Panostaja Oyj Stock Exchange Bulletin, September 5, 2012 10:00 a.m.
PANOSTAJA GROUP INTERIM REPORT NOVEMBER 1, 2011–JULY 31, 2012 (9 months)
Cumulative net sales for the third quarter: MEUR 114.7, growth 12%
Cumulative EBIT for the third quarter: MEUR 4.0, change -16%
During the period under review, cumulative cash flow increased MEUR 3.6.
Panostaja Oyj’s subsidiary Vindea Group Oy acquired the entire shareholding of packaging and logistics services company HSG Logistics Oy.
THIRD QUARTER, MAY–JULY 2012
Net sales MEUR 38.9 (MEUR 33.9), growth 15%
EBIT MEUR 1.6 (EBIT MEUR 2.2)
Profit before taxes MEUR 0.9 (MEUR 1.3)
Earnings per share (undiluted) 1.9 cents (0.5 cents)
Cash flow from business operations MEUR 0.7 (MEUR 3.1).
The MEUR 5.0 growth in net sales resulted from the operational development of Digital Printing Services and organic growth of the Safety segment. The impact of acquisitions on the net sales for the third quarter stood at MEUR 3.6.
The MEUR 0.6 drop in EBIT for the third quarter was mainly due to a major decline in operating profit in the Heat Treatment segment mainly as a result of the Olkiluoto project coming to an end. In addition, changes to the projects of the Safety segment during the period under review weakened EBIT. Profitability in the Takoma segment remained poor also in the third quarter, with the EBIT being negative. The Value-added Logistics segment showed growth, with a MEUR 0.3 increase in EBIT.
NOVEMBER 2011–JULY 2012
Net sales MEUR 114.7 (MEUR 102.6), growth 12%
EBIT MEUR 4.0 (MEUR 4.7), change -16%
Profit before taxes MEUR 2.3 (MEUR 2.7)
Earnings per share (undiluted) 1.7 cents (1.1 cents)
Equity per share EUR 0.61 (EUR 0.66)
Equity ratio 37.0% (33.9%)
Cash flow from business operations MEUR 6.5 (MEUR 2.9).
The MEUR 12.1 growth in net sales resulted primarily from the organic growth of the Digital Printing Services, Value-added Logistics and the Safety segments. Acquisitions made in the previous financial period and the period under review increased net sales MEUR 5.2.
EBIT totaled MEUR 4.0 (MEUR 4.7). The MEUR -0.7 decrease in EBIT was primarily due to a decrease in EBIT for the Takoma segment. Of the reported segments, Value-added Logistics and Digital Printing Services had an operating profit better than the reference period.
Panostaja will further define its result management measures with regard to EBIT. During the 2012 financial year, the Group's comparable net sales are expected to grow by about 10–15% over the previous year and the Group's EBIT is expected to increase or remain on a par with the previous year.
Previous result management: During the 2012 financial year, the Group's comparable net sales are expected to grow by about 10–15% over the previous year and the Group's EBIT is expected to increase.
The Annual General Meeting of January 31, 2012 approved the capital repayment proposal made by the Board. EUR 0.05 per share of capital repayment was paid from the invested unrestricted equity fund. The record date for the capital repayment was February 3, 2012, with the payment date being February 10, 2012. A total of MEUR 2.6 of capital was repaid to parent company shareholders.
| 9 months | 9 months | 12 months | |||||
| Key figures | 11/11-07/12 | 11/10-07/11 | 11/10-10/11 | ||||
| Net sales (MEUR) € | 114.7 | 102.6 | 141.2 | ||||
| EBIT (MEUR) € | 4.0 | 4.7 | 6.7 | ||||
| Profit before taxes (MEUR) € | 2.3 | 2.4 | 4.1 | ||||
| Earnings per share - undiluted (EUR) | 0.02 | 0.01 | 0.02 | ||||
| Equity per share (EUR) | 0.61 | 0.66 | 0.65 | ||||
| Financial position and cash flow: | 31/7/2012 | 31/7/2011 | 31/10/2011 | ||||
| Net liabilities (MEUR) € | 45.3 | 47.5 | 47.2 | ||||
| Gearing (%) | 94.4 | 98.7 | 99.6 | ||||
| Equity ratio (%) | 37.0 | 33.9 | 33.4 | ||||
| Cash flow from business operations (MEUR) | 6.5 | 2.9 | 4.4 | ||||
The income statement for operations discontinued during the review period has been separated from the income statement for retained operations and the result for them is presented in accordance with the IFRS standard on row ‘Earnings from discontinued operations’. Before separating discontinued operations in the income statement from retained operations, Group net sales for the period under review totaled MEUR 118.1, while EBIT amounted to MEUR 4.5. Prior to separation, net sales for the entire 2011 financial year totaled MEUR 163.2 and EBIT MEUR 5.9.
MARKET SITUATION
Panostaja Group’s business operations during the third quarter did not meet expectations, and there remains considerable variation in the development of different segments. The general economic situation and atmosphere became more unstable during the third quarter due to the European financial crisis, and this uncertainty was particularly reflected in segments serving the technology sector. Panostaja believes, however, that a moderate positive development trend will continue during the remaining financial period, even though there are more factors of uncertainty than during the previous financial period. The situation on the financial markets has become more challenging, particularly in the SME sector, and the restraints on credit issue remain a clear risk to the general financial development. After a slight recovery in the spring of 2012, the corporate acquisitions market has once again slowed, particularly due to stricter bank lending policies.
THE ECONOMIC DEVELOPMENT OF THE PANOSTAJA GROUP
MAY–JULY 2012
Panostaja Group net sales in the third quarter were MEUR 38.9 (MEUR 33.9). Export amounted to MEUR 3.2, or 8.2% of net sales.
The MEUR 5.0 growth in net sales resulted from operational development of the Digital Printing Services and Safety segments and organic growth and acquisitions in the Value-added Logistics segment. The impact of acquisitions on the net sales for the third quarter stood at MEUR 3.6.
Of the Group’s ten operational segments, seven exceeded the net sales of the reference year. Correspondingly, three fell below the net sales levels of the reference year. EBIT improved in the following segments: Value-added Logistics, Carpentry Industry and Fittings.
In the third quarter, the Group’s EBIT were MEUR 1.6 (MEUR 2.2) and profit before taxes was MEUR 0.9 (MEUR 1.3). The operating profit margin was 4.2% (6.6%). EBIT for the third quarter fell by MEUR 0.6, primarily due to the conclusion of the Olkiluoto project in the Heat Treatment segment and changes to the projects of the Safety segment during the period of review
NOVEMBER 2011–JULY 2012
Panostaja Group’s net sales were MEUR 114.7 (MEUR 102.6) at the end of the period under review. Export amounted to MEUR 9.0, or 7.8%, of the net sales. The corporate acquisitions made during the previous and current financial period affected the MEUR 12 increase in net sales by MEUR 5.2.
Of the Group’s ten operational segments, seven exceeded the cumulative net sales for the reference period. Correspondingly, four segments exceeded the EBIT levels during the period under review. EBIT improved in the following segments: Digital Printing Services, Value-added Logistics, Carpentry Industry and Supports.
EBIT totaled MEUR 4.0 (MEUR 4.7). The MEUR -0.7 decrease in EBIT was primarily caused by the Takoma segment. The EBIT in the Takoma segment decreased from MEUR -0.8 to MEUR -2.1. Takoma's volumes are still too low considering its capacity and cost structure. The Value-added Logistics and Digital Printing Services segments clearly exceeded the business result of the reference period.
The cumulative result for discontinued operations in the third quarter was MEUR -1.1. The corresponding figure for the reference period (2011) was MEUR -0.8. The consolidated income statement does not include the income statement for operations discontinued in 2011. Instead, the result is entered separately in the consolidated income statement under ‘Income from discontinued operations’.
Before separating discontinued operations in the income statement from retained operations, the Group’s net sales for the review period totaled MEUR 118.1, while EBIT amounted to MEUR 4.5. As far as the entire 2011 financial period is concerned, net sales from operations discontinued during the review period were MEUR 22.1 and EBIT MEUR -0.8. Prior to separation of discontinued operations in the income statement from retained operations, the Group’s net sales for the entire 2011 financial year were MEUR 163.2 and EBIT MEUR 5.9.
The net financing expenses of the Group for the review period were approximately MEUR -2.2 (MEUR -2.1). The Group's liquidity was good and cash flow from business operations (MEUR 6.5) was positive.
| Personnel | |||
| 31/7/2012 | 31/7/2011 | 31/10/2011 | |
| Average number of employees | 1,171 | 1,032 | 1,034 |
| Employees at the end of the period | 1,244 | 1,094 | 1,097 |
| Employees in each segment at the end of the period | 31/7/2012 | 31/7/2011 | 31/10/2011 |
| Digital Printing Services | 340 | 328 | 325 |
| Takoma | 200 | 195 | 190 |
| Safety | 215 | 180 | 188 |
| HEPAC Wholesale | 0 | 37 | 37 |
| Value-added Logistics | 272 | 131 | 131 |
| Fittings | 30 | 32 | 32 |
| Spare Parts for Motor Vehicles | 41 | 36 | 35 |
| Heat Treatment | 64 | 61 | 64 |
| Carpentry Industry | 32 | 32 | 32 |
| Supports | 16 | 15 | 16 |
| Fasteners | 24 | 25 | 25 |
| Technochemical | 0 | 12 | 12 |
| Parent company | 10 | 10 | 10 |
| Group in total | 1,244 | 1,094 | 1,097 |
In the preliminary ruling on the capital repayment in respect of Takoma Oyj shares in spring 2008, the Tax Office for Major Corporations decided on the basis of an overall assessment that Panostaja was a capital investor within the meaning of Section 6, Subsection 1, Item 1 of the Finnish Business Tax Act. For capital investors, capital gains from fixed asset shares are considered taxable income.
Due to the said preliminary ruling, the Tax Office for Major Corporations, in its taxation by direct assessment in 2007, regarded Panostaja Oyj as a capital investor in the aforementioned sense and taxed the company’s certain capital gains from fixed asset shares. Panostaja Oyj submitted a claim for adjustment over the 2007 taxation to the Board of Adjustment claiming that the capital gain from fixed asset shares should be exempt from tax. The Board of Adjustment denied Panostaja Oyj’s claim in August 2009. Panostaja Oyj appealed the decision to the Administrative Court of Helsinki.
In June 2011, Panostaja Oyj was informed that the Administrative Court of Helsinki had rejected the appeal. The Administrative Court considers Panostaja Oyj as a capital investor within the meaning of the Finnish Business Tax Act. Panostaja Oyj has applied to the Supreme Administrative Court for the right to appeal the decision.
GROUP STRUCTURE CHANGES
Panostaja expanded its Value-added Logistics segment when, at the beginning of May, its subsidiary Vindea Group Oy acquired the entire shareholding of HSG Logistics Oy, a company supplying packaging and logistics services. In 2011, the newly-formed company had approximately MEUR 27 in combined net sales and employed a total of 260 people. Since the reorganization, Panostaja Oyj’s shareholding in Vindea Group is about 54%.
A corporate acquisition was made in the Safety segment on May 29, 2012: the business operations of the Helsinki-based IP-Valvonta Oy were acquired.
In March, Panostaja announced that it was selling its entire shareholding in Lämpö-Tukku Oy to Onninen Oy. Lämpö-Tukku Oy was a subsidiary of Eurotermo Holding Oy, a company in which Panostaja owns a 63.3% share. The compensation paid to Panostaja Group comprised the purchase price and repayment of internal loans, and totaled some MEUR 2.4. Panostaja did not record any sales profit or loss from the transaction. The conclusion of the transaction required the approval of the Finnish Competition Authority. At the beginning of April, Panostaja announced that the Finnish Competition Authority had approved it and that the deal had been concluded.
In December 2011, Panostaja implemented an arrangement, through which Spectra Yhtiöt Oy acquired a 100% holding in Oy Alfa-Kem Ab by means of share exchange. Previously, Oy Alfa-Kem Ab formed Panostaja Group’s Technochemical segment. Panostaja Oyj's holding in the corporate entity is 32%, which Panostaja will report as an associated company as of January 2012. Oy Alfa-Kem Ab's prior parent company Annektor Oy merged with Panostaja Oyj on February 29, 2012.
During the current financial period, Panostaja Group has discontinued two reporting segments, Technochemical and HEPAC Wholesale, as a result of corporate divestments. In the previous financial period, the Group reported its business operations in thirteen segments.
SEGMENT REVIEW
Panostaja Group’s business operations for the period under review are reported in eleven segments: Digital Printing Services, Takoma, Safety, Value-added Logistics, Fittings, Spare Parts for Motor Vehicles, Heat Treatment, Carpentry Industry, Supports, Fasteners and Other (parent company + associated companies).
NOVEMBER 2011–JULY 2012
Net sales in the Digital Printing Services segment grew from MEUR 23.0 to MEUR 25.5 and EBIT from MEUR 2.8 to MEUR 3.6. Market price competition increased further. Growth in net sales and EBIT, however, were still kept clearly positive due to successes in the customer interface and operational efficiency.
Net sales in the Takoma segment increased from MEUR 20.1 to MEUR 21.9. EBIT decreased from MEUR -0.8 to MEUR -2.1. Despite the slight growth in net sales during the period under review, Takoma's volumes are still low considering its capacity. In addition, customer ordering small lots affected the efficient use of capacity, and costs have not been successfully adapted to fluctuations in demand. The Takoma segment's order book remained at the previous quarter's level of approximately MEUR 12.
Net sales in the Safety segment increased from MEUR 17.6 to MEUR 21.1, but EBIT dropped from MEUR 0.9 to MEUR 0.6. The increase in net sales was due to the strong organic growth of the segment throughout the entire period under review. The investments in growth were evident in increased costs in the segment, which restrained the growth in EBIT. In addition, changes to the projects during the period under review weakened EBIT.
Net sales in the Value-added Logistics segment grew from MEUR 11.4 to MEUR 16.1 and EBIT increased from MEUR 0.1 to MEUR 0.8. In May, the entire shareholding of packaging and logistics company HSG Logistics Oy was acquired. The acquisition has a positive impact on the growth of net sales and EBIT.
Net sales in the Fittings segment declined from MEUR 8.4 to MEUR 7.8, and EBIT remained on a par with the reference year’s level (MEUR 0.3). A reduction in the co-operation with Abloy had a negative impact on net sales for the period under review. New product launches are yet to compensate for the drop in net sales resulting from the contraction of co-operation with Abloy.
Net sales in the Spare Parts for Motor Vehicles segment grew from MEUR 6.8 to MEUR 7.6, while EBIT remained at the previous year's level (MEUR 0.6). The market situation in the segment has generally slowed down.
Net sales in the Heat Treatment segment declined from MEUR 6.3 to MEUR 5.7, and the MEUR 1.5 EBIT dropped to MEUR 0.8. During the summer months, demand in the operator business was far below that of the reference year. Conclusion of the Olkiluoto project and the postponement of new projects had a negative impact, particularly on operations in the Polish subsidiary and, in turn, on segment net sales and EBIT.
The Carpentry Industry segment remained strong. Net sales grew slightly over the previous year, totalling MEUR 4.5 for the period under review, with EBIT remaining on a par with the reference period at MEUR 0.9. Particularly in the Norwegian market area, the summer situation was an improvement over last year.
Net sales in the Supports segment increased from MEUR 2.8 to MEUR 3.0, even though the economic situation for construction saw a rapid decline during the summer. EBIT increased over the previous year, from MEUR 0.2 to MEUR 0.3.
Net sales in the Fasteners segment was at a level slightly lower of MEUR 2.1 than the reference year, while EBIT fell to MEUR -0.2 from the MEUR -0.0 of the reference year. Uncertainty on the technology sector market continued and customer demand remained low, which was also reflected in the segment net sales and EBIT.
There were no significant changes in the net sales of the Other segment. In the period under review, three associated companies issued reports: Ecosir Group Oy and PE Kiinteistörahasto I Ky as well as, as of January 2012, Spectra Yhtiöt Oy. The profit/loss of the reported associated companies in the review period was MEUR 0.5 (MEUR 0.1), which is presented on a separate row in the Group's income statement. The growth in the profit of associated companies resulted from the sale of a property by PE Kiinteistörahasto I Ky.
INVESTMENTS AND FINANCING
The Group's liquidity was good and cash flow from business operations, MEUR 6.5, was positive (MEUR 2.9). The Group’s liquid assets were MEUR 7.7 (MEUR 15.6). A total of MEUR 7.8 of parent company and the merged Annektor Oy debts, including the convertible bond loan, was paid off on March 1, 2012. In the same connection, a total of MEUR 6.3 of loans were rearranged. The Group’s gross capital expenditure in the review period closed were approximately MEUR 6.2 (MEUR 7.7). The Group’s equity ratio was 37.0 % (33.9 %) and interest-bearing net liabilities totaled MEUR 45.3 (MEUR 47.5). Panostaja Oyj’s convertible subordinated loan amounted to MEUR 15 of the net liabilities (MEUR 20.6). The return on equity was 1.7% (4.6%) and the return on investment 2.5% (5.3%).
| Financial position: | |||||||
| MEUR | 31/7/2012 | 31/7/2011 | 31/10/2011 | ||||
| Interest-bearing liabilities | 57.5 | 67.4 | 66.2 | ||||
| Interest-bearing receivables | 4.5 | 4.3 | 4.4 | ||||
| Cash and cash equivalents | 7.7 | 15.6 | 14.6 | ||||
| Interest-bearing net liabilities | 45.3 | 47.5 | 47.2 | ||||
| Equity (belonging to the parent company’s shareholders as well as minority shareholders) | 48.0 | 48.2 | 47.4 | ||||
| Gearing ratio, % | 94.4 | 98.7 | 99.6 | ||||
| Equity ratio, % | 37.0 | 33.9 | 33.4 | ||||
| Return on equity, % | 1.6 | 4.6 | 5.0 | ||||
| Return on investment, % | 3.6 | 5.3 | 5.6 | ||||
The Annual General Meeting of January 31, 2012 approved the capital repayment proposal made by the Board. EUR 0.05 per share of capital repayment was paid from the invested unrestricted equity fund. The record date for the capital repayment was February 3, 2012, with the payment date being February 10, 2012. A total of MEUR 2.6 of capital was repaid to parent company shareholders.
SHARE PRICE DEVELOPMENT AND SHARE OWNERSHIP
Panostaja Oyj’s share closing rate fluctuated between EUR 0.73 and EUR 1.05 during the third quarter. During the period under review, a total of 5,302,726 shares were exchanged, which amounts to 10.4% of the share capital. The July share closing rate was EUR 0.77. The market value of the company's share capital at the end of July was MEUR 39.8 and the company had 3,785 shareholders (3,870).
| Development of share exchange | 3Q/2012 | 3Q/2011 | 1-3Q/2012 | 1-3Q/2011 | ||
| Shares exchanged, 1,000 pcs | 395 | 489 | 5,303 | 3,221 | ||
| % of share capital | 0.8 | 1.0 | 10.4 | 6.5 | ||
| Share | 31/7/2012 | 31/7/2011 | 31/10/2011 | ||||
| Shares in total, 1,000 pcs | 51,733 | 51,733 | 51,733 | ||||
| Own shares, 1,000 pcs | 565 | 613 | 602 | ||||
| Closing rate | 0.77 | 1.12 | 1.06 | ||||
| Market value(MEUR) | 39.8 | 57.9 | 54.8 | ||||
| Shareholders | 3,785 | 3,870 | 3,826 | ||||
On December 19, 2011, Panostaja Oyj received two notifications pursuant to Chapter 2, Section 9 of the Securities Markets Act concerning changes to holding in the company.
Matti Koskenkorva’s share of Panostaja Oyj's total number of shares was below 10%. Maija Koskenkorva's share was 4,411,873 shares, 8.52% of Panostaja Oyj's share capital and number of votes. Treindex Oy's (former Koskismatti Oy) share of Panostaja Oyj's total number of shares exceeded 5%. Treindex's share was 3,400,000 shares, 6.57% of Panostaja Oyj's share capital and number of votes. Treindex Oy's shareholders are Minna Kumpu, Hanna Malo and Mikko Koskenkorva.
ADMINISTRATION AND GENERAL MEETING
Panostaja Oyj’s Annual General Meeting was held on January 31, 2012 in Tampere. Jukka Ala-Mello, Satu Eskelinen, Hannu Martikainen, Hannu Tarkkonen, Mikko Koskenkorva and Eero Eriksson were re-elected to Panostaja Oyj’s Board of Directors. In the Board’s organizing meeting held immediately after the General Meeting, Jukka Ala-Mello was elected Chairman of the Board. Hannu Tarkkonen was elected Vice Chairman. Authorised Public Accountant Markku Launis and Authorised Public Accountants PricewaterhouseCoopers Oy were selected as general chartered accountants, with Authorised Public Accountant Janne Rajalahti as the responsible public accountant.
The General Meeting approved the closing of the November 1, 2010–October 31, 2011 accounts as well as the proposal by the Board to transfer the profit of the financial period to the profit funds and that capital repayment be paid at a rate of EUR 0.05 per share. The record date for capital repayment was February 3, 2012 and the payment date February 10, 2012. In addition, the Annual Meeting authorized the Board to decide, at its discretion, on the potential distribution of assets to shareholders, the company's financial status permitting, either as dividends from profit funds or as distribution of assets from the invested unrestricted equity fund. The maximum distribution of assets performed on the basis of this authorization totals EUR 5,200,000. The authorization includes the right of the Board to decide on all other terms and conditions relating to the said asset distribution. The authorization will remain valid until the end of the next Annual General Meeting.
In addition, the Annual General Meeting granted exemption from liability to the members of the Board and to the CEO. It was decided at the Annual Meeting that the Chairman of the Board be paid EUR 40,000 as an annual compensation for the term that begins at the end of the Meeting and ends at the end of the 2013 Annual General Meeting, and that the other members of the Board be paid an annual compensation of EUR 20,000. It was further resolved at the Annual General Meeting that approximately 40% of the compensation remitted to the members of the Board be paid on the basis of the share issue authorization given to the Board, by issuing company shares to each Board member if the Board member does not own more than one percent of the company’s shares on the date of the General Meeting. If the holding of a Board member on the date of the General Meeting is over one percent of all company shares, the compensation will be paid in full in monetary form.
In addition, the Annual General Meeting resolved to cancel the authorization concerning the acquisition of the company’s own shares given at the General Meeting of January 27, 2011, and authorized the Board of Directors to decide on the acquisition of the company’s own shares so that the company’s own shares will be acquired in one or several installments and, on the basis of the authorization, a total maximum of 5,100,000 of the company’s own shares may be acquired. By virtue of the authorization, the company’s own shares may be obtained using unrestricted equity only.
The company’s own shares may be acquired at the price in public trade arranged by NASDAQ OMX Helsinki Oy on the date of acquisition or otherwise at the prevailing market price. The Board of Directors will decide how the company’s own shares are to be acquired. The company’s own shares may be acquired not following the proportion of ownership of the shareholders (directed acquisition). The authorization shall be valid until July 31, 2013.
The Board of Directors has not used the authorization granted by the Annual Meeting to acquire its own shares during the review period.
Hannu Tarkkonen, Managing Director of Etera Mutual Pension Insurance Company, announced that he would resign from Panostaja’s Board of Directors on May 10, 2012. According to Panostaja Oyj’s Articles of Association, the company’s Board of Directors must comprise at least three (3) and no more than six (6) ordinary members, according to which the Board will continue with five (5) members.
SHARE CAPITAL AND THE COMPANY’S OWN SHARES
At the close of the period under review, Panostaja Oyj’s share capital was EUR 5,568,681.60. The total number of shares is 51,733,110.
The total number of shares held by the company at the end of the period under review was 565,066 individual shares (at the beginning of period under review: 601,875). The number of the company's own shares corresponded to 1.1% of the number of shares and votes at the end of the entire review period.
In accordance with the decision of the General Meeting of January 27, 2011 and the Board, Panostaja Oyj transferred a total of 12,000 individual shares as meeting compensation for the members of the Board on December 16, 2011. As per the decisions of the General Meeting of January 31, 2012 and the Board, 12,763 and 12,046 shares were transferred.
EQUITY CONVERTIBLE SUBORDINATED LOANS
At the end of the review period, EUR 15,000,000 of the 2011 convertible subordinated loan remained. The interest on the loan is 6.5% and the loan period February 7, 2011–April 1, 2016. The original share exchange rate is EUR 2.20, and the loan shares may be exchanged for no more than 6,818,181 company shares. The total number of loan shares is 300, and they are available for public trade on the Nasdaq OMX Helsinki stock exchange. The share exchange rate will be entered into the company’s invested unrestricted equity fund.
The loan period for the 2006 convertible subordinated loan ended on March 1, 2012. The loan was repaid as a single installment on the end date of the loan period. A fixed 6.5% annual interest was paid for the loan. The interest was paid for the last time at the end of the loan period.
NEAR-FUTURE RISKS AND FACTORS OF UNCERTAINTY
The most significant risks of Panostaja Group have been described in the financial statements. The near-future risks the Group faces are mainly tied to the uncertainty resulting from the crisis in the eurozone and the global economic situation as well as their potential impact on achieving the goals set for the various segments. The instability of the overall economic situation has already lead to a decline in customer demand as well as the postponement of investments, particularly in segments serving the technology sector, which may result in a need for consolidated goodwill write-downs. In the current financial period, credit loss risks continue to represent a significant uncertainty factor in some of the segments. This risk is increased by the tightening of credit issue to SMEs. The weakening in the liquidity of the financial markets and the potential restraints on credit issue may hamper the realization of corporate acquisitions and the availability of finance for working capital. As Panostaja's financing situation is currently stable and its loan portfolio is distributed among several different parties, the potentially negative impact that an expansion of the crisis in Greece might have on the financial market will not jeopardise Panostaja's operations
EVENTS AFTER THE REVIEW PERIOD
There are no major events to report.
PROSPECTS FOR THE REMAINDER OF THE FINANCIAL PERIOD
In accordance with its business strategy, Panostaja Group focuses on increasing shareholder value in the business areas owned by the Group. The development of shareholder value will be constantly monitored as part of a changing operating environment, and decisions on the development or divestment of business areas will be made with the maximization of shareholder value in mind. Active development of shareholder value, the effective allocation of capital and financial opportunities create a solid foundation for significant operational expansion. The need for ownership arrangements in SMEs enables both expansion into new business areas and growth in existing ones.
Economic trend expectations in the fields of existing business areas are strongly tied to the prospects of customer enterprises. The current economic trend expectations are uncertain, and the growth forecast has generally been cut due to the credit crisis in the eurozone and decelerated economic growth. In the various business areas of Panostaja Group, the prospects still vary from cautiously optimistic to slightly pessimistic.
The challenges in the forecastability of the technology industry or weakening prospects may create a need for consolidated goodwill write-downs and, especially in Takoma’s operating environment, continuing uncertainty, low volumes and short lots have influenced the company’s profitability, with set targets not having been reached. The long-term profitability objectives set for Takoma’s business operations are being re-evaluated and, based on this, Panostaja's Board of Directors will re-evaluate Takoma Oyj's goodwill foundations.
Panostaja will further define its result management measures with regard to net sales. During the 2012 financial year, the Group's comparable net sales are expected to grow by about 10–15% over the previous year and the Group's EBIT is expected to increase or remain level with the previous year.
Previous result management: During the 2012 financial year, the Group's comparable net sales are expected to grow by about 10–15% over the previous year and the Group's EBIT is expected to increase.
Panostaja Oyj
Board of Directors
For further information, contact CEO Juha Sarsama: tel. +358 (0)40 774 2099.
Panostaja Oyj
Juha Sarsama
CEO
All forecasts and assessments presented in this interim report bulletin are based on the current outlook of the Group and the Management of the various business areas with regard to the state of the economy and its development, and the results attained may be substantially different.
The information in the interim report has not been audited.
|
INCOME STATEMENT |
05/12- |
05/11- |
11/11- |
11/10- |
|
| 07/12 | 07/11 | 07/12 | 07/11 | 2011 | |
| (EUR 1,000) | |||||
| Net sales | 38,972 | 33,975 | 114,719 | 102,592 | 141,152 |
| Other operating income | 208 | 145 | 637 | 534 | 901 |
| Costs in total | 36,195 | 30,356 | 107,448 | 94,152 | 130,277 |
| Depreciations, amortisations and impairment | 1,361 | 1,529 | 3,936 | 4,224 | 5,041 |
| EBIT | 1,624 | 2,235 | 3,972 | 4,750 | 6,735 |
| Financial income and costs | -797 | -861 | -2,192 | -2,116 | -2,812 |
| Share of associated company profits | 88 | -84 | 523 | 80 | 205 |
| Profit before taxes | 915 | 1,290 | 2,303 | 2,714 | 4,128 |
| Income taxes | -340 | -600 | -564 | -344 | -524 |
| Profit/loss from retained operations | 575 | 690 | 1,739 | 2,370 | 3,604 |
| Profit/loss from discontinued operations | 171 | -126 | -1,145 | -832 | -1,388 |
| Profit/loss for the financial period | 746 | 564 | 594 | 1,538 | 2,216 |
| Attributable to | |||||
| the shareholders of the parent company | 958 | 231 | 847 | 559 | 937 |
| to the minority shareholders | -212 | 333 | -253 | 979 | 1,279 |
| Earnings per share from retained operations | |||||
| EUR, undiluted | 0.015 | 0.007 | 0.039 | 0.028 | 0.046 |
| Earnings per share from retained operations | |||||
| EUR, diluted | 0.015 | 0.007 | 0.039 | 0.028 | 0.046 |
| Earnings per share from discontinued operations | |||||
| EUR, undiluted | 0.003 | -0.003 | -0.022 | -0.017 | -0.027 |
| Earnings per share from discontinued | |||||
| operations EUR, diluted | 0.003 | -0.003 | -0.022 | -0.017 | -0.027 |
| Earnings per share on continuing and discontinued | |||||
| operations EUR, undiluted | 0.019 | 0.005 | 0.017 | 0.011 | 0.019 |
| Earnings per share on continuing and discontinued | |||||
| operations EUR, diluted | 0.019 | 0.005 | 0.017 | 0.011 | 0.019 |
| EXTENSIVE INCOME STATEMENT | |||||
| Items of the extensive income statement | 746 | 564 | 594 | 1,538 | 2,216 |
| Translation differences | 4 | -6 | -86 | -63 | -135 |
| Extensive income statement for the period | 750 | 558 | 508 | 1,475 | 2,081 |
| Attributable to | |||||
| the shareholders of the parent company | 962 | 225 | 761 | 830 | 802 |
| to the minority shareholders | -212 | 333 | -253 | 645 | 1,279 |
| BALANCE SHEET | 31/7/2012 | 31/7/2011 | 31/10/2011 |
| (EUR 1,000) | |||
| ASSETS | |||
| Non-current assets | |||
| Goodwill | 36,539 | 36,561 | 36,529 |
| Other intangible assets | 6,057 | 5,207 | 5,049 |
| Property, plant and equipment | 19,553 | 21,280 | 20,061 |
| Interests in associates | 3,946 | 2,616 | 2,740 |
| Other non-current assets | 14,583 | 12,530 | 13,097 |
| Non-current assets total | 80,678 | 78,194 | 77,476 |
| Current assets | |||
| Stocks | 19,542 | 26,895 | 24,005 |
| Trade and other non-interest-bearing receivables | 22,012 | 21,589 | 26,307 |
| Cash and cash equivalents | 7,729 | 15,625 | 14,643 |
| Current assets total | 49,282 | 64,109 | 64,955 |
| Assets in total | 129,961 | 142,303 | 142,431 |
| EQUITY AND LIABILITIES | |||
| Equity attributable to parent company shareholders | |||
| Share capital | 5,569 | 5,569 | 5,569 |
| Share premium account | 4,646 | 4,646 | 4,646 |
| Translation difference | -165 | -63 | -169 |
| Invested unrestricted equity fund | 16,510 | 19,014 | 19,023 |
| Retained earnings | 4,871 | 4,471 | 4,047 |
| Total | 31,431 | 33,637 | 33,116 |
| Minority interest | 16,570 | 14,584 | 14,270 |
| Equity total | 48,001 | 48,221 | 47,386 |
| Liabilities | |||
| Deferred tax liabilities | 1,641 | 1,780 | 1,520 |
| Equity convertible subordinated loan | 14,381 | 19,848 | 19,895 |
| Non-current liabilities | 33,878 | 43,583 | 32,679 |
| Current liabilities | 32,060 | 28,871 | 40,951 |
| Liabilities total | 81,959 | 94,082 | 95,045 |
| Equity and liabilities in total | 129,961 | 142,303 | 142,431 |
| CASH FLOW STATEMENT | 07/2012 | 07/2011 | 2011 |
| (EUR 1,000) | |||
| Operating net cash flow | 6,531 | 2,956 | 4,354 |
| Investment net cash flow | -3,126 | -7,448 | -6,782 |
| Loans drawn | 7,816 | 21,999 | 19,437 |
| Loans repaid | -15,046 | -17,328 | -17,743 |
| Share issue | 0 | 6,053 | 6,053 |
| Disposal of own shares | 34 | 930 | 942 |
| Dividends paid and capital repayments | -3,216 | -2,804 | -2,853 |
| Financing net cash flow | -10,412 | 8,849 | 5,836 |
| Change in cash flows | -7,007 | 4,357 | 3,408 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| (EUR 1,000) | Share capital | Share premium account | Invested unrestricted equity fund | Translation differences | Profit funds | Minority interest | Total | |||
| Equity | 5,529 | 4,646 | 11,574 | -57 | 6,497 | 13,923 | 42,112 | |||
| 1.11.2010 | ||||||||||
| Profit for the financial period | 559 | 979 | 1,538 | |||||||
| Profit and costs recorded during the financial period, total | 559 | 979 | 1,538 | |||||||
| Dividends paid | -2,555 | -265 | -2,820 | |||||||
| Share subscription | 40 | 276 | 316 | |||||||
| Share issue | 5,738 | 5,738 | ||||||||
| Disposal of own shares | 930 | 930 | ||||||||
| Equity component of convertible subordinated loan | 481 | 481 | ||||||||
| Reward system | 15 | 15 | ||||||||
| Translation differences | -6 | -6 | ||||||||
| Changes in minority interest | -30 | -53 | -83 | |||||||
| Other changes in equity, total | ||||||||||
| Equity | 40 | 0 | 7 440 | -6 | -2 585 | -318 | 4 571 | |||
| 31/7/2011 | 5,569 | 4,646 | 19,014 | -63 | 4,471 | 14,584 | 48,221 | |||
| Equity | 5,569 | 4,646 | 19,023 | -169 | 4,047 | 14,270 | 47,386 | |||
| 1/11/2011 | ||||||||||
| Profit for the financial period | 847 | -253 | 594 | |||||||
| Profit and costs recorded during the financial period, total | 847 | -253 | 594 | |||||||
| Dividends paid | -659 | -659 | ||||||||
| Repayment of capital | -2;557 | -2,557 | ||||||||
| Disposal of own shares | 35 | 35 | ||||||||
| Reward system | 9 | 9 | ||||||||
| Translation differences | 4 | 4 | ||||||||
| Changes in minority interest | -102 | 3,212 | 3,110 | |||||||
| Other changes in equity, total | -2,513 | 4 | -102 | 2,553 | -58 | |||||
| Equity | 5,569 | 4,646 | 16,510 | -86 | 4,792 | 16,570 | 48,001 | |||
| 31/7/2012 | ||||||||||
| KEY FIGURES | |||
| 07/2012 | 07/2011 | 10/2011 | |
| Equity per share(EUR) | 0.61 | 0.66 | 0.65 |
| Earnings per share, diluted (EUR) | 0.02 | 0.01 | 0.02 |
| Earnings per share, undiluted(EUR) | 0.02 | 0.01 | 0.02 |
| Average number of shares during financial period, 1,000 | 51,150 | 49,791 | 50,128 |
| Number of shares at end of financial period, 1,000 | 51,733 | 51,733 | 51,733 |
| Share issues/CL exchanges during financial period, 1,000 | 0 | 4,330 | 4,330 |
| Number of shares, 1,000, diluted | 57,968 | 59,922 | 60,258 |
| Return on equity, % | 1.6 | 4.6 | 5.0 |
| Return on investment, % | 3.6 | 5.3 | 5.6 |
| Gross capital expenditure | |||
| To permanent assets (MEUR) | 6.2 | 7.7 | 9.1 |
| % of net sales | 5.4 | 7.5 | 6.4 |
| Interest-bearing liabilities | 57.5 | 67.4 | 66.2 |
| Equity ratio, % | 37.0 | 33.9 | 33.4 |
| Average number of employees | 1,171 | 1,032 | 1,034 |
GROUP DEVELOPMENT BY QUARTER
| (MEUR) | Q3/12 | Q2/12 | Q1/12 | Q4/11 | Q3/11 | Q2/11 | Q1/11 |
| Net sales | 39.0 | 38.0 | 37.7 | 38.6 | 33.9 | 35.6 | 33.1 |
| Other operating income | 0.2 | 0.3 | 0.1 | 0.3 | 0.1 | 0.3 | 0.2 |
| Costs in total | -36.2 | -35.9 | -35.3 | -36.1 | -30.3 | -32.7 | -31.3 |
| Depreciations, amortisations and impairment | -1.4 | -1.3 | -1.3 | -0.8 | -1.5 | -1.4 | -1.3 |
| EBIT | 1.6 | 1.1 | 1.2 | 2.0 | 2.2 | 1.8 | 0.7 |
| Financing items | -0.8 | -0.6 | -0.7 | -0.7 | -0.8 | -0.7 | -0.5 |
| Share of associated company profits | 0.1 | 0.4 | 0.0 | 0.1 | -0.1 | 0.1 | 0.1 |
| Profit before taxes | 0.9 | 0.9 | 0.5 | 1.4 | 1.3 | 1.1 | 0.3 |
| Taxes | -0.3 | -0.4 | 0.0 | -0.1 | -0.6 | 0.2 | 0.0 |
| Profit from continuing operations | 0.6 | 0.5 | 0.5 | 1.2 | 0.7 | 1.4 | 0.3 |
| Profit from discontinued operations | 0.1 | -0.3 | -0.8 | -0.5 | -0.1 | -0.4 | -0.3 |
| Profit for the financial period | 0.7 | 0.2 | -0.4 | 0.7 | 0.6 | 1.0 | 0.0 |
| Minority interest | -0.2 | -0.2 | 0.2 | 0.3 | 0.3 | 0.5 | 0.1 |
| Parent company shareholder interest | 0.9 | 0.4 | -0.6 | 0.4 | 0.3 | 0.5 | -0.1 |
GUARANTEES GIVEN
| (EUR 1,000) | 07/2012 | 07/2011 | 2011 |
| Guarantees given on behalf of Group companies | |||
| Enterprise mortgages | 40,971 | 41,422 | 41,394 |
| Pledges given | 52,048 | 55,792 | 59,019 |
| Other liabilities | 1,833 | 1,359 | 1,549 |
| Other rental agreements | |||
| In one year | 7,946 | 5,911 | 7,160 |
| In over one year but within five years maximum | 18,394 | 16,400 | 17,543 |
| In over five years | 3,127 | 4,300 | 3,162 |
| Total | 29,467 | 26,612 | 27,865 |
| SEGMENT INFORMATION | ||||
| NET SALES | 05/12-07/12 | 05/11-07/11 | 11/11-07/12 | 11/10-07/11 |
| (EUR 1,000) | ||||
| Digital Printing Services | 8,341 | 7,813 | 25,554 | 22,997 |
| Takoma | 6,734 | 6,280 | 21,911 | 20,081 |
| Safety | 6,406 | 5,803 | 21,058 | 17,607 |
| Value-added Logistics | 7,513 | 3,869 | 16,059 | 11,413 |
| Fittings | 2,332 | 2,670 | 7,770 | 8,407 |
| Spare Parts for Motor Vehicles | 2,643 | 2,369 | 7,558 | 6,822 |
| Heat Treatment | 1,784 | 2,176 | 5,662 | 6,338 |
| Carpentry Industry | 1,513 | 1,314 | 4,510 | 4,429 |
| Supports | 1,086 | 1,054 | 2,992 | 2,776 |
| Fasteners | 724 | 797 | 2,138 | 2,263 |
| Other | 16 | 14 | 48 | 42 |
| Eliminations | -120 | -184 | -541 | -583 |
| Group in total | 38,972 | 33,975 | 114,719 | 102,592 |
| EBIT | ||||
| (EUR 1,000) | ||||
| Digital Printing Services | 997 | 1,096 | 3,594 | 2,833 |
| Takoma | -504 | -434 | -2,085 | -785 |
| Safety | -16 | 344 | 617 | 947 |
| Value-added Logistics | 531 | 218 | 811 | 111 |
| Fittings | 56 | 46 | 327 | 330 |
| Spare Parts for Motor Vehicles | 268 | 303 | 639 | 698 |
| Heat Treatment | 166 | 548 | 801 | 1,450 |
| Carpentry Industry | 364 | 288 | 933 | 916 |
| Supports | 170 | 216 | 303 | 213 |
| Fasteners | -8 | 8 | -169 | -31 |
| Other | -400 | -398 | -1,799 | -1,932 |
| Group in total | 1,624 | 2,235 | 3,972 | 4,750 |
| SEGMENT INFORMATION BY QUARTER | |||||||
| Net sales (MEUR) | 3Q/12 | 2Q/12 | 1Q/12 | 4Q/11 | 3Q/11 | 2Q/11 | 1Q/11 |
| Digital Printing Services | 8.3 | 8.9 | 8.3 | 8.5 | 7.8 | 8.2 | 7.0 |
| Takoma | 6.7 | 7.5 | 7.7 | 7.4 | 6.3 | 7.2 | 6.6 |
| Safety | 6.4 | 7.3 | 7.3 | 7.0 | 5.8 | 6.0 | 5.8 |
| Value-added Logistics | 7.5 | 4.1 | 4.4 | 4.0 | 3.9 | 3.8 | 3.8 |
| Fittings | 2.3 | 2.7 | 3.0 | 2.7 | 3.0 | 2.7 | 3.1 |
| Spare Parts for Motor Vehicles | 2.6 | 2.4 | 2.8 | 2.4 | 2.2 | 2.2 | 2.4 |
| Heat Treatment | 1.8 | 2.0 | 2.7 | 2.2 | 2.2 | 2.0 | 2.0 |
| Carpentry Industry | 1.5 | 1.4 | 1.3 | 1.3 | 1.5 | 1.6 | 1.3 |
| Supports | 1.1 | 0.9 | 1.2 | 1.0 | 0.9 | 0.8 | 1.1 |
| Fasteners | 0.7 | 0.7 | 0.8 | 0.8 | 0.8 | 0.7 | 0.8 |
| Other | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.1 |
| Eliminations | -0.1 | -0.1 | -0.1 | -0.3 | -0.2 | -0.1 | -0.3 |
| Group in total | 39.0 | 37.7 | 38.6 | 33.9 | 35.6 | 33.1 | 34.1 |
| EBIT (MEUR) | 3Q/12 | 2Q/12 | 1Q/12 | 4Q/11 | 3Q/11 | 2Q/11 | 1Q/11 |
| Digital Printing Services | 1.0 | 1.1 | 1.3 | 1.1 | 1.1 | 0.6 | 1.0 |
| Takoma | -0.5 | -0.5 | -0.6 | -0.4 | -0.1 | -0.2 | -0.6 |
| Safety | 0.0 | 0.3 | 0.3 | 0.4 | 0.4 | 0.1 | 1.2 |
| Value-added Logistics | 0.5 | 0.1 | 0.3 | 0.2 | 0.0 | -0.1 | 0.0 |
| Fittings | 0.1 | 0.1 | 0.0 | 0.0 | 0.2 | 0.1 | 0.2 |
| Spare Parts for Motor Vehicles | 0.3 | 0.2 | 0.4 | 0.3 | 0.2 | 0.2 | 0.3 |
| Heat Treatment | 0.2 | 0.4 | 0.7 | 0.5 | 0.4 | 0.5 | 0.1 |
| Carpentry Industry | 0.4 | 0.2 | 0.1 | 0.3 | 0.3 | 0.3 | -0.1 |
| Supports | 0.2 | 0.1 | 0.2 | 0.2 | 0.1 | -0.1 | 0.1 |
| Fasteners | 0.0 | -0.1 | -0.1 | 0.0 | 0.0 | 0.0 | 0.0 |
| Other | -0.4 | -0.7 | -0.6 | -0.4 | -0.9 | -0.7 | -0.3 |
| Group in total | 1.6 | 1.2 | 2.0 | 2.2 | 1.8 | 0.7 | 1.9 |
Panostaja is an investment company developing Finnish SMEs in the role of an active majority shareholder. The company aims to be the most sought-after partner for business owners selling their companies as well as for the best managers and investors. Together with its partners, Panostaja increases the Group's shareholder value and creates Finnish success stories.
Panostaja Oyj currently operates in ten business areas. Flexim Security Oy (Safety) is a specialist in security technology and services, locking, door automation and access control products and solutions. Heatmasters Group (Heat Treatment) offers thermal treatment services for metals in Finland and internationally, and produces, develops and markets heat treatment technology. KL-Varaosat (Spare Parts for Motor Vehicles) is an importer, wholesale dealer and retailer of original spare parts and supplies for Mercedes Benz and BMW cars. Kopijyvä Oy (Digital Printing Services) is one of Finland’s largest companies offering digital printing services. Suomen Helakeskus Oy (Fittings) is a major wholesaler of construction and furniture fittings in Finland. Suomen Kiinnikekeskus Oy (Fasteners) is a supply shop in the fastener field. Matti-Ovi Oy (Carpentry Industry) manufactures and markets, as its main product, solid wood interior doors. Takoma Oyj (Takoma) is a machine shop group with an entrepreneur-driven business model and is registered on the stock exchange. Toimex Oy (Supports) works in the HEPAC field, manufacturing and selling supports. Vindea Oy (Value-added Logistics) is an enterprise specialized in value-added logistics services for the Finnish metal industry.