INCAP GROUP INTERIM REPORT JANUARY-SEPTEMBER 2010: SAVINGS OF STRUCTURAL CHANGE BECAME VISIBLE IN THIRD-QUARTER RESULTS

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Incap Corporation                Stock Exchange Release                3 November 2010 at 8:30 a.m.        

INCAP GROUP INTERIM REPORT JANUARY-SEPTEMBER 2010: SAVINGS OF STRUCTURAL CHANGE BECAME VISIBLE IN THIRD-QUARTER RESULTS

  • revenue in January-September stood at EUR 43.0 million (1-9/2009: EUR 52.0 million) 

  • operating profit (EBIT) in January-September was EUR -3.2 million (EUR -1.3 million)  

  • earnings per share were EUR -0.33 (EUR -0.23). 

  • profitability was burdened by the decline in revenue and the structural change – operating profit (EBIT), however, improved steadily in each three quarters  

  • centralisation of European electronics manufacturing in one unit has progressed according to schedule, and savings due to the structural change began to take effect in the third quarter  

  • the directed share issues in April and September were subscribed in full, and approx. EUR 4.1 million was recognised in the reserve for invested non-restricted equity 

  • Incap changes the guidance and estimates that the Group’s full-year revenue for 2010 will be approximately EUR 59-62 million and the operating profit (EBIT) for 2010 approximately EUR -2.7 to -3.5 million.  


This unaudited interim report has been prepared in accordance with international financial reporting standards (IFRS). Unless otherwise stated, the comparison figures refer to the same period in the previous year.

Sami Mykkänen, the President and CEO of Incap Group: “After a slow first quarter, the demand for Incap’s services picked up markedly in the second quarter, yet decreased again in the third quarter. The decrease in revenue was attributable also to the delay of deliveries mainly due to the shortage of materials. The order book and outlook have improved, particularly in the energy efficiency industry, and we believe this will already have an impact on our revenue in the fourth quarter.

The merger of the operations of our two electronics factories was completed in the autumn. In order to ensure the success of product transfers from one factory to another, we have had to maintain partly overlapping resources. This has made it impossible to fully adjust operations to match the decrease in revenue. However, the cost savings targeted with the structural change began to have an impact on the result from the third quarter onward.

The structural change in production will be completed by year-end, at which time we expect to transfer the sheet-metal business of our Helsinki plant to Lankapaja Corporation in accordance with the previously signed letter of intent. Once the transaction is carried out, we will be able to focus all of our resources on the core areas in our strategy and specialise in the final assembly of end products at our Helsinki plant, where we can offer the greatest added value to our customers.

The directed share issues carried out in the spring and autumn succeeded well and strengthened Incap’s capital and financing structure in line with the target. Finnish Industry Investment Ltd. is most welcome as one of the major shareholders and gives certain stability to the future development of Incap.”

Revenue and earnings in July-September 2010
The third-quarter revenue amounted to EUR 13.7 million, representing a fall of some 17% from the corresponding period last year. The heaviest decrease occurred in the Well-being sector products, and the demand for slot machines in particular declined significantly compared with the corresponding period last year. Problems in the availability of materials also delayed deliveries until the end of the year.

The third-quarter operating profit was EUR -0.5 million (7-9/2009: EUR -0.3 million). This is clearly better than in the previous quarters in 2010, yet somewhat weaker than in the corresponding period last year. The operating result includes a non-recurring provision of approximately EUR 0.7 million for the closure of the Vuokatti plant.

Net profit for the third quarter amounted to EUR -1.1 million (EUR -0.8 million). Earnings per share were EUR -0.08 (EUR -0.07).

 

Quarterly comparison
(EUR thousands)
7-9/
2010
4-6/
2010
1-3/
2010
10-12/
2009
7-9/
2009
4-6/
2009
1-3/
2009
 

Revenue
 

13,741
 

15,836
 

13,436
 

17,746
 

16,613
 

16,928
 

18,479
 

Operating profit/loss (EBIT)
     
 

-471
 

-1,097
 

-1,670
 

-3,666

 
 

-314
 

-472
 

-518
Net profit/loss

 
-1067 -1,490 -1,899 -3,926 -810 -1,035 -949
Earnings per share, EUR -0.08 -0.12 -0.16 -0.32

 
-0.07 -0.08 -0.08

 

 

Revenue and earnings in January-September 2010
Revenue in January-September stood at EUR 43.0 million, which was 17% lower than in the comparable period in 2009 (1-9/2009: EUR 52.0 million). The trend in revenue was affected especially in the beginning of the year by the decline in demand due to the general economic uncertainty. The longer delivery times for raw materials caused delays in deliveries to customers, which decreased the revenue in the third quarter in particular.

The demand for energy efficiency products developed favourably during the review period, and the delivery volume of rotor components used in large motors increased in particular. The demand for design services remained at a good level, and resources in the Bangalore design unit were increased as planned.

Profitability dropped from last year’s comparable period. Operating profit amounted to EUR -3.2 million (EUR -1.3 million), representing -7.5% of revenue (-2.5%). Profitability was mainly affected by the decline in revenue. The cost structure could not be adjusted to fully match the lower revenue, since the merger of two electronics factories, related to the Group’s structural change, required the maintenance of partly overlapping resources. However, the cost savings targeted with the structural change began to have an impact on the result from August onwards.

The availability of certain materials and components weakened clearly, raising market prices and increasing logistics costs.

Net profit for the period totalled EUR -4.5 million (EUR -2.8 million). Net finance costs were decreased by approximately EUR 0.3 million as a result of the Indian rupee strengthening. Depreciation stood at EUR 2.2 million (EUR 2.1 million).

Return on investment was -15% (-5%) and return on equity was -95% (-32%). Earnings per share were EUR -0.33 (EUR -0.23), while equity per share stood at EUR 0.33 (EUR 0.86).

The Group’s balance sheet total was EUR 41.9 million. The Group’s equity at the close of the period was EUR 6.1 million (EUR 10.4 million). Liabilities totalled EUR 35.8 million (EUR 32.0 million), of which EUR 21.9 million (EUR 19.3 million) comprised interest-bearing liabilities. Of liabilities, current liabilities took up EUR 25.6 million (20.6 million). The parent company’s equity totalled EUR 6.1 million, representing 29.9% of the share capital.

The Group’s equity ratio was 14.6% (24.6%). Interest-bearing net liabilities totalled EUR 20.7 million (EUR 18.1 million) and the gearing ratio was 338% (174%).

Business development in January-September 2010
In May, Incap and ABB renewed the supply contract on the rotor components of electrical motors and generators, which signifies the extension of the long-term cooperation between the companies.

To boost new customer acquisition in the company’s strategic focus areas, Incap signed an agreement in June on participating in a venture capital fund managed by Cleantech Invest Oy. The fund invests in cleantech growth companies, which are Incap’s potential customers.

In September, Incap Corporation and Lankapaja Corporation signed a letter of intent regarding the sale of the sheet-metal business of Incap’s Helsinki plant. The planned sale of business is consistent with Incap’s strategy and, if concluded, will enable the specialisation of the Helsinki plant into a final assembly plant. The targeted date for the transfer of the sheet-metal plant’s personnel and production equipment to Lankapaja is 1 January 2011.

A new eccentric press production line was procured for the Vaasa plant during the review period. The production line primarily serves Incap’s customers operating in the fields of wind power, energy production and power distribution. It can be used to fabricate large generator and electric motor components and stressed-skin structures for various devices used in the energy industry.

Financing and cash flow
The Group’s quick ratio was 0.5 (0.6) and the current ratio 1.0 (1.3). Cash flow from operating activities was EUR -3.9 million (EUR 1.9 million) and the change in cash and cash equivalents showed an increase of EUR 0.7 million (an increase of EUR 0.5 million).

Capital expenditures
Cash flow from investing activities was EUR 0.06 million positive (EUR -0.8 million) and included the sale of production equipment based on a customer contract. A new eccentric press production line was procured for the Vaasa plant during the review period. The production line will be brought online during the autumn.

Personnel and organisation
At the end of the review period, Incap Group employed 798 people, of whom 86 were on term of notice with no obligation to work. The average number of personnel was 784 (743). The number of employees grew in India and Estonia. At the end of the review period, 40% of the personnel worked in India, 36% in Finland and 24% in Estonia.

Operations were adjusted throughout the company’s operations during the review period. Cooperation negotiations concerning the entire personnel in Finland were launched in August and the negotiations resulted in temporary layoffs varying from 11 days to three months, scheduled to take place by the end of the year.

Owing to the merger of the Finnish and Estonian electronics production, the head count at the Vuokatti plant has gradually decreased as the periods of notice have expired. At the end of the review period, the unit employed 103 people on term of notice, of whom 17 were subject to the obligation to work.

Pekka Laitila, who earlier managed Incap’s electronics sourcing, was appointed in July as the new Director of Sourcing and Materials for the Group. At the same time, the sourcing organisation was reformed so that the responsibilities of the sourcing director also cover the purchasing of the Finnish and Estonian units, in addition to Group-level sourcing. The objective is to improve the efficiency of the inventory management and to develop purchase operations so that all plants are controlled through a single operating model.

Options
The criteria set for the option programme targeting the President and CEO, and the other management team, in 2009 were not met in terms of the 2009 operating profit and return on working capital. In March 2010, the Board of Directors changed the option programme’s distribution principles, emphasising the fulfilment of each personal objective, and distributed 25,000 B-options to the President and CEO, and a total of 100,000 C-options to the management team members.

The subscription period of B options in the 2004 option programme ended on 30 April 2010, and no option rights were used for subscriptions.

Annual General Meeting
Incap Corporation’s Annual General Meeting was held in Helsinki on 13 April 2010. The Annual General Meeting confirmed the consolidated financial statements over the financial period ended on 31 December 2009 and decided, in accordance with the Board of Director’s proposal, that no dividend would be paid and the loss for the financial period (EUR 3,825,364.79) be left in equity.

Kari Häyrinen, Kalevi Laurila, Susanna Miekk-oja and Lassi Noponen were re-elected as Board members, and Raimo Helasmäki was elected as a new member. The Board elected from among its members Kalevi Laurila as Chairman and Susanna Miekk-oja as Deputy Chairman. Ernst & Young Oy, Authorised Public Accountants, was re-elected as the company’s auditor.

The Annual General Meeting decided to amend the Articles of Association so that the notice of meeting is to be sent no later than 21 days before the AGM.

The Annual General Meeting authorised the Board to decide upon an increase in share capital by one or more new issues within one year from the Annual General Meeting so that the aggregate number of shares subscribed on the basis of the authorisation will be no more than 1,500,000 shares. This Board authorisation is still valid.

Directed share issue in April 2010
The Annual General Meeting held on 13 April 2010 decided, according to the Board of Directors’ proposal, upon increasing the share capital through a directed share issue where a maximum of 2,000,000 new shares were, deviating from the pre-emptive right of the current shareholders, offered to the company’s Board of Directors, President and CEO, management team members, and those of the current shareholders who, at the beginning of the placement on 13 April 2010, held at least 100,000 shares in the company. Before the share issue, new shares accounted for 16.4% of all of the company’s shares, and for 14.1% after it.

The subscription price of the shares was EUR 0.64, which was the volume-weighted average price of the company’s share on the NASDAQ OMX Helsinki Ltd in March 2010.

The Board of Directors approved the subscriptions on 3 May 2010. Seven of the biggest shareholders subscribed for a total of 1,812,200 shares, which represented 90.6% of all the new shares. The Board of Directors, President and CEO, and management team members subscribed for a total of 9.4% of the new shares.

In order to have the new shares admitted for public trading on the NASDAQ OMX Helsinki, Incap published a prospectus on 29 June 2010, and trading in the new shares started on 30 June 2010.

Following the registration of the new shares, Incap Corporation had a total of 14,180,880 shares.

Directed share issue in September 2010
Incap Corporation’s Extraordinary General Meeting decided on 9 September 2010 to carry out a directed share issue where a minimum of 4,000,000 and a maximum of 4,500,000 new shares were, deviating from the pre-emptive right of shareholders, offered to professional investors, the Board of Directors, President and CEO, the management team members, and those of the current shareholders who held at least 100,000 shares on 14 September 2010.

The subscription price was EUR 0.64, which was the volume-weighted average price of the company’s share on the NASDAQ OMX Helsinki in August 2010. The subscription period was from 20 to 28 September 2010, and the subscription price was to be paid by 28 September 2010.

Subscriptions were made for the maximum number of shares, a total of 4,500,000 shares. The new shares issues and subscribed for represent approximately 24.1% of all shares and voting rights after the share issue.

Incap drew up a prospectus in order to have the new shares admitted for public trading on the Helsinki Exchanges. The prospectus will be published estimated in the middle of November.

Following the registration of the new shares, Incap Corporation has a total of 18,680,880 shares.

Announcement in accordance with Chapter 2, section 10, of the Securities Market Act on a change in holdings
After the registration of the shares subscribed for in the directed share issue in April, Göran Sundholm’s holdings in Incap exceeded the notification limit of 5%. Göran Sundholm subscribed for a total of 500,000 new shares, after which he held a total of 1,123,263 Incap shares on 30 June 2010, which represents 7.9% of the company’s shares and votes.

In Sampo Group, the holdings of Mandatum Life Insurance Company Ltd. of Incap Corporation’s shares was 5% on 20 September 2010, after which Mandatum Life Insurance held a total of 1,000,000 shares or 7.1% of the share capital and votes.

The holdings of Oy Etra Invest Ab of Incap Corporation’s shares decreased below 25%. After 20 September 2010, Oy Etra Invest Ab held a total of 3,139.801 shares, or 22.1% of the share capital and votes.

After the subscriptions of the directed share issue in September and the registration of the new shares of Incap, the holdings of Finnish Industry Investment Ltd. exceeded 10%. Following the registration of the new shares, Finnish Industry Investment Ltd. holds 2,185,509 shares or 11.7% of the share capital and votes.

After the subscriptions of the directed share issue in September and the registration of the new shares of Incap, the holdings of JMC Finance Oy decreased below 15%. Following the registration of the new shares, the company holds 2,188,000 shares or 11.7% of the share capital and votes.

According to the announcement made by OP Pohjola Group Central Cooperative, the combined holdings of OP Pohjola Group Central Cooperative and entities controlled by it as well as its subsidiaries and investment funds administered by such subsidiaries, based on Incap’s convertible promissory notes, will decrease below 5% after the registration of the new shares, if the subscription right based on the convertible promissory notes is realised. In this case the combined holdings will total 760,000 shares or 4.1% of Incap Corporation’s share capital and votes.

Shares and shareholders
Incap Corporation has one series of shares, and the number of shares at the end of the period was 14,180,880. After the registration of the new shares subscribed for in September, Incap Corporation will have 16,680,880 shares.

During the period, the share price varied between EUR 0.57 and EUR 0.75 (EUR 0.43 and 0.99). The closing price for the period was EUR 0.65 (EUR 0.69). During the review period, the trading volume was 35.6% of outstanding shares (19.7%).

At the end of the period, the company had 1,129 shareholders (1,145). Foreign or nominee-registered owners held 0.8% (2.8%) of all shares. The company’s market capitalisation on 30 September 2010 was EUR 9.2 million (EUR 8.4 million). The company does not own any of its own shares.

Short-term risks and factors of uncertainty concerning operations
The risks and uncertainty factors related to Incap’s operations are described in more detail in the prospectus published on 29 June 2010. The prospectus is available in Finnish on the company’s website at www.incap.fi.

Fluctuations in the global economy and customer sectors affect Incap’s demand and financial position. The recession has also had an impact on Incap’s revenue and profitability. The time and speed of recovery of the global economy will affect the company’s future revenue and, as a result, its profitability. To date, the recession has not had a negative effect on the solvency of Incap’s customers.

Quality, manufacturing and distribution difficulties of material suppliers, as well as changes in the market prices of materials influence Incap’s delivery capacity and production costs. Most material prices are linked to customer agreements, which reduce material price risks. Changes in material prices will be transferred over to customers’ prices, although with a delay. The availability of materials is considered to be the most significant material-related risk in the near future. This may also lead to a rise in the level of costs.

The general financial market situation affects the financing of Incap. The acquisition of the Indian business unit in 2007 increased the Group’s external financing and financial risks. The financing basis of Indian operations was boosted in 2009 by an equity investment that Finnfund made in Incap’s Indian subsidiary.

On 27 September 2010, Incap Corporation and a financier signed a new financing agreement which will remain valid until 31 May 2012. The new financing agreement covers the loans related to the financing of the Indian company (totalling approximately EUR 5.6 million) and the parent company’s credit line (EUR 1 million) and a factoring credit line, of which EUR 5.1 million was in use on 30 September 2010.

The covenants related to the new agreement are as follows:

  Equity ratio net IBD/EBITDA Net capital expenditure
31 December 2010 7.4% 20.6 EUR 1 million/12 months
30 June 2011 11.6% 4.1 EUR 1 million/12 months
31 December 2011 onwards 10.9% 5.6 EUR 1 million/12 months

 

When calculating the covenants, the factoring credit line in use is not included. The equity ratio on 30 September 2010 was 14.6% and net IBD/EBITDA was -3.9. The covenants will be next reviewed on 31 December 2010 and then every six months. According to the current forecast, it is likely that the net IBD/EBITDA covenant will not be met on 31 December 2010 but will require negotiations with the financier.

Incap’s financial position will continue to be influenced by the trends in the general financial market and the company’s future earnings development. To strengthen its financial position, the company carried out private placements in spring and autumn 2010, from which a total of EUR 4.1 million were recognised in the reserve for invested non-restricted equity. The goal is to also ensure the company’s liquidity through efficient administration of working capital and negotiations concerning different forms of financing.

Outlook for the rest of 2010
Incap’s estimates on future business development are based on its customers’ forecasts and the company’s own assessments.

By the end of 2010, Incap has implemented most of the structural change, which has included the focusing on the selected customer segments, the reduction of manufacturing locations, the shift of operational focus to Asia and the enhancement of design services. The cost savings targeted with the merger of the two electronics plants began to show in the result from August 2010 onwards, and their impact will become more marked towards the end of the year.

Incap expects the Group’s fourth-quarter revenue to be higher than in the previous quarters of 2010. A turn is also expected in the profit development, and the fourth-quarter operating profit is expected to be positive or at least at the same level as in the third quarter. Incap estimates that the company’s full-year revenue for 2010 will be approximately EUR 59-62 million and the operating profit (EBIT) for 2010 approximately EUR -2.7 to -3.5 million.

In its earlier guidance given in the January-June interim report on 4 August 2010, Incap estimated that the company’s revenue in 2010 will be smaller or at the same level as 2009, when it was EUR 70 million. At that time, profitability was expected to improve in the third quarter, and operating profit (EBIT) was expected to be positive in the latter half of 2010. The Group’s full-year operating profit was expected to be in the red, yet to be clearly better than in 2009 when it was EUR -5.0 million.

INCAP CORPORATION
Board of Directors

For additional information, please contact:
Sami Mykkänen, President and CEO, tel. +358 40 559 9047
Eeva Vaajoensuu, Chief Financial Officer, tel. +358 40 763 6570
Hannele Pöllä, Director of Communications and Human Resources, tel. +358 40 504 8296

DISTRIBUTION
NASDAQ OMX Helsinki Oy
Principal media
‘The company’s website: www.incap.fi

PRESS CONFERENCE
Incap will arrange a conference for the press and financial analysts on 3 November 2010 at 10:00 a.m. at the World Trade Center, Helsinki, in Meeting Room 4 on the 2nd floor at Aleksanterinkatu 17, FI-00100 Helsinki.

ANNEXES
1 Consolidated Income Statement
2 Consolidated Balance Sheet
3 Consolidated Cash Flow Statement
4 Consolidated Statement of Changes in Equity
5 Group Key Figures and Contingent Liabilities
6 Quarterly Key Figures

INCAP IN BRIEF
Incap Corporation is an internationally operating contract manufacturer whose comprehensive services cover the entire lifecycle of electromechanical products from design and manufacture to maintenance services. Incap’s customers are leading equipment suppliers in energy-efficiency and well-being technology, for which the company produces competitiveness as a strategic partner. Incap has operations in Finland, Estonia and India. The Group’s revenue in 2009 amounted to around EUR 70 million, and the company currently employs approximately 800 people. Incap’s shares are listed on the NASDAQ OMX Helsinki Oy. For additional information, please contact:  www.incap.fi.


Annex 1

 

CONSOLIDATED INCOME STATEMENT        
(EUR thousands, unaudited) 1-9/2010 1-9/2009 Change % 1-12/2009
         
REVENUE  

43,013
52,021 -17  

69,767
Work performed by the enterprise and capitalised        
Change in inventories of finished goods and        
work in progress 472 -301 -257 -1,499
Other operating income 296 281 5 342
Raw materials and consumables used 29,887 34,050 -12 45,654
Personnel expenses 9,857 10,725 -8 16,132
Depreciation and amortisation 2,177 2,146 1 2,869
Other operating expenses 5,097 6,383 -20 8,924
OPERATING PROFIT/LOSS -3,238 -1,304 148 -,4,970
Financing income and expenses -1,219 -1,488 -18 -1,780
PROFIT/LOSS BEFORE TAX -4,456 -2,792 60 -6,750
Income tax expense 0 -3 -100 29
PROFIT/LOSS FOR THE PERIOD -4,456 -2,795 59 -6,721
         
Earnings per share -0.33 -0.23 43 -0.55
Options have no dilutive effect        
in accounting periods 2009 and 2010        

 

OTHER COMPREHENSIVE INCOME 1-9/2010 1-9/2009 Change % 1-12/2009
         
PROFIT/LOSS FOR THE PERIOD -4,456 -2,795 59 -6,721
         
OTHER COMPREHENSIVE INCOME:        
Translation differences from foreign units 8 20 -59 19
Other comprehensive income, net 8 20 -59 19
         
TOTAL COMPREHENSIVE INCOME -4,448 -2,775 60 -6,702
         
Attributable to:        
Shareholders of the parent company -4,448 -2,775 60 -6,702
Minority interest       0


Annex 2

 

CONSOLIDATED BALANCE SHEET        
(EUR thousands, unaudited) 30 Sept. 2010 30 Sept. 2009  

Change %
31 Dec. 2009
         
ASSETS        
         
NON-CURRENT ASSETS        
Property, plant and equipment 8,403 10,225 -18 10,247
Goodwill 1,029 954 8 977
Other intangible assets 785 1,069 -27 1,008
Other financial assets 314 14 2,130 14
Deferred tax assets 4,199 4,136 2 4,156
TOTAL NON-CURRENT ASSETS 14,731 16,398 -10 16,402
         
CURRENT ASSETS        
Inventories 13,273 14,675 -10 11,381
Trade and other receivables 12,645 10,262 23 11,261
Cash and cash equivalents 1,227 1,136 8 661
TOTAL CURRENT ASSETS 27,145 26,074 4 23,303
         
TOTAL ASSETS 41,876 42,472 -1 39,706
         
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT        
COMPANY        
Share capital 20,487 20,487 0 20,487
Share premium account 44 44 0 44
Reserve for invested non-restricted equity 4,131     0
Exchange differences -451 -458 -1 -459
Retained earnings -18,093 -9,644 88 -13,629
TOTAL EQUITY 6,119 10,430 -41 6,443
         
NON-CURRENT LIABILITIES        
Deferred tax liabilities 70 99 -29 70
Interest-bearing loans and borrowings 10,123 11,363 -11 10,999
NON-CURRENT LIABILITIES 10,193 11,463 -11 11,069
         
CURRENT LIABILITIES        
Trade and other payables 13,772 12,678 8 11,925
Current interest-bearing loans and borrowings 11,792 7,901 49 10,269
CURRENT LIABILITIES 25,565 20,579 24 22,194
         
TOTAL EQUITY AND LIABILITIES 41,876 42,472 -1 39,706
         

 

Annex 3

 

CONSOLIDATED CASH FLOW STATEMENT 1-9/2010  

1-9/2009
1-12/2009
(EUR thousands, unaudited)      
         
Cash flow from operating activities      
Net income -3,238 -1,304 -4,970
Adjustments to operating profit 532 2,162 4,342
Change in working capital 93 2,688 2,929
Interest paid -1,279 -1,642 -1,812
Interest received 12 32 40
Cash flow from operating activities -3,880 1,936 529
       
Cash flow from investing activities      
Capital expenditure on tangible and      
intangible assets -275 -961 -1,064
Proceeds from sale of tangible      
and intangible assets 501 177 17
Other investments -159 0 0
Loans granted -7 -8 -9
Shares of subsidiaries sold 0 0  
Repayments of loan receivables 0 2 2
Cash flow from investing activities 60 -790 -1,054
       
Cash flow from financing activities      
Private placement 4,131    
Drawdown of loans 1,811 2,135 5,683
Repayments of borrowings -547 -1,896 -3,868
Repayments of obligations under finance leases -871 -886 -1,255
Cash flow from financing activities 4,524 -647 560
       
Change in cash and cash equivalents 704 499 35
Cash and cash equivalents at beginning of period 661 641 641
Effect of changes in exchange rates -117 -7 -17
Changes in fair value (cash and cash equivalents) -21 3 2
Cash and cash equivalents at end of period 1,227 1,136 661
       

 

Annex 4

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(EUR thousands, unaudited)
           
             
             
  Share capital Share premium account Reserve for invested non-restricted equity Exchange differences Retained
earnings
Total
             
Equity on 1 Jan. 2009 20,487 44 0 -478 -6,864 13,189
Change in exchange differences       20   20
Options and share-based compensation         15 15
Net income and losses recognised       20 15 35
directly in equity            
             
Net profit/loss         -2,795 -2,795
Total income and losses       20 -2,780 -2,760
             
Equity on 30 Sept. 2009 20,487 44 0 -458 -9,644 10,430
             
Equity on 1 January 2010 20,487 44 0 -459 -13,629 6,443
Share premium     4,160     4,160
Transaction costs for equity      

-29
    -29
Change in exchange differences       8   8
Options and share-based compensation         -7 -7
Other changes            
Net income and losses recognised            
directly in equity     4,131 8 -7 4,132
Profit or loss for the period         -4,456 -4,456
Total income and losses       8 -4,464 -325
             
Equity on 30 Sept. 2010 20,487 44 4,131 -451 -18,093 6,119

 

Annex 5

GROUP KEY FIGURES AND CONTINGENT LIABILITIES 30 Sept. 2010  

 

30 Sept. 2009
31 Dec. 2009
       
Revenue, EUR million 43.0 52.0 69.8
Operating profit, EUR million -3.2 -1.3 -5.0
  % of revenue -7.5 -2.5 -7.1
Profit before taxes, EUR million -4.5 -2.8 -6.7
  % of revenue -10.4 -5.4 -9.7
Return on investment (ROI), % -14.7 -5.3 -15.9
Return on equity (ROE), % -94.6 -31.6 -68.5
Equity ratio, % 14.6 24.6 16.2
Gearing, % 338.1 173.8 319.8
Net debt, EUR millions 23.1 20.6 21.3
Net interest-bearing debt, EUR millions 20.7 18.1 20.6
Average number of shares during the report      
period, adjusted for share issues 13,334,726 12,180,880 12,180,880
Earnings per share (EPS), euro -0.33 -0.23 -0.55
Equity per share, euro 0.33 0.86 0.53
Investments, EUR million 0.3 1 1.1
  % of revenue 0.6 1.9 1.5
Average number of employees 784 743 751
       
CONTINGENT LIABILITIES, EUR millions      
FOR OWN LIABILITIES      
Mortgages 12.0 12.0 12.0
Other liabilities 2.6 6.3 4.6
       
Nominal value of currency options EUR thousands 708.5 460.6 0
Fair values of currency options, EUR thousands -40.5 -12.4 0

 

Annex 6

QUARTERLY KEY FIGURES 7-9/
2010
4-6/
2010
1-3/
2010
10-12/
2009
7-9/
2009
4-6/
2009
1-3/
2009
               
Revenue,
EUR million
13.7 15.8 13.4 17.7 16.6 16.9 18.5
Operating profit,
EUR million
-0.5 -1.1 -1.7 -3.7 -0.3 -0.5 -0.5
  % of revenue -3.4 -6.9 -12.4 -20.7 -1.9 -2.8 -2.8
Profit before taxes,
EUR million
-1.1 -1.5 -1.9 -4 -0.8 -1.0 -0.9
  % of revenue -7.8 -9.4 -14.1 -22.3 -4.9 -6.1 -5.1
Return on
investment
(ROI), %
-6.8 -111.3 -21.5 -47.3 -4 -2.1 -4.9
Return on equity
(ROE), %
-68 -14.6 -138.3 -160 -27.5 -33.9 -29.8
Equity ratio, % 14.6 10.1 11.1 16.2 24.6 26.4 27.4
Gearing, % 338.1 523.1 477.3 319.8 173.8 164.9 151.1
Net debt,
EUR millions
23.1 24.7 24.4 21.3 20.6 19.7 19.6
Net interest-
bearing debt,
EUR millions
20.7 22.3 21.7 20.6 18.1 18.6 18.6
Average number
of share issue-
adjusted shares
during the
financial period
13,334,
726
12,854,
913
12,180,
880
12,180,
880
12,180,
880
12,180,
880
12,180,
880
Earnings per
share (EPS), euro
-0.08 -0.12 -0.16 -0.32 -0.07 -0.08 -0.08
Equity per share,
euro
0.3 0.3 0.37 0.53 0.86 0.92 1.01
Investments,
EUR million
0.1 0.1 0.1 0.1 0.4 0.5 0.1
  % of revenue 1.1 0.4 0.4 0.6 2.2 2.9 0.6
Average number
of employees
787 791 734 776 770 732 728