Solteq Plc Stock Exchange Bulletin 20.10.2011 at 9.00 am
- Turnover totalled 19,5 million euros (19,5 million euros)
- Operating profit totalled 985 thousand euros (-2.213 thousand euros)
- In 2011 the turnover is forecasted to be at the same level as in 2010 but the
operating profit is forecasted to have improved to nearly 5 per cent
- Earnings per share were 0,05 euros (-0,15 euros)
Turnover by operation:
% 1-9/11 1-9/10 1-12/10
Softwareservices 63 67 65
Licences 32 27 27
Hardware 5 6 8
CEO Repe Harmanen:
"The third quarter was operationally and financially in accordance with our
forecasts and our positive performance continued in relation to last year. Our
sales were at the previous year's level. The improvement of profitability has
been successful and in accordance with our plans. After nine months, we are able
to maintain our performance, but we still have work ahead in the upcoming
periods as relates to the specified level set forth in the strategy. Our results
as compared to the previous quarter and on a cumulative basis have improved and
we have maintained our predicted level of earnings.
The level of earnings and improvement are based on improved monitoring, risk
management, as well as the effects of the first cost-saving measures. It was
encouraging to note effect of the implemented measures on our business
operations. It creates good faith in our operations for the coming months and
years. I do not think that we have yet achieved major breakthroughs. We have
been successful in enhancing our situation with well-planned work and small
steps, improvements and activities with our long term customers and employees.
Long-term and trustworthy customer relationships are a solid basis for
everything we do.
The year's theme of "Forecasted Profitability" can be viewed as working and we
want to keep this theme in front and as part of our decision making and
operations. It's important to keep focus on simple and basic things and actions
also in the future.
Demand in our business areas has remained at normal levels throughout the fiscal
year. Our current predictions for the end of the year concerning operations
correspond to our earlier projections. The current turbulent situation on the
European financial markets raises questions on the future. Due this we have
reviewed and attempted to identify factors that may impact our business areas
directly or indirectly and taken necessary planning steps at this stage. We want
to be ready if the situation requires us to react. So far we do not anticipate
any change at the level of operations for this year but, as always, predictions
- especially relating to the distant future - are difficult.
We have advanced our new strategy in accordance with our plans. Parts of the
strategic programs have progressed more slowly than expected, and some on the
other hand faster than predicted. During the summer, we have also gotten the
first new business openings in accordance with our strategy. During the quarter
we have refined and added measures in a few strategic areas in order to speed up
implementation. We have also sought to speed up and streamline operations
through the announced organizational change to better align our operating model
with our strategy. As of the beginning of 2012, Solteq Plc's reported segments
are the Enterprise Resource Planning and Financial Management Solutions and
Value Added Solutions for Enterprise Resource Planning.
Overall, I feel the situation to date this year is even good in some parts. We
see reasonable demand but at the same time the general uncertainty creates
additional challenges for the realization of growth. We will win by rigorously
focusing on our operations, strategy and good client relationships.
We will continue and focus on our operational activities as well as the
implementation of our strategy.
Happy autumn to all of our stakeholders!"
BUSINESS ENVIRONMENT AND BUSINESS DEVELOPMENT
Solteq offers systematically developing operational and financial control
services to commercial, logistics, industrial and public administration actors.
We complement our core offering with solutions for specialized retail
management, maintenance and servicing management, as well as solutions for
quality improvement and the management of systems in which master data is
contained. With the help of our solutions developed using technology from the
world's leading companies, our clients guide their businesses more efficiently
and improve their profitability.
Starting from 1.1.2010, Solteq's operations were divided into four business
areas and the results of the company are monitored through these areas. Business
areas are: ERP (enterprise resource planning), EAM (enterprise asset
management), Data (data management, optimization and integration) and Store
(retail solutions and technology).
Solteq's turnover was 19.492 thousand euros (19.507 thousand euros).
Solteq's operating profit was 985 thousand euros (-2.213 thousand euros). The
company's operating margin was 5,1 % (-11,3 % in 2010).
ERP
Solteq's ERP business area offers its clientele enterprise resource planning
systems and supporting optimization and reporting solutions as well as a set of
other different added value solutions. These solutions help customers lead their
operations and enhance, for example, their purchases, sales and warehouse
management, as well as reporting. A wide group of customers use these solutions
every day in the trade, industry, auto trade and public sector operating areas,
among others.
The revenue of the ERP business area totalled 12,2 million euros. The business
area's operating profit was 1,2 million euros.
EAM
Solteq's EAM solutions include systems for maintenance management, asset
management optimization, fieldwork management and maintenance. Through these
solutions, Solteq's customers can anticipate the need for service of production
lines and machines, monitor the malfunction history and control the machinery
maintenance related material flows from purchasing to warehousing. The clientele
consists of, among others, energy and production plants, companies in the
processing and engineering industries, as well as the maintenance related
service sector.
During the review period, the revenue of the EAM business area totalled 2,9
million euros and the operating profit was 0,1 million euros.
Data
Solteq's Data business area is responsible for services and products relating to
the data (namely, masterdata) that are crucial to the customers' businesses as
well as e-commerce and integration technologies. Solteq offers to its customers
masterdata-related quality improvement projects, data maintenance services in
which the services are outsourced to masterdata service centers, software
technologies and consultancy services that can be utilized in masterdata
management. The aim of these services is to ensure that the data that is stored
in the programs that support customers' enterprise resource planning and
decision-making is high-quality, compatible and up to date.
During the review period the revenue of the Data business area totalled 1,4
million euros and the operating result was -0.4 million euros.
Store
The solutions of Solteq's Store business sector enhance the management of the
purchases, sales and customer relationships of specialty stores and chained
commerce. Every day hundreds of retailers, entrepreneurs and salespersons lead
their businesses and serve their customers in thousands of store locations by
means of these solutions.
The revenue of Store business area totalled 3,0 million euros and the operating
profit was 0.1 million euros during the review period.
TURNOVER AND RESULT
Turnover decreased by 0.1 % compared to the previous year and totalled 19.492
thousand euros (previous review period 19.507 thousand euros).
Turnover consists of several individual clienteles. At the most, one client
corresponds to less than ten per cent of the turnover.
The profit for the review period was 985 thousand euros (-2.213 thousand euros),
the operating profit before taxes was 846 thousand euros (-2.342 thousand euros)
and the operating profit for the review period was 614 thousand euros (-1.764
thousand euros).
BALANCE SHEET AND FINANCING
The total assets amounted to 16.775 thousand euros (19.036 thousand euros).
Liquid assets totalled 147 thousand euros (157 thousand euros). In addition to
liquid assets the company had unused account limits totalling 2.061 thousand
euros at the end of the review period.
Solteq Group's interest-bearing liabilities were 5.041 thousand euros (7.005
thousand euros).
Solteq Group's equity ratio was 33,9 per cent (38,4 per cent).
INVESTMENTS, RESEARCH AND DEVELOPMENT
Gross investment during the review period was 104 thousand euros (97 thousand
euros).
Research and development
Solteq's research and development costs consist mainly of personnel costs. When
developing basic products, it is Solteq's strategy to cooperate with global
actors such as SAP, Microsoft and IBM and utilize their resources and
distribution channels. Own development efforts are focused on added value
products and developing tailored service concepts.
During the review period product development costs were not amortized in
accordance with IFRS standards (comparison year also not amortized for the
review period).
PERSONNEL
The number of permanent employees at the end of the review period was 211 (230).
The average number of personnel during the review period was 213 (237). In the
end of the review period the number of personnel could be divided as follows
ERP: 101 people; EAM: 34 people; DATA: 21 people; STORE: 24 people and 31 people
in shared functions.
RELATED PARTY TRANSACTIONS
Solteq's related parties include the board of directors, managing director and
the management team.
The company has on 1/3 and 23/3/2011 provided notification about an arrangement
in which interest bearing loans and a directed issuance have been given to
Solteq Management Oy, which is owned by management.
Solteq Management Oy is combined into consolidated financial statements on the
basis of the shareholders' agreement.
SHARES, SHAREHOLDERS AND TREASURY SHARES
Solteq Plc's equity on 30.9.2011 was 1.009.154,17 euros which was represented by
12.148.429 shares. The shares have no nominal value.
At the end of the review period, the amount of treasury shares in Solteq Plc and
the group company Solteq Management Oy's possession were 674.976 shares. The
amount of treasury shares represented 5,6 % of the total amount of shares and
votes at the end of the review period. The equivalent value of acquired shares
was 56.069 euros.
Exchange and share price
During the review period, the exchange of Solteq's shares on the Helsinki Stock
Exchange was 1.5 million shares (0.8 million shares) and 1.6 million euros (1.0
million euros). The highest price during the review period was 1.20 euros and
the lowest price was 0.96 euros. The weighted average price of the share was
1.08 euros and the price ending was 1,02 euros. The market value of the
company's shares in the end of the review period totalled 12,4 million euros
(13,8 million euros).
Ownership
At the end of the review period, Solteq had a total of 1,858 shareholders (1,970
shareholders). Solteq's 10 largest shareholders owned 8,499 thousand shares,
amounting to 70.0 per cent of the company's shares and votes. Solteq Plc board
members owned a total of 5,149 thousand shares which equals 42.4 per cent of the
company's shares and votes.
ANNUAL GENERAL MEETING
At Solteq Plc's annual general meeting on 16 March 2011 the 2010 financial
statements were adopted and the members of the board and the managing director
were discharged from liability for the 2010 review period.
The annual general meeting decided in accordance with the board's proposal that
no dividend will be paid for the review period ending on 31 December 2010.
The annual general meeting decided to authorize the board of directors to decide
on acquiring and distress the company's own shares so that the amount in the
possession of the company may reach up to 10 per cent of the company's total
shares at that moment. The shares can be acquired in order to develop the
company's capital structure, finance and execute acquisitions or similar
arrangements or be used as part of the incentive scheme of the personnel or be
otherwise conveyed or cancelled. The shares can be acquired in proportions other
than the shareholders' holdings. The shares are to be acquired through public
trading. The authorization is valid until the next annual general meeting.
The General Meeting approved proposal by the Board to cover the loss of
3.412.908, 22 euros in balance sheet by the fund for invested unrestricted
equity.
BOARD OF DIRECTORS AND AUDITORS
Five members were elected to the board of directors. Ali Saadetdin, Seppo Aalto,
Markku Pietilä, Sirpa Sara-aho and Jukka Sonninen continued as members of the
board. The board elected Ali Saadetdin to act as the Chairman of the Board.
KPMG Oy Ab, Authorized Public Accountants, was re-elected as Solteq's auditors.
Frans Kärki, APA, acts as the chief auditor.
EVENTS AFTER THE REVIEW PERIOD
No events have occurred that require reporting after the review period.
RISKS AND UNCERTAINITIES
The key uncertainties and risks in short term are related to the timing and
pricing of business deals that are the basis for revenue, changes in the level
of costs and the company's ability to manage extensive contract agreements and
deliveries.
The key business risks and uncertainties of the company are monitored constantly
as a part of the board of directors' and management team's duties. The company
has not organized a separate internal audit organization or committee.
PROSPECTS
Relating to year 2011, Solteq forecasts that the annual revenue will be at the
same level as in 2010. The operating profit, however, is forecasted to have
clearly improved to approximately 5 per cent.
Financial Reporting
This interim report has been prepared in accordance with the recognition and
measurement principles of IFRS-standards.
The financial result is reported through four business areas. The ERP business
area includes systems for finance and enterprise resource planning. The EAM
business area consists of asset management optimization, material management and
maintenance management systems. The Data business area includes tools for data
collection, assurance of data's quality and accuracy, as well as tools for data
integration between different systems. The Store business area includes point-
of-sale and store management systems. The most essential product and service
types of the Solteq group of companies are software services, licenses and
hardware sales.
All forecasts and estimates presented in the interim report are based on the
current views of management on the economic environment and outlook. Because of
this, the results can differ as a result of, among other factors, changes in
economy, markets and competitive conditions, changes in the regulatory
environment and other government actions.
The interim report is unaudited.
FINANCIAL INFORMATION
GROUP PROFIT AND LOSS ACCOUNT
(TEUR)
1.7.- 1.7.- 1.1.- 1.1.- 1.1.-
30.9.2011 30.9.2010 30.9.2011 30.9.2010 31.12.2010
NET TURNOVER 5 325 6 748 19 492 19 507 26 998
Other operating
income 0 2 9 14 52
Raw materials and
services -1 211 -1 895 -4 281 -5 360 -7 394
Staff expenses -2 711 -2 835 -10 445 -11 689 -15 688
Depreciation -207 -501 -614 -925 -3 223
Other operating
expenses -903 -1 555 -3 176 -3 760 -5 060
OPERATING RESULT 293 -36 985 -2 213 -4 315
Financial income and
expenses -32 -42 -139 -129 -172
RESULT BEFORE TAXES 261 -78 846 -2 342 -4 487
Income taxes -71 16 -232 578 780
RESULT FOR THE PERIOD
190 -62 614 -1 764 -3 707
OTHER ITEMS OF TOTAL COMPREHENSIVE INCOME
Cash flow hedging -13 15 8 -31 -18
Other items of total comprehensive income
after taxes -10 11 6 -23 -13
TOTAL COMPREHENSIVE INCOME
180 -51 620 -1 787 -3 720
Total profit for the period attributable to
Owners of the parent 190 -62 614 -1 764 -3 707
Total comprehensive income attributable to
Owners of the parent 180 -51 620 -1 787 -3 720
Earnings / share,
e(undiluted) 0,01 -0,01 0,05 -0,15 -0,32
Earnings / share,
e(diluted) 0,01 -0,01 0,05 -0,15 -0,32
Taxes corresponding to the result have been presented as taxes
for the period.
GROUP BALANCE SHEET (TEUR) 30.9.2011 30.9.2010 31.12.2010
ASSETS
NON-CURRENT ASSETS
Intangible assets
Intangible rights 1 860 2 186 2 093
Goodwill 6 199 8 286 6 199
Tangible assets 2 634 2 637 2 660
Investments
Other shares and similar
rights of ownership 93 93 93
Deferred tax
assets 420 453 654
Other receivables 87 157 87
Total non-current
assets 11 293 13 812 11 786
CURRENT ASSETS
Short-term debtors 5 335 5 067 5 294
Cash in hand and at banks 147 157 131
Total current
assets 5 482 5 224 5 425
TOTAL ASSETS 16 775 19 036 17 211
EQUITY AND LIABILITIES
CAPITAL AND RESERVES ATTRIBUTABLE TO THE SHAREHOLDERS OF THE PARENT COMPANY
Share capital 1 009 1 009 1 009
Company's own shares -808 -507 -618
Share premium account 75 75 75
Account for cash flow
hedging -14 -30 -20
Unrestricted equity
fund 3 801 7 214 7 214
Retained earnings 1 012 1 307 1 306
Result for the
financial period 614 -1 764 -3 707
Total equity 5 689 7 304 5 259
Non-current liabilities
Other non-current liabilities 2 444 3 693 3 016
Current liabilities 8 642 8 039 8 936
Total liabilities 11 086 11 732 11 952
TOTAL EQUITY AND
LIABILITIES 16 775 19 036 17 211
FINANCIAL PERFORMANCE
INDICATORS (IFRS) 1-9/2011 1-9/2010 1-12/2010
Net turnover MEUR 19,5 19,5 27,0
Change in net turnover -0,1 % -4,0 % -5,4 %
Operating result MEUR 1,0 -2,2 -4,3
% of turnover 5,1 % -11,3 % -16,0 %
Result before taxes MEUR 0,8 -2,3 -4,5
% of turnover 4,3 % -12,0 % -16,6 %
Equity ratio, % 33,9 38,4 30,6
Gearing, % 86,0 % 93,8 % 132,8 %
Gross investments in
non-current assets MEUR 0,1 0,1 0,2
Return on equity, % 12,6 % -28,2 % -48,7 %
Return on investment, % 10,7 % -19,0 % -29,3 %
Personnel at end of
period 211 230 220
Personnel average
for period 213 237 233
KEY INDICATORS PER SHARE
Earnings / share, e 0,05 -0,15 -0,32
Earnings / share,
e(diluted) 0,05 -0,15 -0,32
Equity / share, e 0,50 0,62 0,45
SEGMENT INFORMATION
Turnover by segment:
Me 1-9/11 1-9/10 Change
ERP 12,2 12,1 +0,1
EAM 2,9 2,6 +0,3
DATA 1,4 2,0 -0,6
STORE 3,0 2,8 +0,2
Total 19,5 19,5
Operating result by segment:
Me 1-9/11 1-9/10 Change
ERP 1,2 -1,1 +2,3
EAM 0,1 -0,3 +0,4
DATA -0,4 -0,5 +0,1
STORE 0,1 -0,3 +0,4
Total 1,0 -2,2 +3,2
QUARTERLY KEY INDICATORS (MEUR)
4Q/09 1Q/10 2Q/10 3Q/10
Net turnover 8,23 6,17 6,59 6,75
Operating result 0,78 -1,02 -1,16 -0,04
Result before taxes 0,75 -1,07 -1,20 -0,08
4Q/10 1Q/11 2Q/11 3Q/11
Net turnover 7,49 6,85 7,32 5,32
Operating result -2,10 0,37 0,32 0,29
Result before taxes -2,15 0,32 0,27 0,26
CASH FLOW STATEMENT (MEUR)
1-9/2011 1-9/2010 1-12/2010
Cash flow from business
operations 2,38 0,77 0,82
Cash flow from capital
expenditure -0,10 -0,10 -0,15
Cash flow from financing activities
Dividend distribution 0,00 -0,71 -0,71
Own shares -0,19 -0,17 -0,28
Loan agreement -2,07 0,10 0,19
Cash flow from financing
activities -2,26 -0,78 -0,80
Change in cash and cash
equivalents 0,02 -0,11 -0,13
TOTAL INVESTMENTS (TEUR)
1-9/2011 1-9/2010 1-12/2010
Continuing operations,
group total 104 97 153
LIABILITIES (MEUR) 30.9.2011 30.9.2010 31.12.2010
Company quorantee for
credit limits 2,61 2,61 2,61
Perfomance bonds 0,00 0,05 0,00
Lease contracts, machinery &
equipment 0,65 0,64 0,41
Lease liability,
premises 1,51 1,90 1,80
Pledged shares 1,59 1,59 1,59
MAJOR SHAREHOLDERS SEPTEMBER 30, 2011
%
1. Saadetdin Ali 3 481 383 28,7
2. Aalto Seppo 1 662 206 13,7
3. Profiz Business Solution Oyj 1 384 823 11,4
4. TP-Yhtiöt Oy 513 380 4,2
5. Solteq Management Oy 400 000 3,3
6. Roininen Matti 350 000 2,9
7. Solteq Oyj 274 976 2,3
8. Hakamäki Jorma 172 430 1,4
9. Saadetdin Katiye 156 600 1,3
10. Aukia Timo 103 230 0,8
10 largest shareholders total 8 499 028 70,0 %
Total of nominee-registered 20 016 0,2 %
Others 3 629 385 29,9 %
Total 12 148 429 100,0 %
STATEMENT OF CHANGES IN GROUP EQUITY (TEUR)
A=Share capital
B=Company's own shares
C=Share premium account
D=Account for cash flow hedging
E=Unrestricted equity fund
F=Retained earnings
G=Total
A B C D E F G
EQUITY 1.1.2010 1 009 -337 75 -7 7 213 2 020 9 973
Total comprehensive income -23 -1 764 -1 787
Acquiring of own shares -170 -170
dividend distribution -712 -712
EQUITY 30.9.2010 1 009 -507 75 -30 7 213 -457 7 304
EQUITY 1.1.2011 1 009 -618 75 -20 7 213 -2 400 5 259
Total comprehensive income 6 614 620
Acquiring of own shares -190 -190
Loss covered by fund -3 413 3 413 0
EQUITY 30.9.2011 1 009 -808 75 -14 3 801 1 626 5 689
CALCULATION OF FINANCIAL RATIOS
Solvency ratio, in percentage
equity x 100
----------------------------------
balance sheet total - advances received
Gearing
interest bearing liabilities - cash,
bank balances and securities x 100
-------------------------------------------
equity
Return on Equity (ROE) in percentage
profit or loss before taxation - taxes x 100
----------------------------------------
equity
Profit from invested equity in percentage
profit or loss before taxation +
interest expenses and other financing expenses x 100
----------------------------------------
balance sheet total - non-interest bearing
liabilities
Earnings per share
pre-tax result - taxes
+/- minority interest
------------------------------------
diluted average share issue
corrected number of shares
Diluted earnings per share
diluted profit before taxation -
taxes +/- minority interest
-----------------------------------------------
diluted average share issue
corrected number of shares
Equity per share
equity
-----------------------
number of shares
Financial Reporting
Solteq Plc's will publish the financial statements bulletin from the financial
year 2011 February 16, 2012 at 9.00 am.
More investor information is available from Solteq's website at www.solteq.com
Additional information:
CEO Repe Harmanen
Telephone: +358 400 467 717
Email: repe.harmanen@solteq.com
CFO Antti Kärkkäinen
Telephone: +358 20 1444 393 or +358 40 8444 393
Email: antti.karkkainen@solteq.com
Distribution:
NASDAQ OMX Helsinki
Key Media
[HUG#1556220]
