Tekla Corporation Stock Exchange Release 8.8.2008 at 9:00
a.m.
Tekla Corporation's Interim Report January 1 - June 30, 2008: Tekla's
profitability still good despite slowing down of growth
Net sales of Tekla Group for January-June 2008 totaled 29.38
(comparable net sales for the same period in 2007: 27.03) million
euros. Growth in net sales was nearly 9%. The operating result was
6.97 (7.09) million euros, 23.7% (26.2%) of net sales.
Net sales for the second quarter were 14.52 (comparable net sales for
the corresponding period in 2007: 13.92) million euros, increasing by
approximately 4%. The operating result for the quarter was 3.04
(3.33) million euros, 20.9% (23.9%) of net sales.
The comparable figures for 2007 have been calculated by excluding the
Defence business, which was divested in April 2007.
Ari Kohonen, President and CEO, comments on the reporting period:
- Tekla's net sales developed favorably during the reporting period,
even if growth has slowed down. Operating result was at the last
year's level. Our profitability is still good despite an increase in
the number of personnel.
- During the first half of the year, the development of net sales in
our main business area, Building & Construction, was satisfactory.
The operating result fell slightly behind compared to the previous
year. Towards the end of the reporting period, growth in the building
industry slowed down in several key market areas. Our customers'
decision-making times have become longer. Rapid increase in the price
of steel has contributed to this. These things were particularly
evident in the United States, B&C's largest individual market. Sales
there remained at a good level, but growth did not reach
expectations. In addition, the weakening of the US dollar decreased
B&C's sales by approximately three percent. In France, sales
developed favorably, but expectations were not reached in the United
Kingdom and some other Western European countries. Development was
favorable in the Middle East, several other emerging markets and
Australia.
- It is difficult to predict license-based sales. We believe that the
soft demand is likely to be relatively short-lived. The development
of sales is still promising, especially in emerging markets. Tekla's
strong market position and the competitive situation of the industry
remained unchanged. The long-term outlook is still good, as the
building industry is seeking ways of working that increase
productivity. We have expanded our product portfolio, aiming to
facilitate this development.
- The Infra & Energy business area's first two quarters went almost
as planned. The second quarter was slightly below expectations. On a
yearly level, the situation is expected to improve; the majority of
I&E's net sales are generated during the latter half of the year.
- Our number of personnel has increased by 44 during the first two
quarters. During the rest of the year, increase in the number of
personnel will be clearly more moderate than during the first two
quarters, with recruitment focusing on personnel working in the
customer interface.
- We updated our net sales and operating result outlook on July 24.
According to it, growth of Tekla's net sales in 2008 will be
approximately 10 percent. We estimate that profitability will remain
good and operating result will be at the previous year's level.
Growth in the Building & Construction business area is expected to
outpace Infra & Energy.
- - -
Tekla will organize an information conference for analysts and media
at Scandic Hotel Simonkenttä, Helsinki (Pavilion cabinet) on August
8, 2008 11:30 a.m.
TEKLA CORPORATION'S INTERIM REPORT JANUARY 1 - JUNE 30, 2008
The figures for the comparison period have been presented for the
continuing businesses, i.e. comparable, excluding the figures for the
Defence business, which was divested in April 2007. Defence's figures
are presented in more detail in the tables of this report.
NET SALES AND PROFITABILITY
* Net sales of Tekla Group for January-June 2008 were 29.38
(comparable net sales 27.03 in January-June 2007) million euros.
* Growth in net sales was 8.69% (comparable).
* Operating result was 6.97 (comparable 7.09) million euros.
* Operating result percentage was 23.7% (comparable 26.2%).
* Earnings per share were 0.23 (comparable 0.23) euros.
* Return on investment was 51.1 (81.7) percent.
* Return on equity was 36.7 (59.8) percent.
FINANCIAL POSITION
* Cash flow from operating activities totaled 7.04 (10.35) million
euros.
* Liquid assets amounted to 25.53 (27.13) million euros on June 30,
2008 and 30.15 million euros on December 31, 2007.
* Equity ratio was 61.8 (56.1) percent.
* Interest-bearing debts were 0.14 (0.31) million euros.
OTHER KEY FIGURES
* International operations accounted for 84% (comparable 82%) of net
sales.
* Personnel averaged 414 (371) for January-June.
* At the end of June, the number of personnel including part-time
staff was 444 (377).
* Gross investments in property, plant and equipment were 0.60 (0.76)
million euros.
* Equity per share was 1.12 (1.02) euros.
* On the last trading day of June, trading closed at 8.00 (14.22)
euros.
NET SALES BY BUSINESS AREA (PRIMARY SEGMENT)
Q1-2/ Q1-2/ Change 1-12/ Q2/ Q2/
Million euros 2008 2007 2007 2008 2007
Building & Construction 23.64 21.43 2.21 45.48 11.45 10.81
Infra & Energy 5.74 5.60 0.14 12.76 3.07 3.11
Defence *) 1.00 -1.00 1.00 0.51
Others 0.01
Total 29.38 28.03 1.35 59.25 14.52 14.43
OPERATING RESULT BY BUSINESS AREA (PRIMARY SEGMENT)
Q1-2/ Q1-2/ Change 1-12/ Q2/2008 Q2/2007
Million euros 2008 2007 2007
Building & Construction 6.75 6.94 -0.19 15.96 2.65 3.09
Infra & Energy 0.23 0.14 0.09 1.96 0.28 0.31
Defence *) 2.53 -2.53 2.78 2.51
Others -0.01 0.01 -0.02 -0.02 0.11 -0.07
Total 6.97 9.62 -2.65 20.68 3.04 5.84
*) The Defence business was divested in April 2007.
BUSINESS AREAS
Building & Construction
Tekla's Building & Construction business area (B&C) develops and
markets the Tekla Structures software product for model-based design
of steel and concrete structures as well as the management of
fabrication and construction.
Growth in the building industry slowed down in several key market
areas. The customers' decision-making times have become longer. A
rapid increase in the price of steel has contributed to this.
It is difficult to predict license-based sales. The soft demand is
likely to be relatively short-lived. The development of sales is
still promising in emerging markets in particular. Tekla's strong
market position and the competitive situation of the industry
remained unchanged. The long-term outlook is still good, as the
building industry is seeking ways of working that increase
productivity. Tekla has expanded its product portfolio, aiming to
facilitate this development.
Demand for modeling systems continues to increase, and product
modeling is strengthening its foothold in structural design and other
stages of the building process. Tekla's market position as a supplier
of 3D modeling software remained strong in all markets and the
numbers of users were on the increase.
It is very favorable for Tekla that the building industry's move to
model-based 3D processes from traditional 2D ways of working
continues. In addition, Building Information Modeling (BIM) is
gaining ground around the world. BIM means that the information of
the product model is transferred and shared between the parties of
the construction process.
The net sales of B&C amounted to 23.64 (21.43) million euros for
January-June 2008. Net sales increased by approximately 10% compared
to the previous year. Operating result was slightly less than the
previous year, amounting to 6.75 (6.94) million euros. B&C's
operating profit percentage for the reporting period was 28.6%
(32.4%). The weakening of the US dollar decreased B&C's net sales by
approximately 3 percent.
During the second quarter, B&C's net sales amounted to 11.45 (10.81)
million euros and its operating result was 2.65 (3.09) million euros.
International operations accounted for 95% (94%) of B&C's net sales
in January-June 2008. With regard to the key market areas, the
highest proportional growth in net sales was seen in the Far East and
the Middle East during the first two quarters. Sales in the largest
individual market, the United States, remained at a good level, but
growth did not reach expectations. In Australia and France, sales
developed favorably, but expectations were not reached in the United
Kingdom and a few other Western European countries. At the beginning
of the year, India was the second-largest market, but slowing growth
in the US market seems to have had an impact on demand in India.
In March, Tekla announced closing a considerable license deal in
India. Prothius Engineering Services, one of the world's largest
engineering offices, acquired more than one hundred new Tekla
Structures licenses.
Tekla joined the Business Software Alliance in spring 2007. The BSA
is a global association that aims to, e.g., reduce software piracy.
The first raids, in which several illegal copies of Tekla Structures
software were found, took place in the Philippines, Indonesia and
China at the beginning of the year. Actions were continued in
co-operation with the BSA.
During the reporting period, B&C's product development concentrated
on the annual main version of Tekla Structures, which was released at
the end of May. The development focused on improving openness.
Customers can customize the software themselves or with their own
partners for their own use. At the same time, a novel software-based
licensing system was adopted.
Infra & Energy
The Infra & Energy business area focuses on the development and sales
of model-based software solutions that support customers' core
processes. Its key customer industries (products in parentheses) are
energy distribution (Tekla Xpower), infrastructure management (Tekla
Xcity, Tekla Xstreet), as well as water and sewage (Tekla Xpipe).
Structural changes in the energy industry and end users' increasing
expectations of the reliability of energy distribution and customer
service increase the need for developing and renewing network
information systems. Tekla has a solid market position in the
industry in the Nordic countries and the Baltic states. In Finland,
increasing regional collaboration will increase the public sector's
GIS development needs. Tekla's market position is strong in large and
medium-sized Finnish municipalities.
The net sales of I&E amounted to 5.74 (5.60) million euros for
January-June 2008. Net sales increased by 2.5%. I&E's operating
result was 0.23 (0.14) million euros. International operations
accounted for 34% (37%) of net sales. I&E's operating result
percentage was 4.0% (2.5%).
I&E's second quarter was at the same level with the corresponding
quarter the previous year. Net sales for the second quarter amounted
to 3.07 (3.11) million euros, and operating profit was 0.28 (0.31)
million euros.
I&E's first half of the year went almost as planned. The second
quarter was slightly below expectations. On a yearly level, the
situation is expected to improve; the majority of I&E's net sales are
generated during the latter half of the year.
The majority of net sales consists of additional and service sales to
existing customers. New customers are expected from the strong
markets in the Nordic countries. Efforts for business growth are
underway in Germany and in the new EU countries. The customer base in
the infrastructure management sector is expected to broaden with the
adoption of regional services in Finland.
During the reporting period, product development in all products
focused on main versions, which were completed in June. Integration
of operational support with automatic meter reading was developed for
Tekla Xpower. In addition, the software was developed to support the
modeling of gas networks more comprehensively. Productization of
Tekla Xpipe for the Swedish market continued. E-service is the
primary target of development in Tekla Xcity. In addition to this,
street and park management applications were developed further.
PERSONNEL
The Group personnel averaged 414 (371) for January-June 2008; on
average 167 (136) worked outside Finland. In these figures, the
number of part-time staff has been converted to correspond to
full-time work contribution. At the beginning of the year, Tekla
personnel totaled 400 (365) including part-time staff, and at the end
of June 444 (377), of whom 179 (147) worked outside Finland.
During the rest of the year, increase in the number of personnel will
be clearly more moderate than during the first two quarters, with
recruitment focusing on experts working in the customer interface.
SHARE AND OWNERSHIP STRUCTURE
Shares and Share Capital
The total number of Tekla Corporation shares at the end of June 2008
was 22,586,200, of which the company owned 69,600. The total book
countervalue of those was 2,088 euros, representing 0.3% of the
company's shares and the total number of votes. A total of 220,702.46
euros had been used for acquiring the company's own shares, and their
market value was 556,800 euros on June 30, 2008. The book
countervalue of the share is 0.03 euros. At the end of the period,
share capital stood at 677,586 euros.
Share Price Trends and Trading
The highest quotation of the share in January-June 2008 was 13.00
(14.94) euros, the lowest 7.58 (7.60) euros. The average quotation
was 10.21 (10.27) euros. On the last trading day of June, trading
closed at 8.00 (14.22) euros.
A total of 4,966,217 (6,967,468) Tekla shares changed hands in
January-June 2008 at OMX Nordic Exchange Helsinki, amounting to 22%
(30.8%) of the entire share capital.
Changes in ownership structure (flagging notifications)
Threadneedle Asset Management Holdings Limited announced that their
holdings in Tekla Corporation crossed above the 5% threshold on
January 14, 2008. According to the notification, Threadneedle's
holdings stood at 5.098%.
ANNUAL GENERAL MEETING
Tekla Corporation's Annual General Meeting on March 19, 2008 adopted
the company's financial statements, consolidated income statement and
balance sheet for 2007. The Annual General Meeting also discharged
the CEO and the Board members from liability. The AGM accepted the
Board's proposal whereby a dividend of 0.50 euros per share was
distributed for 2007. The dividend payment date was April 3, 2008.
Ari Kohonen, Olli-Pekka Laine (Vice Chair), Heikki Marttinen (Chair)
and Erkki Pehu-Lehtonen were re-elected Board members until the
conclusion of the Annual General Meeting in 2009. Reijo Sulonen was
elected as a new Board member. Timo Keinänen was re-elected deputy
member of the Board. Juha Kajanen is the Tekla personnel
representative on the Board and Pirjo Lundén his personal deputy.
PricewaterhouseCoopers were re-elected as auditors, with Markku
Marjomaa, Authorized Public Accountant, as the auditor in charge.
The AGM renewed the Board's authorizations regarding the increase of
the company's share capital and acquiring or transferring the
company's treasury shares.
SHORT-TERM RISKS AND UNCERTAINTY FACTORS
No changes were detected in risks and uncertainty factors during the
reporting period.
Possible risks and uncertainty factors associated with Tekla's
business are mainly related to the market and competition situation
and the general economic situation. Trends in the building industry
may weaken further, at least in certain markets, which might have a
negative impact on the demand for Tekla products.
In the software product business, it is possible to react swiftly to
growing demand, and profits from additional sales are good. The
majority of net sales comprises of sales of licenses entitling to use
software products. Fluctuation in their demand can be rapid and
significant. In the short term and in case of quick changes, it would
be challenging to proportion fixed personnel expenses, which account
for the majority of Tekla's costs.
The sales of Tekla software are geographically distributed. Also
individual customers do not account for a significant share of net
sales, and therefore risks such as those described above are not
significant.
EVENTS AFTER THE REPORTING PERIOD
According to the notification Tekla Corporation received on August 4,
2008 Threadneedle Asset Management Holdings Limited's holdings in
Tekla Corporation crossed above the 10% threshold on August 1, 2008.
According to it further, their holdings are in total 2,264,730
shares, which represent 10.027% of Tekla's shares and voting rights.
OUTLOOK FOR 2008
A new net sales and operating profit outlook was released on July 24.
In it, Tekla estimated its growth in net sales for 2008 to be
approximately 10 percent. Profitability is expected to remain good
and operating result to be at the previous year's level. Growth in
the Building & Construction business area is expected to outpace
Infra & Energy.
Previously, the company estimated the growth in net sales to be
approximately 15% on the previous year and the operating result to
improve on the previous year.
Both outlooks have been calculated for the continuing businesses,
whose net sales for 2007 amounted to 58.24 million euros and
operating result to 17.90 million euros.
NEXT FINANCIAL REPORT
Tekla Corporation's Interim Report for January-September 2008 will be
published on October 23, 2008.
Espoo, August 7, 2008
TEKLA CORPORATION
Board of Directors
For additional information, please contact:
Ari Kohonen, President and CEO, Tel. +358 50 641 24, ari.kohonen (at)
tekla.com
Timo Keinänen, CFO, Tel. +358 400 813 027, timo.keinanen (at)
tekla.com
Distribution: OMX Nordic Exchange Helsinki, main media
Tekla is an international software product company whose model-based
software solutions make customers' core processes more effective in
building and construction, energy distribution, infrastructure
management and water supply. Tekla has customers in more than 80
countries. Tekla Group's net sales for 2007 were nearly 60 million
euros and operating result approximately 20 million euros.
International operations account for more than 80% of net sales.
Tekla Group currently employs nearly 450 people, of whom
approximately 40% work outside Finland. Tekla was established in
1966, making it one of the oldest software companies in Finland.
www.tekla.com
CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
CONSOLIDATED INCOME STATEMENT
Q1-Q2/ Q1-Q2/ 1-12/ Q2/ Q2/
Million euros 2008 2007 2007 2008 2007
Continuing businesses:
Net sales 29.38 27.03 58.24 14.52 13.92
Other operating income 0.54 0.46 1.02 0.42 0.22
Change in inventories of
finished goods and in work in
progress 0.10 0.03 0.05
Raw materials and
consumables used -1.32 -1.10 -2.04 -0.71 -0.52
Employee compensation and
benefit expense -13.87 -12.87 -25.49 -7.23 -6.77
Depreciation -0.55 -0.58 -1.14 -0.28 -0.28
Other operating expenses -7.21 -5.95 -12.72 -3.68 -3.29
Operating result 6.97 7.09 17.90 3.04 3.33
% of net sales 23.72 26.23 30.73 20.94 23.92
Financial income 1.21 0.77 1.86 0.41 0.27
Financial expenses -0.93 -0.50 -1.33 -0.19 -0.24
Profit (loss) before taxes 7.25 7.36 18.43 3.26 3.36
% of net sales 24.68 27.23 31.64 22.45 24.14
Income taxes -2.04 -2.11 -4.92 -0.94 -1.03
Result for the period from
continuing businesses 5.21 5.25 13.51 2.32 2.33
Discontinued operations:
Result for the period from
discontinued operations 1.87 2.06 1.86
Result for the period 5.21 7.12 15.57 2.32 4.19
Attributable to the equity holders of the Company
Earnings per share for profit
attributable to the equity
holders of the Company:
Earnings per share (EUR) 0.23 0.32 0.69 0.10 0.19
Earnings per share from
continuing businesses
attributable to the equity
holders of the Company:
Earnings per share (EUR) 0.23 0.23 0.60 0.10 0.10
Earnings per share from
discontinued operations
attributable to the equity
holders of the Company:
Earnings per share (EUR) 0.08 0.09 0.08
Earnings are not diluted.
CONDENSED BALANCE SHEET
Million euros 6/2008 6/2007 12/2007
Assets
Non-current assets
Property, plant and
equipment 1.73 1.63 1.79
Goodwill 0.10 0.10 0.10
Intangible assets 0.88 0.76 0.74
Other financial assets 0.30 0.30 0.30
Receivables 0.31 0.49 0.49
Deferred
tax assets 0.15 0.14 0.11
Non-current assets, total 3.47 3.42 3.53
Current assets
Inventories 0.07 0.14 0.07
Trade and other
receivables 12.46 10.57 12.96
Other financial assets 19.89 21.15 25.22
Cash and cash equivalents 5.67 6.03 4.97
Current assets, total 38.09 37.89 43.22
Assets related to
discontinued operations 0.25 0.25
Assets total 41.81 41.31 47.00
Equity and liabilities
Equity
Share capital 0.68 0.68 0.68
Share premium account 8.89 8.89 8.89
Other own capital 1.12 1.14 1.17
Retained earnings 14.59 12.22 20.71
Equity total 25.28 22.93 31.45
Non-current liabilities
Deferred tax liabilities 0.05 0.13
Provisions 0.62
Interest-bearing
liabilities 0.09 0.04 0.07
Non-current liabilities total 0.14 0.66 0.20
Current liabilities
Trade and other payables 16.13 16.31 13.35
Tax liabilities 0.21 0.46 1.01
Current interest-bearing
Liabilities 0.05 0.27 0.27
Current liabilities total 16.39 17.04 14.63
Liabilities total 16.53 17.70 14.83
Liabilities related to
discontinued operations 0.68 0.72
Equity and liabilities total 41.81 41.31 47.00
CALCULATION OF RECONCILIATION OF EQUITY
Equity attributable to the holders of the Company
Share Share Fair Acc. Ret.
Cap. prem. Res. value transl. earn.
acct. fund res. diff. Total
Equity January 1,07 0.68 8.89 1.33 0.10 -0.21 13.93 24.72
Transl. differences -0.10 0.18 0.08
Changes in
available-for-sale
investments 0.02 0.02
Items recognized
directly in equity 0.00 0.00 0.00 0.02 -0.10 0.18 0.10
Net profit for the
period 7.12 7.12
Total income and
expenses recognized
in the period 0.00 0.00 0.00 0.02 -0.10 7.30 7.22
Payment of dividend -9.01 -9.01
Equity June 30, 07 0.68 8.89 1.33 0.12 -0.31 12.22 22.93
Equity attributable to the holders of the Company
Share Share Fair Acc. Ret.
Cap. prem. Res. value transl. earn.
acct. fund res. diff. Total
Equity January 1,08 0.68 8.89 1.33 0.30 -0.46 20.71 31.45
Transl. differences 0.09 -0.07 0.02
Changes in
available-for-sale
investments -0.14 -0.14
Items recognized
directly in equity 0.00 0.00 0.00 -0.14 0.09 -0.07 -0.12
Net profit for the
period 5.21 5.21
Total income and
expenses recognized
in the period 0.00 0.00 0.00 -0.14 0.09 5.14 5.09
Payment of dividend -11.26 -11.26
Equity June 30, 08 0.68 8.89 1.33 0.16 -0.37 14.59 25.28
CONDENSED CASH FLOW STATEMENT
Q1-Q2/ Q1-Q2/ 1-12/
Million euros 2008 2007 2007
Cash flows from operating activities:
Continuing businesses 7.04 9.75 12.31
Discontinued operations 0.60 1.24
Net cash flows from operating
activities 7.04 10.35 13.55
Cash flows from investing
activities:
Investments -0.60 -0.76 -1.66
Sale of intangible assets
and property, plant and equipment 0.01 0.02 0.25
Cash flow from sale
of discontinued operations 2.35 2.35
Purchases of available-for-
sale financial assets -31.50 -28.57 -55.16
Proceeds from sale of
available-for-sale
financial assets 33.24 25.34 50.11
Interests received from
available-for-sale
financial assets 0.54 0.33 0.65
Net cash used in/from investing
activities 1.69 -1.29 -3.46
Cash flows from
financing activities:
Payment of dividend -11.26 -9.01 -9.01
Repayments of long-term debt -0.22 -0.39 -0.39
Payments of finance lease
liabilities -0.01 -0.02 -0.04
Net cash used in
financing activities -11.49 -9.42 -9.44
Net decrease/increase
in cash and cash equivalents -2.76 -0.36 0.65
Cash and cash equivalents
at beginning of the period 8.43 7.78 7.78
Cash and cash equivalents
at end of the period 5.67 7.42 8.43
The cash and cash equivalents in
the cash flow statement include:
Cash and cash equivalents 5.67 6.03 4.97
Available-for-sale financial
assets, cash equivalents 1.39 3.46
NOTES TO THE INTERIM REPORT
The notes are presented in millions of euros, unless otherwise
stated.
This interim report has been prepared in accordance with the IAS 34
(Interim Financial Reporting) standard. The same accounting and
valuation
policies and methods of computation have been followed in the interim
financial reports as in the annual financial statements for 2007.
The amendments and interpretations to published standards as well as
new
standards, effective January 1, 2008, are presented in detail in the
financial statements for 2007. The adopted standards have not had a
significant effect on the result or the data presented in the interim
report.
The figures presented in the Interim Report are unaudited.
Use of estimates
When preparing the financial statements, the Group's management is
required
to make estimates and assumptions influencing the content of the
Interim
Report, and it must exercise its judgment regarding the application
of
accounting policies. Although these estimates are based on the
management's
best knowledge, actual results may ultimately differ from the
estimates used
in the interim report. Tax losses carried forward are recognized as
deferred
tax assets only to the extent that it is probable that future taxable
profits
will be available against which unused tax losses can be utilized.
Actual
results could differ from those estimates.
Segment information
Net sales by business area (primary segment)
Q1-Q2/ Q1-Q2/ 1-12/ Q2/ Q2/
Million euros 2008 2007 2007 2008 2007
Building & Construction 23.64 21.43 45.48 11.45 10.81
Infra & Energy 5.74 5.60 12.76 3.07 3.11
Defence *) 1.00 1.00 0.51
Others 0.01
Total 29.38 28.03 59.25 14.52 14.43
Operating result by business area (primary segment)
Q1-Q2/ Q1-Q2/ 1-12/ Q2/ Q2/
Million euros 2008 2007 2007 2008 2007
Building & Construction 6.75 6.94 15.96 2.65 3.09
Infra & Energy 0.23 0.14 1.96 0.28 0.31
Defence *) 2.53 2.78 2.51
Others -0.01 0.01 -0.02 0.11 -0.07
Total 6.97 9.62 20.68 3.04 5.84
*) Defence has been processed as discontinued business for the
comparison period.
Financial indicators Q1-Q2/ Q1-Q2/ 1-12/ Q2/ Q2/
2008 2007 2007 2008 2007
Earnings per share
(EPS), EUR 0.23 0.32 0.69 0.10 0.19
Earnings per share (EPS)
from
continuing businesses,
EUR 0.23 0.23 0.60 0.10 0.10
Earnings per share (EPS)
from
discontinued operations,
EUR 0.08 0.09 0.08
Equity/share, EUR 1.12 1.02 1.40
Interest-bearing
liabilities 0.14 0.31 0.34
Equity ratio, % 61.8 56.1 67.5
Net gearing, % -100.4 -117.0 -94.8
Return on investment, % 51.1 81.7 74.5 54.4 111.6
Return on equity, % 36.7 59.8 55.4 38.5 80.6
Number of shares
at end of period 22,516,600 22,516,600 22,516,600
Number of shares,
on average 22,516,600 22,516,600 22,516,600
Gross investments, MEUR 0.60 0.76 1.66 0.33 0.26
% of net sales 2.04 2.71 2.80 2.27 1.80
Personnel, on average 414 371 374 425 371
Discontinued operations
Defence business
Tekla's Defence business was transferred to Patria on May 1, 2007.
The calculations below show the effect of the business sale
on the result and the cash flow during the reporting and comparison
periods.
Result for the Defence business
Q1-Q2/ Q1-Q2/ 1-12/
2008 2007 2007
Net sales 1.00 1.00
Expenses -0.81 -0.81
Profit (loss) before
income taxes 0.00 0.19 0.19
Taxes -0.05 -0.05
Profit (loss) after taxes 0.00 0.14 0.14
Sales profit from
the Defence business sale 2.34 2.59
Taxes -0.61 -0.67
Sales profit after
taxes 0.00 1.73 1.92
Profit/loss for the period
from discount. operations 0.00 1.87 2.06
Cash flow statement, Defence
Cash flows from
operating activities 0.60 1.24
Cash flow from
investing activities 2.35 2.35
Total cash flow 0.00 2.95 3.59
The effect of the sale of the Defence business on the
financial position of the Group
Assets 0.25 0.25
Liabilities 0.68 0.72
Consolidated income statement by quarter
Q2/ Q1/ Q4/ Q3/ Q2/
Million euros 2008 2008 2007 2007 2007
Continuing businesses:
Net sales 14.52 14.86 16.44 14.78 13.92
Other operating income 0.42 0.12 0.39 0.17 0.22
Change in inventories of
finished goods and in
work in progress -0.05 -0.02 0.05
Raw materials and
consumables used -0.71 -0.61 -0.67 -0.28 -0.52
Employee compensation and
benefit expense -7.23 -6.64 -6.90 -5.72 -6.77
Depreciation -0.28 -0.27 -0.28 -0.28 -0.28
Other operating expenses -3.68 -3.53 -3.94 -2.83 -3.29
Operating result 3.04 3.93 4.99 5.82 3.33
% of net sales 20.94 26.45 30.35 39.38 23.92
Financial income 0.41 0.80 0.47 0.62 0.27
Financial expenses -0.19 -0.74 -0.42 -0.41 -0.24
Profit (loss)
before taxes 3.26 3.99 5.04 6.03 3.36
% of net sales 22.45 26.85 30.66 40.80 24.14
Income taxes -0.94 -1.10 -1.24 -1.57 -1.03
Result for the period
from continuing
businesses 2.32 2.89 3.80 4.46 2.33
Discontinued operations:
Result for the period
from discontinued
operations 0.19 1.86
Result for the period 2.32 2.89 3.99 4.46 4.19
Income taxes Q1-Q2/ Q1-Q2/ 1-12/
2008 2007 2007
Taxes for the financial
period and prior periods -2.16 -1.90 -4.54
Deferred taxes 0.12 -0.21 -0.38
Total -2.04 -2.11 -4.92
Estimated effective tax rate for the financial year
has been applied to the result of the reporting period.
Property, plant and equipment 6/2008 6/2007 12/2007
Cost at the beginning
of the period 7.20 6.82 6.67
Translation differences -0.05 -0.02 -0.09
Additions 0.41 0.37 1.16
Disposals -0.15 -0.23 -0.54
Cost at the end of the
period 7.41 6.94 7.20
Accumulated depreciation at
the beginning of the period 5.41 5.08 4.93
Translation differences -0.04 -0.02 -0.05
Accumulated depreciation on
disposals -0.07 -0.18 -0.31
Depreciation for
the financial period 0.38 0.43 0.84
Accumulated depreciation
at the end of the period 5.68 5.31 5.41
Net book amount
at the end of the period 1.73 1.63 1.79
The investments consisted of normal acquisitions of hardware,
software and equipment.
Provisions
The Group's provisions, loss-making contracts and provisions for
pension obligations have been eliminated on December 31, 2007.
Collaterals, contingent
liabilities and other commitments
6/2008 6/2007 12/2007
Collaterals for own commitments
Business mortgages
(as collateral for bank
guarantee limit) 0.50 0.50 0.50
Pledged funds 0.05 0.07 0.07
Other contingent liabilities
Guarantees 0.06
Leasing and rental
agreement commitments
Premises 4.00 5.62 4.75
Others 0.84 0.74 0.81
Total 4.84 6.36 5.56
Derivative contracts
Currency forward contracts:
Fair value 0.13 0.07 0.31
Nominal value of
underlying instruments 2.37 3.76 3.63
The Group makes derivative contracts to hedge against the
exchange rate risks of prospective sales agreements.
Forward contracts and currency options are stated at fair
value, and related foreign exchange gains and losses are
recognized in the income statement. The derivative contracts
hedge sales in US dollars.
Related party transactions 6/2008 6/2007 12/2007
Gerako Oy
Purchases of services 0.11 0.03 0.06
Reimbursed expenses 0.01
Management remuneration
Salaries and post-employment
benefits
0.94 0.82 1.33
Management herein refers to members of the Tekla Management Team.
Tekla Corporation's Interim Report January 1 - June 30, 2008: Tekla's profitability still good despite slowing down of growth
| Source: Tekla
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