SOLTEQ PLC'S INTERIM REPORT 1.1.-30.6.2009
(Thomson Reuters ONE) - Solteq Plc Stock Exchange Bulletin 12.8.2009 at 9.00am- Turnover for the review period decreased by 4,8 % and totalled 14,7million euros (15,4 million euros)- Operating result for the period decreased and totalled 225 thousandeuros (420 thousand euros)- Operating result improved during the second quarter and totalled415 thousand euros (370 thousand euros)- Termination benefits amounting to 440 thousand euros affected theoperating result for the first quarter- Earnings per share was 0,01 euros (0,01 euros)KEY FIGURESTurnover by operation:% 1-6/09 1-6/08 1-12/08Softwareservices 63 62 61Licences 27 22 26Hardware 10 16 13Turnover by segment:Me 1-6/09 1-6/08 ChangeTrade 9,7 10,1 -0,4Industry and services 5,0 5,3 -0,3Total 14,7 15,4 -0,7Operating result by segment:Me 1-6/09 1-6/08 ChangeTrade -0,2 0,5 -0,7Industry and services 0,4 -0,1 +0,5Total 0,2 0,4 -0,2Managing Director Hannu Ahola:"Our company's result for the second quarter improved clearlycompared to the first quarter and was slightly better than a yearbefore. Saving and efficiency measures made in the beginning of theyear have started to have an effect and, on the other hand, turnoverhas come out as expected. The order backlog strengthened especiallyduring the last part of the review period clearly, which anticipatesimproved operating result and meeting the profitability targets setfor the whole year.BUSINESS ENVIRONMENT AND BUSINESS DEVELOPMENTSolteq is a strategic partner for trade and industry, whose corecompetency is IT solutions that are critical to business. Solteqcombines its own product portfolio with the products from the leadingsoftware companies in the world to deliver individual businessdevelopment and ERP solutions for its customers. The information thatis processed by means of these solutions is helping customers tomanage their business even better than before and to improve theirprofitability.Solteq's operations are internally divided into five separate units.The result is monitored through two operating segments. The segmentTrade consists of Trade and Car Trade units. Industry and servicessegment consists of Industry and Information Management units.Application services is company's internal service unit. OOO SolteqRussia operates as an independent subsidiary which with theassistance of the parent company's organization serves customersoperating in Russia. The number data of OOO Solteq Russia is reportedaccording to the operating segment of the end customer.The company's turnover decreased during the second quarter by 12,3percent while during the first quarter it still increased by 4,6percent. This decrease had been anticipated and was mainly due todecrease in hardware sales compared to the year before when thehardware sales were at an exceptionally high level. No changes areexpected to the turnover trend announced earlier, i.e. turnover isexpected to decrease by 0-5 percent.The company's operating result for the review period decreased andtotalled 225 thousand euros (420 thousand euros) but improved duringthe second quarter totalling 415 thousand euros (370 thousand euros)which is 5,5 percent of the turnover. The improved result clearlyreflects the effect of different efficiency and cost saving measuresmade in the beginning of the year as well as the anticipated turnovertrend. As the operating result for the review period is burdened bythe one-off termination benefit costs in the amount of 440 thousandeuros, the comparable operative business is more profitable duringthis review period than a year before.The order backlog had a favourable trend especially towards the endof the review period and several significant new orders came in. Dueto the overall economic situation, there are still uncertaintiesregarding the business development for the rest of the year but theseare clearly smaller than the ones in the beginning of the year.TRADEBusiness environment - TradeSolteq's Trade unit has had no significant changes compared to thefirst quarter. Customers' decision making processes take longer thanusual and starting projects is considered carefully. There arehowever several long-term investments and system development projectspending which wholesale and chain stores use in aiming to be preparedfor the uptrend to be followed after the recession.There is demand especially for solutions relating to improveefficiency of operations and optimisation. Wholesale and chain storesseek to make their delivery chain more efficient in e.g. procurement,inventory management and transportation monitoring. In addition, alittle over one-year transition period to SEPA and PCI standardschallenges both speciality shops, wholesale and chain stores to beprepared for the changes in cash register and payment systems. Justlike the first quarter, recession had most significant impact onindividual stores which concentrated mainly on updating versions ofthe old systems.Trade unit customers pay special attention to the investment'sexpected yield and repayment time. Projects with most efficiency andcost gains are transferred to the top of the list. Larger projectsare often divided into several phases and smaller modules.Reliability of the supplier partner in this market situation isemphasized even more and the partner being a domestic operator isbeing valued more than before. These requirements give Solteq strongground to increase its clientele.Business environment - Car TradeThe economic situation prospects of Car Trade were weak as in thebeginning of the year and the number of first registrations of carscontinued to diminish. During January - June approximately 52 000 newcars were registered which is 41 percent less than during the sameperiod in 2008. This radical decrease has a direct effect on cardealers' IT investments. Solteq anticipates that extensive IT systemrenewals will only start after the economic prospects become clear.The most significant change in the business environment was therenewal of car tax. The law which came into force on 1.4.2009 changedin such a way that value added tax on car tax was abandoned andrespectively the car tax was increased. The renewal caused need forchanges in car dealers' IT systems and their interfaces.Business development - TradeDespite the recession, the business operations of the Trade unit havedeveloped almost in accordance with the plans. During the reviewperiod Solteq focused especially on developing quality and projectmanagement systems as well as competence certifications and training.These efforts for their part have helped Solteq to strengthen itsposition in the markets.During the second quarter, the demand of customers in wholesale andchain stores focused especially on comprehensive solutions to improvedelivery chain efficiency. In addition both speciality stores as wellas chain and wholesale stores develop their systems to fulfil therequirements of SEPA and PCI standards. Trade customers require moreinformation on the requirements set by these standards whichincreases the demand for consultancy services. Solteq made aninformation campaign during the review period which introduced theeffects of SEPA and PCI standards to the customers.In store systems the project backlog has remained stable. Newinvestments are made in new stores and old systems are renewed whenrequired.One of the most significant new contracts is the renewal of the ERPsystem for Tuko Logistics, which will improve the overallcontrollability and manageability of the customer's work. Thecontract was signed in June 2009 and the project will begin duringthe third quarter of the year.Business development - Car TradeDuring the review period, the demand for Car Trade unit's servicesconcentrated on development of customers' existing systems.The emphasis of system development focused on changes required by thecar tax legislation. During the second quarter, invoicing andfinancial management features were included in the systems.In this challenging market situation Solteq has made an effort inactive customer service and developing own product range in order tobe even more competitive when the investments are started again.INDUSTRYBusiness environment - IndustryThe business environment of Solteq's Industry unit remained uncertainas in the beginning of the year. The order backlogs of large andmiddle-sized industrial companies have decreased and companies havecontinued their cost saving measures. Cost savings and precaution areevident also in the companies that are planning on IT investments,which has pushed their actual investments or decision-making on themfurther.Cautiousness has clearly spread from large companies to themiddle-sized companies during the review period. This could be seenespecially in export companies which have discontinued or postponedtheir investment plans. Although the cautiousness in the operatingenvironment has increased, there is still demand for solutions whichcan improve efficiency or bring cost savings in a short period oftime.Demand for systems in maintenance and material handling was weak inlarge companies. Also middle-sized companies' willingness to investin maintenance systems decreased compared to the first quarter of theyear.Service operations for ERP investment projects developed as expected.Regarding new sales, the focus is on middle-sized companies whichseek cost savings through the renewal of their ERP.Business environment - Information ManagementSolteq's Information Management business unit offers harmonizationand management of master data to its customers. The objective forharmonization is to improve quality of the data that is recorded inthe IT systems. Managing by information in integrated systems isenabled for customers by the means of master data management.During the review period, the customers' decision making processesslowed down slightly, although also new projects were started.Despite the prolonged decision-making the companies are stillinterested in harmonization solutions which improve the efficiency ofpresent systems and gain cost savings. Projects seek solutions tocarefully defined individual needs.The customers of Information Management unit consisted mainly ofindustrial companies. Solteq foresees that public sector customersare a growing customer group in the future. Solteq believes thatcompanies will continue their investments in information managementalso during the economically tight period because clear cost savingswith a short payback period are achieved by the means ofharmonization.Business development - IndustrySales of ERP systems in Solteq's Industry unit were in accordancewith the budget. Demand for maintenance systems continued to be weakbut certain signs of recovering demand can be seen towards the end ofthe year.Of the individual projects, the most significant was the SAP renewalof Helsinki University which continued as planned. SAP implementationin Componenta Plc Group's Dutch office was successful. New MicrosoftDynamics NAV deliveries were made for Nekos Oy among other customers.Of maintenance system customers, a new solution for field maintenanceoperations was delivered to STX Finland.Solteq's subsidiary acting in St Petersburg, OOO Solteq Russia, islaunching a new maintenance project during the third quarter. Also atthe same time co-operation with two new partner companies isbeginning. Solteq is also preparing to allocate more human resourcesto the Russian operations.In product development, efforts continued to develop a softwaresolution for operative property management together with Microsoft.First pilot projects were successfully executed during the reviewperiod and at least one of these is leading to a further project forthe third quarter. Also a first product version of this software isfinalised during the third quarter in accordance with the schedule.Business development - Information ManagementInformation Management unit started a harmonization project ofOutokumpu Tubular's sales items in mid-June which will continue untilthe end of September. Two other projects have been agreed to bestarted in the third quarter of the year and thus the demand can beseen to recover in this business area as well.TURNOVER AND RESULTTurnover decreased by 4,8% compared to the previous year and totalled14.704 thousand euros (previous financial year 15.439 thousandeuros).Turnover consists of several individual customerships. At the most,one client corresponds to a less than five percentages of theturnover.The operating result for the review period was 225 thousand euros(420 thousand euros), result before taxes was 157 thousand euros (262thousand euros) and profit for the period 95 thousand euros (181thousand euros).Operating result is burdened by termination benefits in the amount of440 thousand euros.BALANCE SHEET AND FINANCINGThe total assets amounted to 22.218 thousand euros (22.072 thousandeuros). Liquid assets totalled 319 thousand euros (258 thousandeuros).The company's interest-bearing liabilities were 6.737 thousand euros(6.360 thousand euros).The company's equity ratio was 41,1 percent (41,5%).INVESTMENTS, RESEARCH AND DEVELOPMENTGross investments during the review period were 485 thousand euros(565 thousand euros).Research and developmentSolteq's research and development costs consist mainly of personnelcosts. When developing basic products, it is Solteq's strategy tocooperate with global actors such as SAP, Wincor-Nixdorf andMicrosoft and utilize their resources and distribution channels. Owndevelopment efforts are focused on added value products anddeveloping tailored service concepts.During the review period development costs capitalized under IFRStotalled 285 thousand euros (273 thousand euros). Most costs relatingto development are annually expensed due to their nature. Capitalisedcosts relate to two development projects. Amortisation according toplan will begin when the projects have been commercially implemented.PERSONNELThe number of permanent employees at the end of the review period was245 (271). Average number of personnel during the review period was253 (262). At the end of the review period the number of personnelcould be divided as follows: Trade 122, Industry and Services 96 andShared Functions 27.RELATED PARTY TRANSACTIONSSolteq's related parties include Solteq's board of directors,managing director and the Group's management team. There have been nosignificant changes in the company's related party transactions sincethe financial statements 2008.SHARES, SHAREHOLDERS AND TREASURY SHARESSolteq Plc's equity on 30.6.2009 was 1.009.154,17 euros which wasrepresented by 12.148.429 shares. The shares have no nominal value.In the end of the review period the amount of treasury shares inSolteq Plc's possession was 258.436 shares. The amount of treasuryshares represented 2,13 % from the total amount of shares and votesin the end of the review period. The equivalent value of acquiredshares was 21.468 euros.Exchange and rateDuring the review period, the exchange of Solteq's shares in theHelsinki Stock Exchange was 0,2 million shares (0,3 million shares)and 0,3 million euros (0,5 million euros). Highest rate during thereview period was 1,39 euros and lowest rate 1,02 euros. Weightedaverage rate of the share was 1,21 euros and end rate 1,25 euros. Themarket value of the company's shares at the end of the review periodtotalled 15,2 million euros (17,3 million euros).OwnershipAt the end of the review period, Solteq had a total of 1.984shareholders (2.061 shareholders). Solteq's 10 largest shareholdersowned 8.190 thousand shares i.e. they owned 67,4 per cent of thecompany's shares and votes. Solteq Plc's members of the board owned atotal of 5.189 thousand shares which equals 42,7 per cent of thecompany's shares and votes.ANNUAL GENERAL MEETINGSolteq Plc's annual general meeting on 27.3.2009 adopted thefinancial statements for 2008 and the members of the board and themanaging director were discharged from liability for the financialyear 2008.The annual general meeting decided in accordance with the board'sproposal to distribute a dividend in the amount of 0,04 euros pershare. The reconciliation date for the dividend was 1.4.2009 andpayment date 8.4.2009.The annual general meeting decided to authorize the board ofdirectors to decide on acquiring the company's own shares so that theamount in the possession of the company does not exceed 10 percent ofthe company's total shares at that moment. The shares can be acquiredin order to develop the company's capital structure, finance andexecute acquisitions or similar arrangements or used as part of theincentive scheme of the personnel or convey otherwise or beinvalidated. The shares can be acquired in other proportion than theshareholders' holdings. The shares are to be acquired through publictrading. The authorization is valid until the next annual generalmeeting.BOARD OF DIRECTORS AND AUDITORSSix members were elected to the board of directors. Seppo Aalto, AriHeiniö, Veli-Pekka Jokiniva, Ali Saadetdin, Jukka Sonninen and MarkkuPietilä will continue as members of the board. The board elected AliSaadetdin to act as the chairman of the board.KPMG Oy Ab, Authorized Public Accountants, were re-elected asSolteq's auditors. Frans Kärki, APA, acts as the lead partner.EVENTS AFTER THE REVIEW PERIODAfter the review period no events have occurred that requirereporting.RISKS AND UNCERTAINITIESThe key uncertainties and risks in short term are related to thetiming and pricing of the business deals that are the basis for theturnover, changes in the level of costs and the company's ability tomanage extensive contract agreements and deliveries.The key business risks and uncertainties of the company are monitoredconstantly as a part of the board of directors' and management team'swork. The company has not organized a separate internal auditorganization or committee.PROSPECTSIn the stock exchange bulletin that was announced 16.2.2009 the Boardof Directors of Solteq Plc has estimated that the turnover for 2009is estimated to decrease by 0-5 percent and that the estimatedoperating result is 5-7 percent of the turnover. There are no reasonsto make changes to this estimate.Financial ReportingThis interim report has been prepared in accordance with therecognition and measurement principles of IFRS-standards, but not allof the requirements of IAS 34 have been applied in the preparation.Solteq Group has applied the following new and revised standardsstarting from 1.1.2009: IFRS 8 - Operating Segments and IAS 1 -Presentation of Financial Statements. The change of IFRS 8 has aneffect on the segment information in notes and the change of IAS 1standard has an effect on the presentation of profit and lossstatement. In all other respects the same accounting policies as inthe annual financial statements 2008 have been applied.The financial result is reported through two operating segments. TheTrade segment includes both the Trade business unit and the Car Tradebusiness unit. The Industry and Information Management units belongto the Industry and Services segment. The Application Services unitforms a part of both operating segments. The segments have beendefined based on the operations of company's customer groups. Themost essential product and service types of Solteq group of companiesare software services, licenses and hardware sales. Implementation ofIFRS 8 has not changed the operating segments reported by SolteqGroup because the segment information that was reported alreadyearlier was based on the management's internal reporting and that wasprepared in accordance with the same recognition and measurementprinciples as external reporting.All forecasts and estimates presented in the interim report are basedon the current views of the management on the economic environmentand outlook. Results can differ from those implied as a result of,among other factors, changes in economy, markets and competitiveconditions, changes in the regulatory environment and othergovernment actions.The interim report is unaudited.FINANCIAL INFORMATIONGROUP PROFIT AND LOSS ACCOUNT(TEUR) 1.4.- 1.4.- 1.1.- 1.1.- 1.1.- 30.6.2009 30.6.2008 30.6.2009 30.6.2008 31.12.2008NET TURNOVER 7 495 8 544 14 704 15 439 30 383Other operatingincome 77 35 78 39 44Raw materials andservices -2 085 -2 558 -4 003 -4 015 -7 744Staff expenses -3 781 -4 095 -8 011 -8 180 -15 583Depreciation -177 -184 -350 -359 -718Other operatingexpenses -1 114 -1 372 -2 193 -2 504 -4 922OPERATING RESULT 415 370 225 420 1 460Financial incomeandexpenses -18 -84 -68 -158 -324PROFIT BEFORE APPROPRIATIONAND TAXES 397 286 157 262 1 136Income taxes -113 -95 -62 -81 -269PROFIT FOR THE PERIOD 284 191 95 181 867Othercomprehensiveincome 0 0 0 0 0TOTAL COMPREHENSIVE INCOME 284 191 95 181 867Total profit for the period and comprehensive income attributable toOwners of theparent 284 191 95 181 867Earnings / share,e(undiluted) 0,03 0,02 0,01 0,01 0,07Earnings / share,e(diluted) 0,03 0,02 0,01 0,01 0,07GROUP BALANCE SHEET (TEUR) 30.6.2009 30.6.2008 31.12.2008ASSETSNON-CURRENT ASSETSIntangible assets Intangible rights 2 751 2 233 2 417 Goodwill 8 286 8 286 8 286Tangible assets 2 676 2 742 2 707Investments Other shares and similar rights of ownership 93 99 93Deferred taxassets 207 563 268Total non-currentassets 14 013 13 923 13 771CURRENT ASSETSShort-term debtors 7 886 7 891 7 567Cash in hand and at banks 319 258 695Total currentassets 8 205 8 149 8 262TOTAL ASSETS 22 218 22 072 22 033EQUITY AND LIABILITIESCAPITAL AND RESERVES ATTRIBUTABLE TO THE SHAREHOLDERSOF THE PARENT COMPANY Share capital 1 009 1 009 1 009 Company's own shares -337 -14 -255 Share premium account 75 75 75 Unrestricted equity fund 7 214 7 213 7 213 Retained earnings 1 084 693 693 Profit for the financial period 95 181 867Total equity 9 140 9 157 9 602LIABILITIESNon-current liabilities 3 163 2 163 3 663Current liabilities 9 915 10 752 8 768Total liabilities 13 078 12 915 12 431TOTAL EQUITY ANDLIABILITIES 22 218 22 072 22 033FINANCIAL PERFORMANCEINDICATORS (IFRS) 1-6/2009 1-6/2008 1-12/2008Net turnover MEUR 14,7 15,4 30,4Change in net turnover -4,8 % 14,2 % 8,8 %Operating result MEUR 0,2 0,4 1,5% of turnover 1,5 % 2,7 % 4,8 %Result before taxes MEUR 0,2 0,3 1,1% of turnover 1,1 % 1,7 % 3,7 %Equity ratio, % 41,1 41,5 43,6Gearing, % 70,2 % 66,6 % 58,5 %Gross investments innon-current assets MEUR 0,5 0,6 0,9Return on equity, % 2,1 % 3,8 % 9,0 %Return on investment, % 3,1 % 5,5 % 9,0 %Personnel at end ofperiod 245 271 268Personnel averagefor period 253 262 266KEY INDICATORS PER SHAREEarnings / share, e 0,01 0,01 0,07Earnings / share,e(diluted) 0,01 0,01 0,07Equity / share, e 0,77 0,75 0,80QUARTERLY KEY INDICATORS (MEUR) 3Q/07 4Q/07 1Q/08 2Q/08Net turnover 5,86 8,55 6,89 8,55Operating result 0,30 0,54 0,05 0,37Result before taxes 0,24 0,45 -0,02 0,28 3Q/08 4Q/08 1Q/09 2Q/09Net turnover 6,29 8,65 7,21 7,49Operating result 0,38 0,66 -0,19 0,41Result before taxes 0,30 0,58 -0,24 0,40CASH FLOW STATEMENT (MEUR) 1-6/2009 1-6/2008 1-12/2008Cash flow from businessoperations 0,25 1,89 2,94Cash flow from capitalexpenditure -0,49 -0,54 -0,88Cash flow from financing activities Dividend distribution -0,48 -0,73 -0,73 Own shares -0,08 -0,01 -0,26 Loan agreement 0,42 -0,69 -0,72Cash flow from financingactivities -0,14 -1,43 -1,71Change in cash and cashequivalents -0,38 -0,09 0,35TOTAL INVESTMENTS (TEUR) 1-6/2009 1-6/2008 1-12/2008Continuing operations,group total 485 565 920LIABILITIES (MEUR) 30.6.2009 30.6.2008 31.12.2008Company quorantee forcredit limits 1,18 1,18 1,18Perfomance bonds 0,02 0,05 0,05Lease contracts, machinery &equipment 0,60 0,62 0,59Lease liability,premises 2,31 2,71 2,48The Group has no liabilities from derivative instruments.MAJOR SHAREHOLDERS 30.6.2009 Shares and votes Number %1. Saadetdin Ali 3 481 383 28,7 %2. Aalto Seppo 1 662 206 13,7 %3. Profiz Business Solution Oyj 1 332 925 11,0 %4. TP-Yhtiöt Oy 513 380 4,2 %5. Roininen Matti 332 000 2,7 %6. Solteq Oyj 258 436 2,1 %7. Hakamäki Jorma 228 430 1,9 %8. Saadetdin Katiye 156 600 1,3 %9. Kiiveri Jouko 118 280 1,0 %10. Halmet Jarmo 106 000 0,9 %10 largest shareholders total 8 189 640 67,4 %Total of nominee-registered 85 026 0,7 %Others 3 873 763 31,9 %Total 12 148 429 100,0 %STATEMENT OF CHANGES IN GROUP EQUITY (TEUR)A=Share capitalB=Share issueC=Company's own sharesD=Share premium accountE=Unrestricted equity fundF=Retained earningsG=Total A B C D E F GEQUITY 1.1.2008 1 002 64 0 18 7 213 1 422 9 719Result for the period 181 181Total gains and losses 181 181Subscription issue 7 -64 57 0Acquiring of own shares -14 -14dividend distribution -728 -728EQUITY 30.6.2008 1 009 0 -14 75 7 213 874 9 157EQUITY 1.1.2009 1 009 0 -255 75 7 213 1 560 9 602Result for the period 95 95Total gains and losses 95 95Acquiring of own shares -82 -82dividend distribution -475 -475EQUITY 30.6.2009 1 009 0 -337 75 7 213 1 180 9 140Taxes corresponding to the result have been presented astaxesfor the period.CALCULATION OF FINANCIAL RATIOSSolvency ratio, in percentage equity x100 ---------------------------------- balance sheet total - advances receivedGearing interest bearing liabilities - cash, bank balances and securities x100 ------------------------------------------- equityReturn on Equity (ROE) in percentage profit or loss before taxation - taxes x100 ---------------------------------------- equityProfit from invested equity in percentage profit or loss before taxation + interest expenses and other financing expenses x100 ---------------------------------------- balance sheet total - non-interest bearing liabilitiesEarnings pershare pre-tax result - taxes +/- minority interest ------------------------------------ diluted average share issue corrected number of sharesDiluted earnings per share diluted profit before taxation - taxes +/- minority interest ------------------------------------- diluted average share issue corrected number of sharesEquity per share equity ----------------------- number of sharesSolteq Plc's financial information bulletins in 2009 have beenscheduled as follows:- Interim report 1-9/2009 Wednesday 21.10.2009More investor information on Solteq's website at www.solteq.comAdditional information:Managing Director Hannu AholaTelephone +358 20 1444 211 or +358 40 8444 211E-mail hannu.ahola(at)solteq.comCFO Antti KärkkäinenTelephone +358 20 1444 393 or +358 40 8444 393E-mail antti.karkkainen(at)solteq.comDistribution:NASDAQ OMX HelsinkiKey Mediahttp://hugin.info/130643/R/1334031/316479.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 12.08.2009 - 08:01 Uhr
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