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FINANCIAL STATEMENTS OF TELESTE CORPORATION 1 JANUARY TO 31 DECEMBER 2012(OMX (English) Via Acquire Media NewsEdge) Turku, Finland, 2013-02-01 07:30 CET (GLOBE NEWSWIRE) -- TELESTE CORPORATION FINANCIAL STATEMENTS 1.2.2013 AT 08:30 PROFITABLE GROWTH CONTINUED IN 2012, LAST QUARTER FELL SHORT OF THE COMPARATIVE PERIOD Q4/2012 - Net sales amounted to EUR 47.5 (53.4) million, a decrease of 11.2% - Operating profit stood at EUR 2.7 (4.1) million, a decrease of 34.5% - Undiluted result per share were EUR 0.09 (0.17) per share, a decrease of 44.5% - Orders received totaled EUR 50.8 (53.5) million, a decrease of 4.9% - Cash flow from operations was EUR 5.1 (4.5) million, an increase of 14.0%. January-December 2012 - Net sales amounted to EUR 193.9 (183.6) million, an increase of 5.6% - Operating profit amounted to EUR 10.9 (9.4) million, an increase of 16.6% - Undiluted result per share were EUR 0.38 per share, an increase of 5.6% - Orders received totaled EUR 189.7 (188.1) million, an increase of 0.8% - Cash flow from operations was EUR 15.3 (2.1) million, an increase of 641.6% - The Board of Directors proposes that a dividend of EUR 0.17 (0.14) per outstanding share will be paid. Outlook for 2013 We expect net sales and operating profit for 2013 to reach the 2012 level. In our assessment, net sales and operating profit for the first half of 2013 will remain below the comparative period. Comments on the last quarter of 2012 by CEO Jukka Rinnevaara: "Orders received stood at a satisfactory level due to the good order intake for video surveillance solutions, but the cable operators' demand fell below the comparable period. Teleste's net sales fell below the reference period, as deliveries of equipment for cable operators decreased and the year-on-year deliveries in German fiber projects declined. In spite of the implemented cost management, the drop in net sales resulted in a reduced operating profit. Temporary personnel layoffs were launched in the Finnish operations of Video and Broadband Solutions designed to prepare for a quieter market early in the year. Video and Broadband Solutions' net sales fell below the comparative period, mainly due to a lower demand for the Luminato headend. Deliveries related to video surveillance were at par with the comparative period. In the fourth quarter, an onboard video management and recording solution order of four million euro was received from Chicago Transit Authority (CTA). The delivery is scheduled for 2013. A two-year frame agreement worth about two million euro for intelligent network products was signed with the Danish Stofa A/S. The year-on-year net sales and operating profit of Network Services fell. This decline in net sales and operating profit was mainly due to a reduction in deliveries of fiber-optic projects. The start of new frame agreements also called for an increase in resources. At the end of the period under review, a three-year frame agreement was signed with a German telecom operator for upgrading of networks and technical maintenance." Group Operations in October-December 2012 Key figures (EUR million) 10-12/2012 10-12/2011 Change, % Orders received 50,8 53,5 -4,9% Net sales 47,5 53,4 -11,2% Operating profit 2,7 4,1 -34,5% Operating profit, % 5,7% 7,7% Net profit 1,6 2,9 -43,6% Other important key figures Earnings per share, EUR 0,09 0,17 -44,5% Cash flow from operations, EUR million 5,1 4,5 14,0% In the fourth quarter, orders received by the Group totaled EUR 50.8 (53.5) million, which is 4.9% below the reference period. Order backlog totaled EUR 17.0 (21.2) million. Net sales decreased by 11.2% to EUR 47.5 (53.4) million. Year-on-year operating profit fell by 34.5% standing at EUR 2.7 (4.1) million, which is 5.7% (7.7%) of the net sales. Operating profit includes a sale of a real estate and a reserve reversal of an additional purchase price related to a business acquisition totaling EUR 1.2 million. Personnel costs amounted to EUR 14.8 (15.5) million. Taxes stood at EUR 1.0 (1.1) million. Tax rate rose to 37.8% (27.9%), because a greater part of the profit was made in higher-tax countries. Moreover, specification of the tax deferral for the financial period affected the tax cost. Undiluted result per share was EUR 0.09 (0.17). Operating cash flow amounting to EUR 5.1 (4.5) million was good. Group Operations in January-December 2012 Key figures (EUR million) 1-12/2012 1-12/2011 Change, % Orders received 189,7 188,1 0,8% Net sales 193,9 183,6 5,6% Operating profit 10,9 9,4 16,6% Operating profit, % 5,6% 5,1% Net profit 6,7 6,3 6,4% Other important key figures Earnings per share, EUR 0,38 0,36 5,6% Cash flow from operations, EUR million 15,3 2,1 641,6% Net gearing, % 13,7% 32,2% -57,6% Equity ratio, % 50,5% 41,6% 21,3% Personnel at period-end 1 325 1 319 0,5% Orders received totaled EUR 189.7 (188.1) million. Net sales increased by 5.6% to EUR 193.9 (183.6) million, mainly due to an increase in deliveries involving smart network equipment. Operating profit grew by 16.6% equaling EUR 10.9 (9.4) million. Taxes amounted to EUR 3.4 (2.5) million with the tax rate of 33.7% (28.7%). Undiluted result per share was EUR 0.38 (0.36). Operating cash flow was good, i.e. EUR 15.3 (2.1) million, due to release of working capital and growth in profitability. Video and Broadband Solutions October-December 2012 Economic Development of Video and Broadband Solutions 10-12/2012 10-12/2011 Change, % Orders received 27 830 28 674 -2,9% Net sales 24 659 27 698 -11,0% Operating profit 2 002 3 062 -34,6% Operating profit, % 8,1% 11,1% Year-on-year orders received decreased by 2.9% standing at EUR 27.8 (28.7) million. Order backlog totaled EUR 17.0 (20.3) million. In the fourth quarter, an onboard video recording and management software solution order of four million euro was received from the USA. Net sales decreased by 11.0% to EUR 24.7 (27.7) million. The decline in net sales was due to a decrease in deliveries of headends and certain network projects. Operating profit stood at EUR 2.0 (3.1) million making 8.1% (11.1%) of the net sales. This weakening in the operating profit was mainly caused by diminished net sales. Research and development expenses stood at 3.0 (3.0) million, or 12.3% (10.8%) of the business area's net sales. Activated R&D expenses amounted to EUR 0.3 (0.7) million. The projects involved future product platforms mainly at a research stage and some short-term customer-specific development projects. Depreciation on R&D expenses amounted to EUR 0.5 (0.5) million. Video and Broadband Solutions for January-December 2012 1-12/2012 1-12/2011 Change, % Orders received 97 730 93 274 4,8% Net sales 101 230 89 716 12,8% Operating profit 8 497 8 220 3,4% Operating profit, % 8,4% 9,2% Orders received improved by 4.8% standing at EUR 97.7 (93.3) million. Net sales grew by 12.8% amounting to EUR 101.2 (89.7) million. Operating profit increased by 3.4% standing at EUR 8.5 (8.2) million making 8.4% (9.2%) of the net sales. Product development expenses equaled EUR 11.2 (11.6), in other words 11.2% (12.9%) of the net sales. Activated R&D expenses stood at EUR 0.8 (2.5) million while depreciation on product development expenses equaled EUR 2.0 (2.1) million. Network Services October-December 2012 Economic Development of Network Services 10-12/2012 10-12/2011 Change, % Orders received 22 995 24 797 -7,3% Net sales 22 809 25 735 -11,4% Operating profit 706 1 070 -34,0% Operating profit, % 3,1% 4,2% In Q4, the year-on-year orders received decreased by 7.3% standing at EUR 23.0 (24.8) million. Net sales decreased by 11.4% to EUR 22.8 (25.7) million. This decrease in net sales mainly involved German fiber projects. Operating profit stood at EUR 0.7 (1.1) million making 3.1% (4.2%) of the net sales. This decline in the operating profit over the comparative period was caused by decreased net sales and additional investments required for the new German frame agreements. Network Services in January-December 2012 1-12/2012 1-12/2011 Change, % Orders received 91 931 94 800 -3,0% Net sales 92 645 93 900 -1,3% Operating profit 2 439 1 160 110,3% Operating profit, % 2,6% 1,2% Orders received decreased by 3.0% and stood at EUR 91.9 (94.8) million. Net sales amounted to EUR 92.6 (93.9) million. Operating profit stood at EUR 2.4 (1.2) million making 2.6% (1.2%) of the net sales. Operating profit increased in step with improved productivity. Personnel and Organization in January-December 2012 In the period under review, the Group had an annual average of 1,326 people (1,297/2011 1,215/2010), of whom 567 (564) were employed by Video and Broadband Solutions, and 759 (733) by Network Services. At the end of the review period, the figure totaled 1,325 (1,319/2011, 1,231/2010) of whom 73% (72%/2011, 70%/2010) were stationed overseas. Employees stationed outside Europe accounted for less than 5% of the Group's personnel. In the fourth quarter of 2012, the parent company Teleste Corporation launched cooperation procedures together with the personnel. Adjustments in the number of employees in Finland were initiated in December 2012 by introducing a flexible and rotating temporary layoff. In addition, three persons were made redundant. The rotating temporary layoff agreed in the cooperation procedures can be extended until March 2014. Wages and salaries increased by 7.2% over the previous year and amounted to EUR 58.5 (54.6/ 2011, 50.8 /2010) million. This increase was mainly due to a rise in the number of personnel of Network Services, decrease in the activation of wage costs involving R&D, as well as union-specific contract increases. The number of temporary labor in the Finnish production averaged 22 (10) people. At the end of the review period, there were no temporary employees in Finland. Costs involving temporary labor have been entered under the material costs. Investments in January-December 2012 Investments by the Group for the period under review totaled EUR 3.3 (5.2) million accounting for 1.7% (2.9%) of the net sales. Investments in product development equaled EUR 0.8 (2.5) million. The projects involved future product platforms at the research stage, further development of the existing product families, as well as short-term customer projects. Other investments involved information systems, as well as machinery and equipment for production and services. Investments of EUR 0.8 (0.3) million were made under financial lease arrangements. In Finland, a piece of real property was sold with the capital gain amounting to EUR 0.6 million. Financing and Capital Structure in January to December 2012 Operating cash flow stood at EUR 15.3 (2.1) million. This improved cash flow from operations was due to a growth in profitability, a reduction in inventories, as well as a decrease in accounts receivable. At the end of the period under review, the amount of unused binding stand-by credits amounted to EUR 19.0 (7.5) million. Credit limits are valid until August 2015. The Group’s equity ratio equaled 50.5% (41.6%) and net gearing 13.7% (32.2%). On 31 December 2012, the Group's interest bearing debt stood at EUR 22.1 (33.2) million. Key Risks Faced by the Business Areas Founded in 1954, Teleste is a technology and services company consisting of two business areas: Video and Broadband Solutions and Network Services. With Europe as the main market area, our clients include European cable operators and specified organizations in the public sector. As to Video and Broadband Solutions, client-specific and integrated deliveries of solutions create favorable conditions for growth, even if the involved resource allocation and technical implementation pose a challenge involving, therefore, also reasonable risks. Our customers' network investments vary based on the relevant need for upgrading and their financial structure. Significant part of Teleste's competition comes from the USA so the exchange rate of euro up against the US dollar affects our competitiveness. The exchange rate development of the Chinese renminbi to euro affects our material costs. The company hedges against short-term currency exposure by means of forward contracts. The tight financial market in Europe may slow down our customers' investment plans. Furthermore, a weakening in the consumer purchasing power in Europe could slow down the network investments by the cable operators. Availability of components is subject to natural phenomena, such as floods and earthquakes. Severe weather conditions have an impact on the business areas' ability to deliver products and services. Correct technological choices and their timing are vital for our success. Net sales of Network Services comes, for the most part, from a small number of large European customers, so a significant change in the demand for services by any one of them is reflected in the actual deliveries. To ensure quality of services and cost-efficiency along with efficient service process management, customer satisfaction and improvements in productivity require innovative solutions in terms of processes, products and logistics. Smooth operation of cable networks requires effective technical management and functional hardware solutions in accordance with contractual obligations. This, in turn, demands continuous and determined development of skill levels in Teleste's own personnel as well as those of our subcontractors. In addition, our ability to deliver and compete may be constrained by the adequacy of our sub-contractor network capacity. Tender calculation and management of larger projects with overall responsibility are complex and risky. It is important for our business areas to take into account any market developments such as consolidations taking place among the clientele and competition. The threats to information systems must be minimized to ensure business continuity. The Board of Directors annually reviews any essential risks related to the company operation and the management thereof. Risk management is an integral part of the strategic and operational activities of the business areas. Risks and their probability are reported to the Board in conjunction with regular monthly reports. The company has covered any major risks of loss related to the business areas through insurance policies. Insurance will also cover credit loss risks related to sales receivables. In the period under review, no such risks materialized, and no such legal proceedings or judicial procedures were pending that would have had any essential significance for the Group operation. Group Structure Parent company Teleste has branch offices in Australia, the Netherlands, and Denmark with subsidiaries in 12 countries outside Finland. On account of financial arrangements, Teleste Management Oy, established in March 2010, and Teleste Management II Oy, established in December 2011, have been consolidated into Teleste Corporation's figures. Teleste Incentive Oy has been merged with Teleste Corporation. In Belgium, the company structure was streamlined. Decisions by the Annual General Meeting The Annual General Meeting (AGM) of Teleste Corporation held on 3 April 2012 confirmed the financial statements for 2011 and discharged the Board of Directors and the CEO from liability for the financial period. The AGM confirmed the dividend of EUR 0.14 per share proposed by the Board. The dividend was paid out on 17 April 2012. Ms. Marjo Miettinen, Mr. Pertti Ervi, Mr. Pertti Raatikainen, Mr. Kai Telanne and Mr. Petteri Walldén continue in Teleste's Board of Directors. Mr. Esa Harju was elected a new member while the membership of Mr. Tero Laaksonen ended. Ms. Marjo Miettinen was elected Chair of the Board in the organizational meeting held immediately after the AGM. Authorized Public Accountants KPMG Oy Ab continue as the auditor until the next AGM. Mr. Esa Kailiala, accountant authorized by the Central Chamber of Commerce of Finland, was chosen auditor-in-charge. The AGM authorized the Board to acquire the maximum of 1,400,000 of the company’s own shares and to convey the maximum of 1,779,985 company’s own shares. On 8 April 2011, the AGM authorized the Board of Directors to issue five million new shares; this authorization will be valid until the Annual General Meeting of 2014. Pursuant to the special rights provided by the Company, the maximum number of significant shares is 2,500,000; these special rights are included in the authorization to issue 5,000,000 new shares. Shares and Changes in Share Capital On 31 December 2012, EM Group Oy was the largest single shareholder with a holding of 23.44%. In the period under review, the lowest company share price was EUR 3.04 (2.50) and the highest was EUR 4.44 (4.82). Closing price on 31 December 2012 stood at EUR 4.17 (3.00). According to Euroclear Finland Ltd the number of shareholders at the end of the period under review was 5,182 (5,054). Foreign ownership accounted for 5.8% (7.76%). From 1 January to 31 December 2012, trading with Teleste share at NASDAQ OMX Helsinki amounted to EUR 10.8 (6.2) million. In the period under review, 2.7 (1.7) million Teleste shares were traded on the stock exchange. At the end of December 2012, the Group held 1,302,985 of its own shares, of which the parent company Teleste Corporation had 379,985 shares and the controlled companies had 923,000 shares, respectively. At the end of the period, the Group’s holding of the total amount of shares amounted to 6.96% (6.96%). On 31 December 2012, the registered share capital of Teleste stood at EUR 6,966,932.80 divided in 18,728,590 shares. Trading with stock options 2007B and 2007C began on the NASDAQ OMX Helsinki Ltd on 2 April 2012. These options allow subscription for a maximum of 560,000 shares in the company. Outlook for 2013 Given the new video services offered by the operators, there is a continuous need for increased cable network capacity, so we estimate the deliveries by Video and Broadband Solutions in our target markets to reach at least the 2012 level. In our view, investments by cable operators will fall on the second half of the year. We estimate that Network Services' net sales in our target markets will reach at least the 2012 level and that the profitability will improve from the 2012 level with the developments in productivity. We expect net sales and operating profit for 2013 to reach the 2012 level. In our assessment, net sales and operating profit for the first half of 2013 will remain below the comparative period. 31 January 2013 Teleste Corporation Jukka Rinnevaara Board of Directors President and CEO Teleste's Annual Report for 2012, which includes the audited financial statements, will be published no later than 15 March 2013. The Company will issue a statement of its corporate governance as a separate report, which will be published together with the Annual Report, and will be simultaneously available on the Company's web site. This interim report has been compiled in compliance with IAS 34, as it is accepted within EU, using the recognition and valuation principles with those used in the Annual Report. The Group has adopted revised IFRS 3 Business Combinations from 1.1.2010. The data stated in this report is audited. STATEMENT OF COMPREHENSIVE INCOME, 1000 euros 10-12/2012 10-12/2011 Change % Net sales 47,468 53,433 -11.2 % Other operating income 362 729 -50.3 % Raw material and consumables used -22,482 -25,806 -12.9 % Employee benefits expense -14,752 -15,480 -4.7 % Depreciations -1,209 -1,426 -15.2 % Other operating expenses -6,679 -7,318 -8.7 % Operating profit 2,708 4,132 -34.5 % Financial income 155 60 159.0 % Financial expenses -259 -202 28.0 % Profit before taxes 2,605 3,990 -34.7 % Taxes -984 -1,114 -11.7 % Profit for the period 1,621 2,876 -43.6 % Attributable to: Equity holders of the parent 1,621 2,876 -43.6 % Earnings per share for profit of the year attributable to the equity holders of the parent Basic (expressed in euro per share) 0.09 0.17 -44.5 % Diluted (expressed in euro per share) 0.09 0.17 -45.3 % Total comprehensive income for the period, 1000 euros Net profit 1,621 2,876 -43.6 % Translation differences -48 435 n/a Fair value reserve 24 -76 n/a Total comprehensive income for the period 1,597 3,235 -50.6 % Attributable to: Equity holders of the parent 1,597 3,235 -50.6 % STATEMENT OF COMPREHENSIVE INCOME, 1-12/2012 1-12/2011 Change % 1000 euros Net sales 193,875 183,616 5.6 % Other operating income 1,150 2,112 -45.6 % Raw material and consumables used -94,747 -90,990 4.1 % Employee benefits expense -58,511 -54,560 7.2 % Depreciation -5,078 -5,372 -5.5 % Other operating expenses -25,753 -25,426 1.3 % Operating profit 10,936 9,380 16.6 % Financial income 328 189 73.5 % Financial expenses -1,150 -730 57.5 % Profit before taxes 10,115 8,839 14.4 % Taxes -3,412 -2,540 34.3 % Profit for the period 6,703 6,299 6.4 % Attributable to: Equity holders of the parent 6,703 6,299 6.4 % Earnings per share for profit of the year attributable to the equity holders of the parent Basic ( expressed in euro per share) 0.38 0.36 5.6 % Diluted (expressed in euro per share) 0.38 0.36 4.0 % Total comprehensive income for the period 1000 euros Net profit 6,703 6,299 6.4 % Translation differences 631 149 323.5 % Fair value reserve 144 20 620.0 % Total comprehensive income for the period 7,478 6,468 15.6 % Attributable to: Equity holders of the parent 7,478 6,468 15.6 % STATEMENT OF FINANCIAL POSITION, 1000 euros Assets 1000 euros 31.12.2012 31.12.2011 Change % Non-current assets Property, plant and equipment 10,127 9,364 8.1 % Goodwill 31,350 31,277 0.2 % Other intangible assets 4,174 6,338 -34.1 % Available-for-sale investments 294 713 -58.8 % Deferred tax assets 2,086 1,714 21.7 % Total 48,031 49,406 -2.8 % Current assets Inventories 19,495 24,075 -19.0 % Trade receivables and other receivables 38,524 44,326 -13.1 % Tax receivables 287 0 n/a Cash 13,880 15,404 -9.9 % Total 72,186 83,805 -13.9 % Total assets 120,217 133,211 -9.8 % Equity and liabilities Equity attributable to equity holders of the parent Share capital 6,967 6,967 0.0 % Share premium 1,504 1,504 0.0 % Translation differences 685 54 1168.5 % Invested non restricted equity 2,715 2,571 5.6 % Retained profits 48,008 43,559 10.2 % Non-controlling interest 678 623 8.8 % Total 60,557 55,278 9.5 % Non-current liabilities Interest-bearing liabilities 788 11,940 -93.4 % Other liabilities 22 4,140 -99.5 % Deferred tax liabilities 1,297 1,946 -33.4 % Provisions 503 605 -16.8 % Total 2,610 18,631 -86.0 % Current liabilities Trade and other liabilities 32,612 35,223 -7.4 % Current tax payable 2,075 1,595 30.1 % Provisions 1,004 1,211 -17.1 % Interest-bearing liabilities 21,360 21,273 0.4 % Total 57,050 59,302 -3.8 % Total liabilities 59,660 77,933 -23.4 % Equity and liabilities total 120,217 133,211 -9.8 % CONSOLIDATED CASH FLOW STATEMENT,1000 EUROS 1.1.-31.12. 1.1.-31.12. Change % 2012 2011 Cash flows from operating activities Profit for the period 6,703 6,299 6.4 % Adjustments for: Non-cash transactions 4,877 5,552 -12.2 % Interest and other financial expenses 1,150 730 57.5 % Interest income and other financial income -326 -138 136.5 % Dividends -2 -51 -96.1 % Taxes 3,412 2,540 34.3 % Change in working capital Increase in trade and other receivables 5,802 -11,407 n/a Increase in inventories 4,580 -3,075 n/a Increase in trade and other payables -5,901 4,809 n/a Decrease in provisions -309 -154 100.9 % Paid interests and other financial expenses -726 -760 -4.5 % Received interests and dividends 328 189 73.8 % Paid taxes -4,290 -2,471 73.6 % Cash flow from operating activities 15,297 2,063 641.6 % Cash flow from investing activities Acquisition of subsidiary, net of cash -828 0 n/a acquired Purchases of property, plant and equipment -1,609 -3,346 -51.9 % (PPE) Proceeds from sales of PPE 499 714 -30.1 % Purchases of intangible assets -844 -2,822 -70.1 % Proceeds from sales of shares 0 93 n/a Net cash used in investing activities -2,782 -5,361 -48.1 % Cash flow from financing activities Proceeds from borrowings 0 6,000 n/a Payments of borrowings -11,500 -222 5080.2 % Payment of finance lease liabilities -321 -655 -51.0 % Dividends paid -2,440 -2,091 16.7 % Proceeds from issuance of ordinary shares 0 319 n/a Net cash used in financing activities -14,261 3,351 n/a Change in cash Cash and cash equivalents 1.1. 15,404 15,203 1.3 % Effect of currency changes 221 149 48.3 % Cash and cash equivalents 31.12. 13,880 15,404 -9.9 % Consolidated statement of changes in equity,1000 euros Attributable to equity holders of the parent A Share capital B Share premium C Translation differences D Retained earnings E Invested free capital F Other funds G Total H Share of non-controlling interest I Total equity A B C D E F G H I Equity 31.12.2011 6,967 1,504 54 43,559 2,737 -166 54,655 623 55,278 Total comprehensive 0 0 631 6,703 0 144 7,478 0 7,478 income for the period Dividends 0 0 0 -2,569 0 0 -2,569 129 -2,440 Changes in 74 74 -74 0 subsidiary interest Equity-settled 0 0 0 240 0 0 240 0 240 share-based payments Equity 31.12.2012 6,967 1,504 685 48,007 2,737 -22 59,878 678 60,557 Business segments 2012, Video and Network Group 1000 euros Broadband Services Solutios External sales Services 5,862 92,645 98,507 Goods 95,368 0 95,368 External sales total 101,230 92,645 193,875 Operating profit of segments 8,497 2,439 10,936 Financial items -821 Profit before taxes 10,115 Business segments 2011, 1000 euros Video and Network Group Broadband Services Solutions External sales Services 4,305 93,900 98,205 Goods 85,411 0 85,411 External sales total 89,716 93,900 183,616 Operating profits of the segments 8,220 1,160 9,380 Financial items -541 Profit before taxes 8,839 Geographical segments 2012, Nordic Other Finlan Others Group 1000 euros countries Europe d Sales by origin 17,358 150,936 12,776 12,805 193,875 Assets 8,800 83,634 26,162 1,621 120,217 Capital expenditure for the 15 1,350 1,940 20 3,325 period Geographical segments 2011, Nordic Other Finlan Others Group 1000 euros countries Europe d Sales by origin 11,059 154,979 10,830 6,748 183,616 Assets 9,280 83,634 38,576 1,721 133,211 Capital expenditure for the 15 1,576 3,631 18 5,240 period Information per quarter, 1000 10-12/ 7-9/ 4-6/ 1-3/ 10-12/ 1-12/ euros 12 12 12 12 11 2012 Video and Broadband Solutions Order intake 27,830 19,720 23,790 26,390 28,674 97,730 Net sales 24,659 24,794 24,278 27,499 27,698 101,230 EBIT 2,002 2,423 1,548 2,524 3,062 8,497 EBIT % 8.1 % 9.8 % 6.4 % 9.2 % 11.1 % 8.4 % Network Services Order intake 22,995 20,796 25,409 22,731 24,797 91,931 Net sales 22,809 20,796 25,409 23,631 25,735 92,645 EBIT 706 448 872 413 1,070 2,439 EBIT % 3.1 % 2.2 % 3.4 % 1.7 % 4.2 % 2.6 % Total Order intake 50,825 40,516 49,199 49,121 53,471 189,661 Net sales 47,468 45,590 49,687 51,130 53,433 193,875 EBIT 2,708 2,871 2,420 2,937 4,132 10,936 EBIT % 5.7 % 6.3 % 4.9 % 5.7 % 7.7 % 5.6 % Commitments and contingencies, 1000 euros 2012 2011 Change % Rental liabilities 2,656 3,026 -12.2 % Lease liabilities 5,872 5,098 15.2 % Value of underlying forward contracts 5,936 7,434 -20.1 % Market value of forward contracts -109 -99 10.0 % Interest rate swap 9,000 11,500 -21.7 % Market value of interest swap -22 -167 -86.8 % The number of employees broken down by following 2012 2011 Change categories 31.12. % Research and development 117 122 -4.1 % Production and material management 1,031 1,020 1.1 % Sales and marketing 122 125 -2.4 % Finance,quality and IT 55 52 5.8 % Total 1,325 1,319 0.5 % IFRS IFRS IFRS IFRS IFRS Key figures 2012 2011 2010 2009 2008 Profit and loss account, balance sheet Net sales, Meur 193.9 183.6 167.8 141.7 108.7 Change % 5.6 % 8.6 % 18.5 % 30.3 % -13.1 % Sales outside Finland, % 93.4 % 94.1 % 93.3 % 91.8 % 90.2 % Operating profit, Meur 10.9 9.4 7.4 2.5 5.6 % of net sales 5.6 % 5.1 % 4.4 % 1.8 % 5.2 % Profit after financial items, 10.1 8.8 6.7 1.4 5.1 Meur % of net sales 5.2 % 4.8 % 4.0 % 1.0 % 4.7 % Profit before taxes, Meur 10.1 8.8 6.7 1.4 5.1 % of net sales 5.2 % 4.8 % 4.0 % 1.0 % 4.7 % Profit for the financial 6.7 6.3 4.8 0.4 5.5 period, Meur % of net sales 3.5 % 3.4 % 2.9 % 0.3 % 5.1 % R&D expenditure, Meur 11.2 11.6 10.3 10.8 13.5 % of net sales 5.8 % 6.3 % 6.1 % 7.6 % 12.4 % Gross investments, Meur 3.3 5.2 3.8 25.2 3.9 % of net sales 1.7 % 2.9 % 2.2 % 17.8 % 3.6 % Interest bearing liabilities, 22.1 33.2 28.1 22.8 11.0 Meur Shareholder's equity, Meur 60.6 55.3 50.4 46.7 46.6 Total assets, Meur 120.2 133.2 116.2 110.1 75.5 Personnel and orders Average personnel 1,326 1,297 1,215 1,103 702 Order backlog at year end, 17.0 21.2 17.0 33.1 24.0 Meur Orders received, Meur 189.7 188.1 167.2 151.0 118.6 Key metrics Return on equity, % 11.6 % 11.9 % 9.9 % 0.9 % 11.8 % Return on capital employed, % 13.0 % 11.5 % 10.2 % 3.3 % 10.4 % Equity ratio, % 50.5 % 41.6 % 43.6 % 43.6 % 61.7 % Net gearing, % 13.7 % 32.2 % 25.5 % 22.0 % 3.6 % Earnings per share, euro 0.38 0.36 0.27 0.02 0.32 Earnings per share fully 0.38 0.36 0.27 0.02 0.32 diluted, euro Shareholders’ equity per 3.48 3.17 2.90 2.68 2.74 share, euro Teleste share Highest price, euro 4.44 4.82 5.33 4.30 7.49 Lowest price, euro 3.04 2.50 3.64 2.25 1.90 Closing price, euro 4.17 3.00 4.41 3.72 2.24 Average price, euro 3.98 3.64 4.49 3.62 4.52 Price per earnings 10.8 8.3 16.3 154.1 7.0 Market capitalization, Meur 78.1 56.2 80.2 66.2 39.9 Stock turnover, Meur 10.8 6.2 14.2 28.5 51.1 Turnover, number in millions 2.7 1.7 3.2 7.8 11.5 Turnover, % of share capital 14.4 % 9.1 % 17.4 % 44.0 % 64.6 % Average number of shares 18728590 18189560 18093689 17805590 17708782 Number of shares at the 18728590 18728590 18186590 17805590 17805590 year-end Average number of shares, 17688527 17425605 17693605 17229154 17372555 diluted w/o own shares Number of shares at the 17709672 17425605 17693605 17425605 17039399 year-end, diluted w/o own shares Paid dividend, Meur * 3,0 2.4 2.1 1.4 2.0 Dividend per share, euro * 0,17 0.14 0.12 0,08 0,12 Dividend per net result, % 44.5 % 38.9 % 43.7 % 331.3 % 37.4 % Effective dividend yield, % 4.1 % 4.7 % 2.7 % 2.2 % 5.4 % * The Board's proposal to the AGM Treasury shares Number of % of % of shares shares votes Teleste companies own shares 1,302,985 6.96 % 6.96 % 31.12.2012 CALCULATION OF KEY FIGURES Return on equity: Profit/loss for the financial period ------------------------------ * 100 Shareholders’ equity (average) Return on capital Profit/loss for the period after financial items + employed: financing charges ------------------------------ * 100 Total assets - non-interest-bearing liabilities (average) Equity ratio: Shareholders' equity ----------------------------- * 100 Total assets - advances received Gearing: Interest bearing liabilities - cash in hand and in bank - interest bearing assets ----------------------------- * 100 Shareholders' equity Earnings per share: Profit for the period attributable to equity holder of the parent ---------------------------------------------- Weighted average number of ordinary shares outstanding during the period Earnings per share, Profit for the period attributable to equity holder of diluted: the parent (diluted) ----------------------------------------------- Average number of shares - own shares + number of options at the period-end SHAREHOLDERS AT 31.12.2012 Shares % EM Group Oy 4,389,712 23.44 Mandatum Life 1,679,200 8.97 Ilmarinen Mutual Pension Insurance Company 953,854 5.09 Kaleva Mutual Pension Insurance Company 824,641 4.40 Teleste Management II Oy 542,000 2.89 Varma Mutual Pension Insurance Company 521,150 2.78 State Pension Fund 500,000 2.67 Aktia Capital Mutual Fund 450,000 2.40 Teleste Management Oy 381,000 2.03 Teleste Corporation 379,985 2.03 Op-Suomi Small Cap 350,000 1.87 Fim Fenno Mutual Fund 270,342 1.44 SECTOR DISPERSION AT 31.12.2012 Shareholders % Shares % Corporations 286 5.51 7,254,749 38.73 Financial and insurance corporations 11 0.21 3,385,419 18.07 Public institutions 6 0.11 2,015,104 10.75 Non-profit institutions 37 0.71 384,929 2.05 Households 4,795 92.53 4,585,420 24.48 Foreign countries and nominee 47 0.90 1,102,969 5.88 registered Total 5,182 100.00 18,728,590 100.00 AMOUNT AT 31.12.2012 Shareholders % Shares % 0 – 100 1,157 22.32 79,419 0.42 101 – 1,000 3,016 58.20 1,268,596 6.77 1,001 – 10,000 914 17.63 2,501,777 13.35 10,001 – 100,000 74 1.42 1,796,217 9.59 100,001 – 1,000,000 19 0.36 7,013,669 37.44 1,000,001 - 2 0.03 6,068,912 32.40 Total 5,182 100.00 18,728,590 100.00 Copyright © 2013 OMX AB (publ). 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