------------------------------------------------------------------------------- | Elimination | | | | | | | -846 | -846 | | of minority | | | | | | | | | | interest | | | | | | | | | -------------------------------------------------------------------------------- | Change in | 277 | | 1,80 | | | | | 2,07 | | share | | | 1 | | | | | 8 | | capital | | | | | | | | | -------------------------------------------------------------------------------- | Shareholders | 3,56 | | 2,68 | | | 11,90 | 2,154 | 20,3 | | ' equity as | 8 | | 3 | | | 9 | | 14 | | at 31st Oct. | | | | | | | | | | 2006 | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders | 3,56 | | 2,68 | | | 11,90 | 2,154 | 20,3 | | ' equity as | 8 | | 3 | | | 9 | | 14 | | at 1st Nov. | | | | | | | | | | 2006 | | | | | | | | | -------------------------------------------------------------------------------- | Increase of | 587 | | 1,96 | 2,265 | | | | 4,81 | | share | | | 4 | | | | | 6 | | capital | | | | | | | | | | relating to | | | | | | | | | | convertible | | | | | | | | | | subordinated | | | | | | | | | | bonds | | | | | | | | | -------------------------------------------------------------------------------- | Equity | | | | 860 | | | | 860 | | component of | | | | | | | | | | convertible | | | | | | | | | | subordinated | | | | | | | | | | loan | | | | | | | | | -------------------------------------------------------------------------------- | Share-based | | | | 78 | | | | 78 | | incentive | | | | | | | | | | schemes | | | | | | | | | -------------------------------------------------------------------------------- | Profit for | | | | | | 4,295 | 1,638 | 5,93 | | the | | | | | | | | 3 | | financial | | | | | | | | | | year | | | | | | | | | -------------------------------------------------------------------------------- | Dividends | | | | | | -3,86 | -508 | -4,3 | | paid | | | | | | 5 | | 73 | -------------------------------------------------------------------------------- | Share issue | 1,26 | | | 11,016 | | | | 12,2 | | | 9 | | | | | | | 85 | -------------------------------------------------------------------------------- | Acquisition | | -2,0 | | | | | | -2,0 | | of own | | 50 | | | | | | 50 | | shares | | | | | | | | | -------------------------------------------------------------------------------- | Disposal of | | 656 | | | | | | 656 | | own shares | | | | | | | | | -------------------------------------------------------------------------------- | Currency | | | | | 35 | | | 35 | | translation | | | | | | | | | | differences | | | | | | | | | -------------------------------------------------------------------------------- | Acquisitions | | | | | | | 1,006 | 1,00 | | of minority | | | | | | | | 6 | | interests | | | | | | | | | -------------------------------------------------------------------------------- | Shareholders | 5,42 | -1,3 | 4,64 | 14,219, | 35 | 12,33 | 4,290 | 39,5 | | ' equity as | 4 | 94 | 7 | | | 9 | | 60 | | at 31st Oct. | | | | | | | | | | 2007 | | | | | | | | | -------------------------------------------------------------------------------- KEY INDICATORS -------------------------------------------------------------------------------- | | 10/2007 | 10/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity per share, EUR | 0.78 | 0.68 | -------------------------------------------------------------------------------- | Earnings per share (EPS), EUR - diluted | 0.10 | 0.24 | -------------------------------------------------------------------------------- | Earnings per share (EPS), EUR - basic | 0.12 | 0.27 | -------------------------------------------------------------------------------- | Average number of shares during the year, 1,000 | 35,782 | 27,839 | -------------------------------------------------------------------------------- | Number of shares at year-end, 1,000 | 45,201 | 29,735 | -------------------------------------------------------------------------------- | Dividends paid/bonds converted during the year, | 15,466 | 2,310 | | 1,000 | | | -------------------------------------------------------------------------------- | Number of shares, 1,000 - diluted | 46,782 | 31,224 | -------------------------------------------------------------------------------- | Return on equity (ROE), % | 18.6 | 22.7 | -------------------------------------------------------------------------------- | Return on investment (ROI), % | 14.8 | 16.1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Gross capital expenditure | | | -------------------------------------------------------------------------------- | On non-current assets, EUR million | 21.9 | 4.8 | -------------------------------------------------------------------------------- | % of net turnover | 24.1 | 8.3 | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 50,653 | 10,733, | -------------------------------------------------------------------------------- | Equity ratio, % | 34.9 | 43.4 | -------------------------------------------------------------------------------- | Average number of employees | 571 | 526 | -------------------------------------------------------------------------------- GROUP'S QUARTERLY PERFORMANCE -------------------------------------------------------------------------------- | (EUR | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | IFRS | | million) | | | | | | | | | -------------------------------------------------------------------------------- | | Q1/06 | Q2/06 | Q3/06 | Q4/06 | Q1/07 | Q2/07 | Q3/07 | Q4/07 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net turnover | 11.4 | 12.5 | 14.0 | 19.9 | 16.7 | 16.0 | 27.1 | 31.0 | -------------------------------------------------------------------------------- | Other | 0.1 | 0.0 | 0.1 | 0.6 | 0.0 | 0.1 | 0.3 | 0.3 | | operating | | | | | | | | | | income | | | | | | | | | -------------------------------------------------------------------------------- | Total | 10.5 | 11.7 | 12.5 | 17.1 | 15.0 | 13.4 | 24.3 | 27.0 | | expenses | | | | | | | | | -------------------------------------------------------------------------------- | Depreciation | 0.2 | 0.3 | 0.3 | 0.4 | 0.3 | 0.4 | 0.5 | 0.9 | | and | | | | | | | | | | amortisation | | | | | | | | | -------------------------------------------------------------------------------- | Operating | 0.7 | 0.5 | 1.3 | 3.0 | 1.4 | 2.3 | 2.5 | 2.1 | | profit | | | | | | | | | -------------------------------------------------------------------------------- | Financial | -0.2 | -0.1 | -0.1 | -0.1 | -0.1 | -0.1 | -0.3 | -0.3 | | items | | | | | | | | | -------------------------------------------------------------------------------- | Profit | 0.5 | 0.4 | 1.2 | 2.8 | 1.2 | 2.3 | 2.2 | 1.8 | | before taxes | | | | | | | | | -------------------------------------------------------------------------------- | Taxes | -0.1 | -0.1 | -0.3 | -0.7 | -0.3 | -0.7 | -0.5 | -0.4 | -------------------------------------------------------------------------------- | Minority | -0.2 | -0.2 | -0.3 | -0.5 | -0.3 | -0.6 | -0.4 | -0.3 | | interest | | | | | | | | | -------------------------------------------------------------------------------- | Profit from | 0.2 | 0.1 | 0.6 | 1.7 | 0.6 | 1.0 | 1.3 | 1.1 | | continuing | | | | | | | | | | operations | | | | | | | | | -------------------------------------------------------------------------------- | Profit from | 0.1 | 0.5 | 0.2 | 4.1 | 0.0 | 0.4 | 0.0 | 0.0 | | discontinued | | | | | | | | | | operations | | | | | | | | | -------------------------------------------------------------------------------- | Profit for | 0.3 | 0.6 | 0.8 | 5.8 | 0.6 | 1.4 | 1.3 | 1.0 | | the | | | | | | | | | | financial | | | | | | | | | | year | | | | | | | | | -------------------------------------------------------------------------------- CONTINGENT LIABILITIES -------------------------------------------------------------------------------- | EUR 1,000 | 2007 | 2006 | -------------------------------------------------------------------------------- | Collateral given on behalf of Group companies | | | -------------------------------------------------------------------------------- | Mortgages | 7,938 | 6,130 | -------------------------------------------------------------------------------- | Floating charges | 4,117 | 3,460 | -------------------------------------------------------------------------------- | Pledges given | 14,610 | 6,325 | -------------------------------------------------------------------------------- | Rental liabilities | 1,354 | 1,185 | -------------------------------------------------------------------------------- | Other liabilities | 514 | 13 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Amounts payable under lease contracts | | | -------------------------------------------------------------------------------- | Payable within one year | 564 | 334 | -------------------------------------------------------------------------------- | Payable after one year but within five years | 852 | 481 | -------------------------------------------------------------------------------- Liabilities have been measured at the nominal or book value of collateral. The Group has entered into interest rate swaps at a nominal value of EUR 1.2 million. SEGMENT INFORMATION The Group's primary reporting segments are business segments. For the last financial year, the Group is reporting on five business segments. The Group does not have a secondary reporting segment. -------------------------------------------------------------------------------- | EUR 1,000 | 2007 | 2006 | -------------------------------------------------------------------------------- | NET TURNOVER | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Industrial services | 15,251 | 8,514 | -------------------------------------------------------------------------------- | Joinery industry | 9,471 | 10,583 | -------------------------------------------------------------------------------- | Industrial construction | 21,629 | 19,684 | -------------------------------------------------------------------------------- | Wholesale trade | 29,696 | 12,560 | -------------------------------------------------------------------------------- | Other | 14,716 | 6,414 | -------------------------------------------------------------------------------- | Total | 90,763 | 57,755 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OPERATING PROFIT/LOSS | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Industrial services | 1,678 | 463 | -------------------------------------------------------------------------------- | Joinery industry | 615 | 114 | -------------------------------------------------------------------------------- | Industrial construction | 5,209 | 4,409 | -------------------------------------------------------------------------------- | Wholesale trade | 1,497 | 240 | -------------------------------------------------------------------------------- | Other | -700 | 249 | -------------------------------------------------------------------------------- | Total | 8,299 | 5,476 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Industrial services | 10,596 | 5,956 | -------------------------------------------------------------------------------- | Joinery industry | 6,407 | 7,901 | -------------------------------------------------------------------------------- | Industrial construction | 12,399 | 11,314 | -------------------------------------------------------------------------------- | Wholesale trade | 36,476 | 7,006 | -------------------------------------------------------------------------------- | Other | 49,067 | 15,453 | -------------------------------------------------------------------------------- | Total | 114,945 | 47,631 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LIABILITIES | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Industrial services | 7,044 | 3,303 | -------------------------------------------------------------------------------- | Joinery industry | 3,278 | 8,399 | -------------------------------------------------------------------------------- | Industrial construction | 5,403 | 6,878 | -------------------------------------------------------------------------------- | Wholesale trade | 12,395 | 6,072 | -------------------------------------------------------------------------------- | Other | 45,813 | 2,664 | -------------------------------------------------------------------------------- | Total | 73,933 | 27,316 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | INVESTMENTS | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Industrial services | 3,490 | 606 | -------------------------------------------------------------------------------- | Joinery industry | 136 | 1,155 | -------------------------------------------------------------------------------- | Industrial construction | 1,457 | 1,189 | -------------------------------------------------------------------------------- | Wholesale trade | 7,913 | 217 | -------------------------------------------------------------------------------- | Other | 8,932 | 1,623 | -------------------------------------------------------------------------------- | Total | 21,928 | 4,790 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | DEPRECIATION AND AMORTISATION | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Industrial services | 349 | 116 | -------------------------------------------------------------------------------- | Joinery industry | 504 | 480 | -------------------------------------------------------------------------------- | Industrial construction | 527 | 265 | -------------------------------------------------------------------------------- | Wholesale trade | 224 | 169 | -------------------------------------------------------------------------------- | Other | 506 | 179 | -------------------------------------------------------------------------------- | Total | 2,110 | 1,209 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EMPLOYEES | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Industrial services | 144 | 84 | -------------------------------------------------------------------------------- | Joinery industry | 82 | 92 | -------------------------------------------------------------------------------- | Industrial construction | 161 | 156 | -------------------------------------------------------------------------------- | Wholesale trade | 133 | 31 | -------------------------------------------------------------------------------- | Others | 199 | 62 | -------------------------------------------------------------------------------- | Total | 719 | 425 | -------------------------------------------------------------------------------- Panostaja Oyj is a multi-sector holding company. The company invests in Finnish small and medium-sized enterprises operating in traditional industries. Investments are mostly carried out through acquisitions. Panostaja Group invests business resources and strategic know-how in companies. The objective is to raise the target company to become a major player in its field according to a pre-determined schedule. Once this schedule has elapsed, the enterprise will continue to operate as an independent growth company. At present, the company operates in twelve business areas. Oy Alfa-Kem Ab manufactures and markets industrial chemicals, cleaning agents and institutional kitchen detergents. Arme Oy carries out industrial insulation, exterior cladding and scaffolding work. Heatmasters Group offers metal heat-treatment services domestically and internationally and manufactures, develops and markets heat-treatment technology. Fittings companies Suomen Helakeskus Oy and Seinäjoen Rakennustarvike ja Lukko Oy are key wholesalers of building and furniture hardware in Finland. Fastenings companies Helsingin Laaturuuvi Oy, Porin Pultti Oy and Ruuvipojat Oy serve retailers throughout Finland. KL-Varaosat companies specialise in import, wholesale and retail of OEM spare parts and accessories for Mercedes-Benz and BMW cars. LukkoExpert Security Oy is an expert in locks, door automation and security technology and services. Lämpö-Tukku Oy specialises in wholesale of heating, plumbing and ventilation equipment. Suomen Puunjalostus Oy operates in the joinery industry, with solid-wood interior doors and wooden staircases as its main products. Takoma Oyj is a listed mechanical engineering group based on an entrepreneur-driven business model. Toimex Oy manufactures and sells heating, plumbing and ventilation supports. Vallog Oy specialises in metal industry manufacturing and logistics services.
PANOSTAJA GROUP FINANCIAL STATEMENTS REPORT, 1st NOVEMBER 2006-31st OCTOBER 2007
| Source: Panostaja Oyj