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INTERIM REPORT OF COMPTEL CORPORATION 1 JANUARY - 31 MARCH 2014(OMX Via Acquire Media NewsEdge) Stock exchange release 17 April 2014 at 8.00 am Profitability and strong cash flow despite lower level of y-o-y net sales. -- Net sales EUR 18.0 (January - March 2013: 21.2), change -14.9% -- Operating result EUR 1.0 million (1.0) -- Earnings per share EUR 0.00 (-0.01) -- Order backlog EUR 42.2 million (50.1), change -15.8% Comptel’s operating result for 2014 is expected to be EUR 5-10 million. The 2014 revenue is expected to remain at the 2013 level while the new solutions are expected to grow from Q2 onwards. Juhani Hintikka, President and CEO: ”Our order backlog increased from last quarter and we won three new customers during the first quarter of 2014. Our first quarter revenue declined year over year due seasonality swings between quarters. We divested one of our legacy businesses that also contributed slightly negatively to our order intake and revenue. Market conditions continue to be challenging but we are making progress with our product offering. We won a new analytics solution project in Q1 with a leading Asian operator, Globe Telecom. Our profitability improved compared to the first quarter of last year and our cost base is now lower due to earlier implemented cost saving measures. We maintained a strong cash flow throughout the quarter and currently our cash exceeds our bank debt. During the quarter we signed a strategic partnership with Tech Mahindra and we also won our first joint project after the partnership agreement.” Business Review of the First Quarter 2014 Comptel’s net sales declined in the first quarter by 14.9 per cent from the previous year, to 18.0 million (21.2). The quarterly revenue declined due to seasonality swings between quarters. Operating result for the period was EUR 1.0 million (1.0), which corresponds to 5.3 per cent of net sales (4.9). The earlier implemented cost saving measures have improved the cost base Result before taxes was EUR 0.8 million (0.1) and net result was EUR 0.2 million (-0.6). Tax expense for the period was EUR 0.6 million (0.7), of which EUR 0.7 million were withholding taxes. Earnings per share for the period under review were EUR 0.00 (-0.01). The Group’s order backlog declined from the previous year and was EUR 42.2 million (50.1) at the end of the period. Business areas Net sales, 1-3 1-3 Change, 1-12 EUR million 2014 2013 % 2013 -------------------------------------------------- Europe 6.8 8.4 -18.7 33.1 -------------------------------------------------- Asia Pacific 5.9 5.7 4.7 20.9 -------------------------------------------------- Middle East and Africa 3.2 3.5 -10.4 16.3 -------------------------------------------------- Americas 2.2 3.6 -40.9 12.3 -------------------------------------------------- Total 18.0 21.2 -14.9 82.7 -------------------------------------------------- Operating result, EUR million -------------------------------------------------- Europe 2.9 3.2 -7.7 15.6 -------------------------------------------------- Asia Pacific 3.8 2.8 38.1 10.1 -------------------------------------------------- Middle East and Africa 1.4 1.1 30.2 6.7 -------------------------------------------------- Americas 0.9 2.3 -62.9 7.0 -------------------------------------------------- Unallocated costs -8.0 -8.3 -2.9 -32.1 -------------------------------------------------- Total 1.0 1.0 -8.0 7.3 -------------------------------------------------- Operating result, % of net sales -------------------------------------------------- Europe 42.9 37.8 - 47.3 -------------------------------------------------- Asia Pacific 64.7 49.0 - 48.0 -------------------------------------------------- Middle East and Africa 44.4 30.5 - 40.8 -------------------------------------------------- Americas 40.1 63.9 - 56.9 -------------------------------------------------- Total 5.3 4.9 - 8.8 -------------------------------------------------- Net sales grew in Asia Pacific. Proportional profitability improved in Asia Pacific and Middle East and Africa. In January - March, Comptel received 3 significant orders (Q1 2013: 6), all three in Comptel Control & Charge. As significant orders Comptel reports sold projects and licenses with a minimum value of EUR 500,000. Net sales breakdown, 1-3 1-3 Change, % 1-12 EUR million 2014 2013 2013 ----------------------------------------------------------- Project & License business 9.1 12.2 -25.4 47.1 ----------------------------------------------------------- Recurring business 8.9 8.9 -0.5 35.6 ----------------------------------------------------------- Total 18.0 21.2 -14.9 82.7 ----------------------------------------------------------- Project & License business declined year over year while Recurring business was on same level as previous year. Net sales breakdown, 1-3 2014 1-3 2013 Change, % 1-12 EUR million 2013 --------------------------------------------------------- New business 3.4 5.4 -37.0 19.2 --------------------------------------------------------- Current business 14.6 15.7 -7.0 63.5 --------------------------------------------------------- Total 18.0 21.2 -14.9 82.7 --------------------------------------------------------- As forecasted we expect the new business to start grow from Q2 onwards. Financial Position EUR million 31 March 31 March Change 31 Dec Change 2014 2013 , 2013 , % % -------------------------------------------------------------------------------- Statement of financial 60.6 65.9 -8.1 67.9 -10.9 position total -------------------------------------------------------------------------------- Liquid assets 10.4 4.5 131.3 6.5 59.6 -------------------------------------------------------------------------------- Trade receivables, gross 18.0 25.8 -30.1 23.7 -24.0 -------------------------------------------------------------------------------- Bad debt provision -0.8 -1.2 -31.4 -1.0 -20.8 -------------------------------------------------------------------------------- Trade receivables, net 17.2 24.6 -30.0 22.7 -24.1 -------------------------------------------------------------------------------- Accrued income 7.8 12.3 -36.8 9.4 -17.5 -------------------------------------------------------------------------------- Deferred income related to 1.9 3.0 -35.1 1.9 2.2 partial debiting -------------------------------------------------------------------------------- Interest-bearing debt 7.7 10.0 -23.3 8.8 -12.4 -------------------------------------------------------------------------------- Equity ratio, per cent 55.4 49.8 11.2 50.5 9.6 -------------------------------------------------------------------------------- The statement of financial position total was EUR 60.6 million. Operating cash flow was EUR 7.2 million (0.0) in the first quarter. The trade receivables were EUR 17.2 million (24.6) at the end of the period. The accrued income was EUR 7.8 million (12.3). The deferred income related to partial debiting was EUR 1.9 million (3.0). Comptel has an 18 million credit facility arrangement, of which 7 million is in use. Out of this arrangement Comptel had 5 million of the term-loan and 2 million, out of total 13 million revolving credit facility outstanding at the quarter end. The credit facility is valid until January 2016. The equity ratio was 55.4 per cent (49.8) and the gearing ratio was -9.9 per cent (20.9). Research and Development (R&D) EUR million 1-3 1-3 Change, % 1-12 2014 2013 2013 ------------------------------------------------------------------------------- Direct R&D expenditure 3.9 4.2 -6.8 17.8 ------------------------------------------------------------------------------- Capitalisation of R&D expenditure according to -1.1 -1.1 5.0 -5.5 IAS 38 ------------------------------------------------------------------------------- R&D depreciation and impairment charges 1.2 0.9 31.9 4.2 ------------------------------------------------------------------------------- R&D expenditure, net 3.9 4.0 -1.6 16.5 ------------------------------------------------------------------------------- Direct R&D expenditure, % of net sales 21.7 19.8 - 21.5 ------------------------------------------------------------------------------- Direct R&D expenditure represented 21.7 per cent (19.8) of net sales. Comptel’s R&D expenditure was mainly targeted at the service fulfillment automation of telecom operators and to the management and real-time analysis of rapidly increasing data traffic. Comptel seeks global market leadership in these areas where key business challenges of operators and service providers will be solved. In addition, the company is developing an integrated software platform which will enable a cost-efficient and solution-based R&D. In 2014, the company focuses on developing its offering within the Comptel Fulfillment, Comptel Policy & Charging Control and advanced analytics product areas. One major software release was launched in these respective product areas during the review period. Investments EUR million 1-3 1-3 Change, 1-12 2014 2013 % 2013 -------------------------------------------------------------------------------- Gross investments in property, plant and equipment 0.2 0.2 56,2 0.6 and intangible assets -------------------------------------------------------------------------------- The investments comprised of devices, software and furnishings. The investments were funded through cash flow from operations. Personnel 31 March 31 March Change, 31 Dec Change, 2014 2013 % 2013 % -------------------------------------------------------------------------------- Number of employees at the 683 686 -0.4 690 -1.0 end of period -------------------------------------------------------------------------------- 1-3 2013 1-3 2012 Change, 1-12 2013 Change, % % -------------------------------------------------------------------------------- Average number of personnel 688 683 0.7 684 0.6 during the period -------------------------------------------------------------------------------- The number of employees remained at the previous year’s level. In the first quarter, the personnel expenses were 48.6 per cent of net sales (53.9). At the end of the period, 28.8 per cent (30.6) of the personnel were located in Finland, 28.0 per cent (26.5) in Malaysia, 11.3 per cent (10.6) in Bulgaria, 6.9 per cent (3.8) in India, 5.9 per cent (6.7) in the United Kingdom, 3.2 per cent (7.9) in the United Arab Emirates, 2.8 per cent (2.8) in Norway, and 13.1 per cent (11.1) in other countries where Comptel operates. Comptel share The closing share price of the period was EUR 0.53 (0.40). Comptel’s market value at the end of the period was EUR 56.8 million (42.8). Comptel share 1-3 2014 1-3 2013 Change, % 1-12 2013 --------------------------------------------------------------- Shares traded, million 13.3 4.3 212.1 18.4 --------------------------------------------------------------- Shares traded, EUR million 7.0 1.7 307.1 8.7 --------------------------------------------------------------- Highest price, EUR 0.57 0.45 26.7 0.59 --------------------------------------------------------------- Lowest price, EUR 0.48 0.38 26.3 0.38 --------------------------------------------------------------- Of Comptel’s outstanding shares, 7.7 per cent (7.0) were nominee registered or held by foreign shareholders at the end of the period. The company held 161,219 of its own shares at the end of the period, which is 0.15 per cent of the total number of its shares. The total counter-book value of the shares held by the company was EUR 3,224. Corporate Governance The Annual General Meeting (AGM), held on 12 of March 2014, re-elected Mr Pertti Ervi, Mr Hannu Vaajoensuu, Ms Eriikka Söderström and Mr Antti Vasara as members of the Board of Directors. Mr Heikki Mäkijärvi was elected as a new member of the Board of Directors. In the meeting held after the AGM, the Board of Directors elected Mr Pertti Ervi as chairman and Mr Hannu Vaajoensuu as vice chairman. The Board decided not to set up committees. The AGM appointed Ernst & Young Oy as the company’s auditor. Mr Heikki Ilkka is acting as the principal auditor. The AGM resolved that dividend of 0.01 EUR per share will be paid for 2013. The AGM authorised the Board of Directors to decide on share issues amounting to a maximum of 21,400,000 new shares and on repurchase or conveying of the company's own shares up to a maximum number of 10,700,000 shares. The authorisations are valid until 30 June 2015. However, the authorisation to implement the company's share-based incentive programs is valid until five years from the AGM resolution. A separate stock exchange release about the authorisations given and other decisions made by the Annual General Meeting was published on 12 of March 2014. Events after the Reporting Period There were no significant events after the reporting period. Near-term Risks and Uncertainties Comptel develops dynamic end-to-end solutions for leading operators globally in the telecom field. This requires Comptel to understand correctly the trends taking place in its business environment and the needs of its customers and resellers by each region. Failure to identify market conditions, address customers’ needs and develop its products in a timely way may significantly undermine the growth of Comptel’s business and its profitability. Characteristics to Comptel’s field of industry are significant quarterly variations of net sales and profit, which are related to customers’ purchasing behaviour and the timing of major single deals. Comptel's business consists of deliveries of large productised IT system and the value of a single project may be several million euros. Therefore, the risk or credit risk associated with a single project or an individual customer may be significant. Furthermore, some of Comptel's customers operate in countries that are or have been war zone which in part may increase credit risk. Comptel operates globally so it is exposed to risks arising from different currency positions. Exchange rate changes between the Euro, which is the company’s reporting currency, and the US Dollar, UK Pound Sterling and Malaysian Ringgit affect the company’s net sales, expenses and net profit. The application process to prevent Comptel’s double taxation is still pending with the Ministry of Finance in Finland. However, the process between the states is very slow and the timing of a change is hard to forecast. The interpretation of tax treaties may result in different views between the countries in question. This could mean that the double taxation will prevail. Comptel has also applications for return of withholding taxes in other countries but they are subject to local legal processes, which take time to get completed. The risks and uncertainties of Comptel are described more in detail in the company’s financial statements and the Board of Directors’ report for 2013. Outlook Comptel’s operating result for 2014 is expected to be EUR 5-10 million. The 2014 revenue is expected to remain at the 2013 level while the new solutions are expected to grow from Q2 onwards. Characteristically a significant part of Comptel’s operating profit and net sales is generated in the second half of the year. Stock Exchange Release Practice of Comptel Corporation based on Finnish Securities Markets Act 2:7 § The Board of Directors of Comptel Corporation have decided to specify the stock exchange release practice of the company accordingly: Comptel will issue consistently, without undue delay all significant purchase orders that may have effect on the value of the securities as follows: 1. Order received from a new customer 2. Order with minimum value of EUR 1,0 million 3. Order on new strategic products The objective of the stock exchange release practice of Comptel is to ensure that the market holds accurate and sufficient information for defining the right value of the securities. Comptel uses all endeavours to provide transparent, consistent, fair and accurate market communication. TABLE PART The interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU. The accounting policies and methods of computation adopted in the financial statements are consistent with those of the annual financial statements for the year ended 2013 except for the application of new or amended standards and interpretations as set forth in note 1. All figures in the financial report have been rounded and consequently the sum of the individual figures can deviate from the sum figure. The interim report is unaudited. Consolidated Statement of Comprehensive Income 1 Jan – 1 Jan – (EUR 1,000) 31 Mar 31 Mar 2014 2013 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Net sales 18,023 21,171 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Other operating income 314 1 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Materials and services -1,078 -1,114 -------------------------------------------------------------------------------- Employee benefits -8,753 -11,402 -------------------------------------------------------------------------------- Depreciation, amortisation and impairment charges -1,504 -1,255 -------------------------------------------------------------------------------- Other operating expenses -6,042 -6,358 -------------------------------------------------------------------------------- -17,378 -20,130 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Operating profit/loss 959 1,042 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Financial income 602 203 -------------------------------------------------------------------------------- Financial expenses -786 -1,155 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Profit/loss before income taxes 775 90 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Income taxes -623 -703 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Profit/loss for the period 152 -613 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Other comprehensive income -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Other comprehensive income to be reclassified to profit or loss in subsequent periods -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Translation differences 89 -100 -------------------------------------------------------------------------------- Total other comprehensive income 89 -100 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total comprehensive income for the period 241 -713 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Profit/loss attributable to: -------------------------------------------------------------------------------- Equity holders of the parent company 152 -613 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total comprehensive income attributable to: -------------------------------------------------------------------------------- Equity holders of the parent company 241 -713 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Shareholders of the parent company: -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Earnings per share, EUR 0.00 -0.01 -------------------------------------------------------------------------------- Earnings per share, diluted, EUR 0.00 -0.01 -------------------------------------------------------------------------------- Consolidated Statement of Financial Position (EUR 31 Mar 2014 31 Dec 2013 1,000) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Assets -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Non-current assets -------------------------------------------------------------------------------- Goodwill 2,646 2,646 -------------------------------------------------------------------------------- Other intangible assets 14,021 14,174 -------------------------------------------------------------------------------- Tangible assets 1,678 1,629 -------------------------------------------------------------------------------- Investments in associates 661 661 -------------------------------------------------------------------------------- Available-for sale financial assets 87 87 -------------------------------------------------------------------------------- Deferred tax assets 4,652 4,358 -------------------------------------------------------------------------------- Other non-current receivables 509 500 -------------------------------------------------------------------------------- 24,254 24,055 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Current assets -------------------------------------------------------------------------------- Trade and other current receivables 25,872 37,346 -------------------------------------------------------------------------------- Cash and cash equivalents 10,444 6,542 -------------------------------------------------------------------------------- 36,316 43,889 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total assets 60,570 67,944 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Equity and liabilities -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Equity attributable to equity holders of the parent company -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Share capital 2,141 2,141 -------------------------------------------------------------------------------- Fund of invested non-restricted equity 401 401 -------------------------------------------------------------------------------- Translation differences -1,130 -1,219 -------------------------------------------------------------------------------- Retained earnings 26,476 27,600 -------------------------------------------------------------------------------- Total equity 27,888 28,924 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Non-current liabilities -------------------------------------------------------------------------------- Deferred tax liabilities 2,807 2,983 -------------------------------------------------------------------------------- Non-current financial liabilities 3,417 3,483 -------------------------------------------------------------------------------- 6,224 6,466 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Current liabilities -------------------------------------------------------------------------------- Provisions 1,767 1,939 -------------------------------------------------------------------------------- Current financial liabilities 4,265 5,287 -------------------------------------------------------------------------------- Trade and other current liabilities 20,425 25,329 -------------------------------------------------------------------------------- 26,457 32,554 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total liabilities 32,682 39,020 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Total equity and liabilities 60,570 67,944 -------------------------------------------------------------------------------- Consolidated Statement of Cash Flows 1 Jan – 31 1 Jan – 31 (EUR 1,000) Mar 2014 Mar 2013 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Cash flows from operating activities -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Profit/loss for the period 152 -613 -------------------------------------------------------------------------------- Adjustments: -------------------------------------------------------------------------------- Non-cash transactions or items that are not part of 1,268 1,748 cash flows from operating activities -------------------------------------------------------------------------------- Interest and other financial expenses 221 563 -------------------------------------------------------------------------------- Interest income -5 -4 -------------------------------------------------------------------------------- Income taxes 623 703 -------------------------------------------------------------------------------- Change in working capital: -------------------------------------------------------------------------------- Change in trade and other current receivables 11,116 2,850 -------------------------------------------------------------------------------- Change in trade and other current liabilities -4,819 -3,717 -------------------------------------------------------------------------------- Change in provisions -171 -292 -------------------------------------------------------------------------------- Interest and other financial expenses paid -27 -86 -------------------------------------------------------------------------------- Interest received 3 2 -------------------------------------------------------------------------------- Income taxes paid and tax returns received -1,180 -1,110 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Net cash from operating activities 7,181 45 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Cash flows from investing activities -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Proceeds from sale of business operations 200 - -------------------------------------------------------------------------------- Investments in tangible assets -238 -142 -------------------------------------------------------------------------------- Investments in intangible assets - -10 -------------------------------------------------------------------------------- Investments in development projects -1,147 -1,092 -------------------------------------------------------------------------------- Proceeds from sale of intangible assets 2 - -------------------------------------------------------------------------------- Change in other non-current receivables - -15 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Net cash used in investing activities -1,183 -1,259 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Cash flows from financing activities -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Dividends paid -1,073 - -------------------------------------------------------------------------------- Proceeds from borrowings - 2,000 -------------------------------------------------------------------------------- Repayment of borrowings -1,000 -1,004 -------------------------------------------------------------------------------- Lease payments -57 -13 -------------------------------------------------------------------------------- Change in other non-current liabilities -31 - -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Net cash used in financing activities -2,160 982 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Net change in cash and cash equivalents 3,838 -232 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Cash and cash equivalents at the beginning of the 6,542 4,817 period -------------------------------------------------------------------------------- Cash and cash equivalents at the end of the period 10,444 4,515 -------------------------------------------------------------------------------- Change 3,901 -302 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Effects of changes in foreign exchange rates 64 -70 -------------------------------------------------------------------------------- Consolidated Statement of Changes in Equity -------------------------------------------------------------------------------- - Equity attributable to equity holders of the parent company -------------------------------------------------------------------------------- - EUR 1,000 Share Other Translation Retained Total capital reserves differences earnings -------------------------------------------------------------------------------- Equity at 2,141 243 -636 25,208 26,956 31 Dec 2012 -------------------------------------------------------------------------------- Share-based 80 80 compensation -------------------------------------------------------------------------------- Total comprehensive -100 -613 -713 income for the period -------------------------------------------------------------------------------- Equity at 2,141 243 -736 24,675 26,323 31 Mar 2013 -------------------------------------------------------------------------------- Consolidated Statement of Changes in Equity -------------------------------------------------------------------------------- - Equity attributable to equity holders of the parent company -------------------------------------------------------------------------------- - EUR 1,000 Share Other Translation Retained Total capital reserves differences earnings -------------------------------------------------------------------------------- Equity at 2,141 401 -1,219 27,600 28,924 31 Dec 2013 -------------------------------------------------------------------------------- Dividends -1,073 -1,073 -------------------------------------------------------------------------------- Share-based 9 9 compensation -------------------------------------------------------------------------------- Prior year correction * -210 -210 -------------------------------------------------------------------------------- Other changes -3 -3 -------------------------------------------------------------------------------- Total comprehensive 89 152 241 income for the period -------------------------------------------------------------------------------- Equity at 2,141 401 -1,130 26,476 27,888 31 Mar 2014 -------------------------------------------------------------------------------- *Difference in prior year receivables was corrected directly to Retained Earnings during the quarter. Notes 1. Application of new or amended standards and interpretations Comptel has adopted the new or amended standards and interpretations, effective for the financial years beginning on or after 1 January 2014. However those have not had an impact on the consolidated financial statements. 2. Segment information Net sales by segment EUR 1,000 1 Jan – 1 Jan – 31 Mar 2014 31 Mar 2013 ------------------------------------------------ ------------------------------------------------ Europe 6,794 8,354 ------------------------------------------------ Asia-Pacific 5,917 5,650 ------------------------------------------------ Middle East and Africa 3,160 3,526 ------------------------------------------------ Americas 2,151 3,640 ------------------------------------------------ Group total 18,023 21,171 ------------------------------------------------ Operating profit/loss by segment EUR 1,000 1 Jan – 1 Jan – 31 Mar 2014 31 Mar 2013 ---------------------------------------------------------------- ---------------------------------------------------------------- Europe 2,913 3,154 ---------------------------------------------------------------- Asia-Pacific 3,826 2,770 ---------------------------------------------------------------- Middle East and Africa 1,403 1,077 ---------------------------------------------------------------- Americas 863 2,326 ---------------------------------------------------------------- Group unallocated expenses -8,045 -8,285 ---------------------------------------------------------------- Group operating profit/loss total 959 1,042 ---------------------------------------------------------------- Financial income and expenses -184 -952 ---------------------------------------------------------------- Group profit/loss before income taxes 775 90 ---------------------------------------------------------------- 3. Income tax Income tax expense according to the statement of comprehensive income for the period was EUR 623 thousand (EUR 703 thousand). In 2006, the Board of Adjustment of the Tax Office for Major Corporations refused to accept the crediting of taxes withheld at source in taxation of 2004 and 2005. The application process to prevent Comptel’s double taxation is still pending with the Ministry of Finance in Finland. However, the process between the states is very slow and the timing of a change is hard to forecast. The interpretation of tax treaties may result in different views between the countries in question. This could mean that the double taxation will prevail. According to the Board of Adjustment’s decision currently in force, Comptel Corporation has expensed taxes withheld at source amounting to EUR 665 thousand in January - March (EUR 413 thousand). 4. Tangible assets EUR 1,000 1 Jan – 31 Mar 2014 1 Jan – 31 Mar 2013 --------------------------------------------------- --------------------------------------------------- Additions 238 142 --------------------------------------------------- Disposals - -26 --------------------------------------------------- 5. Related party transactions The Comptel Group have a related party relationship with its associate, the Board of Directors, the Executive Board and also with people and companies under Comptel management’s influence. Transactions which have been entered into with related parties are as follows: EUR 1,000 1 Jan – 31 Mar 2014 1 Jan – 31 Mar 2013 --------------------------------------------------------- --------------------------------------------------------- Associate --------------------------------------------------------- Interest income 2 2 --------------------------------------------------------- EUR 1,000 31 Mar 2014 31 Dec 2013 ------------------------------------------------- ------------------------------------------------- Associate ------------------------------------------------- Non-current receivables 108 105 ------------------------------------------------- Remuneration to key management Key management personnel compensation includes the employee benefits of the members of the Board of Directors and the Executive Board. EUR 1,000 1 Jan – 31 Mar 1 Jan – 31 Mar 2014 2013 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Salaries and other short-term employee 323 413 benefits -------------------------------------------------------------------------------- Share-based payments 30 79 -------------------------------------------------------------------------------- Total 353 492 -------------------------------------------------------------------------------- Guarantees and other commitments EUR 1,000 31 Mar 2014 31 Dec 2013 ------------------------------------ ------------------------------------ Guarantees 32 33 ------------------------------------ 6. Commitments Minimum lease payments on non-cancellable office facilities and other operating leases are payable as follows: EUR 1,000 31 Mar 2014 31 Dec 2013 ---------------------------------------------------- ---------------------------------------------------- Less than one year 2,243 2,312 ---------------------------------------------------- Between one and five years 4,181 4,596 ---------------------------------------------------- Total 6,425 6,908 ---------------------------------------------------- The group had no material capital commitments for the purchase of tangible assets at 31 March 2014 and 31 March 2013. 7. Contingent liabilities EUR 1,000 31 Mar 2014 31 Dec 2013 --------------------------------------------- --------------------------------------------- Bank guarantees 1,869 1,674 --------------------------------------------- Corporate mortgages 200 200 --------------------------------------------- EUR 1,000 31 Mar 2014 31 Dec 2013 -------------------------------------------------------------------- -------------------------------------------------------------------- Contingent liabilities on behalf of others -------------------------------------------------------------------- Guarantees 71 72 -------------------------------------------------------------------- 8. Key figures Financial summary 1 Jan - 31 Mar 1 Jan - 31 Mar 2014 2013 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Net sales, EUR 1,000 18,023 21,171 -------------------------------------------------------------------------------- Net sales, change % -14.9 6.2 -------------------------------------------------------------------------------- Operating profit/loss, EUR 1,000 959 1,042 -------------------------------------------------------------------------------- Operating profit/loss, change % 8.0 108.8 -------------------------------------------------------------------------------- Operating profit/loss, as % of net sales 5.3 4.9 -------------------------------------------------------------------------------- Profit/loss before taxes, EUR 1,000 775 90 -------------------------------------------------------------------------------- Profit/loss before taxes, as % of net sales 4.3 0.4 -------------------------------------------------------------------------------- Return on equity, % - - -------------------------------------------------------------------------------- Return on investment, % - - -------------------------------------------------------------------------------- Equity ratio, % 55.4 49.8 -------------------------------------------------------------------------------- Gross investments in tangible and intangible 238 152 assets, EUR 1,0001) -------------------------------------------------------------------------------- Gross investments in tangible and intangible 1.3 0.7 assets, as % of net sales -------------------------------------------------------------------------------- Capitalisations according to IAS 38 to 1,147 1,092 intangible assets, EUR 1,000 -------------------------------------------------------------------------------- Research and development expenditure, EUR 1,000 3,904 4,191 -------------------------------------------------------------------------------- Research and development expenditure, 21.7 19.8 as % of net sales -------------------------------------------------------------------------------- Order backlog, EUR 1,000 42,164 50,061 -------------------------------------------------------------------------------- Average number of employees during the period 683 683 -------------------------------------------------------------------------------- Interest-bearing net liabilities, EUR 1,000 -2,762 5,497 -------------------------------------------------------------------------------- Gearing ratio, % -9.9 20.9 -------------------------------------------------------------------------------- 1) The figure does not include investments in development projects. Per share data 1 Jan – 1 Jan – 31 Mar 2014 31 Mar 2013 ----------------------------------------------------------------------------- ----------------------------------------------------------------------------- Earnings per share (EPS), EUR 0.00 -0.01 ----------------------------------------------------------------------------- EPS diluted, EUR 0.00 -0.01 ----------------------------------------------------------------------------- Equity per share, EUR 0.26 0.25 ----------------------------------------------------------------------------- Dividend per share, EUR - - ----------------------------------------------------------------------------- Dividend per earnings, % - - ----------------------------------------------------------------------------- Effective dividend yield, % - - ----------------------------------------------------------------------------- P/E ratio - - ----------------------------------------------------------------------------- ----------------------------------------------------------------------------- Adjusted number of shares at the end of the period 107,421,270 107,054,810 ----------------------------------------------------------------------------- of which the number of treasury shares 161,219 161,219 ----------------------------------------------------------------------------- Outstanding shares 107,260,051 106,893,591 ----------------------------------------------------------------------------- Adjusted average number of shares during the period 107,260,051 106,863,518 ----------------------------------------------------------------------------- Average number of shares, dilution included 107,260,051 106,863,518 ----------------------------------------------------------------------------- 9. Definition of key figures -------------------------------------------------------------------------------- Operating margin % = Operating profit/loss x100 ------------------------------------ ------------------------------------ Net sales Profit margin (before income taxes) = Profit/loss before taxes x100 % ------------------------------------ ------------------------------------ Net sales Return on equity % (ROE) = Profit/loss x100 ------------------------------------ ------------------------------------ Total equity (average during year) Return on investment % (ROI) = Profit/loss before taxes + x100 financial expenses ------------------------------------ ------------------------------------ Total equity + interest bearing liabilities (average during the year) Equity ratio % = Total equity x100 ------------------------------------ ------------------------------------ Statement of financial position total – advances received Gross investments in tangible and = Gross investments in tangible and x100 intangible assets, as % of net intangible assets sales ------------------------------------ ------------------------------------ Net sales Research and development = Research and development x100 expenditure, as % of net sales expenditure ------------------------------------ ------------------------------------ Net sales Gearing ratio % = Interest-bearing liabilities – x100 cash and cash equivalents ------------------------------------ ------------------------------------ Total equity Earnings per share (EPS) = Profit/loss for the financial year attributable to equity shareholders ------------------------------------ ------------------------------------ Average number of outstanding shares for the financial year Equity per share = Equity attributable to the equity holders of the parent company ------------------------------------ ------------------------------------ Adjusted number of shares at the end of period Dividend per share = Dividend ------------------------------------ ------------------------------------ Adjusted number of shares at the end of period Dividend per earnings % = Dividend per share x100 ------------------------------------ ------------------------------------ Earnings per share (EPS) Effective dividend yield % = Dividend per share x100 ------------------------------------ ------------------------------------ Share closing price at end of period P/E ratio = Share closing price at end of period ------------------------------------ ------------------------------------ Earnings per share (EPS) -------------------------------------------------------------------------------- Schedule for Comptel’s interim reports in 2014: January-June 29.7.2014 January-September 21.10.2014 COMPTEL CORPORATION Board of Directors Additional information: Mr Juhani Hintikka, President and CEO, tel. +358 9 700 1131 Mr Tom Jansson, CFO, tel. +358 40 700 1849 Distribution: NASDAQ OMX Helsinki Major media www.comptel.com Copyright © 2014 OMX AB (publ). 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