TECNOMEN LIFETREE CORPORATION'S INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 2009 (unaudited)
Tecnomen Lifetree Corporation INTERIM REPORT
29 October 2009 at 8.30 am
TECNOMEN LIFETREE CORPORATION'S INTERIM REPORT 1 JANUARY - 30 SEPTEMBER 2009
(unaudited)
Net sales in the third quarter of the year totalled EUR 13.2 (18.2) million. The
cash flow after investments before the net payment for the acquisition of
Tecnotree India (formerly Lifetree) was EUR -1.7 (9.8) million. Net sales for
the first nine months of the year were EUR 39.7 (55.5) million and the result
was EUR -8.9 (5.3) million. The cash flow after investments before the net
payment for the Tecnotree India acquisition was EUR -0.8 (11.9) million. The
order book at the close of the period stood at EUR 15.2 (17.2) million.
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| KEY FIGURES | 7-9/200 | 7-9/200 | 1-9/200 | 1-9/2008 | 2008 |
| | 9 | 8 | 9 | | |
--------------------------------------------------------------------------------
| Net sales, MEUR | 13.2 | 18.2 | 39.7 | 55.5 | 77.2 |
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| Net sales, change % | -27.4 | -4.8 | -28.4 | 8.9 | 10.1 |
--------------------------------------------------------------------------------
| Operating result before | -2.0 | 3.3 | -5.3 | 6.5 | 11.5 |
| one-time costs, MEUR | | | | | |
--------------------------------------------------------------------------------
| Operating result, MEUR | -3.0 | 3.3 | -6.3 | 6.5 | 11.5 |
--------------------------------------------------------------------------------
| % of net sales | -23.0 | 18.2 | -15.7 | 11.8 | 14.9 |
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| Profit before taxes, | -3.5 | 4.2 | -6.7 | 7.7 | 13.5 |
| MEUR | | | | | |
--------------------------------------------------------------------------------
| % of net sales | -26.7 | 23.0 | -16.8 | 13.8 | 17.5 |
--------------------------------------------------------------------------------
| Result for the period | -4.3 | 3.1 | -8.9 | 5.3 | 10.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, | -0.06 | 0.05 | -0.14 | 0.09 | 0.17 |
| basic, EUR | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | -0.06 | 0.05 | -0.13 | 0.09 | 0.17 |
| diluted, EUR | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order book, MEUR | | | 15.2 | 17.2 | 9.7 |
--------------------------------------------------------------------------------
| Cash flow after | -1.7 | 9.8 | -0.8 | 11.9 | 17.9 |
| investments and before | | | | | |
| net payment for | | | | | |
| Tecnotree India | | | | | |
| acquisition, MEUR | | | | | |
--------------------------------------------------------------------------------
| Change in cash and cash | -2.1 | 9.8 | -20.7 | 7.8 | 33.8 |
| equivalents, MEUR | | | | | |
--------------------------------------------------------------------------------
| Cash and cash | | | 30.5 | 25.2 | 51.0 |
| equivalents, MEUR | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity ratio % | | | 68.8 | 83.9 | 70.3 |
--------------------------------------------------------------------------------
| Net gearing % | | | -13.7 | -31.8 | -37.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel at | | | 842 | 354 | 354 |
| end of period | | | | | |
--------------------------------------------------------------------------------
Tecnomen Lifetree Corporation uses the name Tecnotree for itself, and this name
is also used in this interim report.
Unless otherwise stated, all figures presented below are for the review period
1-9/2009 and the figures for comparison are for the corresponding period
1-9/2008. The figures for the period 1-9/2009 include the figures for Tecnotree
India (formerly Lifetree) for the period 6 May - 30 September 2009.
President and CEO Eero Mertano:
“Net sales in the nine month review period were significantly lower than last
year (EUR -15.8 million). This decline occurred mainly in the VAS business,
where net sales were EUR -13.4 million down on the first nine months of last
year. The net sales of the BSS/OSS business in the review period were also
slightly down on the previous year (EUR -2.3 million). Due to the global
financial crisis, operators remain cautious about making capital expenditure and
many have postponed their investments until 2010. Reduction in Tecnotree's sales
is mainly due to postponed customer decisions.
In response to the global recession, we have begun a major restructuring at
Tecnotree. Through this we are enhancing the efficiency of our organizational
structure and processes, while maintaining our strong commitment to product
development. In connection with this, during the third quarter the company
completed the personnel negotiations in Finland, as required by Finnish
legislation, and we have also begun negotiations on savings measures in Ireland.
These actions and reducing the use of sub-contracting will result in annual cost
savings of more than EUR 10 million as from the beginning of 2010.
With its new cost structure, expanded product portfolio and local service
offering, Tecnotree is more competitive in all respects.”
SALES AND NET SALES
Tecnotree's net sales in the review period declined 28.4 per cent to EUR 39.7
(55.5) million.
EUR 17.1 million of the sales in the review period have been recognised by stage
of completion (IAS 11 Construction contracts) and EUR 22.7 million on delivery
(IAS 18 Revenues).
Net sales by geographical area were: Americas 43.5 per cent (53.4 %), EMEA 51.5
per cent (34.0 %) and APAC 4.9 per cent (12.6 %).
Net sales by product line were: VAS (Value Added Services, formerly Messaging)
39.7 per cent (52.6 %) and BSS/OSS (Business and Operations Support Systems,
formerly Charging) 60.3 per cent (47.4 %).
Sales through global partners totalled EUR 4.7 (7.9) million or 11.7 per cent
(14.3 %) of net sales.
Maintenance and service sales totalled EUR 16.9 (13.0) million or 42.6 per cent
(23.5 %) of net sales.
The order book stood at EUR 15.2 (17.2) million at the end of the review period.
Americas accounted for 19.0 per cent of the order book, EMEA for 76.0 per cent
and APAC for 5.0 per cent.
OPERATING RESULT
Net sales in the review period totalled EUR 39.7 (55.5) million and the
operating result EUR -6.3 (6.5) million. The fall in net sales was the main
cause of the decline in the operating result.
Net sales for the VAS business unit totalled EUR 15.8 (29.2) million, so they
decreased EUR 13.4 million from the corresponding period in the previous year,
when VAS had an exceptionally large number of projects especially in the EMEA
and APAC regions. EUR 12.3 million of this decrease took place in the
January-June period and EUR 1.1 million in the third quarter. Net sales of the
BSS/OSS business unit totalled EUR 24.0 (26.3) million in the nine month period,
a decline of EUR 2.3 million. The decrease in the third quarter was EUR 3.8
million.
Tecnotree announced in September that it was cutting its workforce in Finland by
20 persons. Further cuts of 15 persons have been made elsewhere in the Group.
One-time costs of EUR 1.0 million have been recognized in the third quarter for
these. These personnel cuts and other reductions in costs will give rise to
annual savings of more than EUR 5 million, which will have a partial impact in
the fourth quarter and in full from the beginning of 2010.
Capitalisation of research and development costs and amortisation of these had
the net impact of weakening the result by EUR 1.8 million compared to the
previous year. The operating result in the review period was -15.7 % (11.8 %) of
net sales.
Tecnotree Convergence Limited (formerly Lifetree Convergence Limited) has been
consolidated as from 6 May 2009. Its impact on net sales was EUR 8.3 million and
on the operating profit EUR 2.1 million.
Tecnotree's business operations are based on project sales. The income and costs
recorded for these vary considerably from one quarter to another. For this
reason it is important to base an examination of the profitability of the
company on the result for more then one quarter.
The result for the period before taxes was EUR -6.7 (7.7) million.
Taxes for the period totalled EUR 2.2 (2.3) million, including a change in the
deferred tax liability of EUR 0.8 (1.0) million based on the capitalization of
R&D costs and withholding taxes of EUR 0.7 (0.7) million recognised as parent
company expenses.
Earnings per share were EUR -0.14 (0.09). Equity per share at the end of the
period was EUR 1.12 (1.34).
FINANCING AND INVESTMENTS
Tecnotree's liquid funds totalled EUR 30.5 (25.2) million. The change in cash
and cash equivalents for the review period was EUR -20.7 million, which includes
dividends of EUR 5.1 million paid in the second quarter as well as the purchase
consideration for the Lifetree acquisition less the cash and cash equivalents of
Lifetree at the acquisition date, EUR 14.5 million.
The balance sheet total on 30 September 2009 stood at EUR 121.6 (94.3) million.
Interest-bearing liabilities were EUR 20.0 (0.0) million. The net debt to equity
ratio (net gearing) was -13.7 per cent (-31.8 %). The balance sheet structure
remained strong and the equity ratio on 30 September 2009 was 68.8 per cent
(83.9 %).
Tecnotree's gross capital expenditure during the review period, excluding the
capitalisation of development costs, was EUR 1.3 (0.9) million or 3.2 per cent
(1.7 %) of net sales.
Financial income and expenses (net) during the review period totalled EUR -0.4
(1.1) million.
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| CHANGE IN WORKING CAPITAL, MEUR | 1-9/2009 | 1-9/2008 | 1-12/2008 |
| (increase - / decrease +) | | | |
--------------------------------------------------------------------------------
| Change in trade receivables | 2.5 | 12.6 | 11.8 |
--------------------------------------------------------------------------------
| Change in other short-term | 9.0 | -1.8 | -0.6 |
| receivables | | | |
--------------------------------------------------------------------------------
| Change in inventories | -0.3 | 0.9 | 1.3 |
--------------------------------------------------------------------------------
| Change in trade payables | -1.9 | -1.5 | -1.8 |
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| Change in other current liabilities | -1.5 | -1.9 | -1.6 |
--------------------------------------------------------------------------------
| CHANGE IN WORKING CAPITAL, TOTAL | 7.7 | 8.4 | 9.1 |
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BUSINESS UNITS
Following the completion of the acquisition of Lifetree on 6 May 2009, the
company has the following business units: VAS (Value Added Services), comprising
the former Messaging product line and Lifetree's MDX+ business, and BSS/OSS
(Business and Operations Support Systems), formed by the former Charging product
line with Lifetree's operations apart from the MDX+ business.
VAS (Value Added Services), formerly Messaging
Sales in the nine month review period were significantly lower than in the
corresponding period last year, due to the global decline in demand. Sales
comprised mainly deliveries of Next Generation Messaging products. During the
third quarter Tecnotree won a new customer for NGM systems in both Europe and
Africa. System expansions were delivered in Africa and Latin America, as well as
a new expansion for an intelligent network information system (EAIP) based on a
Telco Server in Europe. Maintenance and service sales remained strong in all
main market areas.
BSS/OSS (Business and Operations Support Systems), formerly Charging
Net sales of the BSS/OSS unit were slightly lower than in the same period last
year. Demand was strong in the Middle East and Africa and satisfactory in Latin
America. The completion percentage of current projects improved during the
review period, as did the maintenance contract base. Operators have shown much
interest in the new BSS/OSS products obtained through the merger of Tecnomen and
Lifetree.
RESEARCH AND DEVELOPMENT
Research and development costs during the review period totalled EUR 10.7 (11.8)
million, corresponding to 26.9 per cent (21.3 %) of net sales. EUR 4.5 (5.7)
million of development costs were capitalised and will be amortised over 3-5
years from the start of commercial use. R&D costs of EUR 3.2 (2.5) million were
amortised during the review period.
PERSONNEL
At the end of September 2009 Tecnotree employed 842 (354) persons, of whom 90
(88) worked in Finland and 752 (266) elsewhere, with 510 of these in India. The
company employed on average 613 (360) people during the review period. Personnel
by geographical area were as follows:
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| | 1-9/2009 | 1-9/2008 | 1-12/2008 |
--------------------------------------------------------------------------------
| Personnel, at end of period | 842 | 354 | 354 |
--------------------------------------------------------------------------------
| Americas | 50 | 65 | 65 |
--------------------------------------------------------------------------------
| EMEA | 264 | 264 | 264 |
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| APAC | 528 | 25 | 25 |
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| Personnel, average | 613 | 360 | 358 |
--------------------------------------------------------------------------------
| Personnel expenses before R&D | 21.9 | 19.9 | 27.4 |
| capitalisation (MEUR) | | | |
--------------------------------------------------------------------------------
ACQUISITION OF SHARES OF LIFETREE CONVERGENCE LTD
The company acquired 96.51 % of the shares of Lifetree Convergence Ltd in a
transaction on 6 May 2009. During the third quarter Tecnotree acquired a further
1.53 % of the company's shares from external shareholders, so that Tecnotree's
holding at the end of September stood at 98.04 %.
The Annual General Meeting on 12 March 2008 authorised the Board of Directors to
issue a maximum of 17,800,000 new shares. Under this authorisation the Board of
Directors, in accordance with the terms and conditions of the transaction
between the owners of Tecnomen and Lifetree, issued new Company shares on the
following terms and conditions:
A total of 13,676,658 new Company shares were subscribed in the share issue. The
new shares were offered to the sellers of Lifetree, deviating from the
pre-emptive subscription rights of the shareholders. There was therefore a
weighty financial reason for the Company to deviate from shareholders'
pre-emptive subscription rights. The subscription price for each new share was
EUR 0.86. The subscription price was paid as contribution in kind.
The company published a listing prospectus on 11 May 2009. Trading in the new
shares on the main list of NASDAQ Helsinki Oy commenced on 15 May 2009.
Lifetree Convergence Ltd changed its name in June 2009 to Tecnotree Convergence
Ltd.
TECNOTREE'S SHARES AND SHARE CAPITAL
At the end of September 2009 the shareholders' equity of Tecnotree Corporation
stood at EUR 82.3 (79.1) million and the share capital was EUR 4.7. The total
number of shares was 72,953,736. The company held 134,800 of these shares, which
represents 0.18 per cent of the company's total number of shares and votes.
Equity per share was EUR 1.12 (1.34).
A total of 18,415,905 Tecnotree shares (EUR 19,098,552) were traded on the
Helsinki Exchanges during the period 2 January - 30 September 2009, representing
25.2 per cent of the total number of shares.
The highest share price quoted in the period was EUR 1.21 and the lowest EUR
0.78. The average quoted price was EUR 1.01 and the closing price on 30
September 2009 was EUR 1.00. The market capitalisation of the share stock at the
end of the period was EUR 72,953,736.
CURRENT AUTHORISATIONS
Tecnomen's Annual General Meeting held on 12 March 2008 authorised the Board of
Directors to decide on issuing shares and on giving special rights entitling to
shares. The authorisation includes the right to decide on issuing and/or
conveying a maximum of 17,800,000 new shares and/or the Company's own shares
held by the Company either against payment or for free. The authorisation is
valid for two years from the decision of the Annual General Meeting. Under this
authorisation, on 6 May 2009 the Board decided on a share issue against payment
in connection with the acquisition of the shares of Lifetree Convergence Ltd by
issuing 13,676,658 new shares, and 4,123,342 shares are still unused.
Tecnomen Lifetree Corporation's Annual General Meeting held on 19 March 2009
authorized the Board of Directors to decide on acquiring a maximum of 5,790,000
of the Company's own shares. Own shares may be acquired with unrestricted
shareholders' equity otherwise than in proportion to the holdings of the
shareholders through public trading of the securities arranged by NASDAQ OMX
Helsinki Oy at the market price of the shares in public trading at the time of
the acquisition. The shares can be acquired for the purpose of developing the
capital structure of the Company, carrying out corporate acquisitions or other
business arrangements to develop the business of the Company, financing capital
expenditure, to be used as part of the Company's incentive schemes, or to be
otherwise retained in the possession of the Company, disposed of or nullified in
the extent and manner decided by the Board of Directors. The Board of Directors
decides on other terms of the share acquisition. This authorisation replaces the
authorisation given by the Annual General Meeting on 12 March 2008 and is valid
for one year from the decision of the AGM. This authorisation has not been
exercised during the review period.
SEGMENT INFORMATION
As from 1 January 2009, Tecnotree is applying the new IFRS 8 standard (Operating
Segments). Like the former primary segments under IAS 14, Tecnotree Group's
operating segments under IFRS 8 comprise the developing and supplying of
messaging and charging solutions. The operating segments presented are VAS
(Value Added Services), the former Messaging product line with Lifetree's MDX+
business, and BSS/OSS (Business and Operations Support Systems), the former
Charging product line with Lifetree's business operations apart from the MDX+
business. This is because these are clearly distinct businesses and they are
monitored in the company's internal financial reporting as separate business
units.
As from the beginning of 2010 the segments reported by Tecnotree will be
geographical regions. These will be Americas (North, Central and South America),
Europe, MEA (Middle East and Africa), and APAC (Asia Pacific)
STOCK OPTION PROGRAMMES
No changes took place in the company's stock option schemes during the third
quarter.
During the review period the company had in force a 2006 stock option programme.
The state of these options on 30 September 2009 was as follows:
--------------------------------------------------------------------------------
| Option | Maximum | Number of | Exercise period | Exercise |
| series | number of | granted | | price |
| | options | options | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 2006A | 667,000 | 304,000 | 1.4.2007-30.4.2010 | 2.47 |
--------------------------------------------------------------------------------
| 2006B | 667,000 | 667,000 | 1.4.2008-30.4.2011 | 1.32 |
--------------------------------------------------------------------------------
| 2006C | 667,000 | | 1.4.2009-30.4.2012 | 0.98 |
--------------------------------------------------------------------------------
| Total | 2,001,000 | 971,000 | | |
--------------------------------------------------------------------------------
The dividend paid of EUR 0.07 has been deducted from the exercise price for the
2006 options.
The Annual General Meeting of Tecnomen Lifetree Corporation on 19 March 2009
decided on a stock option plan that came into effect after the acquisition of
the shares of Lifetree Convergence Ltd was completed. The state of these options
on 30 September 2009 was as follows:
--------------------------------------------------------------------------------
| Option | Maximum | Number of | Exercise period | Exercise |
| series | number of | granted | | price |
| | options | options | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 2009A | 1,026,005 | 265,554 | 1.4.2009-31.3.2011 | 0.86 |
--------------------------------------------------------------------------------
| 2009B | 2,394,013 | 619,627 | 1.4.2010-31.3.2012 | 0.86 |
--------------------------------------------------------------------------------
| 2009C | 3,420,018 | 885,181 | 1.4.2011-31.3.2013 | 0.86 |
--------------------------------------------------------------------------------
| Total | 6,840,036 | 1,770,362 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 2006 and | 8,841,036 | 2,741,362 | | |
| 2009 | | | | |
| total | | | | |
--------------------------------------------------------------------------------
Altogether 8,841,036 stock options remained on 30 September 2009 of all the
company's stock options in circulation. The shares that could be subscribed on
the basis of these stock options accounted for a maximum of 10.81 % of the
Company's shares and the votes carried by the shares after any increase in share
capital. On 30 September 2009 the Company still held 6,099,674 of all the
current stock options. The issued stock options had a maximum diluting effect on
30 September 2009 of 3.62 %.
The company's Board of Directors may issue stock options such that their maximum
dilution shall not exceed 8.50 %.
RISKS AND UNCERTAINTY FACTORS
The risks and uncertainty factors for Tecnotree are explained in the report of
the Board of Directors presented in the 2008 Annual Report and in the listing
prospectus published on 11 May 2009. The risks and uncertainties to which the
company is exposed in the near future relate to major projects that are under
negotiation and to their timing, as well as to changes in currency exchange
rates. No significant changes have taken place in the company's risks and
uncertainty factors compared to the previous interim report.
EVENTS AFTER THE END OF THE PERIOD
Tecnotree's Board of Directors has appointed Eero Mertano, Vice President,
BSS/OSS, as interim President and CEO of the company as from 2 October 2009.
Current President and CEO Jarmo Niemi is resigning his position on health
grounds. He will continue at for the time being working on special duties
assigned by the Board.
As from 2 October 2009 the company's management board comprises Eero Mertano,
Atul Chopra, Naim Kazi and Tuomas Wegelius.
Because of the fall in demand and the global financial crisis, Tecnotree is
considering personnel reductions at its Irish subsidiary Tecnotree Ltd. The
company estimates that the reductions will affect a maximum of 80 people.
On 28 October 2009, under the authorisation given by the AGM on 12 March 2008,
Tecnotree's Board of Directors has decided on a directed share issue against
payment, in which a total of 677,241 new company shares will be offered for
subscription. Tecnotree's share capital will not change in consequence of the
share issue, but the number of shares will rise by 677,241.
PROSPECTS
The fall in demand and the global financial crisis, as per our release on 6th
October, has continued. Whole year net sales are estimated to be significantly
lower than last year and the operating result is expected to show a substantial
loss.
The integration of Tecnomen and Lifetree is going according to plan and the
acquisition is expected to create considerable synergy benefits, which will have
their full impact in the next few years.
Variations between quarterly figures are expected to be considerable.
FINANCIAL INFORMATION
Tecnotree is holding a conference for analysts and the media to announce its
third quarter results at 10.00 am on 29 October 2009 in the Espa conference room
at the Scandic Hotel Simonkenttä, Simonkatu 9, Helsinki. The interim review will
be presented by President and CEO Eero Mertano and the conference will be held
in Finnish. The material to be presented at the press conference will be
available at www.tecnotree.com.
TECNOMEN LIFETREE CORPORATION
Board of Directors
FURTHER INFORMATION
Mr Eero Mertano, President and CEO, tel. +358 (0)50 535 4970
Mr Tuomas Wegelius, CFO, tel. +358 (0)400 433 228
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Main media
www.tecnotree.com
This interim report has been prepared in accordance with IFRS reporting and
evaluation principles, but not complying with all the requirements of IAS 34
Interim Financial Reporting. The accounting principles for the interim report,
as well as the formulas for calculating the key figures presented, are the same
as the principles published in the 2008 Annual Report, apart from the new and
revised IFRS regulations that came into force on 1 January 2009. These have not
had a significant impact on the accounting principles and basis for preparing
the interim report.
The financial figures in the income statement, the balance sheet and key
indicators are presented in million euros. The figures shown here have been
calculated using exact values.
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| CONSOLIDATED INCOME | | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ |
| STATEMENT, MEUR | | 2009 | 2008 | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| NET SALES | | 13.2 | 18.2 | 39.7 | 55.5 | 77.2 |
--------------------------------------------------------------------------------
| Other operating income | | 0.2 | 0.0 | 0.3 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Materials and services | | -2.3 | -4.1 | -7.7 | -13.0 | -16.7 |
--------------------------------------------------------------------------------
| Employee benefit | | -7.3 | -5.1 | -19.0 | -17.1 | -24.0 |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Depreciation | | -1.8 | -1.4 | -4.9 | -4.1 | -5.6 |
--------------------------------------------------------------------------------
| Other operating | | -5.1 | -4.3 | -14.6 | -14.8 | -19.4 |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| OPERATING RESULT | | -3.0 | 3.3 | -6.3 | 6.5 | 11.5 |
--------------------------------------------------------------------------------
| Financial income | | 0.2 | 1.1 | 1.1 | 1.5 | 3.0 |
--------------------------------------------------------------------------------
| Financial expenses | | -0.7 | -0.2 | -1.5 | -0.4 | -1.1 |
--------------------------------------------------------------------------------
| RESULT BEFORE TAXES | | -3.5 | 4.2 | -6.7 | 7.7 | 13.5 |
--------------------------------------------------------------------------------
| Income taxes | | -0.8 | -1.1 | -2.2 | -2.3 | -3.3 |
--------------------------------------------------------------------------------
| RESULT FOR THE PERIOD | | -4.3 | 3.1 | -8.9 | 5.3 | 10.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Allocated to: | | | | | | |
--------------------------------------------------------------------------------
| Equity holders of | | -4.4 | 3.1 | -9.0 | 5.3 | 10.2 |
| parent | | | | | | |
| Company | | | | | | |
--------------------------------------------------------------------------------
| Minority interest | | 0.1 | | 0.1 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share | | | | | | |
| calculated from the | | | | | | |
| profit attributable to | | | | | | |
| equity holders of | | | | | | |
| parent company: | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, | | -0.06 | 0.05 | -0.14 | 0.09 | 0.17 |
| basic, EUR | | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | | -0.06 | 0.05 | -0.13 | 0.09 | 0.17 |
| diluted, EUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED STATEMENT OF | | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ |
| COMPREHENSIVE INCOME, Me | | 2009 | 2008 | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| RESULT FOR THE PERIOD | | -4.3 | 3.1 | -8.9 | 5.3 | 10.2 |
--------------------------------------------------------------------------------
| Other comprehensive | | | | | | |
| income: | | | | | | |
--------------------------------------------------------------------------------
| Translation differences | | -1.0 | -0.2 | -1.4 | -0.2 | -0.5 |
| from foreign operations, | | | | | | |
| net of tax | | | | | | |
--------------------------------------------------------------------------------
| TOTAL COMPREHENSIVE | | -5.3 | 2.9 | -10.3 | 5.1 | 9.6 |
| INCOME FOR THE PERIOD | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Allocated to: | | | | | | |
--------------------------------------------------------------------------------
| Equity holders of parent | | -5.4 | 2.9 | -10.4 | 5.1 | 9.6 |
| company | | | | | | |
--------------------------------------------------------------------------------
| Minority interest | | 0.1 | | 0.1 | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE SHEET, | | 30.9.2009 | 30.9.2008 | 31.12.2008 |
| MEUR | | | | |
--------------------------------------------------------------------------------
| Assets | | | | |
--------------------------------------------------------------------------------
| Goodwill | | 18.8 | 0.7 | 0.7 |
--------------------------------------------------------------------------------
| Other intangible assets | | 24.2 | 19.0 | 19.3 |
--------------------------------------------------------------------------------
| Tangible assets | | 7.5 | 7.3 | 7.0 |
--------------------------------------------------------------------------------
| Deferred tax assets | | 1.3 | | |
--------------------------------------------------------------------------------
| Other non-current assets | | 0.8 | 0.5 | 0.7 |
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Inventories | | 1.5 | 1.5 | 1.1 |
--------------------------------------------------------------------------------
| Trade receivables | | 18.0 | 14.1 | 14.4 |
--------------------------------------------------------------------------------
| Other receivables | | 18.2 | 26.1 | 24.6 |
--------------------------------------------------------------------------------
| Investments | | 0.8 | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | | 30.5 | 25.2 | 51.0 |
--------------------------------------------------------------------------------
| TOTAL ASSETS | | 121.6 | 94.3 | 118.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity | | 82.3 | 79.1 | 83.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | | 6.2 | 4.4 | 4.5 |
--------------------------------------------------------------------------------
| Non-current | | 17.8 | | |
| interest-bearing | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Other non-current | | 0.3 | 0.0 | 0.0 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Current interest-bearing | | 2.2 | | 20.0 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Trade and other payables | | 12.8 | 10.8 | 10.8 |
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES, | | 121.6 | 94.3 | 118.9 |
| TOTAL | | | | |
--------------------------------------------------------------------------------
CALCULATION OF CHANGES IN SHAREHOLDERS' EQUITY, MEUR
A = Share capital
B = Share premium fund
C = Own shares
D = Translation differences
E = Invested non-restricted equity reserve
F = Other reserves
G = Retained earnings
H = Total equity attributable to equity holders of parent company
I = Minority interest
J = Total shareholders' equity
--------------------------------------------------------------------------------
| MEUR | A | B | C | D | E | F | G | H | I | J |
--------------------------------------------------------------------------------
| Sharehold | 4. | 0.8 | -0. | -0. | 0.3 | 50.6 | 27.3 | 83.5 | | 83.5 |
| ers' | 7 | | 1 | 1 | | | | | | |
| equi | | | | | | | | | | |
| ty | | | | | | | | | | |
| 1 Jan. | | | | | | | | | | |
| 2009 | | | | | | | | | | |
--------------------------------------------------------------------------------
| Share | | | | | 11.8 | 2.0 | | 13.7 | | 13.7 |
| issue | | | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | -0.5 | -4.6 | -5.1 | | -5.1 |
| distribut | | | | | | | | | | |
| ion | | | | | | | | | | |
--------------------------------------------------------------------------------
| Share-bas | | | | | | | 0.1 | 0.1 | | 0.1 |
| ed | | | | | | | | | | |
| payments | | | | | | | | | | |
--------------------------------------------------------------------------------
| Business | | | | | | | | | 0.3 | 0.3 |
| combinati | | | | | | | | | | |
| ons | | | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | -1. | | | -9.0 | -10.4 | 0.1 | -10.3 |
| comprehen | | | | 4 | | | | | | |
| sive | | | | | | | | | | |
| income | | | | | | | | | | |
| for the | | | | | | | | | | |
| period | | | | | | | | | | |
--------------------------------------------------------------------------------
| Sharehold | 4. | 0.8 | -0. | -1. | 12.1 | 52.0 | 13.8 | 81.9 | 0.4 | 82.3 |
| ers' | 7 | | 1 | 5 | | | | | | |
| equity | | | | | | | | | | |
| 30 Sept. | | | | | | | | | | |
| 2009 | | | | | | | | | | |
--------------------------------------------------------------------------------
In June 2009 a total dividend of EUR 5,097,325.52 was paid, or EUR 0.07 per
share on 72,818,936 shares.
--------------------------------------------------------------------------------
| MEUR | A | B | C | D | E | F | G | H/J |
--------------------------------------------------------------------------------
| Shareholde | 4.7 | 0.8 | -0.1 | 0.2 | 0.3 | 54.7 | 17.4 | 78.0 |
| rs' | | | | | | | | |
| equity | | | | | | | | |
| 1 Jan. | | | | | | | | |
| 2008 | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | -4.1 | | -4.1 |
| distributi | | | | | | | | |
| on | | | | | | | | |
--------------------------------------------------------------------------------
| Options | | | | | 0.0 | | | 0.0 |
| exercised | | | | | | | | |
--------------------------------------------------------------------------------
| Share-base | | | | | | | 0.1 | 0.1 |
| d payments | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | | -0.0 | -0.0 |
| adjustment | | | | | | | | |
| s | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | -0.2 | | | 5.3 | 5.1 |
| comprehens | | | | | | | | |
| ive income | | | | | | | | |
| for the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Shareholde | 4.7 | 0.8 | -0.1 | -0.0 | 0.3 | 50.6 | 22.8 | 79.1 |
| rs' equity | | | | | | | | |
| 30 Sept. | | | | | | | | |
| 2008 | | | | | | | | |
--------------------------------------------------------------------------------
In March 2008 a total dividend of EUR 4,138,209.46 was paid, or EUR 0.07 per
share on 59,117,278 shares.
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW STATEMENT, | | 1-9/2009 | 1-9/2008 | 1-12/ |
| MEUR | | | | 2008 |
--------------------------------------------------------------------------------
| Cash flow from operating activities | | | | |
--------------------------------------------------------------------------------
| Result for the period | | -8.9 | 5.3 | 10.2 |
--------------------------------------------------------------------------------
| Adjustments | | 4.9 | 3.4 | 5.0 |
--------------------------------------------------------------------------------
| Interest income | | -0.5 | -0.4 | -0.7 |
--------------------------------------------------------------------------------
| Interest expense | | 1.1 | 0.0 | 0.1 |
--------------------------------------------------------------------------------
| Income taxes | | 2.2 | 2.3 | 3.3 |
--------------------------------------------------------------------------------
| Other adjustments | | 0.0 | -0.2 | 0.0 |
--------------------------------------------------------------------------------
| Changes in working capital | | 7.7 | 8.4 | 9.1 |
--------------------------------------------------------------------------------
| Interest paid | | -1.0 | 0.0 | -0.0 |
--------------------------------------------------------------------------------
| Interest received | | 0.4 | 0.4 | 0.7 |
--------------------------------------------------------------------------------
| Income taxes paid | | -1.3 | -0.7 | -1.4 |
--------------------------------------------------------------------------------
| Net cash flow from operating | | 4.6 | 18.5 | 26.1 |
| activities | | | | |
--------------------------------------------------------------------------------
| Cash flow from investing activities | | | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries less | | -14.5 | | |
| cash and cash equivalents at acq. | | | | |
| date | | | | |
--------------------------------------------------------------------------------
| Investments in intangible assets | | -4.7 | -5.9 | -7.2 |
--------------------------------------------------------------------------------
| Investments in tangible assets | | -1.1 | -0.6 | -1.0 |
--------------------------------------------------------------------------------
| Investments in other financial | | -0.5 | | |
| assets | | | | |
--------------------------------------------------------------------------------
| Proceeds from disposal of other | | 0.8 | | |
| financial assets | | | | |
--------------------------------------------------------------------------------
| Dividends received from investments | | 0.1 | | |
| | | | | |
--------------------------------------------------------------------------------
| Net cash flow from investing | | -19.9 | -6.6 | -8.2 |
| activities | | | | |
--------------------------------------------------------------------------------
| Cash flow from financing activities | | | | |
--------------------------------------------------------------------------------
| Shares subscribed with share | | | 0.0 | 0.0 |
| options | | | | |
--------------------------------------------------------------------------------
| Proceeds from short-term borrowings | | | | 20.0 |
--------------------------------------------------------------------------------
| Repayments of short-term borrowings | | -0.3 | | |
--------------------------------------------------------------------------------
| Dividend paid | | -5.1 | -4.1 | -4.1 |
--------------------------------------------------------------------------------
| Net cash flow from financing | | -5.4 | -4.1 | 15.9 |
| activities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Increase (+) and decrease (-) in | | -20.7 | 7.8 | 33.8 |
| cash and cash equivalents | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents at beg. | | 51.0 | 17.5 | 17.5 |
| of period | | | | |
--------------------------------------------------------------------------------
| Impact of changes in exchange rates | | 0.0 | -0.1 | -0.3 |
--------------------------------------------------------------------------------
| Change in fair value of investments | | 0.1 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Cash and cash equivalents at end of | | 30.5 | 25.2 | 51.0 |
| period | | | | |
--------------------------------------------------------------------------------
| Change | | -20.7 | 7.8 | 33.8 |
--------------------------------------------------------------------------------
SEGMENT INFORMATION
--------------------------------------------------------------------------------
| OPERATING SEGMENTS: | 1-9/2009 | 1-9/2008 | 1-12/2008 |
| NET SALES, MEUR | | | |
--------------------------------------------------------------------------------
| VAS | 15.8 | 29.2 | 40.4 |
--------------------------------------------------------------------------------
| BSS/OSS | 24.0 | 26.3 | 36.8 |
--------------------------------------------------------------------------------
| TOTAL | 39.7 | 55.5 | 77.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| GEOGRAPHICAL AREAS | 1-9/2009 | 1-9/2008 | 1-12/2008 |
| NET SALES, MEUR | | | |
--------------------------------------------------------------------------------
| Americas (North, Central and South | 17.3 | 29.7 | 41.6 |
| America) | | | |
--------------------------------------------------------------------------------
| EMEA (Europe, the Middle East and | 20.5 | 18.9 | 27.6 |
| Africa) | | | |
--------------------------------------------------------------------------------
| APAC (Asia Pacific) | 2.0 | 7.0 | 8.0 |
--------------------------------------------------------------------------------
| TOTAL | 39.7 | 55.5 | 77.2 |
--------------------------------------------------------------------------------
ACQUISITIONS
The company acquired 96.51 % of the shares of Tecnotree India (formerly Lifetree
Convergence Ltd) in a transaction on 6 May 2009. Tecnotree India and its
subsidiaries have been consolidated into the Tecnotree group since 6 May 2009.
The purchase price calculation was presented in the interim report for the
second quarter on a preliminary basis as permitted by IFRS 3.
During the third quarter Tecnotree acquired a further 1.53 % of Lifetree's
shares from minority holders. This increased Tecnotree's ownership to 98.04 %
and goodwill by EUR 0.2 million.
Tecnotree's net result for the period 1 January - 30 September 2009 includes a
profit of EUR 2.4 million recorded by the acquired company Tecnotree India. If
the acquisition had taken place on 1 January 2009, Tecnotree's net sales for the
period 1 January - 30 September 2009 would have been some EUR 44.7 million and
the result about EUR -8.6 million.
--------------------------------------------------------------------------------
| CONSOLIDATED CONTINGENT | 30.9.2009 | 30.9.2008 | 31.12.2008 |
| LIABILITIES, MEUR | | | |
--------------------------------------------------------------------------------
| Pledges given | 0.0 | | 0.1 |
--------------------------------------------------------------------------------
| Guarantees | | | |
--------------------------------------------------------------------------------
| On own behalf | 0.2 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Other liabilities | | | |
--------------------------------------------------------------------------------
| Restriction related to real estate | 0.4 | 0.4 | 0.4 |
| in Ireland | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OTHER OPERATING LEASES, MEUR | 30.9.2009 | 30.9.2008 | 31.12.2008 |
| Minimum rents payable based on | | | |
| other leases that cannot be | | | |
| cancelled: | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Other operating leases | | | |
--------------------------------------------------------------------------------
| Less than one year | 0.6 | 0.4 | 0.6 |
--------------------------------------------------------------------------------
| Between one and five years | 0.8 | 0.6 | 0.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED KEY FINANCIAL FIGURES, | 1-9/2009 | 1-9/2008 | 1-12/2008 |
| MEUR | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on investment, % | -6.7 | 13.7 | 16.0 |
--------------------------------------------------------------------------------
| Return on equity, % | -14.3 | 9.0 | 12.6 |
--------------------------------------------------------------------------------
| Equity ratio, % | 68.8 | 83.9 | 70.3 |
--------------------------------------------------------------------------------
| Net gearing, % | -13.7 | -31.8 | -37.2 |
--------------------------------------------------------------------------------
| Investments | 1.3 | 0.9 | 1.3 |
--------------------------------------------------------------------------------
| % of net sales | 3.2 | 1.7 | 1.7 |
--------------------------------------------------------------------------------
| Research and development | 10.7 | 11.8 | 15.5 |
--------------------------------------------------------------------------------
| % of net sales | 26.9 | 21.3 | 20.0 |
--------------------------------------------------------------------------------
| Order book | 15.2 | 17.2 | 9.7 |
--------------------------------------------------------------------------------
| Personnel, average | 613 | 360 | 358 |
--------------------------------------------------------------------------------
| Personnel, at end of period | 842 | 354 | 354 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED KEY FIGURES PER SHARE, | 1-9/2009 | 1-9/2008 | 1-12/2008 |
| MEUR | | | |
--------------------------------------------------------------------------------
| Earnings per share, basic, EUR | -0.14 | 0.09 | 0.17 |
--------------------------------------------------------------------------------
| Earnings per share, diluted, EUR | -0.13 | 0.09 | 0.17 |
--------------------------------------------------------------------------------
| Equity per share, EUR | 1.12 | 1.34 | 1.41 |
--------------------------------------------------------------------------------
| Number of shares at end of period, x | 78,819 | 59,142 | 59,142 |
| 1,000 | | | |
--------------------------------------------------------------------------------
| Number of shares on average, x 1,000 | 66,306 | 59,131 | 59,134 |
--------------------------------------------------------------------------------
| Share price, EUR | | | |
--------------------------------------------------------------------------------
| Average | 1.01 | 1.07 | 1.00 |
--------------------------------------------------------------------------------
| Lowest | 0.78 | 0.94 | 0.75 |
--------------------------------------------------------------------------------
| Highest | 1.21 | 1.27 | 1.27 |
--------------------------------------------------------------------------------
| Share price at end of period | 1.00 | 0.96 | 0.84 |
--------------------------------------------------------------------------------
| Market capitalisation of issued stock | 73.0 | 56.9 | 49.8 |
| at end of period, MEUR | | | |
--------------------------------------------------------------------------------
| Share turnover, million shares | 18.4 | 16.7 | 23.2 |
--------------------------------------------------------------------------------
| Share turnover, % of total | 25.2 | 28.2 | 39.2 |
--------------------------------------------------------------------------------
| Share turnover, MEUR | 19.1 | 17.8 | 23.2 |
--------------------------------------------------------------------------------
| Dividend per share | | | 0.07 |
--------------------------------------------------------------------------------
| Dividend per earnings, % | | | 0.41 |
--------------------------------------------------------------------------------
| Effective dividend yield | | | 0.08 |
--------------------------------------------------------------------------------
| Price/earnings ratio (P/E) | | | 4.88 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| KEY FIGURES PER | 3Q/09 | 2Q/09 | 1Q/09 | 4Q/08 | 3Q/08 | 2Q/08 |
| QUARTER, MEUR | | | | | | |
--------------------------------------------------------------------------------
| Net sales, MEUR | 13.2 | 15.0 | 11.5 | 21.7 | 18.2 | 22.2 |
--------------------------------------------------------------------------------
| Net sales, change % | -27.4 | -32.6 | -24.1 | 13.3 | -4.8 | 6.4 |
--------------------------------------------------------------------------------
| Operating result, MEUR | -3.0 | -1.5 | -1.7 | 5.0 | 3.3 | 3.6 |
--------------------------------------------------------------------------------
| % of net sales | -23.0 | -10.0 | -14.9 | 23.1 | 18.2 | 16.3 |
--------------------------------------------------------------------------------
| Result before taxes, | -3.5 | -1.8 | -1.4 | 5.8 | 4.2 | 3.9 |
| MEUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel at end of | 842 | 820 | 350 | 354 | 354 | 359 |
| period | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, | -0.06 | -0.04 | -0.03 | 0.08 | 0.05 | 0.06 |
| basic, EUR | | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | -0.06 | -0.04 | -0.03 | 0.08 | 0.05 | 0.06 |
| diluted, EUR | | | | | | |
--------------------------------------------------------------------------------
| Equity per share, EUR | 1.12 | 1.20 | 1.38 | 1.41 | 1.34 | 1.29 |
--------------------------------------------------------------------------------
| Net interest-bearing | -11.3 | -14.3 | -31.5 | -31.0 | -25.2 | -15.5 |
| liabilities, MEUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order book, MEUR | 15.2 | 21.5 | 11.7 | 9.7 | 17.2 | 25.1 |
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Tecnotree Corporation, Finnoonniitynkuja 7, FIN-02271 Espoo, Finland, Tel +358 9 804 781 | Privacy Statement | Personal Profile
Tecnotree VAT no. FI16515770