Tekla Corporation Interim report November
3, 2010 at 9:00 a.m.
Tekla Corporation's Interim Report January 1 - September 30, 2010:
Favorable development continues
Net sales of Tekla Group for January-September 2010 totaled 40.94 (35.78)
million euros, increasing by 14.4%. The operating result was 6.89 (4.61) million
euros, 16.8% (12.9%) of net sales. Earnings per share were 0.24 (0.16) euros.
Net sales for the third quarter amounted to 13.62 (11.73) million euros,
increasing by 16.1%. The operating result for the quarter was 3.31 (2.39)
million euros, or 24.3% (20.4%) of net sales.
Ari Kohonen, President and CEO, comments on the reporting period:
- Net sales and operating result for the third quarter increased clearly; in
other words, the favorable trend continued. The development of the entire
reporting period was also positive.
- Our main business area, Building & Construction, increased its net sales by
nearly 17% during the reporting period, and its operating result was
considerably better than in the comparison period in 2009. Also, the Q3 net
sales increased. The growth of license sales remained at the same level as
during the first two quarters. The good development of maintenance sales
continued, increasing on the previous year.
- The development by market area remained similar to the second quarter. The
Nordic countries, the Middle East and India were still the most successful.
Sales also picked up in several Western European countries. The United States
continued as Tekla's largest individual market in January-September, but sales
there remained at the same level as before.
- Net sales of the Infra & Energy business area increased by approximately 8
percent during the reporting period, but its operating result decreased
slightly. In the last quarter net sales and operating result are estimated to
increase.
- The construction industry is moving to a model-based way of working, and the
expansion of our product offering will continue. In accordance with accounting
regulations, 0.5 million euros of R&D expenses have been capitalized during the
reporting period in connection with longer-term development of new technology
and clearly novel customer offering.
- The number of personnel increased by 14 during the third quarter. Since the
beginning of the year, the number of personnel has increased by 21 employees. We
have increased recruitment in order to be able to utilize the market potential
in sight.
The Board of Directors does not change its full-year net sales and result
forecast. Net sales are estimated to increase by approximately 15% on the year
before and the operating result percentage to be 15 to 20 percent.
- - -
Tekla will organize an information meeting for analysts and media at WTC
Helsinki (meeting room Marski), Aleksanterinkatu 17, on November 3, 2010 at
12:30 a.m. - 1:30 p.m. A conference call in English will take place on the same
day starting at 3:00 p.m. Finnish time. The telephone number is
+358 9 231 44 877, code: 160305#.
- - -
Tekla Corporation drives the evolution of digital information models with its
software, providing a growing competitive advantage to customers in the
construction and infrastructure industries.
Tekla's net sales for 2009 were 50 million euros and operating result nearly 7
million euros. International operations accounted for over 80% of net sales.
Tekla has customers in almost 100 countries, offices in 15 countries and a
worldwide partner network. Tekla Group currently employs nearly 500 people, of
whom almost 200 work outside of the headquarters in Finland. Tekla was
established in 1966, and is one of the longest-operating Finnish software
companies. www.tekla.com
- - -
NET SALES AND PROFITABILITY
* Net sales of Tekla Group for January-September 2010 were 40.94 (35.78 in
January-September 2009) million euros.
* Net sales increased by 14.4%.
* Operating result was 6.89 (4.61) million euros.
* Operating result percentage was 16.8 (12.9).
* Earnings per share were 0.24 (0.16) euros.
* Return on investment was 32.0 (22.8) percent.
* Return on equity was 23.9 (15.9) percent.
FINANCIAL POSITION
* Cash flows from operating activities totaled 8.66 (6.43) million euros.
* Liquid assets amounted to 29.09 (26.18) million euros on September 30. The
assets have been invested in money market instruments with very low risk. Liquid
assets amounted to 26.65 (26.30) million euros on December 31, 2009.
* Equity ratio was 68.8 (72.4) percent.
* Interest-bearing debts were 0.14 (0.12) million euros.
* Changes in exchange rates had such an effect that the weakening of the euro
against several key invoicing currencies had a slightly positive effect on net
sales and operating result. The effect was seen in the second and third
quarters.
OTHER KEY FIGURES
* International operations accounted for 80% (81%) of net sales.
* Personnel averaged 456 (457) for January-September.
* At the end of September, the number of personnel including part-time staff was
487 (467).
* At the beginning of the year, the number of personnel including part-time
staff was 466 (464).
* Equity per share was 1.39 (1.26) euros.
* On the last trading day of September, trading closed at 8.25 (7.00) euros.
* Gross investments were 2.88 (1.47) million euros.
* 0.5 (0) million euros of research and product development expenses were
capitalized. No corresponding projects have taken place previously
BUSINESS AREAS
NET SALES
Q1-3/ Q1-3/ Q1-4/
Million euros 2010 2009 Change 2009 Q3/2010 Q3/2009
----------------------------------------------------------------
Building & Construction 30.87 26.44 4.43 36.34 10.68 8.98
Infra & Energy 10.11 9.39 0.72 13.80 2.95 2.76
Sales between segments -0.04 -0.05 0.01 -0.07 -0.01 -0.01
----------------------------------------------------------------
Total 40.94 35.78 5.16 50.07 13.62 11.73
OPERATING RESULT
Q1-3/ Q1-3/ Q1-4/
Million euros 2010 2009 Change 2009 Q3/2010 Q3/2009
----------------------------------------------------------------
Building & Construction 5.97 3.67 2.30 4.72 3.05 2.19
Infra & Energy 0.89 1.13 -0.24 2.08 0.23 0.39
Others 0.03 -0.19 0.22 0.01 0.03 -0.19
----------------------------------------------------------------
Total 6.89 4.61 2.28 6.81 3.31 2.39
Building & Construction
Tekla's Building & Construction business area (B&C) develops and markets the
Tekla Structures software product designed for Building Information Modeling
(BIM). The software offers open integration with other programs and models
imported from them, supporting all the phases of the construction process Tekla
Structures is a comprehensive solution for structural engineering, design and
production of steel structures and precast units, reinforced concrete detailing
as well as site and construction management.
Tekla's position as a supplier of 3D modeling software is strong and the number
of users is increasing despite the building industry's challenging situation.
Customers in the building industry are seeking tools that make their operations
more efficient, which is what Tekla's products are. Information modeling is
gaining a stronger foothold in structural design and other stages of the
building process. The benefits of information modeling are seen more clearly in
site management in particular.
Demand has fluctuated strongly in license-based sales. Particularly from fall
2008 onward, the development of the building industry was negative until the end
of 2009 in nearly all of Tekla's key market areas. Favorable development has
taken place in the demand this year.
The net sales of B&C amounted to 30.87 (26.44) million euros for January-
September 2010. Net sales increased by 16.8% compared to the corresponding
period the previous year. Approximately one fifth of license sales were
generated by non-structural steel engineering and detailing offering. This share
was considerably higher in the Nordic countries. B&C's operating result was
5.97 (3.67) million euros and operating result percentage was 19.3% (13.9%).
During the third quarter, B&C's net sales increased to 10.68 (8.98) million
euros. The operating result was 3.05 (2.19) million euros, or 28.6% (24.4%) of
net sales.
International operations accounted for 95% (96%) of B&C's net sales in January-
September 2010. The development by market area in the third quarter remained
similar to the previous quarter. The Nordic countries, the Middle East and India
were still the most successful. Sales also picked up in several Western European
countries. In terms of the three first quarters as a whole, the United States
continues as Tekla's largest individual market, but sales remained at the same
level as before. India, Saudi Arabia, Japan, and France are examples of
successful markets.
It is very favorable for Tekla that the building industry's move to information-
model-based 3D processes from traditional 2D ways of working continues. Because
of this, the business area's long-term outlook continues to be promising.
Building Information Modeling (BIM) is consolidating its position in the
building industry. BIM means that the information of the product model is
transferred and shared between the parties of the construction process. This
expands the cooperation between the parties of the construction process. In
order to facilitate cooperation, the interoperability of software is increased
further and data exchange between software systems is improved, so that
customers are able to choose the product that is suited the best for a specific
task.
After the reporting period, at the beginning of November, Tekla and Autodesk
announced a collaboration to enable better compatibility between their
respective Revit and Tekla Structures software. New features are being developed
to these BIM software platforms in order to exchange data between the software
smoothly in the different phases of the building process.
In April, Tekla announced that it had signed a framework agreement with the
Swedish company Sweco.
Tekla Structures' functionality for cast-in-place was selected as the "Most
Innovative Product" at the North American construction industry's annual "World
of Concrete" event in March.
During the first quarter, Tekla established a regional office in Singapore to
serve customers throughout Southeast Asia. At the same time, the product
development activity in Malaysia was transferred to Finland.
Measures against software piracy continued both by own efforts and in
cooperation with other parties, such as BSA. The efforts are bearing fruit, even
though piracy will probably never be eradicated completely.
The product development of Tekla Structures concentrated on development that
supports the advance of BIM, i.e., sharing and utilizing the models between the
parties. With regard to product development, investments were increased in
longer-term development of new technology and completely new types of customer
offerings. The annual main version of Tekla Structures was released at the
beginning of February 2010.
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), public administration (Tekla Xcity), as well as civil engineering and
water (Tekla Xstreet and Tekla Xpipe).
In the energy industry, information system acquisitions are strategic
investments for the companies. The economic recession has not had much effect on
these investments. Climate change and the endeavor towards sustainable
development set new requirements for the industry, e.g., with new energy
production methods becoming more common and partial decentralization of
production. In addition, consumers' demands for the reliability of distribution
and energy consumption-related customer service will increase. New technologies,
smart grids and software solutions hold a key role in achieving these
objectives. Tekla's market position as a supplier of energy distribution
information systems is strong in the Nordic and Baltic countries.
In public administration, the tightening economy has decreased income and funds
available for investments. Improved and more extensive utilization of
information technology is seen to be a key solution for achieving efficiency,
self-services and thereby cost-savings. Citizens' services are being extensively
migrated into the Web, and the accessibility of the services can also be
improved this way. Tekla's sales and market position remained strong in Finland.
The net sales of I&E amounted to 10.11 (9.39) million euros for January-
September 2010. The business area's net sales increased by almost 8 percent.
I&E's operating result was 0.89 (1.13) million euros. I&E's operating result
percentage was 8.8% (12.0%). International operations accounted for 33% (39%) of
net sales.
Net sales for the third quarter amounted to 2.95 (2.76) million euros, and
operating result was 0.23 (0.39) million euros, or 7.8% (14.1%) of net sales. In
the last quarter net sales and operating result are estimated to increase.
Latvenergo expanded the use of Tekla Xpower by ordering an outage communication
solution for customer service support during the third quarter.
In June, an agreement was signed with Vattenfall Lämpö Oy on the implementation
of the Tekla Xpower district heating solution. Agreements on district heating
systems were also made with a Norwegian and a Swedish customer.
An agreement was signed with the City of Kuopio on the implementation of the
Tekla Xcity system as the core solution for the city's geographic information
management. The adoption of e-service solutions expanded in Finnish cities.
New agreements on the further development of Tekla Xcity have been made with key
customers. The project will focus on the further development of the Tekla web
solutions and geographic information analyses. With regard to e-services, a
feedback system (ePalaute) and a service for plot marketing and sales (eTontti)
were completed.
PERSONNEL
Tekla Group personnel averaged 456 (457) for January-September 2010; on average
184 (189) 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 466 (464) including part-time
staff, of whom 192 (189) worked outside Finland, and at the end of September
487 (467), of whom 186 (190) worked outside Finland.
During the third quarter, the number of personnel increased by 14 persons.
Compared to the beginning of the year, there were 21 more employees at the end
of September. Part of the increase is associated with the longer-term
development activity mentioned above and part with fixed-term and part-time
recruitments. Tekla's long-term personnel trend is a growing one in order to be
able to take advantage of the market potential in sight.
SHARE AND OWNERSHIP STRUCTURE
Shares and share capital
The total number of Tekla Corporation shares at the end of September 2010 was
22,586,200, of which the company owned 96,600. The total book countervalue of
those was 2,898 euros representing 0.43% of the company's shares. A total of
652,479.02 euros had been used for acquiring the company's own shares, and their
market value was 796,950 euros on September 30, 2010. The book countervalue of
the share is 0.03 euros. At the end of the period, share capital stood at
677,586 euros.
Transfer of treasury shares
Based on the authorization issued by the Annual General Meeting of 2010, a total
of 73,000 treasury shares were transferred as part of the purchase price when
Tekla acquired a 20% share in Construsoft Groep BV at the beginning of May.
Construsoft has been a reseller of Tekla products in several countries for 15
years.
Share price trends and trading
The highest quotation of the share in January-September 2010 was 8.26 (7.88)
euros, the lowest 6.29 (3.40) euros. The average quotation was 7.24 (4.82)
euros. On the last trading day of September, trading closed at 8.25 (7.00)
euros.
A total of 4,007,001 (2,292,565) Tekla shares changed hands in January-September
2010 at NASDAQ OMX Helsinki Ltd, amounting to 17.7% (10.2%) of the entire share
capital.
Nominee registered and foreign owners held 18.34% (24.53%) of all shares at the
end of September 2010.
SHORT-TERM RISKS AND UNCERTAINTY FACTORS
No changes have taken place in the 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 improved in several market
areas, but the development is incoherent. There is no certainty of the continued
favorable development of the global economy.
A majority of Tekla's 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 with rapidly decreasing demand, it is challenging to
proportion fixed personnel expenses, which account for the majority of Tekla's
costs. Tekla is, however, able to react swiftly to growing demand, and profits
from additional sales are good.
The sales of Tekla software are geographically distributed. In addition,
individual customers do not account for a significant share of net sales, and
therefore such risks are not essential.
ANNUAL GENERAL MEETING
Tekla Corporation's Annual General Meeting was held on April 8, 2010. The AGM
adopted Tekla Corporation's financial statements and consolidated financial
statements for 2009. It also discharged the CEO and the Board members from
liability. The AGM accepted the Board's proposal whereby a dividend of 0.20
euros per share be distributed for 2009, or a total of 4,483,320 euros. The
dividend payment date was April 20, 2010.
Ari Kohonen, Olli-Pekka Laine (Vice Chair), Heikki Marttinen (Chair), Erkki
Pehu-Lehtonen and Reijo Sulonen were re-elected Board members until the
conclusion of the Annual General Meeting in 2011. Timo Keinänen was re-elected
deputy member of the Board. Juha Kajanen will continue as the Tekla personnel
representative on the Board with Kirsi Hakkila as his personal deputy.
Ernst & Young Oy, Authorized Public Accountants, was elected as company auditor,
with Erkka Talvinko, Authorized Public Accountant, as the auditor in charge.
The AGM decided on reducing the share premium account shown on the company's
balance sheet of December 31, 2009 by 8,892,678.86 euros by transferring all the
funds in the share premium account to the invested non-restricted equity fund.
The National Board of Patents and Registration of Finland authorized the
reduction of the share premium account in the third quarter. The reduction was
booked in September. Any possible repayment of equity requires a decision by a
General Meeting.
The AGM authorized the Board to increase the company's share capital and acquire
or transfer the company's treasury shares. The authorizations are valid until
the next Annual General Meeting, however not later than April 30, 2011.
The Board of Directors has exercised the authorization to transfer treasury
shares at the beginning of May. This has been discussed under "Share and
ownership structure" in this report.
OUTLOOK FOR 2010
Tekla's future outlook is positive. This notion is also supported by the
favorable development of net sales and operating result during January -
September.
The Board of Directors does not change its net sales and result forecast. Net
sales are estimated to increase by approximately 15% on the year before and the
operating result percentage to be 15 to 20 percent.
NEXT FINANCIAL REPORT
Tekla's financial statement bulletin for 2010 will be published on Friday,
February 11, 2011.
Espoo, November 2, 2010
TEKLA CORPORATION
Board of Directors
For additional information, please contact:
Ari Kohonen, President and CEO, Tel. +358 50 641 24
Timo Keinänen, CFO, Tel. +358 400 813 027
firstname.lastname@tekla.com
Distribution: NASDAQ OMX Helsinki Ltd, main media
CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
CONSOLIDATED INCOME STATEMENT
Q1-Q3/ Q1-Q3/ Q1-Q4/ Q3/ Q3/
Million euros 2010 2009 2009 2010 2009
Net sales 40.94 35.78 50.07 13.62 11.73
Other operating income 0.40 0.19 0.33 0.15 0.06
Change in inventories of finished goods
and in work in progress -0.03 0.04 0.07 -0.01 0.04
Raw materials and consumables used -1.32 -1.42 -2.11 -0.32 -0.33
Employee compensation and benefit
expense -23.01 -20.94 -28.74 -7.14 -6.30
Depreciation -1.31 -1.16 -1.57 -0.45 -0.41
Other operating expenses -8.85 -7.88 -11.24 -2.58 -2.40
Share of results in associated
companies 0.07 0.04 0.00
Operating result 6.89 4.61 6.81 3.31 2.39
% of net sales 16.83 12.88 13.60 24.30 20.38
Financial income 1.51 1.57 2.01 0.04 0.31
Financial expenses -1.17 -1.23 -1.56 -0.42 -0.37
Profit (loss) before taxes 7.23 4.95 7.26 2.93 2.33
% of net sales 17.66 13.83 14.50 21.51 19.86
Income taxes -1.75 -1.46 -2.02 -0.84 -0.58
Result for the period 5.48 3.49 5.24 2.09 1.75
Attributable to:
Owners of the parent 5.48 3.49 5.24 2.09 1.75
Earnings per share for profit attributable
to the owners of the parent (EUR) 0.24 0.16 0.23 0.09 0.08
Earnings are not diluted.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Q1-Q3/ Q1-Q3/ Q1-Q4/ Q3/ Q3/
Million euros 2010 2009 2009 2010 2009
Result for the period 5.48 3.49 5.24 2.09 1.75
Other comprehensive income for the
period, net of tax:
Transl. differences -0.13 0.08 0.08 -0.03 0.01
Changes in available-for-sale
investments -0.04 0.03 -0.15 -0.01 0.04
Total -0.17 0.11 -0.07 -0.04 0.05
Total comprehensive income for the
period 5.31 3.60 5.17 2.05 1.80
Attributable to:
Owners of the parent 5.31 3.60 5.17 2.05 1.80
CONDENSED BALANCE SHEET
Million euros 9/2010 9/2009 12/2009
Assets
Non-current assets
Property, plant and equipment 1.32 1.48 1.42
Goodwill 0.20 0.19 0.19
Intangible assets 2.40 2.12 2.03
Investments in associated companies 1.34
Other financial assets 0.13 2.91 1.64
Receivables 0.40 0.19 0.36
Deferred tax assets 0.77 0.34 0.44
Non-current assets, total 6.56 7.23 6.08
Current assets
Inventories 0.08 0.07 0.11
Trade and other current receivables 9.89 7.87 9.74
Tax receivables 0.05 0.72 0.13
Other financial assets 21.77 18.85 20.04
Cash and cash equivalents 7.34 4.78 5.13
Current assets, total 39.13 32.29 35.15
Assets total 45.69 39.52 41.23
Equity and liabilities
Equity
Share capital 0.68 0.68 0.68
Share premium account 8.89 8.89
Invested non-restricted equity fund 9.16
Other own capital 1.63 1.98 1.80
Retained earnings 19.77 16.78 18.53
Equity total 31.24 28.33 29.90
Non-current liabilities
Deferred tax liabilities 0.09 0.11 0.10
Interest-bearing liabilities 0.05 0.08 0.08
Non-current liabilities total 0.14 0.19 0.18
Current liabilities
Trade and other payables 14.04 10.94 11.05
Tax liabilities 0.18 0.02 0.04
Current interest-bearing liabilities 0.09 0.04 0.06
Current liabilities total 14.31 11.00 11.15
Liabilities total 14.45 11.19 11.33
Equity and liabilities total 45.69 39.52 41.23
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to the owners of the parent
Inv.
non-
Share Fair Acc. restr.
Share prem. Other value transl. equity Ret.
cap. acct funds res. diff. fund earn. Total
Equity
January 1, 2009 0.68 8.89 1.33 0.24 -0.53 19.72 30.33
Payment of dividend -5.60 -5.60
Transfer from
retained
earnings 0.83 -0.83 0.00
Total comprehens.
income for
the period 0.03 0.08 3.49 3.60
Equity
September 30, 2009 0.68 8.89 1.33 0.27 0.38 0.00 16.78 28.33
Attributable to the owners of the parent
Inv.
non-
Fair Acc. restr.
Share Share prem. Other value transl. equity Ret.
cap. acct funds res. diff. fund earn. Total
Equity
January 1, 2010 0.68 8.89 1.33 0.09 0.38 18.53 29.90
Payment of dividend -4.48 -4.48
Transfer of
treasury
shares May 7, 2010 0.27 0.24 0.51
Decrease of share
premium account -8.89 8.89 0.00
Total comprehens.
income for
the period -0.04 -0.13 5.48 5.31
Equity
September 30, 2010 0.68 0.00 1.33 0.05 0.25 9.16 19.77 31.24
CONDENSED CASH FLOW STATEMENT
Q1-Q3/ Q1-Q3/ Q1-Q4/
Million euros 2010 2009 2009
Net cash flows from operating activities 8.66 6.43 6.89
Cash flows from investing activities:
Investments -1.54 -1.46 -1.71
Sale of intangible assets and property,
plant and equipment 0,00 0.04 0.22
Purchases of available-for-sale financial
assets -39.72 -26.24 -33.16
Proceeds from sale of available-for-sale
financial assets 38.65 24.18 32.82
Acquisition of associated companies -0.40
Interests received from available-for-sale
financial assets 0.29 0.48 0.72
Net cash used in/from investing activities -2.72 -3.00 -1.11
Cash flows from financing activities:
Payment of dividend -4.48 -5.60 -5.60
Payments of finance lease liabilities -0.04 -0.03 -0.04
Net cash used in financing activities -4.52 -5.63 -5.64
Net decrease/increase in cash and cash
equivalents 1.42 -2.20 0.14
Cash and cash equivalents at beginning
of the period 7.12 6.98 6.98
Cash and cash equivalents at end of the
period 8.54 4.78 7.12
The cash and cash equivalents in the
cash flow statement include:
Cash and cash equivalents 7.34 4.78 5.13
Available-for-sale financial assets, cash
equivalents 1.20 0.00 1.99
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 report as in the annual
financial statements for 2009. The amendments and interpretations to published
standards as well as new standards, effective January 1, 2010, are presented in
detail in the financial statement for 2009.
The figures presented in the interim report are unaudited.
Use of estimates
When preparing the interim report, 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
Q1-Q3/ Q1-Q3/ Q1-Q4/ Q3/ Q3/
Million euros 2010 2009 2009 2010 2009
Building & Construction 30.87 26.44 36.34 10.68 8.98
Infra & Energy 10.11 9.39 13.80 2.95 2.76
Net sales between segments -0.04 -0.05 -0.07 -0.01 -0.01
Total 40.94 35.78 50.07 13.62 11.73
Operating result by business area
Q1-Q3/ Q1-Q3/ Q1-Q4/ Q3/ Q3/
Million euros 2010 2009 2009 2010 2009
Building & Construction 5.97 3.67 4.72 3.05 2.19
Infra & Energy 0.89 1.13 2.08 0.23 0.39
Others 0.03 -0.19 0.01 0.03 -0.19
Total 6.89 4.61 6.81 3.31 2.39
Financial indicators
Q1-Q3/ Q1-Q3/ Q1-Q4/ Q3/ Q3/
2010 2009 2009 2010 2009
Earnings per share (EPS),
EUR 0.24 0.16 0.23 0.09 0.08
Equity/share, EUR 1.39 1.26 1.33
Interest-bearing liabilities 0.14 0.12 0.13
Equity ratio, % 68.8 72.4 73.1
Net gearing, % -92.7 -82.9 -83.7
Return on investment, % 32.0 22.8 24.5 39.5 34.2
Return on equity, % 23.9 15.9 17.4 27.8 25.6
Number of shares, at end of 22,489,600 22,416,600 22,416,600
the period
Number of shares, on 22,455,908 22,416,600 22,416,600
average
Gross investments, MEUR 2.88 1.47 1.71 0.67 0.31
% of net sales 7.03 4.11 3.42 4.92 2.64
Personnel, on average 456 457 456 465 455
Consolidated income statement by quarter
Q3/ Q2/ Q1/ Q4/ Q3/
Million euros 2010 2010 2010 2009 2009
Net sales 13.62 14.48 12.84 14.29 11.73
Other operating income 0.15 0.12 0.13 0.14 0.06
Change in inventories of
finished goods and in work in
progress -0.01 -0.05 0.03 0.03 0.04
Raw materials and
consumables used -0.32 -0.56 -0.44 -0.69 -0.33
Employee compensation and
benefit expense -7.14 -8.35 -7.52 -7.80 -6.30
Depreciation -0.45 -0.44 -0.42 -0.41 -0.41
Other operating expenses -2.58 -3.13 -3.14 -3.36 -2.40
Share of results in associated
companies 0.04 0.03
Operating result 3.31 2.10 1.48 2.20 2.39
% of net sales 24.30 14.50 11.53 15.40 20.38
Financial income 0.04 0.68 0.79 0.44 0.31
Financial expenses -0.42 -0.37 -0.38 -0.33 -0.37
Profit (loss) before taxes 2.93 2.41 1.89 2.31 2.33
% of net sales 21.51 16.64 14.72 16.17 19.86
Income taxes -0.84 -0.52 -0.39 -0.56 -0.58
Result for the period 2.09 1.89 1.50 1.75 1.75
Acquired operations
Tekla Corporation reinforced its collaboration with the Dutch reseller
Construsoft Groep BV by acquiring 20% of its shares on May 3, 2010. Construsoft
has been a reseller of Tekla products in several countries for 15 years.
Of the purchase price, 0.40 million euros was paid in cash. As part of the
purchase price, 73,000 treasury shares were transferred at a price of 7.03 euros
per share according to the market value on May 7, 2010, for a total price of
0.51 million euros. Tekla is obliged to pay an additional purchase price
depending on the result development of the acquired business in 2009-2011. The
additional purchase price estimated in the Interim report is 0.36 million euros,
and any resulting liability will be due in 2012.
Consolidated result of the associated company and equity adjustment to the
investment is 0.07 million euros. Had Construsoft Groep BV's figures been
consolidated as from the beginning of the financial period, Tekla's result would
have been approximately 0.01 million euros higher.
Total acquisition cost
Consideration paid in cash 0.40
Transferred treasury shares 0.51
Additional purchase price 0.36
Total 1.27
Of the purchase price, 0.16 million euros were allocated to goodwill and 0.61
million euros to customer relationships in intangible assets, which are included
in the balance sheet value of the associated company according to the one-line
principle.
Income taxes
Q1-Q3/ Q1-Q3/ Q1-Q4/
2010 2009 2009
Taxes for the financial period and prior
periods -2.08 -1.59 -2.28
Deferred taxes 0.33 0.13 0.26
Total -1.75 -1.46 -2.02
Property, plant and equipment
9/2010 9/2009 12/2009
Cost at the beginning of the period 8.30 7.76 7.76
Translation differences 0.19 0.01 0.03
Additions 0.60 0.49 0.66
Disposals -0.71 -0.14 -0.15
Cost at the end of the period 8.38 8.12 8.30
Accumulated depreciation at the
beginning of the period 6.88 6.06 6.06
Translation differences 0.13 0.01 0.02
Accumulated depreciation on disposals -0.64 -0.08 -0.08
Depreciation for the financial period 0.69 0.65 0.88
Accumulated depreciation at the end
of the period 7.06 6.64 6.88
Net book amount at the end of the
period 1.32 1.48 1.42
The investments consisted of normal acquisitions of hardware, software, and
equipment.
In accordance with accounting regulations, 0.5 million euros of R&D expenses
have been capitalized during the reporting period in connection with longer-term
development of new technology and clearly novel customer offering. No
corresponding projects have taken place previously.
Provisions
The Group had no provisions in the reporting or comparison period.
Collaterals, contingent liabilities and other commitments
9/2010 9/2009 12/2009
Collaterals for own commitments
Business mortgages (as collateral for
bank guarantee limit) 0.50 0.50 0.50
Pledged funds 0.23 0.06 0.07
Leasing and rental agreement
commitments
Premises 3.58 4.75 4.63
Others 0.40 0.62 0.59
Total 3.98 5.37 5.22
Derivative contracts
Currency forward contracts:
Fair value 0.07 0.09 0.06
Nominal value of underlying instruments 2.20 1.80 2.49
The Group makes derivative contracts to hedge against the exchange rate risks of
prospective sales agreements. Derivative contracts 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 in accordance with
the Group policy.
Related party transactions 9/2010 9/2009 12/2009
Gerako Oy
Purchases of services 0.19 0.16 0.21
Management remuneration
Salaries and post-employment benefits 0.87 1.00 1.27
Management herein refers to members of the Tekla Management Team.
[HUG#1458212]
Tekla Corporation's Interim Report January 1 - September 30, 2010: Favorable development continues
| Source: Tekla
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