Stock exchange release
20th October 2015 at 8.00 am
INTERIM REPORT OF COMPTEL CORPORATION 1 JANUARY-30 SEPTEMBER 2015
- Revenue grew by 10.5% in the first nine months of 2015
- Backlog increased by 18.9% compared to last year.
Key figures for the third quarter of 2015:
- Net sales EUR 22.4 million (Q3 2014: 20.3), growth 10.3%
- Operating result EUR 0.8 million (2.2), change -63,7%
- Net profit EUR -0.1 million (0.4), change -116.9%
- Earnings per share EUR 0.00 (0.01)
-
Order backlog EUR 53.5 million (45.0), growth 18.9%
Key figures for the January-September of 2015:
· Net sales EUR 65.1 million (January - September 2014: 58.9), growth 10.5%
· Operating result EUR 2.9 million (4.4), change -34.4%
· Net profit EUR 0.6 million (1.2), change -53.4%
· Earnings per share EUR 0.01 (0.01)
Outlook (unchanged)
We expect the 2015 net sales to grow compared to previous year and we expect operating profit to be in the range of 8-12% of revenue, excluding one-time charges.
Characteristically a significant part of Comptel’s operating profit and net sales is generated in the second half of the year.
Juhani Hintikka, President and CEO:
” Our business continued to grow in the third quarter. Our revenues grew by 10,5 per cent and our order backlog 18,9 per cent compared to last. We invested in delivery capacity for customer projects in the remainder of the year. This reduced our profitability but was necessary in order to efficiently deliver our increased order backlog. Our revenue mix, in the third quarter, was more service oriented than on average which lowered our profitability.
Both our product business units are now on a growth track and we expect this trend to continue. Integrated analytics solution is now live in all regions with four customers.
For 2014 tax year new decision was made by tax authorities and deductibility for withholding taxes for certain countries were limited. As a result, we had to do a EUR 0.4 million onetime tax charge in the third quarter.
Our strategy implementation is developing as planned. We will launch a new data monetizer product in November in a new marketing event, NexterDay North. In line with our strategy, we have also made progress, during the year, on the growth markets as well as with global accounts
During the third quarter, we secured 6 significant orders valued over EUR 0.5 million each.”
Business review of the third quarter and January-September 2015
In the third quarter, Comptel’s net sales increased by 10.3 per cent compared to the respective quarter last year and were EUR 22.4 million (20.3). Comptel FlowOne solution continued to grow, driving the Service Orchestration Business Unit growth to 12.7 per cent in this quarter. Strong sales in Fastermind and Datarefinery in the third quarter contributed to Intelligent Data unit growth of 7 per cent compared to respective quarter last year.
In January-September, net sales increased by 10.5 per cent from the comparable period last year and were EUR 65.1 million (58.9). The growth increase for the year was driven by Comptel FlowOne and Service Orchestration unit.
In the third quarter, the operating result was EUR 0.8 million (2.2), which corresponds to 3.6 per cent of net sales (11.0). Investments in delivery capacity decreased the third quarter profitability.
The operating result for January-September was EUR 2.9 million (4.4), which corresponds to 4.4 per cent of net sales (7.4). The reduction in profitability in the first nine months is due to investments in growth.
Financial income/expenses were EUR -1.2 million. The main driver for the expense is foreign currency fluctuation.
In January-September, profit before taxes was EUR 1.7 million (3.2) and net profit for the period was EUR 0.6 million (1.2). Earnings per share for the period were EUR 0.01 (0.01).
In the third quarter, EUR 0.4 million one-time tax charge was included in tax expenses due to new tax ruling of withholding taxes from the Finnish tax authorities. Tax expenses for January - September was EUR 1.1 million (2.0), including EUR 0.9 million (1.2) of withholding taxes.
Order backlog increased from the previous year and was EUR 53.5 million (45.0) at the end of the period. The strong order intake during the year has contributed to the increase of the backlog.
Comptel strategy
Life is digital moments. Digital demand will be driven by “Generation Cloud” customers and enterprises interacting with millions of digital applications. The Internet of Things with billions of connected devices will further accelerate the digital demand leading to exploding data volumes. Future mobile and fixed networks will provide hyper speeds and undergo a transformation from hardware to software. Network functions will be virtualised. Mounting complexity will require orchestration of business flows and virtualised resources.
Comptel mission is to perfect the digital moments and translate them into business moments by connecting digital demand and supply.
The Comptel strategy focuses on providing solutions for digital and communications service providers in two major areas – Intelligent Data and Service Orchestration. The Intelligent Data business delivers solutions and services to customers for monetising data and turning big data into intelligent automated actions. The Service Orchestration business area provides solutions and services for business flow orchestration and mastering the digital buying experience.
Comptel’s strategic target is to establish itself as a leading software vendor for connecting digital demand and supply.
Strategy execution is based on six strategic objectives: solutions with unique value, thought leadership, customer excellence, new markets, leverage by partners and inspired people.
Comptel´s marketing strategy strives for industry thought leadership on carefully selected themes and topics which are: Digital Buying Experience, Monetising more with less time, Orchestration of service and order flows from ground to cloud and intelligent fast data. The essence of Comptel’s thought leadership is captured in the book “Operation Nexterday” that was launched in Barcelona’s Mobile World Congress in March 2015.
Business areas
|
Net sales, EUR million |
7-9 2015 |
7-9 2014 |
Change % | 1-9 2015 | 1-9 2014 |
Change % |
1-12 2014 |
| Europe | 8.1 | 8.1 | 0.7 | 24.4 | 23.5 | 3.7 | 35.4 |
| Asia Pacific | 7.3 | 6.8 | 6.3 | 20.7 | 19.0 | 8.9 | 24.8 |
| Middle East and Africa | 4.6 | 3.5 | 32.2 | 12.0 | 10.4 | 15.6 | 16.8 |
| Americas | 2.5 | 2.0 | 24.9 | 8.0 | 6.0 | 33.5 | 8.8 |
| Total | 22.4 | 20.3 | 10.3 | 65.1 | 58.9 | 10.5 | 85.7 |
|
Operating result, EUR million |
|||||||
| Europe | 5.4 | 4.5 | 18.5 | 15.6 | 11.9 | 31.1 | 19.5 |
| Asia Pacific | 3.5 | 4.5 | -21.8 | 10.7 | 12.1 | -11.7 | 14.5 |
| Middle East and Africa | 2.0 | 1.0 | 91.2 | 3.8 | 3.9 | -4.7 | 7.3 |
| Americas | 1.0 | 0.8 | 25.8 | 4.1 | 2.6 | 55.8 | 4.0 |
| Unallocated costs | -11.1 | -8.6 | 28.1 | -31.2 | -26.1 | 19.4 | -37.0 |
| Total | 0.8 | 2.2 | -63.7 | 2.9 | 4.4 | -34.4 | 8.3 |
|
Operating result, % of net sales |
|||||||
| Europe | 66.1 | 56.2 | - | 63.8 | 50.4 | - | 55.3 |
| Asia Pacific | 48.5 | 66.0 | - | 51.5 | 63.5 | - | 58.7 |
| Middle East and Africa | 43.3 | 29.9 | - | 31.3 | 38.0 | - | 43.2 |
| Americas | 41.4 | 41.1 | - | 50.6 | 43.3 | - | 45.5 |
| Total | 3.6 | 11.0 | - | 4.4 | 7.4 | - | 9.7 |
In the third quarter, net sales grew in all regions. Compared to respective quarter last year growth was strong especially in Middle East and Africa and the Americas region. Sales mix and investments in delivery capabilities did impact the profitability of the regions.
In January - September, net sales increased in all regions. The proportional profitability declined in Asia Pacific and Middle East while improving in the other two regions.
In January - September, Comptel received 20 significant orders (January - September 2014:15): Service Orchestration received 14 orders(ten for the FlowOne Fulfillment solution, four for FlowOne Provisioning and Activation) and Intelligent Data received four orders (two for Data Refinery, one for Fastermind and one for the Monetizer solution). Two orders were multisolution orders across business units. As significant orders Comptel reports sold projects and licenses with a minimum value of EUR 0.5 million.
|
Net sales breakdown, EUR million |
7-9 2015 |
7-9 2014 |
Change % |
1-9 2015 |
1-9 2014 |
Change % |
1-12 2014 |
| Project & License business | 13.9 | 11.9 | 17.0 | 39.3 | 33.3 | 17.8 | 52.1 |
| Recurring business | 8.5 | 8.4 | 0.8 | 25.9 | 25.6 | 1.0 | 33.6 |
| Total | 22.4 | 20.3 | 10.3 | 65.1 | 58.9 | 10.5 | 85.7 |
New Project & License business continues to be the driver for growth.
|
Net sales breakdown, EUR million |
7-9 2015 |
7-9 2014 |
Change % |
1-9 2015 |
1-9 2014 |
Change % |
1-12 2014 |
| Intelligent Data | 9.2 | 8.6 | 7.0 | 27.9 | 27.5 | 1.4 | 39.7 |
| Service Orchestration | 13.2 | 11.7 | 12.7 | 37.2 | 31.4 | 18.5 | 46.0 |
| Total | 22.4 | 20.3 | 10.3 | 65.1 | 58.9 | 10.5 | 85.7 |
FlowOne Fulfillment solution and Service Orchestration business unit continued to grow in the third quarter. New sales in Datarefinary and Fastermind contributed to the Intelligent Data growth in the third quarter.
Financial Position
| EUR million | 30 Sep 2015 | 31 Dec 2014 |
Change % |
30 Sep 2014 |
Change % |
| Statement of financial position total | 65.3 | 77.6 | -15.9 | 62.0 | 5.2 |
| Liquid assets | 2.7 | 9.4 | -71.3 | 5.7 | -53.1 |
| Trade receivables, gross | 25.1 | 28.9 | -13.1 | 22.8 | 10.0 |
| Bad debt provision | -1.5 | -1.2 | 30.8 | -0.8 | 95.8 |
| Trade receivables, net | 23.6 | 27.7 | -15.0 | 22.0 | 6.9 |
| Accrued income | 12.5 | 10.9 | 14.6 | 10.3 | 21.7 |
| Deferred income related to partial debiting | 3.0 | 4.4 | -32.8 | 2.6 | 13.9 |
| Interest-bearing debt | 5.4 | 7.6 | -28.4 | 5.6 | -2.4 |
| Equity ratio, per cent | 64.9 | 52.4 | 23.8 | 59.0 | 10.1 |
The statement of financial position on 30 September 2015 was EUR 65.3 million (62.0), of which liquid assets amounted to EUR 2.7 million (5.7). Operating cash flow was EUR -1.6 million (3.2) in the third quarter and EUR 0.8 million (6.6) in January-September.
Trade receivables were EUR 23.6 million (22.0) at the end of the period. Accrued income was EUR 12.5 million (10.3). Deferred income related to partial debiting was EUR 3.0 million (2.6).
Comptel has a EUR 25 million credit facility arrangement consisting of EUR 20 million revolving credit facility and EUR 5 million overdraft capacity on current bank account. Out of this arrangement Comptel had EUR 5 million of the revolving credit facility outstanding at the end of the period. The credit facility is valid until July 2018.
The equity ratio was 64.9 per cent (59.0) and the gearing ratio was 8.2 per cent (-0.6).
Research and Development (R&D)
| EUR million |
7-9 2015 |
7-9 2014 |
Change % |
1-9 2015 |
1-9 2014 |
Change % |
1-12 2014 |
| Direct R&D expenditure | 4.2 | 3.9 | 5.4 | 12.8 | 11.7 | 10.0 | 16.8 |
| Capitalisation of R&D expenditure according to IAS 38 | -1.3 | -1.2 | 13.3 | -3.7 | -3.4 | 10.2 | -4.7 |
| R&D depreciation and impairment charges | 1.5 | 1.0 | 57.6 | 4.1 | 3.7 | 9.6 | 4.9 |
| R&D expenditure, net | 4.3 | 3.7 | 16.4 | 13.2 | 12.0 | 9.8 | 17.0 |
| Direct R&D expenditure, % of net sales | 18.6 | 19.4 | - | 19.7 | 19.8 | - | 19.6 |
Direct R&D expenditure represented 19.7 per cent (19.8) of net sales in January - September.
The focus of Comptel’s R&D expenditure was in the further development of solutions in the main product areas, Service Orchestration and Intelligent Data. Development is targeted both to secure the recurring revenue with competitive products and to win new markets by giving customers unique value with new innovations. Service Orchestration’s FlowOne Fulfillment solution is developed as a suite of orchestration elements that manage the service and business flows from ground to cloud. Intelligent Data’s Data Refinery captures data-in-motion and uses embedded intelligence to refine it for automated, in-the-moment decisions and actions. Monetizer is the business policy and charging tool that allows the rapid innovation and design of rich communication and data service offers. Data Fastermind embeds artificial intelligence, prediction and machine learning capabilities into all solutions.
In these areas Comptel seeks global thought leadership in solving the business challenges of operators and digital communications service providers. Additionally Comptel has started to invest in new products around the digital buying experience.
During 2015, we have continued to develop our current offering. During January - September nine major software releases were launched in these respective product areas.
| EUR million |
7-9 2015 |
7-9 2014 |
Change % |
1-9 2015 |
1-9 2014 |
Change % |
1-12 2014 |
| Gross investments in property, plant and equipment and intangible assets | 0.1 | 0.1 | -5.5 | 0.4 | 0.4 | 4.4 | 0.7 |
Investments
The investments comprised of devices, software and furnishings and were funded through cash flow from operations.
Personnel
| 30 Sep 2015 | 31 Dec 2014 |
Change % |
30 Sep 2014 |
Change % |
|
| Number of employees at the end of period | 748 | 660 | 13.3 | 653 | 14.5 |
|
7-9 2015 |
1-12 2014 |
Change % |
7-9 2014 |
Change % |
|
| Average number of personnel during the period | 716 | 665 | 7.7 | 666 | 7.5 |
The number of personnel changed due to investment in R&D and delivery capacity. In the third quarter, personnel expenses were 49.7 per cent of net sales (48.2). In January - September, personnel expenses were 48.2 per cent of net sales (48.5).
At the end of the period, 29.4 per cent (29.7) of the personnel were located in Finland, 26.6 per cent (28.6) in Malaysia, 9.9 per cent (11.5) in Bulgaria, 11.8 per cent (7.2) in India, 2.9 per cent (3.1) in the United Arab Emirates, and 19.4 per cent (19.9) in other countries where Comptel operates.
Comptel’s share
The closing share price of the period was EUR 1.19 (0.64). Comptel’s market value at the end of the period was EUR 127.9 million (68.2).
| Comptel share |
7-9 2015 |
7-9 2014 |
Change % |
1-9 2015 |
1-9 2014 |
Change % |
1-12 2014 |
| Shares traded, million | 6.9 | 3.7 | 85.5 | 24.6 | 20.6 | 19.0 | 27.8 |
| Shares traded, EUR million | 8.5 | 2.3 | 264.6 | 28.2 | 11.5 | 144.5 |
16.5 |
| Highest price, EUR | 1.41 | 0.67 | 110.4 | 1.49 | 0.70 | 112.9 | 1.00 |
| Lowest price, EUR | 1.06 | 0.60 | 76.7 | 0.84 | 0.48 | 75.0 | 0.48 |
Of Comptel’s outstanding shares, 6.0 per cent (3.4) were nominee registered or held by foreign shareholders at the end of the period.
At the end of the period the company held 118,507 of its own shares, which is 0.11 per cent of the total number of shares. The total counter-book value of the shares held by the company was EUR 2,358.
3.478.260 share options were distributed during the review period based on Stock Option Incentive plan 2015.
Corporate Governance
The Annual General Meeting (AGM) of Comptel Corporation was held on 9th of April 2015. The resolutions of the Annual General Meeting as well as the minutes of the Annual General Meeting can be found at company’s web page www.comptel.com.
The AGM authorised the Board of Directors to decide on share issues amounting to a maximum of 21,400,000 new shares and on repurchase or conveying of the company's own shares up to a maximum number of 10,700,000 shares. The authorisations are valid until 30th of June 2016. However, the authorisation to implement the company's share-based incentive programs is valid five years from the AGM resolution.
A separate stock exchange release about the authorisations given and other decisions made by the Annual General Meeting was published on 9th of April 2015.
Events after the reporting period
There were no significant events after the reporting period.
Near-term risks and uncertainties
Comptel develops dynamic end-to-end solutions for leading operators globally in the telecom field. This requires Comptel to understand correctly the trends taking place in its business environment and the needs of its customers and resellers by each region. Failure to identify market conditions, address customers’ needs and develop its products in a timely manner may significantly undermine the growth of Comptel’s business and its profitability.
Characteristics of Comptel’s field of industry are significant quarterly variations of net sales and profit, which are related to customers’ purchasing behaviour and the timing of major single deals.
Comptel’s business consists of deliveries of large productised IT systems, and the value of a single project may be several million euros. Therefore, the credit risk associated with a single project or an individual customer may be significant. Furthermore, some of Comptel’s customers operate in countries where the political or financial climate can be unstable which in part may increase credit risk.
Comptel operates globally and so it is exposed to risks arising from different currency positions. Exchange rate changes between the euro, which is the company’s reporting currency, and the US dollar, UK pound sterling and Malaysian ringgit affect the company’s net sales, expenses and net profit.
The application process to prevent Comptel’s double taxation is still pending with the Ministry of Finance in Finland. However, the process between the states is very slow and the timing of a decision is hard to forecast. The interpretation of tax treaties may result in different views between the countries in question. This could mean that the double taxation will prevail. Comptel has also applications for return of withholding taxes in other countries but they are subject to local legal processes, which take time to get completed. Due to latest decisions by the Finnish tax authorities this risk impact on corporate effective tax rate is lower.
The risks and uncertainties of Comptel are described in more detail in the company’s financial statements and the Board of Directors’ report for 2014.
Outlook (unchanged)
We expect the 2015 net sales to grow compared to previous year and we expect operating profit to be in the range of 8-12% of revenue, excluding one-time charges.
Characteristically a significant part of Comptel’s operating profit and net sales is generated in the second half of the year.
Helsinki 20th of October
COMPTEL CORPORATION
Board of Directors
Additional information:
Mr Juhani Hintikka, President and CEO, tel. +358 9 700 1131
Mr Tom Jansson, CFO, tel. +358 40 700 1849
FINANCIAL TABLES
The interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU. The accounting policies and methods of computation adopted in the financial statements are consistent with those of the annual financial statements for the year ended 2014.
All figures in the financial report have been rounded and consequently the sum of the individual figures can deviate from the sum figure. The interim report is unaudited.
| Consolidated Statement of Comprehensive Income (EUR 1,000) |
1 Jan – 30 Sep 2015 |
1 Jan – 30 Sep 2014 |
1 Jul – 30 Sep 2015 |
1 Jul – 30 Sep 2014 |
|||
| Net sales | 65,117 | 58,922 | 22,422 | 20,327 | |||
| Other operating income | 23 | 281 | 7 | -25 | |||
| Materials and services | -3,990 | -2,855 | -1,664 | -756 | |||
| Employee benefits | -31,381 | -28,605 | -11,040 | -9,807 | |||
| Depreciation, amortisation and impairment charges | -5,084 | -4,762 | -1,843 | -1,600 | |||
| Other operating expenses | -21,820 | -18,611 | -7,071 | -5,903 | |||
| -62,274 | -54,833 | -21,618 | -18,066 | ||||
| Operating profit/loss | 2,866 | 4,370 | 811 | 2,236 | |||
| Financial income | 1,302 | 879 | 295 | 336 | |||
| Financial expenses | -2,476 | -2,034 | -572 | -892 | |||
| Profit/loss before income taxes | 1,691 | 3,216 | 534 | 1,680 | |||
| Income taxes | -1,127 | -2,005 | -600 | -1,286 | |||
| Profit/loss for the period | 564 | 1,211 | -67 | 394 | |||
| Other comprehensive income: | |||||||
| Other comprehensive income to be reclassified to profit or loss in subsequent periods | |||||||
| Translation differences | 114 | 674 | -555 | 361 | |||
| Cash flow hedges | 519 | - | 75 | - | |||
| Income tax relating to components of other comprehensive income | -104 | - | -14 | - | |||
| Total other comprehensive income | 529 | 674 | -495 | 361 | |||
| Total comprehensive income for the period | 1,093 | 1,885 | -562 | 755 | |||
| Profit/loss attributable to: | |||||||
| Equity holders of the parent company | 564 | 1,211 | -67 | 394 | |||
| Total comprehensive income attributable to: | |||||||
| Equity holders of the parent company | 1,093 | 1,885 | -562 | 755 | |||
| Shareholders of the parent company: | |||||||
| Earnings per share, EUR | 0.00 | 0.01 | 0.0 | 0.00 | |||
| Earnings per share, diluted, EUR | 0.00 | 0.01 | 0.0 | 0.00 | |||
|
|
|||||||
|
Consolidated Statement of Financial Position (EUR 1,000) |
30 Sep 2015 | 31 Dec 2014 | |||||
| Assets | |||||||
| Non-current assets | |||||||
| Goodwill | 2,646 | 2,646 | |||||
| Other intangible assets | 12,727 | 13,435 | |||||
| Tangible assets | 1,254 | 1,596 | |||||
| Investments in associates | 673 | 673 | |||||
| Available-for-sale financial assets | 87 | 87 | |||||
| Deferred tax assets | 6,859 | 5,880 | |||||
| Other non-current receivables | 634 | 613 | |||||
| 24,880 | 24,929 | ||||||
| Current assets | |||||||
| Trade and other current receivables | 36,328 | 43,043 | |||||
| Current tax asset | 1,388 | 315 | |||||
| Cash and cash equivalents | 2,683 | 9,352 | |||||
| 40,398 | 52,710 | ||||||
| Total assets | 65,279 | 77,638 | |||||
| Equity and liabilities | |||||||
| Equity attributable to equity holders of the parent company | |||||||
| Share capital | 2,141 | 2,141 | |||||
| Fund of invested non-restricted equity | 1,294 | 401 | |||||
| Fair value reserve | -585 | -182 | |||||
| Translation differences | 234 | -699 | |||||
| Retained earnings | 30,431 | 31,685 | |||||
| Total equity | 33,515 | 33,346 | |||||
| Non-current liabilities | |||||||
| Deferred tax liabilities | 2,630 | 2,669 | |||||
| Non-current financial liabilities | 124 | 1,257 | |||||
| 2,754 | 3,926 | ||||||
| Current liabilities | |||||||
| Provisions | 1,065 | 1,325 | |||||
| Current financial liabilities | 5,294 | 6,305 | |||||
| Trade and other current liabilities | 22,650 | 32,737 | |||||
| 29,009 | 40,367 | ||||||
| Total liabilities | 31,764 | 44,292 | |||||
| Total equity and liabilities | 65,279 | 77,638 | |||||
|
Consolidated Statement of Cash Flows (EUR 1,000) |
1 Jan – 30 Sep 2015 |
1 Jan – 30 Sep 2014 |
| Cash flows from operating activities | ||
| Profit/loss for the period | 564 | 1,211 |
| Adjustments: | ||
| Non-cash transactions or items that are not part of cash flows from operating activities | 6,425 | 4,641 |
| Interest and other financial expenses | 206 | 1,081 |
| Interest income | -55 | -18 |
| Income taxes | 1,168 | 1,769 |
| Change in working capital: | ||
| Change in trade and other current receivables | 5,688 | 2,758 |
| Change in trade and other current liabilities | -10,604 | -2,358 |
| Change in provisions | -141 | 59 |
| Interest and other financial expenses paid | -219 | -194 |
| Interest received | 63 | 12 |
| Income taxes paid and tax returns received | -2,292 | -2,399 |
| Net cash from operating activities | 803 | 6,561 |
| Cash flows from investing activities | ||
| Proceeds from sale of business operations | - | 200 |
| Investments in tangible assets | -395 | -379 |
| Investments in intangible assets | - | - |
| Investments in development projects | -3,716 | -3,371 |
| Proceeds from the sale of tangible assets | 5 | 34 |
| Change in other non-current receivables | 6 | -8 |
| Net cash used in investing activities | -4,100 | -3,553 |
| Cash flows from financing activities | ||
| Dividends paid | -2,139 | -1,073 |
| Shares issued | 93 | - |
| Proceeds from share options | 800 | - |
| Acquisition of Company’s own shares | - | -146 |
| Proceeds from borrowings | 20,102 | - |
| Repayment of borrowings | -22,031 | -3,012 |
| Lease payments | -179 | -163 |
| Change in other non-current liabilities | - | -68 |
| Net cash used in financing activities | -3,355 | -4,463 |
| Net change in cash and cash equivalents | -6,652 | -1,454 |
| Cash and cash equivalents at the beginning of the period | 9,352 | 6,542 |
| Cash and cash equivalents at the end of the period | 2,683 | 5,720 |
| Change | -6,669 | -822 |
| Effects of changes in foreign exchange rates | -17 | 632 |
| Consolidated Statement of Changes in Equity | |||||
| Equity attributable to equity holders of the parent company | |||||
| EUR 1,000 | Share capital | Other reserves | Translation differences | Retained earnings | Total |
|
Equity at 31 Dec 2013 |
2,141 | 401 | -1,219 | 27,600 | 28,924 |
| Dividends | -1,073 | -1,073 | |||
| Acquisition of Company’s own shares | -146 | -146 | |||
| Share-based compensation | 198 | 198 | |||
| Prior year correction * | -210 | -210 | |||
| Other changes | -14 | -14 | |||
| Total comprehensive income for the period | 674 | 1,211 | 1,885 | ||
|
Equity at 30 Sep 2014 |
2,141 | 401 | -545 | 27,566 | 29,562 |
| Consolidated Statement of Changes in Equity | |||||||
| Equity attributable to equity holders of the parent company | |||||||
| EUR 1,000 | Share capital | Other reserves | Translation differences | Fair value reserve | Retained earnings | Total | |
|
Equity at 31 Dec 2014 |
2,141 | 401 | -698 | -182 | 31,684 | 33,346 | |
| Dividends | -2,139 | -2,139 | |||||
| Shares issued | 93 | 93 | |||||
| Share-based compensation | 800 | 322 | 1,122 | ||||
| Total comprehensive income for the period | 113 | 415 | 564 | 1,092 | |||
|
Equity at 30 Sep 2015 |
2,141 | 1,295 | -585 | 233 | 30,431 | 33,515 | |
*Difference in prior year receivables was corrected directly to Retained Earnings during the quarter.
Notes
1. Application of new or amended standards and interpretations
Comptel has adopted the new or amended standards and interpretations, effective for the financial years beginning on or after 1 January 2015. However those have not had an impact on the consolidated financial statements.
2. Segment information
Net sales by segment
| EUR 1,000 |
1 Jan – 30 Sep 2015 |
1 Jan – 30 Sep 2014 |
1 Jul – 30 Sep 2015 |
1 Jul – 30 Sep 2014 |
| Europe | 24,376 | 23,511 | 8,108 | 8,053 |
| Asia-Pacific | 20,739 | 19,039 | 7,278 | 6,843 |
| Middle East and Africa | 11,985 | 10,367 | 4,567 | 3,454 |
| Americas | 8,017 | 6,004 | 2,469 | 1,978 |
| Group total | 65,117 | 58,922 | 22,422 | 20,327 |
Operating profit/loss by segment
| EUR 1,000 |
1 Jan – 30 Sep 2015 |
1 Jan – 30 Sep 2014 |
1 Jul – 30 Sep 2015 |
1 Jul – 30 Sep 2014 |
| Europe | 15,555 | 11,851 | 5,358 | 4,523 |
| Asia-Pacific | 10,679 | 12,095 | 3,531 | 4,514 |
| Middle East and Africa | 3,753 | 3,939 | 1,977 | 1,034 |
| Americas | 4,053 | 2,601 | 1,022 | 812 |
| Group unallocated expenses | -31,174 | -26,116 | -11,078 | -8,647 |
| Group operating profit/loss total | 2,866 | 4,370 | 811 | 2,236 |
| Financial income and expenses | -1,174 | -1,155 | -277 | -556 |
| Group profit/loss before income taxes | 1,691 | 3,216 | 534 | 1,680 |
3. Income tax
Income tax expense according to the statement of comprehensive income for the period was EUR 1,127 thousand (EUR 2,005 thousand).
In 2006, the Board of Adjustment of the Tax Office for Major Corporations refused to accept the crediting of taxes withheld at source in taxation of 2004 and 2005.
The application process to prevent Comptel’s double taxation is still pending with the Ministry of Finance in Finland. However, the process between the states is very slow and the timing of a change is hard to forecast. The interpretation of tax treaties may result in different views between the countries in question. This could mean that the double taxation will prevail.
According to the Board of Adjustment’s decision currently in force, Comptel Corporation has expensed taxes withheld at source amounting to EUR 926 thousand in January - September (EUR 1,207 thousand).
4. Tangible assets
| EUR 1,000 |
1 Jan – 30 Sep 2015 |
1 Jan – 30 Sep 2014 |
| Additions | 395 | 379 |
| Disposals | -147 | -17 |
5. Related party transactions
The Comptel Group have a related party relationship with its associate, the Board of Directors, the Executive Board and also with people and companies under Comptel management’s influence.
Transactions which have been entered into with related parties are as follows:
| EUR 1,000 |
1 Jan – 30 Sep 2015 |
1 Jan – 30 Sep 2014 |
| Associate | ||
| Interest income | 6 | 6 |
| EUR 1,000 | 30 Sep 2015 | 31 Dec 2014 |
| Associate | ||
| Non-current receivables | 119 | 108 |
Remuneration to key management
Key management personnel compensation includes the employee benefits of the members of the Board of Directors and the Executive Board.
| EUR 1,000 | 1 Jan – 30 Sep 2015 | 1 Jan – 30 Sep 2014 |
| Salaries and other short-term employee benefits | 1,301 | 1,336 |
| Share-based payments | 456 | 429 |
| Total | 1,757 | 1,765 |
During the period a new incentive program was decided for the CEO, in which against his own investment new options of 3,478,260 were granted.
Guarantees and other commitments
| EUR 1,000 | 30 Sep 2015 | 31 Dec 2014 |
| Guarantees | 13 | 7 |
6. Commitments
Minimum lease payments on non-cancellable office facilities and other operating leases are payable as follows:
| EUR 1,000 | 30 Sep 2015 | 31 Dec 2014 |
| Less than one year | 2,050 | 2,439 |
| Between one and five years | 1,537 | 2,962 |
| Total | 3,587 | 5,401 |
The group had no material capital commitments for the purchase of tangible assets at 30 September 2015 and 30 September 2014.
7. Contingent liabilities
| EUR 1,000 | 30 Sep 2015 | 31 Dec 2014 |
| Bank guarantees | 2,528 | 2,881 |
| Corporate mortgages | 200 | 200 |
| EUR 1,000 | 30 Sep 2015 | 31 Dec 2014 |
| Contingent liabilities on behalf of others | ||
| Guarantees | 30 | 34 |
8. Fair values of financial assets and liabilities
|
EUR 1,000 |
Book value 30 Sep 2015 |
Fair value 30 Sep 2015 |
Book value 30 Sep 2014 |
Fair value 30 Sep 2014 |
Book value 31 Dec 2014 |
Fair value 31 Dec 2014 |
| Financial assets | ||||||
| Financial assets at fair value through profit or loss | ||||||
| Forward contracts (level 2) | 137 | 137 | 30 | 30 | 25 | 25 |
| Available-for-sale financial assets (level 3)) | 87 | 87 | 87 | 87 | 87 | 87 |
| Non-current trade receivables | 1,722 | 1,722 | 1,130 | 1,130 | 1,466 | 1,466 |
| Current trade receivables | 23,394 | 23,394 | 21,699 | 21,699 | 27,449 | 27,449 |
| Other current receivables | 1,560 | 1,560 | 494 | 494 | 4,624 | 4,624 |
| Cash and cash equivalents | 2,683 | 2,683 | 5,720 | 5,720 | 9,352 | 9,352 |
| Financial liabilities | ||||||
| Financial liabilities at fair value through profit or loss | ||||||
| Forward contracts (level 2) | - | - | 211 | 211 | 847 | 847 |
| Trade payables and other liabilities | 22,165 | 22,165 | 23,043 | 23,043 | 32,713 | 32,713 |
| Non-current loans from financial institutions | 44 | 44 | 1,000 | 1,003 | 1,078 | 1,081 |
| Non-current finance lease liabilities | - | - | 215 | 215 | 179 | 179 |
| Other non-current liabilities | 110 | 110 | 31 | 31 | - | - |
| Current loans from financial institutions | 5,044 | 5,048 | 4,044 | 4,090 | 5,984 | 6,095 |
| Current overdraft facility | 135 | 135 | - | - | - | - |
| Current finance lease liabilities | 77 | 77 | 211 | 211 | 259 | 259 |
| Other current liabilities | 31 | 31 | 70 | 70 | 63 | 63 |
9. Key figures
| Financial summary |
1 Jan – 30 Sep 2015 |
1 Jan – 30 Sep 2014 |
1 Jan – 31 Dec 2014 |
| Net sales, EUR 1,000 | 65,117 | 58,922 | 85,714 |
| Net sales, change % | 10.5 | -2.6 | 3.7 |
| Operating profit/loss, EUR 1,000 | 2,866 | 4,370 | 8,311 |
| Operating profit/loss, change % | -34.4 | 21.2 | 13.7 |
| Operating profit/loss, as % of net sales | 4.4 | 7.4 | 9.7 |
| Profit/loss before taxes, EUR 1,000 | 1,691 | 3,216 | 7,436 |
| Profit/loss before taxes, as % of net sales | 2.6 | 5.5 | 8.7 |
| Return on equity, % | - | - | 17.5 |
| Return on investment, % | - | - | 19.5 |
| Equity ratio, % | 64.1 | 59.0 | 52.4 |
| Gross investments in tangible and intangible assets, EUR 1,0001) | 395 | 379 | 740 |
| Gross investments in tangible and intangible assets, as % of net sales | 0.6 | 0.6 | 0.9 |
| Capitalisations according to IAS 38 to intangible assets, EUR 1,000 | 3,716 | 3,371 | 4,720 |
| Research and development expenditure, EUR 1,000 | 12,815 | 11,652 | 16,791 |
|
Research and development expenditure, as % of net sales |
19.7 | 19.8 | 19.6 |
| Order backlog, EUR 1,000 | 53,526 | 45,019 | 55,213 |
| Average number of employees during the period | 716 | 666 | 665 |
| Interest-bearing net liabilities, EUR 1,000 | 2,735 | -169 | -1,789 |
| Gearing ratio, % | 8.2 | -0.6 | -5.4 |
1) The figure does not include investments in development projects.
| Per share data |
1 Jan – 30 Sep 2015 |
1 Jan – 30 Sep 2014 |
1 Jan – 31 Dec 2014 |
| Earnings per share (EPS), EUR | 0.01 | 0.01 | 0.05 |
| EPS diluted, EUR | 0.01 | 0.01 | 0.05 |
| Equity per share, EUR | 0.31 | 0.28 | 0.31 |
| Dividend per share, EUR | - | - | 0.02 |
| Dividend per earnings, % | - | - | 39.5 |
| Effective dividend yield, % | - | - | 2.0 |
| P/E ratio | - | - | 19.4 |
| Adjusted number of shares at the end of the period | 107,603,775 | 107,421,270 | 107,421,270 |
| of which the number of treasury shares | 118,507 | 193,412 | 464,739 |
| Outstanding shares | 107,485,268 | 107,227,858 | 106,956,531 |
| Adjusted average number of shares during the period | 107,202,754 | 107,421,270 | 107,284,900 |
| Average number of shares, dilution included | 108,769,930 | 108,597,351 | 107,625,526 |
10. Definition of key figures
| Operating margin % | = | Operating profit/loss | x100 |
| Net sales | |||
| Profit margin (before income taxes) % | = | Profit/loss before taxes | x100 |
| Net sales | |||
| Return on equity % (ROE) | = | Profit/loss | x100 |
| Total equity (average during year) | |||
| Return on investment % (ROI) | = | Profit/loss before taxes + financial expenses | x100 |
| Total equity + interest bearing liabilities (average during the year) | |||
| Equity ratio % | = | Total equity | x100 |
| Statement of financial position total – advances received | |||
| Gross investments in tangible and intangible assets, as % of net sales | = | Gross investments in tangible and intangible assets | x100 |
| Net sales | |||
| Research and development expenditure, as % of net sales | = | Research and development expenditure | x100 |
| Net sales | |||
| Gearing ratio % | = | Interest-bearing liabilities – cash and cash equivalents | x100 |
| Total equity | |||
| Earnings per share (EPS) | = | Profit/loss for the financial year attributable to equity shareholders | |
| Average number of outstanding shares for the financial year | |||
| Equity per share | = | Equity attributable to the equity holders of the parent company | |
| Adjusted number of shares at the end of period | |||
| Dividend per share | = | Dividend | |
| Adjusted number of shares at the end of period | |||
| Dividend per earnings % | = | Dividend per share | x100 |
| Earnings per share (EPS) | |||
| Effective dividend yield % | = | Dividend per share | x100 |
| Share closing price at end of period | |||
| P/E ratio | = | Share closing price at end of period | |
| Earnings per share (EPS) | |||