Stock exchange release
9th August 2016 at 8.00 am
HALF YEAR RESULT OF COMPTEL CORPORATION 1 JANUARY - 30 JUNE 2016
Strong growth and significant profitability improvement.
Key figures for the second quarter of 2016:
· Net sales EUR 25.3 million (April - June 2015: 21.7), growth 16.4%
· Operating profit EUR 3.0 million (0.6), growth 428.5%
· Operating profit 11.7% of net sales (2.6)
· Net profit EUR 2.3 million (0.3), growth 581.7%
· Earnings per share EUR 0.02 (0.00)
· Order backlog EUR 64.2 million (58.8), growth 9.3%
Key figures for the first half of 2016:
· Net sales EUR 47.7 million (H1 2015: 42.7), growth 11.7%
· Operating profit EUR 4.7 million (2.1), growth 130.0%
· Operating profit 9.9% of net sales (4.8)
· Net profit EUR 3.1 million (0.6), growth 397.4%
· Earnings per share EUR 0.03 (0.01)Key figures for the second quarter of 2016:
Outlook (changed):
Specified guidance is:
“Comptel expects the 2016 net sales to continue to grow and operating profit to be in the range of 9–14% of revenue.”
Previous guidance was:
“Comptel expects the 2016 net sales to continue to grow and operating profit to be in the range of 8–14% of revenue.”
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:
“I’m very pleased with our progress in the second quarter. This was the 8th consecutive quarter we produced year-on-year growth. Compared to the previous year, our net sales grew 16.4 per cent in the second quarter and 11.7 per cent in the first half of the year. Company’s strategy execution progressed well in all areas and second quarter results improved significantly compared to previous year.
We are also pleased that both of our business units were growing on a year-over-year basis. In the second quarter, Intelligent Data grew by 8.9 per cent and Service Orchestration by 22.2 per cent. Both business units have currently a strong demand for their solutions.
Regionally net sales growth was strong in both APAC and EMEA, both regions growing significantly in the second quarter and also compared to the previous year. From a growth perspective, we currently see challenges in our South Americas region.
Also our profitability is improving and our previously made investments are yielding results. In the second quarter, our operating profit was 11.7 per cent of net sales.
Our backlog continued to be strong and we managed to close several multi-year deals in the second quarter. These will give us visibility and a good foundation also for the coming years.
The FWD application continued to attract customer interest. We signed our first large-scale FWD deployment in APAC. There are several customer negotiations ongoing which creates a good foundation for growth in coming years.
In the second quarter, we received two favorable rulings from the Indian tax authorities related to old withholding taxes. We are still investigating and assessing the process of refunds. The outcome of these rulings has not been reflected in the financials at this stage.
During the second quarter, we secured 13 significant orders (Q2 2015:9), valued over EUR 0.5 million.”
Business Review of the Second Quarter and the First Half of 2016
Comptel’s net sales grew in the second quarter by 16.4 per cent compared to the previous year, to EUR 25.3 million (21.7). Net sales growth continued due to the increased order intake in the first half of the year and the strong backlog in the beginning of the quarter. Comptel’s net sales grew by 19.7 per cent in Asia-Pacific and by 20.7 per cent in EMEA.
In the first half of the year, Comptel’s net sales grew by 11.7 per cent compared to previous year and was 47.7 million (42.7). Both business units grew in the first half, Intelligent Data unit by 11.6 per cent and Service Orchestration unit by 11.7 per cent.
The operating result for the second quarter was EUR 3.0 million (0.6), which corresponds to 11.8 per cent of net sales (2.6). The improved profitability was due to increased net sales and costs growing proportionally less.
In the first half, the operating result was EUR 4.7 million (2.1), which corresponds to 9.9 per cent of net sales (4.8). Profitability improvement was due to the net sales increase during the first half of the year.
In the second quarter, the result before taxes was EUR 3.3 million (0.4) and net profit EUR 2.3 million (0.3). The net profit improved by 582 per cent compared to the previous year. Earnings per share for the second quarter was EUR 0.02 (0.00).
The result before taxes for the first half, was EUR 4.7 million (1.2) and net profit EUR 3.1 million (0.6). The net profit improved by 397.4 per cent compared to the previous year. Earnings per share for the first half was EUR 0.03 (0.01).
The tax expense for the second quarter was EUR 1.0 million (0.0), of which 0.2 million were withholding taxes, related to double taxation. In the first half the tax expenses were EUR 1.6 million (0.5), of which 0.5 million were withholding taxes, related to double taxation. During second quarter, favourable tax ruling was obtained in India for past withholding taxes. The outcome of these rulings has not been reflected in the financials at this stage, as the probability of the tax returns are still under assessment.
In April-June, Comptel received 13 significant orders (Q2 2015: 2), of which Intelligent Data unit received five (five Data Refinery solutions) and Service Orchestration received five (five FlowOne solutions). Three orders were multi-solution orders across the business units. As significant orders Comptel reports sold projects and licenses with a minimum value of EUR 500,000.
The Group’s 12-month order backlog increased from the previous year and was EUR 64.2 million (58.8) at the end of the period. The Group’s total order backlog exceeds EUR 90 million at the end of second quarter.
Business areas
|
Net sales, EUR million |
4-6 2016 |
4-6 2015 |
Change, % |
1-6 2016 |
1-6 2015 |
Change % |
1-12 2015 |
| Intelligent Data | 10.5 | 9.6 | 8.9 | 20.9 | 18.7 | 11.6 | 42.5 |
| Service Orchestration | 14.8 | 12.1 | 22.2 | 26.8 | 24.0 | 11.7 | 55.2 |
| Other | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||
| Total | 25.3 | 21.7 | 16.4 | 47.7 | 42.7 | 11.7 | 97.7 |
|
Operating result, EUR million |
|||||||
| Intelligent Data | 1.4 | 0.6 | 129.4 | 3.1 | 1.5 | 106.8 | 5.8 |
| Service Orchestration | 2.5 | 0.5 | 392.4 | 3.2 | 1.6 | 99.2 | 5.1 |
| Other | -0.8 | -0.5 | 59.0 | -1.5 | -1.0 | 48.8 | -2.5 |
| Total | 3.0 | 0.6 | 428.5 | 4.7 | 2.1 | 130.0 | 8.5 |
|
Operating result, % of net sales |
|||||||
| Intelligent Data | 12.9 | 6.1 | 14.7 | 7.9 | 13.7 | ||
| Service Orchestration | 16.6 | 4.1 | 11.9 | 6.7 | 9.3 | ||
| Other | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||
| Total | 11.8 | 2.6 | 9.9 | 4.8 | 8.7 |
In the second quarter, Service Orchestration’s net sales growth accelerated to 22.2 per cent compared to the previous year. Service Orchestration’s profitability improvement was due to the increase in net sales. In the second quarter, Intelligent Data unit grew by 8.9 per cent year-over-year.
In the first half, the net sales of both business units increased compared to the previous year. Intelligent Data unit grew by 11.6 per cent and Service Orchestration by 11.7 per cent. The profitability of both business units improved due to the net sales growth.
|
Net sales breakdown, EUR million |
4-6 2016 |
4-6 2015 |
Change, % |
1-6 2016 |
1-6 2016 |
Change % |
1-12 2015 |
| Project & License business | 16.4 | 13.2 | 23.8 | 30.5 | 25.3 | 20.6 | 63.3 |
| Recurring business | 8.9 | 8.5 | 4.8 | 17.1 | 17.4 | -1.3 | 34.4 |
| Total | 25.3 | 21.7 | 16.4 | 47.7 | 42.7 | 11.7 | 97.7 |
Project and license business, with its 23.8 per cent growth rate, was the main growth driver in the second quarter. Support and maintenance business grew by 4.8 per cent.
In the first half, Project and license business grew by 20.6 per cent. Support and maintenance business declined by 1.3 per cent, due to low growth in the first quarter.
|
Net sales Regional breakdown, EUR million |
4-6 2016 |
4-6 2015 |
Change, % |
1-6 2016 |
1-6 2015 |
Change, % |
1-12 2015 |
| APAC | 8.9 | 7.4 | 19.6 | 16.3 | 13.5 | 20.9 | 29.6 |
| EMEA | 13.5 | 11.2 | 20.7 | 26.7 | 23.7 | 12.9 | 56.9 |
| AMERICAS | 2.9 | 3.1 | -6.6 | 4.7 | 5.5 | -16.0 | 11.2 |
| Total | 25.3 | 21.7 | 16.4 | 47.7 | 42.7 | 11.7 | 97.7 |
Asia-Pacific’s net sales continued to grow significantly. In the second quarter, Asia-Pacific’s net sales increased by 19.6 per cent compared to the previous year. In the second quarter, also EMEA’s net sales grew significantly, by 20.7 per cent. In the Americas region, net sales decreased by 6.6 per cent compared to the previous year. This was mainly due to decline in sales in South America.
In the first half, net sales in Asia-Pacific grew by 20.9 per cent compared to the previous year. The growth was due to continued high demand and came across the region. The EMEA region’s net sales grew by 12.9 per cent due to continued investments from existing customers. Net sales in the Americas region decreased by 16.0 per cent due to decline in sales in South America.
Financial Position
| EUR million |
30 Jun 2016 |
30 Jun 2015 |
Change, % |
31 Dec 2015 |
Change, % |
| Statement of financial position total | 74.6 | 64.4 | 15.8 | 86.4 | -13.6 |
| Liquid assets | 5.3 | 4.6 | 14.3 | 3.0 | 74.6 |
| Trade receivables, gross | 28.9 | 22.6 | 27.9 | 42.1 | -31.4 |
| Bad debt provision | -1.7 | -1.4 | 26.8 | -1.6 | 5.9 |
| Trade receivables, net | 27.1 | 21.2 | 27.9 | 40.5 | -32.9 |
| Accrued income | 14.3 | 11.8 | 20.9 | 10.0 | 43.3 |
| Deferred income related to partial debiting | 3.5 | 2.7 | 29.3 | 3.3 | 7.0 |
| Interest-bearing debt | 5.3 | 4.4 | 18.5 | 7.2 | -26.6 |
| Equity ratio, per cent | 61.4 | 65.3 | -6.1 | 52.4 | 17.1 |
The statement of the financial position on 30 June 2016 was EUR 74.6 million (64.4), of which liquid assets amounted to EUR 5.3 million (4.6). The operating cash flow was EUR 1.1 million (3.0) in the second quarter and EUR 11.8 million (2.4) in the first half of the year.
Trade receivables were EUR 27.1 million (21.2) at the end of the period. The accrued income was EUR 14.3 million (11.8). The deferred income related to partial debiting was EUR 3.5 million (2.7).
Comptel has a EUR 25 million credit facility arrangement consisting of a EUR 20 million revolving credit facility and a 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 61.4 per cent (65.3) and the gearing was -0.1 per cent (-0.6).
Research and Development (R&D)
| EUR million |
4-6 2016 |
4-6 2015 |
Change % |
1-6 2016 |
1-6 2015 |
Change % |
1-12 2015 |
| Direct R&D expenditure | 5.6 | 4.3 | 29.1 | 10.3 | 8.7 | 18.5 | 20.3 |
| Capitalisation of R&D expenditure according to IAS 38 | -1.7 | -1.3 | 26.9 | -3.0 | -2.4 | 27.1 | -5.2 |
| R&D depreciation and impairment charges | 1.2 | 1.3 | -4.9 | 2.6 | 2.6 | 1.0 | 5.5 |
| R&D expenditure, net | 5.2 | 4.3 | 19.6 | 9.8 | 8.9 | 11.1 | 20.6 |
| Direct R&D expenditure, % of net sales | 22.2 | 20.0 | - | 21.5 | 20.3 | 20.8 |
Direct R&D expenditure represented 21.5 per cent (20.3) of net sales.
The key focus of Comptel’s R&D expenditure was in the further development of our existing solutions (Service Orchestration and Intelligent Data) and release of the new FWD time-based mobile data marketing solution.
Development work was focused on securing recurring revenue with competitive products, winning new markets by giving customers unique value, and by improving margins with better deployment and scalability of our products.
The FlowOne Fulfillment solution has been developed as a suite of orchestration elements that manage the life-cycle of digital services and business flows from ground to cloud. Data Refinery captures data-in-motion and uses SoftbladeTM technology with embedded intelligence to refine it for automated real-time decision making. Monetizer is the business policy and charging solution that sets the speed to money and allows the innovation and designing of rich communication and data. Data Fastermind embeds artificial intelligence, predictive analytics and machine learning capabilities into all solutions. In all of these areas, Comptel seeks global thought leadership in solving the business challenges of operators and digital communications service providers.
During 2016 the company will further continue to develop its current offering. In the first half six major software releases were launched in the above-mentioned product areas.
Investments
| EUR million |
4-6 2016 |
4-6 2015 |
Change % |
1-6 2016 |
1-6 2015 |
Change % |
1-12 2015 |
| Gross investments in property, plant and equipment and intangible assets | 0.3 | 0.2 | 79.3 | 0.4 | 0.3 | 47.5 | 0.6 |
The investments comprised of devices, software and furnishings. The investments were funded through cash flow from operations.
Personnel
| 30 Jun 2016 |
30 Jun 2015 |
Change, % | 31 Dec 2015 | Change, % | |
| Number of employees at the end of period | 790 | 746 | 5.9 | 742 | 6.5 |
|
4-6 2016 |
4-6 2015 |
Change, % |
1-12 2015 |
Change, % | |
| Average number of personnel during the period | 758 | 700 | 8.3 | 723 | 4.8 |
The number of employees increased compared to the previous year due to the increase in investments during 2016. In the second quarter, the personnel expenses were 48.4 per cent of net sales (49.1).
At the end of the period, 28.7 per cent (30.4) of the personnel were located in Finland, 23.2 per cent (26.4) in Malaysia, 13.7 per cent (10.7) in India, 11.6 per cent (10.1) in Bulgaria, and 22.8 per cent (22.4) in other countries where Comptel operates.
Comptel share
The closing share price of the period was EUR 1.79 (1.27). Comptel’s market value at the end of the period was EUR 194.6 million (136.4).
| Comptel share |
4-6 2016 |
4-6 2015 |
Change % |
1-6 2016 |
1-6 2015 |
Change % |
1-12 2015 |
| Shares traded, million | 8.5 | 11.5 | -26.1 | 23.2 | 17.7 | 31.4 | 41.2 |
| Shares traded, EUR million | 13.5 | 13.9 | -2.7 | 35.2 | 19.7 | 79.0 | 52.9 |
| Highest price, EUR | 1.89 | 1.49 | 26.8 | 1.89 | 1.49 | 26.8 | 1.93 |
| Lowest price, EUR | 1.41 | 0.95 | 48.4 | 1.19 | 0.84 | 41.7 | 0.84 |
Of Comptel’s outstanding shares, 6.1 per cent (6.5) were nominee registered or held by foreign shareholders at the end of the period.
At the end of the period the company held 117,129 of its own shares, which represents 0.11 per cent of the total number of shares. The total counter-book value of the shares held by the company was EUR 2,305.
Corporate Governance
Comptel Corporation’s Annual General Meeting (AGM) was held on 6 April 2016. The AGM resolved the number of Board members to be five. Mr Pertti Ervi, Mr Hannu Vaajoensuu, Ms Eriikka Söderström, and Mr Antti Vasara were re-elected as members of the Board of Directors. Thomas Berlemann was elected as a new member of the Board of Directors.
The AGM appointed Ernst & Young Oy as the company’s auditor. Mr. Mikko Järventausta is acting as the principal auditor.
The AGM resolved that a dividend of 0.03 EUR per share was paid for the year 2015.
In its meeting held after the Annual General Meeting, the Board of Directors elected Mr Pertti Ervi as chairman and Mr Hannu Vaajoensuu as vice chairman.
The Board of Directors decided to establish an audit committee to deal with the preparation of matters relating to the company’s financial reporting and control. The Board of Directors elected Ms Eriikka Söderström as the chairman of the audit committee, and Mr Pertti Ervi and Mr Antti Vasara as the members of the audit committee. All the members of the audit committee are independent from the company and its significant shareholders.
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 30 June 2017. 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 6 April 2016.
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 way 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 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 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. 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.
The risks and uncertainties of Comptel are described in more detail in the company’s financial statements and the Board of Directors’ report for 2015.
Outlook (changed)
Specified guidance is:
“Comptel expects the 2016 net sales to continue to grow and operating profit to be in the range of 9–14% of revenue.”
Previous guidance was:
“Comptel expects the 2016 net sales to continue to grow and operating profit to be in the range of 8–14% of revenue.”
Characteristically a significant part of Comptel’s operating profit and net sales is generated in the second half of the year.
Schedule for Comptel’s interim reports in 2016:
January-September 20 October 2016
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
TABLE PART
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 2015.
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 Jun 2016 |
1 Jan – 30 Jun 2015 |
1 Apr – 30 Jun 2016 |
1 Jan – 30 Jun 2015 |
| Net sales | 47,687 | 42,695 | 25,295 | 21,739 |
| Other operating income | 13 | 16 | 10 | 13 |
| Materials and services | -2,212 | -2,326 | -1,094 | -1,222 |
| Employee benefits | -22,433 | -20,341 | -12,240 | -10,765 |
| Depreciation, amortisation and impairment charges | -3,062 | -3,240 | -1,441 | -1,630 |
| Other operating expenses | -15,265 | -14,749 | -7,557 | -7,572 |
| -42,972 | -40,656 | -22,333 | -21,189 | |
| Operating profit/loss | 4,727 | 2,055 | 2,973 | 562 |
| Financial income | 1,497 | 1,006 | 593 | 154 |
| Financial expenses | -1,507 | -1,904 | -269 | -353 |
| Profit/loss before income taxes | 4,718 | 1,158 | 3,297 | 363 |
| Income taxes | -1,581 | -527 | -988 | -24 |
| Profit/loss for the period | 3,136 | 631 | 2,309 | 339 |
| Other comprehensive income: | ||||
| Other comprehensive income to be reclassified to profit or loss in subsequent periods | ||||
| Translation differences | -349 | 736 | 115 | 5 |
| Cash flow hedges | -329 | 444 | -965 | 397 |
| Income tax relating to components of other comprehensive income | 113 | -89 | 247 | -80 |
| Total other comprehensive income | -564 | 1,091 | -603 | 322 |
| Total comprehensive income for the period | 2,572 | 1,722 | 1,706 | 661 |
| Profit/loss attributable to: | ||||
| Equity holders of the parent company | 3,136 | 631 | 2,309 | 339 |
| Total comprehensive income attributable to: | ||||
| Equity holders of the parent company | 2,572 | 1,722 | 1,706 | 661 |
| Shareholders of the parent company: | ||||
| Earnings per share, EUR | 0,03 | 0,01 | 0,02 | 0,0 |
| Earnings per share, diluted, EUR | 0,03 | 0,01 | 0,02 | 0,0 |
|
|
|
Consolidated Statement of Financial Position (EUR 1,000) |
30 Jun 2016 | 30 Jun 2015 | 31 Dec 2015 |
| Assets | |||
| Non-current assets | |||
| Goodwill | 2,646 | 2,646 | 2,646 |
| Other intangible assets | 13,149 | 13,039 | 12,837 |
| Tangible assets | 1,416 | 1,458 | 1,152 |
| Investments in associates | 960 | 673 | 960 |
| Available-for-sale financial assets | 87 | 87 | 87 |
| Deferred tax assets | 7,857 | 7,101 | 7,685 |
| Other non-current receivables | 700 | 651 | 646 |
| 26,815 | 25,654 | 26,013 | |
| Current assets | |||
| Trade and other current receivables | 42,202 | 33,622 | 56,930 |
| Current tax asset | 289 | 515 | 403 |
| Cash and cash equivalents | 5,289 | 4,627 | 3,030 |
| 47,780 | 38,763 | 60,363 | |
| Total assets | 74,595 | 64,418 | 86,376 |
| Equity and liabilities | |||
| Equity attributable to equity holders of the parent company | |||
| Share capital | 2,141 | 2,141 | 2,141 |
| Fund of invested non-restricted equity | 1,755 | 454 | 1,698 |
| Fair value reserve | -89 | 174 | -170 |
| Translation differences | -1,322 | 30 | -510 |
| Retained earnings | 34,003 | 30,264 | 34,165 |
| Total equity | 36,489 | 33,063 | 37,324 |
| Non-current liabilities | |||
| Deferred tax liabilities | 2,662 | 2,664 | 2,572 |
| Non-current financial liabilities | 130 | 165 | 92 |
| 2,792 | 2,830 | 2,664 | |
| Current liabilities | |||
| Provisions | 167 | 1,261 | 1,090 |
| Current financial liabilities | 5,273 | 4,274 | 7,075 |
| Trade and other current liabilities | 29,874 | 22,989 | 38,223 |
| 35,314 | 28,524 | 46,388 | |
| Total liabilities | 38,105 | 31,354 | 49,052 |
| Total equity and liabilities | 74,595 | 64,418 | 86,376 |
|
Consolidated Statement of Cash Flows (EUR 1,000) |
1 Jan – 30 Jun 2016 |
1 Jan – 30 Jun 2015 |
| Cash flows from operating activities | ||
| Profit/loss for the period | 3,136 | 631 |
| Adjustments: | ||
| Non-cash transactions or items that are not part of cash flows from operating activities | 3,271 | 4,405 |
| Interest and other financial expenses | 101 | 173 |
| Interest income | -9 | -49 |
| Income taxes | 1,501 | 925 |
| Change in working capital: | ||
| Change in trade and other current receivables | 14,763 | 9,415 |
| Change in trade and other current liabilities | -8,507 | -10,445 |
| Change in provisions | -712 | -421 |
| Interest and other financial expenses paid | -101 | -170 |
| Interest received | 3 | 45 |
| Income taxes paid and tax returns received | -1,614 | -2,064 |
| Net cash from operating activities | 11,833 | 2,445 |
| Cash flows from investing activities | ||
| Investments in tangible assets | -614 | -279 |
| Investments in development projects | -3,008 | -2,368 |
| Change in other non-current receivables | -93 | 10 |
| Net cash used in investing activities | -3,716 | -2,637 |
| Cash flows from financing activities | ||
| Dividends paid | -3,248 | -2,139 |
| Shares issued | - | 53 |
| Proceeds from borrowings | 14,978 | 11,060 |
| Repayment of borrowings | -16,979 | -14,053 |
| Lease payments | 232 | -131 |
| Net cash used in financing activities | -5,020 | -5,210 |
| Net change in cash and cash equivalents | 3,099 | -5,402 |
| Cash and cash equivalents at the beginning of the period | 3,030 | 9,352 |
| Cash and cash equivalents at the end of the period | 5,289 | 4,627 |
| Change | 2,259 | -4,725 |
| Effects of changes in foreign exchange rates | -840 | 677 |
| 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 | 53 | 53 | ||||
| Share-based compensation | 66 | 66 | ||||
| Other changes | 23 | 23 | ||||
| Total comprehensive income for the period | 728 | 356 | 631 | 1,715 | ||
|
Equity at 30 Jun 2015 |
2,141 | 454 | 30 | 174 | 30,264 | 33,063 |
| 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 2015 |
2,141 | 1,698 | -510 | -170 | 34,165 | 37,324 | |
| Dividends | -3,248 | -3,248 | |||||
| Shares issued | 57 | 57 | |||||
| Share-based compensation | 233 | 233 | |||||
| Prior year correction * | -283 | -283 | |||||
| Total comprehensive income for the period | -813 | 82 | 3,136 | 2,405 | |||
|
Equity at 30 Jun 2016 |
2,141 | 1,755 | -1,322 | -89 | 34,003 | 36,488 | |
*Prior year expenses were 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 2016. 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 Jun 2016 |
1 Jan – 30 Jun 2015 |
1 Apr – 30 Jun 2016 |
1 Apr – 30 Jun 2015 |
| Intelligent Data | 20,917 | 18,735 | 10,478 | 9,622 |
| Service Orchestration | 26,757 | 23,960 | 14,811 | 12,117 |
| Other | 13 | - | 7 | |
| Group total | 47,687 | 42,695 | 25,295 | 21,739 |
Operating profit/loss by segment
| EUR 1,000 |
1 Jan – 30 Jun 2016 |
1 Jan – 30 Jun 2015 |
1 Apr – 30 Jun 2016 |
1 Apr – 30 Jun 2015 |
| Intelligent Data | 3,071 | 1,485 | 1,354 | 590 |
| Service Orchestration | 3,194 | 1,603 | 2,455 | 499 |
| Other | -1,538 | -1,034 | -837 | -526 |
| Group operating profit/loss total | 4,727 | 2,055 | 2,972 | 562 |
3. Income tax
Income tax expense according to the statement of comprehensive income for the period was EUR 1,581 thousand (EUR 527 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 517 thousand in January - June (EUR 333 thousand).
4. Tangible assets
| EUR 1,000 |
1 Jan – 30 Jun 2016 |
1 Jan – 30 Jun 2015 |
| Additions | 411 | 279 |
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 Jun 2016 |
1 Jan – 30 Jun 2015 |
| Associate | ||
| Interest income | 4 | 4 |
| EUR 1,000 | 30 Jun 2016 | 31 Dec 2015 |
| Associate | ||
| Non-current receivables | 124 | 117 |
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 Jun 2016 | 1 Jan - 30 Jun 2015 |
| Salaries and other short-term employee benefits | 859 | 786 |
| Share-based payments | 286 | 224 |
| Other compensation | 35 | - |
| Total | 1,181 | 1,010 |
Guarantees and other commitments
| EUR 1,000 | 30 Jun 2016 | 31 Dec 2015 |
| Guarantees | - | 29 |
6. Commitments
Minimum lease payments on non-cancellable office facilities and other operating leases are payable as follows:
| EUR 1,000 | 30 Jun 2016 | 31 Dec 2015 |
| Less than one year | 2,061 | 2,161 |
| Between one and five years | 5,192 | 1,218 |
| More than five years | 1,091 | - |
| Total | 8,344 | 3,379 |
The group had no material capital commitments for the purchase of tangible assets at 30 June 2016 and 30 June 2015.
7. Contingent liabilities
| EUR 1,000 | 30 Jun 2016 | 31 Dec 2015 |
| Bank guarantees | 2,297 | 2,727 |
| Corporate mortgages | 200 | 200 |
| EUR 1,000 | 30 Jun 2016 | 31 Dec 2015 |
| Contingent liabilities on behalf of others | ||
| Guarantees | 18 | 29 |
8. Fair values of financial assets and liabilities
|
EUR 1,000 |
Book value 30.6.2016 |
Fair value 30.6.2016 |
Book value 30.6.2015 |
Fair value 30.6.2015 |
Book value 31.12.2015 |
Fair value 31.12.2015 |
| Financial assets | ||||||
| Financial assets at fair value through profit or loss | ||||||
| Forward contracts (level 2) | 97 | 97 | - | - | - | - |
| Available-for-sale financial assets (level 3)) | 87 | 87 | 87 | 87 | 87 | 87 |
| Non-current trade receivables | 2,195 | 2,195 | 1,541 | 1,541 | 1,872 | 1,872 |
| Current trade receivables | 26,695 | 26,695 | 21,053 | 21,053 | 40,232 | 40,232 |
| Other current receivables | 657 | 657 | 2,686 | 2,686 | 7,133 | 7,133 |
| Cash and cash equivalents | 5,289 | 5,289 | 4,627 | 4,627 | 3,030 | 3,030 |
| Financial liabilities | ||||||
| Financial liabilities at fair value through profit or loss | ||||||
| Forward contracts (level 2) | 97 | 97 | 246 | 246 | 138 | 138 |
| Trade payables and other liabilities | 29,265 | 29,265 | 23,335 | 23,335 | 38,020 | 38,020 |
| Non-current loans from financial institutions | 11 | 11 | 56 | 56 | 33 | 33 |
| Non-current finance lease liabilities | 119 | 119 | - | - | 58 | 58 |
| Other non-current liabilities | - | - | 110 | 110 | - | - |
| Current loans from financial institutions | 5,044 | 5,050 | 4,044 | 4,063 | 5,044 | 5,056 |
| Current bank overdraft facility | - | - | - | - | 1,918 | 1,918 |
| Current finance lease liabilities | 95 | 95 | 199 | 199 | 112 | 112 |
| Other current liabilities | - | - | 31 | 31 | - | - |
9. Key figures
| Financial summary |
1 Jan – 30 Jun 2016 |
1 Jan – 30 Jun 2015 |
1 Jan- 31 Dec 2015 |
| Net sales, EUR 1,000 | 47,687 | 42,695 | 97,728 |
| Net sales, change % | 11.7 | 10.6 | 14.0 |
| Operating profit/loss, EUR 1,000 | 4,727 | 2,055 | 8,474 |
| Operating profit/loss, change % | 130.0 | -3.7 | 2.0 |
| Operating profit/loss, as % of net sales | 9.9 | 4.8 | 8.7 |
| Profit/loss before taxes, EUR 1,000 | 4,717 | 1,158 | 7,612 |
| Profit/loss before taxes, as % of net sales | 9.9 | 2.7 | 7.8 |
| Return on equity, % | - | - | 12.8 |
| Return on investment, % | - | - | 18.3 |
| Equity ratio, % | 61.4 | 65.3 | 52.4 |
| Gross investments in tangible and intangible assets, EUR 1,0001) | 411 | 279 | 558 |
| Gross investments in tangible and intangible assets, as % of net sales | 0,9 | 0.7 | 0.6 |
| Capitalisations according to IAS 38 to intangible assets, EUR 1,000 | 3,008 | 2,368 | 5,176 |
| Research and development expenditure, EUR 1,000 | 10,251 | 8,653 | 20,299 |
|
Research and development expenditure, as % of net sales |
21.5 | 20.3 | 20.8 |
| Order backlog, EUR 1,000 | 64,215 | 58,760 | 66,344 |
| Average number of employees during the period | 758 | 700 | 723 |
| Interest-bearing net liabilities, EUR 1,000 | -28 | -187 | 4,137 |
| Gearing ratio, % | -0.1 | -0.6 | 11.1 |
1) The figure does not include investments in development projects.
| Per share data |
1 Jan – 30 Jun 2016 |
1 Jan – 30 Jun 2015 |
1 Jan- 31 Dec 2015 |
| Earnings per share (EPS), EUR | 0.03 | 0.01 | 0.04 |
| EPS diluted, EUR | 0.03 | 0.01 | 0.04 |
| Equity per share, EUR | 0.33 | 0.31 | 0.34 |
| Dividend per share, EUR | - | - | 0.03 |
| Dividend per earnings, % | - | - | 72.7 |
| Effective dividend yield, % | - | - | 1.6 |
| P/E ratio | - | - | 43.4 |
| Adjusted number of shares at the end of the period | 108,395,409 | 107,525,175 | 108,395,409 |
| of which the number of treasury shares | 117,129 | 118,507 | 118,507 |
| Outstanding shares | 108,278,280 | 107,406,668 | 108,276,902 |
| Adjusted average number of shares during the period | 108,202,657 | 107,084,788 | 107,370,551 |
| Average number of shares, dilution included | 109,640,245 | 108,740,382 | 109,640,245 |
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) | |||