Tekla Corporation Stock Exchange Release October 23, 2008 at
9.00 a.m.
Tekla Corporation's Interim Report January 1 - September 30, 2008:
Tekla lowers its net sales and operating result outlook
Net sales of Tekla Group for January-September 2008 totaled 43.10
(comparable net sales for the same period in 2007: 41.81) million
euros. Growth in net sales was approximately 3%. The operating result
was 10.47 (12.91) million euros, 24.3% (30.9%) of net sales.
Net sales for the third quarter were 13.72 (comparable net sales for
the corresponding period in 2007: 14.78) million euros, approximately
7% less than the year before. The operating result for the quarter
was 3.50 (5.82) million euros, 25.5% (39.4%) of net sales.
The comparable figures for 2007 have been calculated by excluding the
Defence business, which was divested in April 2007.
Ari Kohonen, President and CEO, comments on the reporting period:
- Growth in Tekla's net sales slowed down towards the end of the
reporting period and our operating result lagged behind last year's
figures. The figures for the third quarter did not meet our
expectations, especially when compared to the corresponding period in
2007, which was an excellent quarter. The general economic
uncertainty affects customers' investments, making their
decision-making times longer and postponing the start-up of projects
into the future. Uncertainty of financing adds to the slowing down of
growth in the building industry, which is particularly seen in new
larger projects. As we have stated previously, strong fluctuations in
demand are possible in license-based sales.
- In our main business area, Building & Construction, net sales and
operating result fell behind the same period in 2007, during which
some rather large deals were made. As we expect to be closing similar
deals during the remainder of this year, we predict the last quarter
to be better than in the previous year.
- Despite the softer third quarter, we believe our outlook to still
be good. Tekla's strong market position and competition in the
industry remain unchanged. Customers in the building industry are
looking for tools that make their operations more efficient, which is
exactly what Tekla's products do. Building Information Modeling is
still gaining ground around the world.
- In January-September, the largest markets in terms of net sales
were North America, Western Europe, India and the Middle East. Sales
did not increase in the United States, which continues to be B&C's
largest individual market, but they were at a good level. During the
third quarter, sales were favorable in Germany, Denmark, Russia and
several Asian countries.
- The Infra & Energy business area's first three quarters went as
planned. The last quarter of the year is typically good, and the
business area is expected to reach its yearly objectives.
- Increase in the number of personnel during the third quarter was 7
people, while during the first two quarters it was 44. During the
first half of the year we added personnel mainly to product
development to ensure future growth. In the future, possible
increases in personnel will focus on personnel working in the
customer interface.
Due to the softened prospects for the construction industry, Tekla
lowers its net sales and operating result outlook for the full year.
Growth in net sales for 2008 is expected to be approximately 5%,
while operating result will be slightly lower than the year before.
- - -
Tekla will organize an information conference (in Finnish) for
analysts and media at Scandic Hotel Simonkenttä, Helsinki (Pavilion
cabinet) on October 23, 2008, 1:00 p.m.
- - -
TEKLA CORPORATION'S INTERIM REPORT JANUARY 1 - SEPTEMBER 30, 2008
The figures for the comparison period have been presented for the
continuing businesses, i.e. comparable, excluding the figures for the
Defence business, which was divested in April 2007. Defence's figures
are presented in more detail in the tables of this report.
NET SALES AND PROFITABILITY
* Net sales of Tekla Group for January-September 2008 were 43.10
(comparable net sales 41.81 in January-September 2007) million euros.
* Growth in net sales was 3.1% (comparable).
* Operating result was 10.47 (comparable 12.91) million euros.
* Operating result percentage was 24.3% (comparable 30.9%).
* Earnings per share were 0.35 (comparable 0.43) euros.
* Return on investment was 50.2 (80.4) percent.
* Return on equity was 36.1 (59.3) percent.
FINANCIAL POSITION
* Cash flow from operating activities totaled 7.50 (11.44) million
euros.
* Liquid assets amounted to 25.16 (28.06) million euros on September
30, 2008 and 30.15 million euros on December 31, 2007. The assets are
invested in money market instruments with very low risk.
* Equity ratio was 66.9 (65.3) percent.
* Interest-bearing debts were 0.13 (0.31) million euros.
OTHER KEY FIGURES
* International operations accounted for 84% (comparable 83%) of net
sales.
* Personnel averaged 422 (371) for January-September.
* At the end of September, the number of personnel including
part-time staff was 451 (384).
* Gross investments in property, plant and equipment were 1.07 (1.14)
million euros.
* Equity per share was 1.22 (1.21) euros.
* On the last trading day of September, trading closed at 6.10
(10.20) euros.
NET SALES BY BUSINESS AREA (PRIMARY SEGMENT)
Q1-3/ Q1-3/ Change 1-12/ Q3/ Q3/
Million euros 2008 2007 2007 2008 2007
Building & Construction 34.65 33.44 1.21 45.48 11.01 12.01
Infra & Energy 8.45 8.36 0.09 12.76 2.71 2.76
Defence *) 1.00 -1.00 1.00
Others 0.01 -0.01 0.01 0.01
Total 43.10 42.81 0.29 59.25 13.72 14.78
OPERATING RESULT BY BUSINESS AREA (PRIMARY SEGMENT)
Q1-3/ Q1-3/ Change 1-12/ Q3/2008 Q3/2007
Million euros 2008 2007 2007
Building & Construction 9.77 12.11 -2.34 15.96 3.02 5.17
Infra & Energy 0.71 0.76 -0.05 1.96 0.48 0.62
Defence *) 2.53 -2.53 2.78
Others -0.01 0.04 -0.05 -0.02 0.03
Total 10.47 15.44 -4.97 20.68 3.50 5.82
*) The Defence business was divested in April 2007.
BUSINESS AREAS
Building & Construction
Tekla's Building & Construction business area (B&C) develops and
markets the Tekla Structures software product for model-based design
of steel and concrete structures as well as the management of
fabrication and construction.
Strong fluctuations in demand are possible in license-based sales.
This was seen particularly towards the end of the reporting period.
Growth of the building industry slowed down in several market areas.
Uncertainty of financing adds to the slowing down of growth, which is
particularly seen in new larger projects. The general economic
uncertainty affects customers' investments, making their
decision-making times longer and postponing the start-up of projects
into the future.
Tekla's strong market position and competition in the industry
remained unchanged. Customers in the building industry are seeking
tools that make their operations more efficient, which is what
Tekla's products are. Demand for modeling systems continues to
increase, and product modeling is strengthening its foothold in
structural design and other stages of the building process, such as
construction. Tekla's market position as a supplier of 3D modeling
software is strong in all markets and the numbers of users have been
on the increase.
It is very favorable for Tekla that the building industry's move to
model-based 3D processes from traditional 2D ways of working
continues. In addition, Building Information Modeling (BIM) is a
trend that is gaining momentum in the industry. BIM means that the
information of the product model is transferred and shared between
the parties of the construction process.
The net sales of B&C amounted to 34.65 (33.44) million euros for
January-September 2008. Net sales increased by approximately 4%
compared to the previous year. Operating result was less than the
previous year, amounting to 9.77 (12.11) million euros. B&C's
operating result percentage for the reporting period was 28.2%
(36.2%).
During the third quarter, B&C's net sales amounted to 11.01 (12.01)
million euros and its operating result was 3.02 (5.17) million euros.
The quarter was softer than the corresponding period the previous
year, during which some rather major deals were made. As Tekla
expects to be closing similar kind of deals during the remainder of
this year, the last quarter is predicted to be better than in the
previous year.
International operations accounted for 96% (94%) of B&C's net sales
in January-September 2008. In January-September, the largest markets
in terms of net sales were North America, Western Europe, India and
the Middle East. Sales did not increase in the United States, which
continues as B&C's largest individual market, but they were at a good
level. During the third quarter, sales were favorable in Germany,
Denmark, Russia and several Asian countries.
In August, Tekla announced a deal with Al Habtoor-Murray & Roberts
Joint Venture chosen to construct the Trump International Hotel and
Tower in Palm Jumeirah, Dubai. Murray & Roberts purchased a
significant number of Tekla Structures software licenses to make the
62-story hotel project and other major projects in the future happen.
A partnership agreement was signed with the U.S. company Vico
Software in August. The cooperation concerns the transfer of quantity
and cost planning as well as schedule data between Tekla and Vico
software.
In September, US precaster Shockey Precast Group and Barton Marlow,
one of the largest general contractors in the United States,
announced that they were using Tekla Structures BIM in their
collaborative projects.
Once complete, Burj Dubai will be among the tallest buildings in the
world. Tekla Structures is also being used in this project.
In March, Tekla announced closing a considerable license deal in
India. Prothius Engineering Services, one of the world's largest
engineering offices, acquired more than one hundred new Tekla
Structures licenses.
During the third quarter, B&C's product development concentrated on
the intermediate version of Tekla Structures, which will be released
at the beginning of November. Tekla Structures for Construction
Management is a tool especially for controlling and site management
phases of construction projects. Construction companies and
contractors have already piloted the product in major projects in the
United States, the Middle East and Nordic countries, for instance.
Infra & Energy
The Infra & Energy business area focuses on the development and sales
of model-based software solutions that support customers' core
processes. Its key customer industries (products in parentheses) are
energy distribution (Tekla Xpower), infrastructure management (Tekla
Xcity, Tekla Xstreet), as well as water and sewage (Tekla Xpipe).
Structural changes in the energy industry and end users' increasing
expectations of the reliability of energy distribution and customer
service increase the need for developing and renewing network
information systems. Tekla has a solid market position in the
industry in the Nordic countries and the Baltic countries. In
Finland, increasing regional collaboration will increase the public
sector's GIS development needs. Tekla's market position is strong in
large and medium-sized Finnish municipalities.
The net sales of I&E amounted to 8.45 (8.36) million euros for
January-September 2008. Net sales increased by approximately 1%.
I&E's operating result was 0.71 (0.76) million euros. International
operations accounted for 37% (38%) of net sales. I&E's operating
result percentage was 8.4% (9.1%).
With regard to net sales I&E's third quarter was at the same level
with the corresponding quarter the previous year. Net sales for the
third quarter amounted to 2.71 (2.76) million euros, and operating
result was 0.48 (0.62) million euros.
The Infra & Energy business area's first three quarters went as
planned. The last quarter of the year is typically good, and the
business area is expected to reach its yearly objectives.
The majority of net sales consists of additional and service sales to
existing customers. New customers are expected from the strong
markets in the Nordic countries. Efforts for business growth are
underway in Germany and in the new EU countries. The customer base in
the infrastructure management sector is expected to broaden with the
adoption of regional services in Finland.
In order to strengthen its supply to the energy industry, Tekla
acquired the Swedish company OakTree Software Ab in September. The
two employees of the company were employed by Tekla.
Latvenergo acquired the Tekla Xpower Distribution Management System
(DMS) for use throughout Latvia. Tekla Xstreet software licenses were
sold in Finland for the Talvivaara mining project and the City of
Espoo for planning and modeling the alignment of a metro tunnel.
In Tekla Xpower software product development, the integration
projects of operational support and calculation with automatic meter
reading (AMR) were completed. In addition, new functionalities for
district heating and gas network service outage management (OMS,
operation management system) were developed in collaboration with
Swedish customers. As for Tekla Xcity, the project to develop
electronic building supervision services was completed and customer
deliveries were started. Tekla's part of the development of the
Finnish KuntaGML project (geographic information service interface)
proceeded from planning to implementation.
PERSONNEL
The Group personnel averaged 422 (371) for January-September 2008; on
average 170 (141) worked outside Finland. In these figures, the
number of part-time staff has been converted to correspond to
full-time work contribution. At the beginning of the year, Tekla
personnel totaled 400 (365) including part-time staff, and at the end
of September 451 (384), of whom 179 (152) worked outside Finland.
Increase in the number of personnel during the third quarter was 7
people, while during the first two quarters it was 44. During the
first half of the year personnel was added mainly to product
development to ensure future growth. In the future, possible
increases in personnel will focus on personnel working in the
customer interface.
SHARE AND OWNERSHIP STRUCTURE
Share Repurchase
Tekla's Board of Directors decided on August 8, 2008 to start
purchases of a maximum of 100,000 Tekla shares for the development of
the company's capital structure. The decision was based on the
authorization given by the Annual General Meeting on March 19, 2008,
authorizing the Board to decide on the acquisition of a maximum of
500,000 Tekla shares. Purchases started on August 18, 2008 and ended
when the authorization was used up after the reporting period on
October 10, 2008.
Shares and Share Capital
The total number of Tekla Corporation shares at the end of September
2008 was 22,586,200, of which the company owned 152,866. The total
book countervalue of those was 4,585.98 euros, representing 0.68% of
the company's shares and the total number of votes. A total of
808,485.19 euros had been used for acquiring the company's own
shares, and their market value was 932,482.60 euros on September 30,
2008. The book countervalue of the share is 0.03 euros. At the end of
the period, share capital stood at 677,586 euros.
Share Price Trends and Trading
The highest quotation of the share in January-September 2008 was
13.00 (14.94) euros, the lowest 5.80 (7.60) euros. The average
quotation was 9.71 (10.59) euros. On the last trading day of
September, trading closed at 6.10 (10.20) euros.
A total of 6,078,136 (10,516,655) Tekla shares changed hands in
January-September 2008 at NASDAQ OMX Helsinki Ltd, amounting to 26.9%
(46.6%) of the entire share capital.
Changes in ownership structure (flagging notifications)
Threadneedle Asset Management Holdings Limited announced that their
holdings in Tekla Corporation crossed above the 5% threshold on
January 14, 2008. According to the notification, Threadneedle's
holdings stood at 5.098%.
Threadneedle Asset Management Holdings Limited announced that their
holdings in Tekla Corporation crossed above the 10% threshold on
August 1, 2008. According to the notification, Threadneedle's
holdings amounted to 2,264,730 Tekla shares, or 10.027% of Tekla's
shares and votes.
ANNUAL GENERAL MEETING
Tekla Corporation's Annual General Meeting on March 19, 2008 adopted
the company's financial statements and the Group income statement and
balance sheet for 2007. The Annual General Meeting also discharged
the CEO and the Board members from liability. The AGM accepted the
Board's proposal whereby a dividend of 0.50 euros per share was
distributed for 2007. The dividend payment date was April 3, 2008.
Ari Kohonen, Olli-Pekka Laine (Vice Chair), Heikki Marttinen (Chair)
and Erkki Pehu-Lehtonen were re-elected Board members until the
conclusion of the Annual General Meeting in 2009. Reijo Sulonen was
elected as a new Board member. Timo Keinänen was re-elected deputy
member of the Board. Juha Kajanen is the Tekla personnel
representative on the Board and Pirjo Lundén his personal deputy.
PricewaterhouseCoopers were re-elected as auditors, with Markku
Marjomaa, Authorized Public Accountant, as the auditor in charge.
The AGM renewed the Board's authorizations regarding the increase of
the company's share capital and acquiring or transferring the
company's treasury shares. In August, the Board decided to use its
authorization regarding share repurchase. This is described in more
detail elsewhere in this report.
SHORT-TERM RISKS AND UNCERTAINTY FACTORS
Possible risks and uncertainty factors associated with Tekla's
business are mainly related to the market and competition situation
and the general economic situation. Trends in the building industry
have weakened in several markets, and it has had a negative impact on
the demand for Tekla products.
In the software product business, it is possible to react swiftly to
growing demand, and profits from additional sales are good. The
majority of net sales comprises of sales of licenses entitling to use
software products. Fluctuation in their demand can be rapid and
significant. In the short term and in case of quick changes, it would
be challenging to proportion fixed personnel expenses, which account
for the majority of Tekla's costs.
The sales of Tekla software are geographically distributed. Also
individual customers do not account for a significant share of net
sales, and therefore risks such as those described above are not
significant.
OUTLOOK FOR 2008
Due to the softened prospects of the construction industry, Tekla is
lowering its net sales and operating result outlook for the full
year. Growth in net sales for 2008 is expected to be approximately
5%, while operating result will be slightly lower than the year
before.
According to the previous estimate, growth in net sales will be
approximately 10% and operating result will be at the previous year's
level.
Both outlooks have been calculated for the continuing businesses,
whose net sales for 2007 amounted to 58.24 million euros and
operating result to 17.90 million euros.
NEXT FINANCIAL REPORT
Tekla Corporation's financial statements bulletin for 2008 will be
published on Friday, February 6, 2009.
Espoo, October 22, 2008
TEKLA CORPORATION
Board of Directors
For additional information, please contact:
Ari Kohonen, President and CEO, Tel. +358 50 641 24, ari.kohonen (at)
tekla.com
Timo Keinänen, CFO, Tel. +358 400 813 027, timo.keinanen (at)
tekla.com
Distribution: Nasdaq OMX Helsinki Ltd, main media
Tekla is an international software product company whose model-based
software solutions make customers' core processes more effective in
building and construction, energy distribution, infrastructure
management and water supply. Tekla has customers in more than 80
countries. Tekla Group's net sales for 2007 were nearly 60 million
euros and operating result approximately 20 million euros.
International operations account for almost 85% of net sales. Tekla
Group currently employs about 450 people, of whom 40% work outside
Finland. Tekla was established in 1966, making it one of the oldest
software companies in Finland. www.tekla.com
CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
CONSOLIDATED INCOME STATEMENT
Q1-Q3/ Q1-Q3/ 1-12/ Q3/ Q3/
Million euros 2008 2007 2007 2008 2007
Continuing businesses:
Net sales 43.10 41.81 58.24 13.72 14.78
Other operating income 0.69 0.63 1.02 0.15 0.17
Change in inventories of
finished goods and
in work in progress 0.08 0.08 0.03 0.08 -0.02
Raw materials and
consumables used -1.88 -1.38 -2.04 -0.56 -0.28
Employee compensation and
benefit expense -20.43 -18.59 -25.49 -6.56 -5.72
Depreciation -0.84 -0.86 -1.14 -0.29 -0.28
Other operating expenses -10.25 -8.78 -12.72 -3.04 -2.83
Operating result 10.47 12.91 17.90 3.50 5.82
% of net sales 24.29 30.88 30.73 25.51 39.38
Financial income 1.70 1.39 1.86 0.49 0.62
Financial expenses -1.08 -0.91 -1.33 -0.15 -0.41
Profit (loss) before taxes 11.09 13.39 18.43 3.84 6.03
% of net sales 25.73 32.03 31.64 27.99 40.80
Income taxes -3.13 -3.68 -4.92 -1.09 -1.57
Result for the period from
continuing businesses 7.96 9.71 13.51 2.75 4.46
Discontinued operations:
Result for the period from
discontinued operations 1.87 2.06
Result for the period 7.96 11.58 15.57 2.75 4.46
Attributable to the equity holders of the Company
Earnings per share for profit
attributable to the equity
holders of the Company:
Earnings per share (EUR) 0.35 0.51 0.69 0.12 0.20
Earnings per share from
continuing businesses
attributable to the equity
holders of the Company:
Earnings per share (EUR) 0.35 0.43 0.60 0.12 0.20
Earnings per share from
discontinued operations
attributable to the equity
holders of the Company:
Earnings per share (EUR) 0.00 0.08 0.09
Earnings are not diluted.
CONDENSED BALANCE SHEET
Million euros 9/2008 9/2007 12/2007
Assets
Non-current assets
Property, plant and
equipment 1.65 1.80 1.79
Goodwill 0.23 0.10 0.10
Intangible assets 1.01 0.69 0.74
Other financial assets 0.30 0.30 0.30
Receivables 0.29 0.54 0.49
Deferred
tax assets 0.23 0.02 0.11
Non-current assets, total 3.71 3.45 3.53
Current assets
Inventories 0.16 0.12 0.07
Trade and other
receivables 11.94 10.45 12.96
Tax receivables 0.10 0.00
Other financial assets 19.66 21.70 25.22
Cash and cash equivalents 5.54 6.41 4.97
Current assets, total 37.40 38.68 43.22
Assets related to
discontinued operations 0.25 0.25
Assets total 41.36 42.13 47.00
Equity and liabilities
Equity
Share capital 0.68 0.68 0.68
Share premium account 8.89 8.89 8.89
Other own capital 1.30 1.09 1.17
Retained earnings 16.52 16.66 20.71
Equity total 27.39 27.32 31.45
Non-current liabilities
Deferred tax liabilities 0.04 0.13
Provisions 0.56
Interest-bearing liabilities 0.08 0.05 0.07
Non-current liabilities total 0.12 0.61 0.20
Current liabilities
Trade and other payables 13.58 12.22 13.35
Tax liabilities 0.22 1.04 1.01
Current interest-bearing
liabilities 0.05 0.26 0.27
Current liabilities total 13.85 13.52 14.63
Liabilities total 13.97 14.13 14.83
Liabilities related to
discontinued operations 0.68 0.72
Equity and liabilities total 41.36 42.13 47.00
CALCULATION OF RECONCILIATION OF EQUITY
Equity attributable to the holders of the Company
Share Share Fair Acc. Ret.
cap. prem. Res. value transl earn.
acct. fund res. diff. Total
Equity January 1, 0.68 8.89 1.33 0.10 -0.21 13.93 24.72
07
Transl. differences -0.16 0.16 0.00
Changes in
available-
for-sale 0.03 0.03
investments
Items recognized
directly in equity 0.00 0.00 0.00 0.03 -0.16 0.16 0.03
Net profit for
the period 11.58 11.58
Total income and
expenses recognized
in the period 0.00 0.00 0.00 0.03 -0.16 11.74 11.61
Payment of dividend -9.01 -9.01
Equity September 0.68 8.89 1.33 0.13 -0.37 16.66 27.32
30, 07
Equity attributable to the holders of the Company
Share Share Fair Acc. Ret.
cap. prem. Res. value transl earn.
acct. fund res. diff. Total
Equity January 1, 0.68 8.89 1.33 0.30 -0.46 20.71 31.45
08
Transl. differences 0.17 -0.30 -0.13
Changes in
available-
for-sale -0.04 -0.04
investments
Items recognized
directly in equity 0.00 0.00 0.00 -0.04 0.17 -0.30 -0.17
Net profit for the
period 7.96 7.96
Total income and
expenses recognized
in the period 0.00 0.00 0.00 -0.04 0.17 7.66 7.79
Payment of dividend -11.26 -11.26
Acquisition of own
shares -0.59 -0.59
Equity September 0.68 8.89 1.33 0.26 -0.29 16.52 27.39
30, 08
CONDENSED CASH FLOW STATEMENT
Q1-Q3/ Q1-Q3/ 1-12/
Million euros 2008 2007 2007
Cash flows from operating
activities:
Continuing businesses 7.50 10.84 12.31
Discontinued operations 0.60 1.24
Net cash flows from operating
Activities 7.50 11.44 13.55
Cash flows from investing
activities:
Investments -1.07 -1.14 -1.66
Sale of intangible assets
and property, plant and
Equipment 0.00 0.03 0.25
Cash flow from sale
of discontinued operations 2.35 2.35
Purchases of available-for-
sale financial assets -38.15 -44.31 -55.16
Proceeds from sale of avail.-
for-sale financial assets 40.51 39.35 50.11
Interests received from
available-for-sale financial
Assets 0.70 0.54 0.65
Net cash used in/from
investing activities 1.99 -3.18 -3.46
Cash flows from financing
activities:
Payment of dividend -11.26 -9.01 -9.01
Own shares -0.59
Repayments of long-term debt -0.22 -0.39 -0.39
Payments of finance lease
Liabilities -0.01 -0.03 -0.04
Net cash used in financing
Activities -12.08 -9.43 -9.44
Net decrease/increase in cash
and cash equivalents -2.59 -1.17 0.65
Cash and cash equivalents at
beginning of the period 8.43 7.78 7.78
Cash and cash equivalents at
end of the period 5.84 6.61 8.43
The cash and cash equivalents
in the cash flow statement
include:
Cash and cash equivalents 5.54 6.41 4.97
Available-for-sale financial
assets, cash equivalents 0.30 0.20 3.46
NOTES TO THE INTERIM REPORT
The notes are presented in millions of euros, unless otherwise
stated.
This interim report has been prepared in accordance with the IAS 34
(Interim
Financial Reporting) standard. The same accounting and valuation
policies and
methods of computation have been followed in the interim reports as
in the annual financial statements for 2007.
The amendments and interpretations to published standards as well as
new
standards, effective January 1, 2008, are presented in detail in the
financial
statements for 2007. The adopted standards have not had a significant
effect on
the result or the data presented in the interim report. The figures
presented
in the interim report are unaudited.
Use of estimates
When preparing the interim reports, the Group's management is
required to
make estimates and assumptions influencing the content of the interim
report,
and it must exercise its judgment regarding the application of
accounting
policies. Although these estimates are based on the management's best
knowledge, actual results may ultimately differ from the estimates
used in
the interim report. Tax losses carried forward are recognized as
deferred tax
assets only to the extent that it is probable that future taxable
profits
will be available against which unused tax losses can be utilized.
Actual results could differ from those estimates.
Segment information
Net sales by business area (primary segment)
Q1-Q3/ Q1-Q3/ 1-12/ Q3/ Q3/
Million euros 2008 2007 2007 2008 2007
Building & Construction 34.65 33.44 45.48 11.01 12.01
Infra & Energy 8.45 8.36 12.76 2.71 2.76
Defence *) 1.00 1.00
Others 0.01 0.01 0.01
Total 43.10 42.81 59.25 13.72 14.78
Operating result by business area (primary segment)
Q1-Q3/ Q1-Q3/ 1-12/ Q3/ Q3/
Million euros 2008 2007 2007 2008 2007
Building & Construction 9.77 12.11 15.96 3.02 5.17
Infra & Energy 0.71 0.76 1.96 0.48 0.62
Defence *) 2.53 2.78
Others -0.01 0.04 -0.02 0.03
Total 10.47 15.44 20.68 3.50 5.82
*) Defence has been processed as discontinued operations for the
comparison period.
Financial indicators Q1-Q3/ Q1-Q3/ 1-12/ Q3/ Q3/
2008 2007 2007 2008 2007
Earnings per share (EPS), 0.35 0.51 0.69 0.12 0.20
EUR
Earnings per share (EPS)
from
continuing businesses, 0.35 0.43 0.60 0.12 0.20
EUR
Earnings per share (EPS)
from
discontinued operations, 0.00 0.08 0.09 0.00 0.00
EUR
Equity/share, EUR 1.22 1.21 1.40
Interest-bearing 0.13 0.31 0.34
liabilities
Equity ratio, % 66.9 65.3 67.5
Net gearing, % -91.4 -101.6 -94.8
Return on investment, % 50.2 80.4 74.5 58.2 95.1
Return on equity, % 36.1 59.3 55.4 41.7 71.0
Number of shares
at end of period 22433334 22516600 22516600 22433334 22516600
Number of shares,
on average 22508167 22516600 22516600 22491485 22516600
Gross investments, MEUR 1.07 1.14 1.66 0.47 0.38
% of net sales 2.48 2.66 2.80 3.43 2.57
Personnel, on average 422 371 374 436 369
Discontinued operations
Defence business
Tekla's Defence business was transferred to Patria on May 1, 2007.
The calculations below show the effect of the business sale on the
result and the cash flow during the reporting and comparison periods.
Result for the Defence business
Q1-Q3/ Q1-Q3/ 1-12/
2008 2007 2007
Net sales 1.00 1.00
Expenses -0.81 -0.81
Profit (loss) before
income taxes 0.00 0.19 0.19
Taxes -0.05 -0.05
Profit (loss) after
taxes 0.00 0.14 0.14
Sales profit from the
Defence business sale 2.34 2.59
Taxes -0.61 -0.67
Sales profit after
taxes 0.00 1.73 1.92
Profit/loss for
the period from
discontinued operations 0.00 1.87 2.06
Cash flow statement, Defence
Cash flows from
operating activities 0.60 1.24
Cash flow from investing
activities 2.35 2.35
Total cash flow 0.00 2.95 3.59
The effect of the sale of the Defence business on the
financial position of the Group
Assets 0.25 0.25
Liabilities 0.68 0.72
Consolidated income statement by quarter
Q3/ Q2/ Q1/ Q4/ Q3/
Million euros 2008 2008 2008 2007 2007
Continuing businesses:
Net sales 13.72 14.52 14.86 16.44 14.78
Other operating income 0.15 0.42 0.12 0.39 0.17
Change in inventories of
finished goods and in work
in progress 0.08 0.00 -0.05 -0.02
Raw materials and
consumables used -0.56 -0.71 -0.61 -0.67 -0.28
Employee compensation and
benefit expense -6.56 -7.23 -6.64 -6.90 -5.72
Depreciation -0.29 -0.28 -0.27 -0.28 -0.28
Other operating expenses -3.04 -3.68 -3.53 -3.94 -2.83
Operating result 3.50 3.04 3.93 4.99 5.82
% of net sales 25.51 20.94 26.45 30.35 39.38
Financial income 0.49 0.41 0.80 0.47 0.62
Financial expenses -0.15 -0.19 -0.74 -0.42 -0.41
Profit (loss) before taxes 3.84 3.26 3.99 5.04 6.03
% of net sales 27.99 22.45 26.85 30.66 40.80
Income taxes -1.09 -0.94 -1.10 -1.24 -1.57
Result for the period
from continuing businesses 2.75 2.32 2.89 3.80 4.46
Discontinued operations:
Result for the period from
discontinued operations 0.19
Result for the period 2.75 2.32 2.89 3.99 4.46
Income taxes Q1-Q3/ Q1-Q3/ 1-12/
2008 2007 2007
Taxes for the financial
period and prior periods -3.34 -3.35 -4.54
Deferred taxes 0.21 -0.33 -0.38
Total -3.13 -3.68 -4.92
Estimated effective tax rate for the financial year has
been applied to the result of the reporting period.
Property,
plant and equipment 9/2008 9/2007 12/2007
Cost at the beginning of the period 7.20 6.82 6.67
Translation differences -0.03 -0.05 -0.09
Additions 0.53 0.76 1.16
Disposals -0.15 -0.25 -0.54
Cost at the end of the
period 7.55 7.28 7.20
Accumulated depreciation at
the beginning of the period 5.41 5.08 4.93
Translation differences -0.03 -0.04 -0.05
Accumulated depreciation on
disposals -0.07 -0.19 -0.31
Depreciation for the financial period 0.59 0.63 0.84
Accumulated depreciation
at the end of the period 5.90 5.48 5.41
Net book amount at the end of the period 1.65 1.80 1.79
The investments consisted of normal acquisitions of hardware,
software
and equipment.
Provisions
The Group's provisions, loss-making contracts and provisions for
pension
obligations have been eliminated on December 31, 2007.
Collaterals,
contingent liabilities and other commitments
9/2008 9/2007 12/2007
Collaterals for own commitments
Business mortgages
(as collateral for bank guarantee limit) 0.50 0.50 0.50
Pledged funds 0.05 0.06 0.07
Leasing and rental
agreement commitments
Premises 6.01 5.23 4.75
Others 0.78 0.84 0.81
Total 6.79 6.07 5.56
Derivative contracts
Currency forward contracts:
Fair value -0.09 0.25 0.31
Nominal value of
underlying instruments 2.01 5.18 3.63
The Group makes derivative contracts to hedge against the exchange
rate
risks of prospective sales agreements. Forward contracts and currency
options are stated at fair value, and related foreign exchange gains
and
losses are recognized in the income statement. The derivative
contracts
hedge sales in US dollars.
Related party transactions 9/2008 9/2007 12/2007
Gerako Oy
Purchases of services 0.15 0.05 0.06
Reimbursed expenses 0.01 0.01
Management remuneration
Salaries and post-employment
benefits 1.22 1.08 1.33
Management herein refers to members of the Tekla Management Team.
Tekla Corporation's Interim Report January 1 - September 30, 2008
| Source: Tekla
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