Revenio Group Corporation : Revenio Group Corporation: FINANCIAL STATEMENTS BULLETIN, JANUARY 1 - DECEMBER 31, 2012 - HEALTH TECH SURGING - CHANGE IN STRATEGY SUPPORTS GROWTH TARGETS Revenio Group Corporation Stock Exchange Release, February 8, 2013 at 9:00 a.m. REVENIO GROUP CORPORATION'S FINANCIAL STATEMENTS BULLETIN, JANUARY 1 - DECEMBER 31, 2012 - HEALTH TECH SURGING - CHANGE IN STRATEGY SUPPORTS GROWTH TARGETS Highlights for the period: *The Revenio Health Tech segment performed excellently in terms of both net sales and profitability. Sales were particularly strong in North America and Asia. *The Revenio Technology and Services segment improved its result, especially thanks to the good trend in the Information Displays and Software businesses; the Contact Center business also posted growth. *Both the strategy and organization were changed to support growth, effective as from December 1, 2012. *The decision to divest the Done Logistics business was made on December 18, 2012; provisions for expenses associated with winding up the business are recognized in the result for discontinued operations in Q4/2012. *The proposed dividend is EUR 0.02 (0.02) per share. In addition, an authorization for a capital repayment of EUR 1,000,000.00 at the maximum will be proposed. Group key figures: *Consolidated net sales amounted to EUR 25.4 million (EUR 21.4 million), up 18.3 percent. *Consolidated operating profit was EUR 4.9 million (EUR 3.3 million), or 19.4 (15.6) percent of net sales. *The net sales of the Revenio Health Tech segment amounted to EUR 11.1 million (EUR 8.9 million), up 23.8 percent. *The operating profit of Revenio Health Tech segment was EUR 4.4 million (EUR 3.5 million), representing 40.0 (38.7) percent of net sales, an increase of EUR 0.9 million. *The net sales of the Revenio Technology and Services segment came to EUR 14.3 million (EUR 12.5 million), up 14.4 percent. *The operating profit of Revenio Technology and Services was EUR 1.5 million (EUR 0.7 million), representing 10.2 (5.6) percent of net sales, an increase of EUR 0.8 million. *Net result from discontinued operations was EUR -4.8 million (EUR 1.8 million), consisting of the earnings of Done Logistics and provisions for expenses associated with winding up its business. The figures for the reference period include capital gains from the divestment of Done Information in 2011. *For continuing operations, undiluted earnings per share came to EUR 0.059 (0.028) and diluted earnings per share to EUR 0.059 (0.027). *Cash flow from operating activities amounted to EUR 0.8 million (EUR 4.2 million). *Financial guidance for 2013: In continuing operations, net sales and operating profit excluding non-recurring items are expected to see year-on-year growth. OCTOBER-DECEMBER/2012 *Consolidated net sales amounted to EUR 7.7 million (EUR 5.7 million), up 34.9 percent. *Consolidated operating profit was EUR 1.4 million (EUR 0.7 million), or 18.2 (13.1) percent of net sales. *The net sales of the Revenio Health Tech segment amounted to EUR 3.2 million (EUR 2.6 million), up 23.1 percent. *The operating profit of Revenio Health Tech segment was EUR 1.2 million (EUR 1.1 million), representing 35.8 (38.5) percent of net sales, an increase of EUR 0.1 million. *The net sales of the Revenio Technology and Services segment came to EUR 4.5 million (EUR 3.0 million), up 46.7 percent. *The operating profit of Revenio Technology and Services segment was EUR 0.5 million (EUR 0.1 million), representing 10.9 (3.3) percent of net sales, an increase of EUR 0.4 million. President and CEO Olli-Pekka Salovaara: "2012 was a significant year for Revenio Group. At the end of the year, we kicked off a strategy overhaul geared toward supporting measures to bolster strong growth in health technology. Our target in the health technology sector is to buildIcareinto the leading global player in tonometers used in screening for intraocular pressure. This change process began on December 1, 2012, when the Group's business operations were divided into two business units and reporting segments. The operations of the Revenio Health Tech segment comprise the business operations of Icare Finland Oy and some of the parent company's functions. I am responsible for this segment in addition to my other duties. The Revenio Technology and Services segment comprises the Software business (Done Software Solutions Oy), the Information Displays business (FLS Finland Oy), the Rigid Inflatable Boats business (Boomeranger Boats Oy), the Contact Center business (Midas Touch Oy) and some of the functions of the Group's parent company. In December, we announced that we will divest the operations of the Group's company Done Logistics Oy. Riku Lamppu has been appointed to head up the segment. Our financial objective for 2012 was to grow both net sales and profitability in which we succeeded in continuing operations. Further bolstering the net sales and profitability of the Health Tech segment was vitally important from the perspective of our strategic choices. Both the Software and Information Displays businesses saw excellent growth and profitability development. The strong growth in the order book of the Rigid Inflatable Boats business was also a commendable achievement. Delightfully, the Contact Center business continued to develop surely and steadily. Health technology is a growing and profitable business for Revenio. Of Revenio's businesses, Icare Finland, which focuses on health technology, has achieved the best growth in profitability and net sales in both the short and long term. The company has accumulated a wealth of in-house expertise - and we now seek to harness it. Thanks to our expertise in technology, we have become the international product and cost leadership in tonometers. Our international distribution network is highly effective, both operationally and financially. We are very knowledgeable in official approval processes in different countries. By focusing our resources on this highly developed and promising business area, we are building a strong growth path for Revenio Group." MARKET SITUATION REVENIO HEALTH TECH The Revenio Health Tech segment comprises Icare Finland Oy, the managing director of which is Timo Hildén, which specializes in the development, manufacture and sale of tonometers, as well as some functions that were previously part of the Group's parent company. Olli-Pekka Salovaara, the Group's President and CEO, heads up this business segment in addition to his other tasks. The Revenio Health Tech segment had a good market situation during the entire financial year, and demand for its products grew substantially. The segment's current main markets are in North America, Europe, Russia and selected Asian countries, such as Japan and India. Thanks to the geographical structure of its sales and the growing demand for its products, the segment's business operations were not hindered by macroeconomic challenges, except in southern European countries. There are a number of markets with major demand potential that the company has not tapped into yet - particularly South America and China. The bulk of current demand focuses on the first-generation Icare TA-01 tonometer. One key part of a tonometer is a disposable probe. Demand for these probes increased substantially - and is expected to rise further in step with the growth of the tonometer customer base. New emerging product groups are the Icare Pro for specialist physicians and the Icare One self-tonometry device. The latter device, intended for self-administered measurements at home, has performed extremely well in medical studies on glaucoma treatment carried out by many leading ophthalmologists. These studies are expected to influence the development of glaucoma monitoring and treatment practices in the future, which in turn will serve to improve demand for Icare tonometers. It is estimated that more than 150 million people worldwide suffer from glaucoma and that only about half of them have been diagnosed with the disease. As healthcare systems develop, screening for glaucoma will become more common. Traditionally, examinations for eye diseases have been the domain of specialists. Icare's patented measuring technology enables mass screening. As this becomes common, intraocular pressure measurements can also be performed by general practitioners, optometrists, opticians and first-aid station staff. This will give Icare the opportunity to expand its customer base. Legislation on intraocular pressure measurement varies from country to country. For this reason, Icare's global distribution network has been set up to serve exactly the right target group in each country within the framework of local legislation. Icare's measurement system has been extensively patented. The strongest competitors are alternative technologies developed by competitors. The Icare product family's advantages are technology and cost leadership. Icare tonometers can also be used to measure the intraocular pressure of animals. This target group also presents an attractive opportunity for broadening Icare's customer base. Icare's market position can be bolstered further by developing product features. Development measures were launched during the review period with a view to retaining the company's competitive advantage and generating revenue from replacement purchases by customers seeking to update their devices. As the customer base grows, so will the demand for productized maintenance services. REVENIO TECHNOLOGY AND SERVICES On December 1, 2012, the Revenio Technology and Services segment was formed from four Group businesses and companies and some functions of the Group's parent company. Riku Lamppu was appointed as the head of this segment. He is also the CEO of Midas Touch Oy, which is part of this segment. The businesses included in this segment are Software (Done Software Solutions), Contact Center (Midas Touch), Information Displays (FLS Finland) and Rigid Inflatable Boats (Boomeranger Boats). Contact Center business The market situation of the Contact Center business remained good during the financial period. Market growth in this business was restrained, but the number of inbound commissions - which are a core expertise area for the segment - is on the rise. This paves the way for steady growth and enables business operations to focus on outsourcing solutions for technical customer support and other expert services. The market situation for outbound commissions, such as telemarketing campaigns, was more challenging from a profitability perspective. The market situation is also affected by the availability of suitable staff for support tasks in the business localities, which was satisfactory in the Contact Center business during the review period. Rigid Inflatable Boats business The market situation for rigid inflatable boats and outlook for their demand improved slightly during the review period, in part due to the expansion of tendering and customer orders to new customer accounts in different geographical areas and user groups. New customer relationships with the authorities were forged in countries such as Malta and the Netherlands. The general economic situation in European countries did not affect the number of state defense and rescue projects. When the Rigid Inflatable Boats business is vying for projects, its competitors are often the same leading players - especially when these projects are large. Disputes concerning public procurement decisions have become more common, reflecting the tough competition between the leading players in this field. This slows down dealings somewhat in the Rigid Inflatable Boats business. Information Displays business The market situation for LED price displays was good, enabling the business to post its best-ever annual sales. Demand primarily comprises small-scale projects carried out on short schedules. Demand for procurements related to BP's multi-year framework agreement developed favorably, as did demand in new market areas such as Russia. Of the traditional market areas, demand was good in Sweden and Finland. Demand for parking guidance systems was very modest. Software business The market situation of the Software business was good. Demand is affected by gaining new customer projects and their scheduling. Carrying out pilot projects for large customer corporations may create market potential for larger-scale deployment projects in the future. The expansion of the installed software base also increases the amount of small-scale development and maintenance work. Competition for projects is considerable. NET SALES, PROFITABILITY AND PROFIT Consolidated net sales from Revenio Group's continuing operations for the period from January 1 to December 31, 2012 were EUR 25.4 million (EUR 21.4 million), showing an increase of 18.3 percent. Earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations amounted to EUR 5.7 million (EUR 4.0 million), or 22.5 (18.8) percent of net sales. Consolidated operating profit (EBIT) from continuing operations was EUR 4.9 million (EUR 3.3 million), representing 19.4 (15.6) percent of net sales. The pre-tax result totaled EUR 4.7 million (EUR 3.0 million), or 18.5 (14.0) percent of net sales. For continuing operations, consolidated net profit for the financial year amounted to EUR 4.6 million (EUR 2.1 million), representing 18.0 (9.9) percent of net sales. Net profit for discontinued operations during the financial year totaled EUR -4.8 million (EUR 1.8 million). Profit for the financial year totaled EUR -0.3 million (EUR 3.9 million). Undiluted earnings per share for continuing operations totaled EUR 0.059 (0.028), while dilution-adjusted earnings per share came to EUR 0.059 (0.027). For discontinued operations, the undiluted and diluted earnings per share totaled EUR -0.063 (0.023). Dilution-adjusted earnings per share for continuing and discontinued operations during the financial year totaled EUR -0.004 (0.050). Equity per share was EUR 0.19 (0.21). The net sales of continuing operations in Q4 came to EUR 7.7 million (EUR 5.7 million). Net sales were up 34.9 percent. Consolidated operating profit for Q4 from continuing operations amounted to EUR 1.4 million (EUR 0.7 million), or 18.2 (13.1) percent of net sales. The undiluted and diluted earnings per share from continuing and discontinued operations in Q4 totaled EUR -0.008 (0.003). In 2012, net sales of the Group's continuing operations grew 18.3 percent year-on-year. Substantial net sales growth was seen in the Revenio Health Tech segment as well as in the Information Displays and Software businesses of the Revenio Technology and Services segment. In this segment, the Contact Center business also achieved profitable growth in operations. The net sales of the Rigid Inflatable Boats business declined due to the timing of orders and production. Both business segments posted higher operating profit than in the previous year. On December 18, 2012, the Group decided to divest the Done Logistics Oy business. As from that day, the company has been classified under discontinued operations in consolidated reporting. This change in reporting also applies to the reference years. The net profit of discontinued operations in the 2012 financial year consists of the net profit of Done Logistics Oy, a provision for the expenses related to winding up operations and a write-down of the additional sale price receivable from the divestment of Done Information Oy. BALANCE SHEET, FINANCIAL POSITION AND INVESTMENTS The consolidated balance sheet total on December 31, 2012 was EUR 25.0 million (EUR 24.8 million). Shareholders' equity came to EUR 14.7 million (EUR 16.4 million). At the end of the financial year, interest-bearing net liabilities totaled EUR -1.8 million (EUR -2.8 million) and gearing stood at -12.2 (-17.3) percent. The consolidated equity ratio was 62.2 (66.6) percent. The Group's liquid assets amounted to EUR 5.0 million (EUR 4.4 million) at the end of the financial year. Thanks to good financial development, the Group's financial position remained stable throughout the financial year. During the financial year, the Group withdrew a EUR 2.0 million standby-by credit and made arrangements for a EUR 2.0 million credit facility to replace the Group's checking account facility. Cash flow from operating activities came to EUR 0.8 million (EUR 4.2 million). Cash flow was increased by the profitability of continuing operations and decreased by the profitability of discontinued operations and capital tied in operations. The Group's purchases of PPE and intangible assets totaled EUR 0.3 million (EUR 0.7 million). These investments were earmarked for production equipment, information technology and software. GROUP STRUCTURE At the end of the financial year, Revenio Group comprised parent company Revenio Group Corporation and its wholly owned subsidiaries, all active companies: Midas Touch Oy, Done Logistics Oy, Done Software Solutions Oy, Icare Finland Oy, Boomeranger Boats Oy, and FLS Finland Oy. Done Logistics Oy has been categorized under discontinued operations. In order to improve the effectiveness of the Group structure, the subsidiaries of Midas Touch Oy - Midas Touch Media Oy, Midas Touch Gateway Oy, Midas Touch Interactive Oy, Midas Touch Tech Oy, and Midas Touch Care Oy - were merged into their parent company on February 29, 2012. OPERATIONS BY BUSINESS SEGMENT Revenio Group Corporation's business operations are organized into two segments: Revenio Health Tech (Icare Finland) and Revenio Technology and Services (Midas Touch, Done Software Solutions, Boomeranger Boats, and FLS Finland). At the end of the financial year, Done Logistics was categorized under discontinued operations. The structure is in line with the Group's organization and internal reporting. Revenio Health Tech The Revenio Health Tech segment comprises Icare Finland, which specializes in the development, manufacture and sale of tonometers, as well as some functions that were previously part of the Group's parent company. Olli-Pekka Salovaara, the Group's President and CEO, heads up this business segment in addition to his other tasks. In 2012, net sales of the Health Tech segment totaled EUR 11.1 million (EUR 8.9 million), up 23.8 percent. The operating profit of the Health Tech segment amounted to EUR 4.4 million (EUR 3.5 million). Q4 net sales came to EUR 3.2 million (EUR 2.6 million) and operating profit to EUR 1.2 million (EUR 1.1 million). As in earlier financial years, net sales and operating profit saw substantial growth. In geographical terms, net sales growth was generated primarily by the markets of the USA, Japan, the UK, Australia, Russia, India, Canada, Norway and the Netherlands. The bulk of product sales comprised the Icare TA01 tonometer, the company's main product, and its disposable probes, which saw substantial growth in demand. The new products Icare One and Icare Pro are in the first stages of their life cycle. Their sales growth was in line with other sales trends. The US subsidiary that went into business in 2012 performed excellently in meeting its sales and operational targets. During the financial year, the company achieved additional visibility in ophthalmology research and among the field's leading researchers. Icare products were used in many major medical studies on glaucoma treatment and the development of treatments. Country-specific sales licenses play a key role in global tonometer sales. During the review period, the company obtained a total of 28 new sales licenses in different countries. These licenses lay the foundation for the future sales development of new products in particular. The processing of sales licenses in the USA was slower than anticipated. The license process for Icare One was suspended for additional preparatory work. It is expected that the sales license application will be resubmitted in 2013. A new CEO took the helm at Icare Finland Oy during the review period. The previous CEO, Ari Tiukkanen, took up a position at another company. The new CEO is Timo Hildén, M.Econ, who has extensive work experience in management positions in the healthcare industry. Prior to joining Icare Finland Oy, he worked as Thermo Fisher Scientific Oy's CEO and director of global business for liquid handling instruments. Icare's export and R&D resources were bolstered during the financial year. The company has launched projects to develop its current products with a view to maintaining and enhancing their competitiveness in the years ahead. Quality processes and procurements were developed further. Strategic work related to Icare's growth opportunities as part of the healthcare segment was started up. The projects aim to ensure further business growth and create new growth opportunities. The trend in the Revenio Health Tech segment's operating profit was favorable. Thanks to the good development of net sales, the aforementioned development measures did not burden profitability. In 2013, the Revenio Health Tech segment will increase its outlays on development in order to pave the way for growth in future financial periods. Revenio Technology and Services On December 1, 2012, the Revenio Technology and Services segment was formed from four Group businesses and companies and some functions of the Group's parent company. Riku Lamppu was appointed as the head of this segment. He is also the CEO of Midas Touch Oy, which is part of this segment. The businesses included in this segment are the Software business (Done Software Solutions), Contact Center business (Midas Touch), Information Displays business (FLS Finland), and Rigid Inflatable Boats business (Boomeranger Boats). In 2012, the segment had net sales of EUR 14.3 million (EUR 12.5 million) and operating profit of EUR 1.5 million (EUR 0.7 million). Q4 net sales came to EUR 4.5 million (EUR 3.0 million) and operating profit to EUR 0.5 million (EUR 0.1 million). Net sales saw substantial growth in the Information Displays business and the Software business, both of which posted their best-ever net sales. Net sales also rose in the Contact Center business thanks to growth in inbound commissions. Net sales declined in the Rigid Inflatable Boats business. Net sales of the Information Displays business grew because exports more than doubled compared with the previous year. Sales also grew in Finland. The largest share of exports went to the Nordic countries, particularly Sweden, and to continental Europe, especially Germany. Sales to Russia, a new export country, were started. Growth in the Software business was mainly due to projects carried out for two major Finnish listed companies, higher income from maintenance fees and small-scale development work for existing customers. The strategy of the Contact Center business has been to increase the share of operations accounted for by inbound commissions, as the outlook for such commissions is more stable and they pose smaller trade cycle and business risks. Inbound operations include, for example, solutions for technical customer services and outsourced customer services. On the whole, net sales grew as the number of inbound commissions rose and the number of outbound commissions declined. The net sales of the Rigid Inflatable Boats business saw a year-on-year decline due to the slow order inflow in the first half of the year. The business gained significant orders in the second half, which will have a favorable effect on net sales in 2013. Major orders were received from both existing and new customers and geographical areas, which is in line with the business strategy. The major factors behind growth in the segment's operating profit were the excellent profitability trends of the Information Displays and Software businesses and the growth in the profitability of the Contact Center business. In all these businesses, the profitability trend was driven by net sales growth and very moderate cost development. Profitability went into the red in the Rigid Inflatable Boats business, as orders materialized mainly in the latter half of the year, and sales efforts were targeted at this financial period. Net sales and segment's margin excluding non-recurring items were as follows: Segment Segment profit profit Net Sales Net Sales margin margin 1-12/2012 1-12/2011 1-12/2012 1-12/2011 MEUR share MEUR share MEUR % MEUR % Revenio 40 39 Health Tech 11.1 44 % 8.9 42 % 4.4 % 3.5 % Revenio Technology and 10 Services 14.3 56 % 12.5 58 % 1.5 % 0.7 6 % 23 19 Total 25.4 100 % 21.4 100 % 5.9 % 4.2 % Parent company expenses -1.0 -0.8 Operating Profit, Group 19 16 Total 4.9 % 3.3 % The Group's net sales and operating profit from continuing operations by segment and quarter: The net sales, margin, and profit, by segment and quarter , excluding non-recurring items, were as follows: MEUR Q4/12 Q3/12 Q2/12 Q1/12 Q4/11 Q3/11 Q2/11 Q1/11 Net sales: Revenio Health Tech 3.2 2.6 2.6 2.6 2.6 1.9 2.2 2.3 Revenio Technology and Services 4.5 3.4 3.2 3.2 3.0 2.8 3.4 3.3 Total 7.7 6.1 5.8 5.8 5.6 4.7 5.6 5.6 Segment profit margin: Revenio Health Tech 1.2 1.0 1.0 1.2 1.1 0.8 0.8 0.9 Revenio Technology and Services 0.5 0.5 0.2 0.3 0.1 0.2 0.3 0.2 Total 1.7 1.6 1.3 1.5 1.2 1.0 1.1 1.0 Parent co. expenses -0.2 -0.2 -0.2 -0.3 -0.2 -0.2 -0.2 -0.2 Operating profit 1.4 1.4 1.0 1.1 1.0 0.8 0.8 0.8 Operating profit-% 18 22 17 20 18 17 15 15 HUMAN RESOURCES In 2012, the number of personnel employed by the Group averaged 198 (201) in continuing operations. At the end of the period, the number of employees was 220 (215). The average age of staff was 40 years (41 years). An occupational wellbeing survey of all Group employees was carried out at the end of the financial year. Compared to the previous survey carried out in 2010, the results improved almost across the board. The personnel and leadership development measures to be taken on the basis of the survey results will be specified and implemented in 2013. The number of personnel employed by the Group during the financial year, by segment, averaged: Average no. of employees by segments: 31 Dec. 2012 31 Dec. 2011 Change Revenio Health Tech 13 13 0 Revenio Technology and Services 181 184 -3 Parent Company 4 4 0 Group Total 198 201 -3 Wages, salaries, and other remuneration paid during the financial year totaled EUR 6.9 million (EUR 6.6 million) in continuing operations. MANAGEMENT Olli-Pekka Salovaara is the President and CEO of Revenio Group Corporation. The Management Group consists of Olli-Pekka Salovaara, President and CEO, Riku Lamppu, head of Revenio Technology and Services, Juha Kujala, Development Director, and Pekka Raatikainen, CFO. The CEOs of the Group's subsidiaries are Timo Hildén (Icare Finland), Riku Lamppu (Midas Touch), Helena Korte (FLS Finland), Jussi Mannerberg (Boomeranger Boats), Riku Lamppu (Done Logistics) and Ari Suominen (Done Software Solutions). Riku Lamppu serves as the CEO of Done Logistics, which is categorized under discontinued operations, in addition to his other duties. SHARES, SHARE CAPITAL AND MANAGEMENT HOLDINGS On December 31, 2012, Revenio Group Corporation's fully paid-up share capital registered with the Trade Register was EUR 5,314,918.72 and the number of shares outstanding totaled 76,929,730. The company has one series of shares. All shares confer the same voting rights and an equal right to dividends and the company's funds. On December 31, 2012, the Board of Directors and the President and CEO held 1.9 percent of the company's shares, totaling 1,499,267 shares, and 18.6 percent of the option rights, for a total of 684,365 options. CHANGES IN SHAREHOLDING On October 10, 2012, the company was informed that Jyri Merivirta's holding of Revenio Group Corporation shares and votes had declined to under three-twentieths (3/20). Merivirta now holds 13.00 percent of Revenio Group Corporation's shares and votes, and owns 10,000,000 shares in the company. On October 29, 2012, Eyemaker's Finland Oy notified the company that its holding of Revenio Group Corporation shares and votes had declined to under one-tenth (1/10). Eyemaker's Finland Oy now holds 6.50 percent of Revenio Group Corporation's shares and votes, and owns 5,000,000 shares in the company. PURCHASE OF OWN SHARES The company did not buy back any of its own shares during the financial year. Of the 322,610 treasury shares acquired in 2011 that were held by the company at the beginning of the financial year, 226,667 were used for the payment of Board emoluments in accordance with the decision taken by the general meeting of shareholders on March 28, 2012. The Board members - Rolf Fryckman, Matti Hyytiäinen, Julia Ormio and Pekka Tammela - each received 40,000 shares in Board emoluments. Timo Mänty, the chairman of the Board, received 66,667 shares in Board emoluments. At the end of the financial year, the company held a total of 95,943 of its own shares. OPTION RIGHTS On the basis of the share issue authorization approved by the Annual General Meeting on April 3, 2007, the Board of Revenio Group Corporation decided, on November 23, 2007, on a new corporate option plan, comprising a maximum of 3,684,365 option rights. Each option right entitles the holder to subscribe to one Revenio Group Corporation share. Against the total number of the company's shares on December 31, 2012, the proportion of shares to be subscribed for on the basis of the option rights issued represents a maximum of 4.7 percent of the company's shares and votes, once all new shares subscribed for with these option rights have been registered. Share subscriptions via the option program entitle the holder to a dividend from the subscription year onwards. The option rights have been divided into three series: Series A (1,684,365 shares), Series B (1,000,000) and Series C (1,000,000). The subscription periods for options are as follows: Series A, May 1, 2009 - May 1, 2013, Series B, November 1, 2010 - November 1, 2014, and Series C, May 1, 2012 - May 1, 2016. The share subscription price will be the trade-weighted average price during the periods November 1-30, 2007 (EUR 0.62, Series A), April 1-30, 2009 (EUR 0.27, Series B) and November 1-30, 2010 (EUR 0.26, Series C). No new options were granted to employees during the period. During the period, a total of 40,000 new shares were subscribed under 2007C series options. The increase in the share capital was entered in the Trade Register on October 3, 2012. Proceeds from the share subscription were booked in their entirety in the invested unrestricted equity reserve. TRADING ON THE NASDAQ OMX HELSINKI During the period January 1 - December 31, 2012, Revenio Group Corporation's turnover on the NASDAQ OMX Helsinki exchange totaled EUR 13.6 million (EUR 17.3 million), representing 32.7 (39.4) million shares or 42.5 (51.2) percent of shares outstanding. The trading high was EUR 0.50 (0.62) and the low EUR 0.33 (0.30). At the end of the review period, the closing price was EUR 0.40 (0.48), and the average share price EUR 0.42 (0.44). Revenio Group Corporation's market value on December 31, 2012, was EUR 30.8 million (EUR 36.9 million). ANNUAL GENERAL MEETING AND BOARD AUTHORIZATIONS IN EFFECT The Annual General Meeting held on March 28, 2012 approved the company's financial statements and discharged the members of the Board of Directors and the President and CEO from liability for the financial year January 1 - December 31, 2011. The AGM re-selected the following persons as members of the Board of Directors: Timo Mänty, Pekka Tammela, Rolf Fryckman, Julia Ormio and Matti Hyytiäinen. The AGM decided that the Chairman of the Board should be entitled to an annual emolument of EUR 60,000 and the other Board members to an annual emolument of EUR 36,000, with the exception that any member who holds a stake of at least five percent in Revenio Group Corporation, either directly or through a company in which he or she has a minimum holding of 50 percent, should not be entitled to a separate emolument. In total, 40 percent of Board members' emoluments will be settled in the form of shares in the company, while 60 percent will consist of monetary payment. The AGM re-elected PricewaterhouseCoopers Oy, Authorized Public Accountants, as the company's auditors with Juha Tuomala, Authorized Public Accountant, acting as the principal auditor. The AGM decided to accept the Board's proposal on profit distribution, according to which the profit for the financial period, EUR 2,056,691.01, will be added to retained earnings, and a dividend of EUR 0.02 per share will be paid, totaling EUR 1,531,342.42. The AGM authorized the Board to make the decision to buy back a maximum of 7,688,973 of the company's own shares, in one or more installments, using the company's unrestricted equity, in which case any buyback will reduce the amount of company distributable earnings. The AGM cancelled the Board of Directors' valid unexercised share-issue authorizations, and authorized the Board to decide to issue a maximum of 30,000,000 shares or to grant special rights (including stock options) entitling to shares, as referred to in Section 1 of Chapter 10 of the Limited Liability Companies Act, in one or several tranches. This authorization was granted to be used to finance and implement any prospective corporate acquisitions or other transactions, to implement the company's share-based incentive plans, or for other purposes determined by the Board. The Board has the right to decide on all terms and conditions governing said share issue and the granting of special rights, including the subscribers or grantees of the special rights, and the consideration payable. The Board's authorization includes the right to waive shareholders' preemptive subscription rights and covers the issue of new shares and the transfer of any shares that may be held by the company. This authorization will be valid until April 30, 2013. BOARD OF DIRECTORS AND AUDITORS Since March 28, 2012, Revenio Group Corporation's Board of Directors has included Timo Mänty, M.Econ, Managing Director of Onninen Oy (Chairman of the Board), Pekka Tammela, M.Econ, Authorized Public Accountant, partner in Pajamaa Partners Oy, Rolf Fryckman, optician, Chairman of Eyemaker's Finland Oy, Matti Hyytiäinen, M.Econ, Managing Director of PKC Group Oyj, and Julia Ormio, Senior Legal Counsel at Foster Wheeler Energy Oy. PricewaterhouseCoopers Oy, Authorized Public Accountants, serves as the company's auditor, with Juha Tuomala, Authorized Public Accountant, as the principal auditor. In 2012, the Board of Directors met 18 times. On average, Board members' meeting attendance rate was 97.7 percent. In accordance with the AGM's decision, 40 percent of Board members' emoluments, in total, were settled in the form of shares in the company, while 60 percent consisted of monetary payment. In the course of the financial year, the company made, in total, EUR 122,653.35 in monetary payments as Board emoluments. In addition, 226,667 Revenio Group Corporation shares in all were granted as Board emoluments. In the 2012 financial year, the President and CEO was paid EUR 260,278.19 in salary. MAJOR BUSINESS RISKS AND UNCERTAINTIES Revenio Group's risks are defined as strategic, operational, trade cycle, hazard, and financial risks. The Group's strategic risks include competition in all sectors, the threat posed by new competing products, and any other actions of the company's rivals that may affect the competitive situation. Another factor posing a strategic risk is related to success in R&D operations and, therefore, preservation of the product range's competitiveness. In the Group's sectors, requiring particular expertise in accordance with the strategy, essential risks also include those related to the retention and development of key personnel as well as dependence on the operational ability of the subcontractor and supplier network. Corporate acquisitions are part of the Group's strategy. The success of these acquisitions has a significant impact on the reaching of growth and profitability targets. Acquisitions may also change the Group's risk profile. Strategic risks and the need for action are regularly assessed and are monitored in connection with day-to-day management, monthly Group reporting, and annual strategy updates. Operational risks are associated with the retention and development of major customers, the operations of the distribution network and success in extending the customer base and markets. In the Revenio Health Tech segment especially, operational risks include factors related to expansion into new markets, such as various countries' regulation of sales licenses for medical instruments imposed at national level and the related official decisions concerning the health care market. The operational risks related to the manufacture, product development, and production control of medical instruments are estimated to be higher than average in the Revenio Health Tech segment, because of that sector's requirements concerning quality. Project-based operations, mainly carried out in the Revenio Technology and Services segment, involve exposure to operational risks related to the management of demanding end-to-end deliveries, which may concern the company's own project work, subcontractors and suppliers. The share of deferred tax assets in the assets item of the consolidated balance sheet is significant. Changes in business profitability and in both tax legislation and its interpretation could lead to changes in the availability and amount of deferred tax assets. Hazard risks are covered by insurances. Property insurance and insurance against interruptions to business provide protection against risks in these areas. The business pursued is covered by international liability insurances. Financial risks consist of credit, interest, liquidity, and foreign exchange risks. To manage credit loss risks, the Group has taken out credit insurance covering all companies in the Group. Every month, and more frequently if necessary, the Board, in its meetings, assesses matters related to financial issues. If required, the Board provides decisions and guidelines for the management of financial risks concerning interest-rate and currency hedging, for instance. The liquidity risk can be affected by the availability of external financing, the development of the Group's credit standing, the trend in business operations and changes in the payment behavior of customers. Liquidity risks are monitored by means of cash forecasts, which are drawn up for periods of 12 months at most at a time. MAJOR EVENTS AFTER THE PERIOD The company's number of shares rose to 77,110,790 on January 31, 2013 due to the subscription of a total of 181,060 shares with 2007 B and C options. Done Logistics Oy, which is categorized under discontinued operations, divested part of its business operations to Amipac Oy on February 7, 2013. The transaction did not have a significant effect on the Group's financial position. OUTLOOK FOR 2013 In continuing operations, consolidated net sales and operating profit excluding non-recurring items are expected to see year-on-year growth. THE BOARD'S PROPOSAL TO THE ANNUAL GENERAL MEETING The consolidated net profit for the year totaled EUR -287 thousand and that of the parent company EUR 1,545,444.10. The parent company's distributable earnings on December 31, 2012 totaled EUR 14,469,251.77. The Board of Directors will propose to the Annual General Meeting on March 21, 2013, that the parent company's distributable earnings be allocated as follows: - A per-share dividend of EUR 0.02, for a total of 1,536,675.74, against the total number of shares on the balance sheet date, will be distributed. - in addition, the Board of Directors proposes that the Annual General Meeting authorize the Board of Directors to distribute funds to shareholders, at its own discretion, as a capital repayment from the invested unrestricted equity reserve. The maximum amount of funds that can be distributed on the basis of the authorization would be EUR 1,000,000.00. The rest of the distributable retained earnings will be entered under equity. In the Board's opinion, the proposed dividend distribution does not endanger the parent company's or Group's liquidity. STATEMENT OF ACCOUNTING POLICIES The recognition and valuation principles underlying the financial information presented in this Interim Report comply with the principles of the International Financial Reporting Standards (IFRS). The report does not comply with all the requirements of IAS 34, Interim Financial Reporting. These financial statements are based on audited figures. GROUP KEY FIGURES AND RATIOS (MEUR) 1-12/2012 1-12/2011 Net sales, continuing operations 25.4 21.4 Ebitda, continuing operations 5.7 4.0 Ebitda-%, continuing operations 22.5 18.8 Operating profit, continuing operations 4.9 3.3 Operating profit-%, continuing operations 19.4 15.6 Pre-tax profit, continuing operations 4.7 3.0 Pre-tax profit-%, continuing operations 18.5 14.0 Net profit from discontinued operations -4.8 1.8 Net profit -0.3 2.1 Net profit-% -1.1 8.3 Gross capital expenditure 0.3 0.7 Gross capital expenditure-% 1.1 3.3 R&D costs 0.4 0.4 R&D costs-% from net sales 1.4 1.9 Gearing-% -12.2 -17.3 Equity ratio-% 62.2 66.6 Return on investment-% (ROI) 0.4 20.2 Return on equity-% (ROE) -1.8 14.1 Undiluted earnings per share, EUR, continuing operations 0.059 0.028 Diluted Earnings per share, EUR, continuing operations 0.059 0.027 Undiluted earnings per share, EUR, discontinued operations -0.063 0.023 Diluted Earnings per share, EUR, discontinued operations -0.063 0.023 Equity per share, EUR 0.19 0.21 Average no. of employees, continuing operations 198 201 Cash flow from operating activities 0.8 4.2 Cash flow from investing activities -0.1 1.1 Net cash used in financing activities -0.2 -3.0 Total cash flow 0.5 2.4 CONSOLIDATED COMPREHENSIVE 1-12/2012 1-12/2011 INCOME STATEMENT (MEUR) NET SALES 25.4 21.4 Other operating income 0.1 0.1 Materials and services -6.9 -5.5 Employee benefits -8.4 -8.0 Depreciation/amortization -0.8 -0.7 Other operating expenses -4.5 -4.0 OPERATING PROFIT, CONTINUING OPERATIONS 4.9 3.3 Share of associates' results 0.0 0.0 Financial expenses (net) -0.2 -0.3 PRE-TAX PROFIT, CONTINUING OPERATIONS 4.7 3.1 Income tax expense -0.1 -0.9 Net profit from continuing operations 4.6 2.1 Net profit from discontinued operations -4.8 1.8 NET PROFIT -0.3 3.9 Other comprehensive income items 0.0 0.0 Income tax expense for comprehensive income 0.0 0.0 Other comprehensive income items after taxes 0.0 0.0 TOTAL COMPREHENSIVE INCOME -0.3 3.9 Net profit attributable to: Parent company shareholders -0.3 3.9 Total comprehensive income attributable to: Parent company shareholders -0.3 3.9 Earnings per share, undiluted,EUR, continuing operations 0.059 0.028 Earnings per share, diluted,EUR, continuing operations 0.059 0.027 Earnings per share, undiluted,EUR, discontinued operations -0.063 0.023 Earnings per share, diluted,EUR, discontinued operations -0.063 0.023 CONSOLIDATED COMPREHENSIVE INCOME STATEMENT (MEUR) 10-12/2012 10-12/2011 NET SALES 7.7 5.7 Other operating income 0.0 0.0 Materials and services -2.5 -1.3 Employee benefits -2.3 -2.3 Depreciation/amortization -0.3 -0.1 Other operating expenses -1.2 -0.9 OPERATING PROFIT, CONTINUING OPERATIONS 1.4 1.1 Share of associates' results 0.0 0.0 Financial expenses (net) 0.0 -0.2 PRE-TAX PROFIT, CONTINUING OPERATIONS 1.4 0.9 Income tax expense 0.1 -0.4 Net profit from continuing operations 1.4 0.5 Net profit from discontinued operations -2.1 0.2 NET PROFIT -0.6 0.7 Other comprehensive income items 0.0 0.0 Income tax expense for comprehensive income 0.0 0.0 Other comprehensive income items after taxes 0.0 0.0 TOTAL COMPREHENSIVE INCOME -0.6 0.7 Net profit attributable to: Parent company shareholders -0.6 0.7 Total comprehensive income attributable to: Parent company shareholders -0.6 0.7 CONSOLIDATED BALANCE SHEET (MEUR) 31 Dec 2012 31 Dec 2011 ASSETS NON-CURRENT ASSETS Property. plant and equipment 1.6 1.6 Goodwill 8.1 8.1 Intangible assets 0.6 1.0 Shares in associates 0.0 0.3 Deferred tax assets 1.6 1.8 TOTAL NON-CURRENT ASSETS 12.0 12.8 CURRENT ASSETS Inventories 1.3 1.0 Trade and other receivables 4.8 3.3 Cash and cash equivalents 5.0 4.5 TOTAL CURRENT ASSETS 11.2 8.9 Non-current assets held for sale 1.8 3.1 TOTAL ASSETS 25.0 24.8 LIABILITIES AND SHAREHOLDERS' EQUITY SHAREHOLDERS' EQUITY Share capital 5.3 5.3 Share premium 2.4 2.4 Fair value reserve 0.3 0.3 Invested unrestricted capital reserve 7.1 7.0 Retained earnings/loss -0.4 1.4 TOTAL EQUITY. attributable to holders of parent company equity 14.7 16.4 TOTAL SHAREHOLDERS' EQUITY 14.7 16.4 LIABILITIES NON-CURRENT LIABILITIES Deferred tax liabilities 0.2 0.3 Provisions 0.1 0.1 Financial liabilities 1.4 0.4 TOTAL LONG-TERM LIABILITIES 1.7 0.8 CURRENT LIABILITIES Advance payments 1.4 0.1 Trade and other payables 3.3 4.0 Financial liabilities 1.8 1.1 TOTAL SHORT-TERM LIABILITIES 6.5 5.1 Long-term liabilities held for sale 2.1 2.5 TOTAL LIABILITIES 10.3 8.4 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 25.0 24.8 CONSOLIDATED STATEMENT OF CHANGE IN EQUITY (MEUR) Share Share Other Retained Total capital Premium Reserves Earnings Equity Balance 1 Jan 2012 5.3 2.4 7.3 1.3 16.4 Dividend distribution 0.0 0.0 0.0 -1.5 -1.5 Options expense adjustment 0.0 0.0 0.0 0.1 0.1 Net profit 0.0 0.0 0.0 0.3 0.3 Balance 31 Dec 2012 5.3 2.4 7.3 -0.4 14.7 Share Share Other Retained Total capital Premium Reserves Earnings Equity Balance 1 Jan 2011 5.3 2.4 7.3 -1.0 14.1 Dividend distribution 0.0 0.0 0.0 -1.5 -1.5 Own shares purchased 0.0 0.0 0.0 -0.2 -0.2 Options expense adjustment 0.0 0.0 0.0 0.1 0.1 Net profit 0.0 0.0 0.0 3.9 3.9 Balance 30 Sept 2011 5.3 2.4 7.3 1.3 16.4 CONSOLIDATED CASH FLOW STATEMENT (MEUR) 1-12/2012 1-12/2011 Net profit -0.3 3.9 Adjustments to net profit 1.2 1.9 Change in working capital -0.1 -1.6 Interest paid -0.1 0.0 Interest received 0.0 0.0 CASH FLOW FROM OPERATING ACTIVITIES 0.8 4.2 Sales of subsidiaries and associates' shares (net) 0.2 1.7 Purchase of PPE -0.2 -0.5 Purchase of Intangible assets 0.0 0.0 NET CASH USED IN INVESTING ACTIVITIES -0.1 1.1 Purchase of own shares 0.0 -0.2 Paid dividends -1.5 -1.5 Repayments of long-term borrowings -1.7 -1.2 Long-term loans received 3.2 0.0 Finance lease principal payment -0.1 -0.1 NET CASH USED IN FINANCING ACTIVITIES -0.2 -3.0 Net change in cash and equivalents 0.5 2.4 Cash and equivalents. period-start 4.4 2.1 Cash and equivalents. period-end 5.0 4.4 NET SALES AND OPERATING PROFIT BY QUARTER (MEUR) Q4/2012 Q3/2012 Q2/2012 Q1/2012 Q4/2011 Q3/2011 Q2/2011 Q1/2011 Net sales 7.7 6.1 5.8 5.8 5.7 4.6 5.6 5.6 Oper. Profit 1.4 1.4 1.0 1.2 0.7 1.0 0.8 0.8 Oper. profit.-% 18 23 17 20 13 21 15 15 MAIN SHAREHOLDERS 31 Dec 2012 No. of shares % 1. Merivirta Jyri 10,000,000 13 % 2. Eyemakers' Finland Oy 5,000,000 6 % 3. Sijoitusrahasto Evli Suomi Osake 3,710,767 5 % 4. Keskinäinen Eläkevakuutusyhtiö Etera 3,500,000 5 % 5. Gerako Oy 3,400,000 4 % 6. Alpisalo Mia 2,948,153 4 % 7. Joensuun Kauppa ja Kone Oy 2,700,000 4 % 8. Kirkon Keskusrahasto 1,240,810 2 % 9. AJP Holding Oy 1,000,000 1 % 10. Kiesvaara Tuomo 901,230 1 % Revenio Group Corporation Board of Directors For additional information: President & CEO Olli-Pekka Salovaara, GSM +358 (0)40 5675520 firstname.lastname@example.org http://www.revenio.fi DISTRIBUTION: NASDAQ OMX Helsinki Financial Supervisory Authority (FIN-FSA) Principal media www.revenio.fi ------------------------------------------------------------------------------ This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Revenio Group Corporation via Thomson Reuters ONE HUG#1676546
Revenio Group Corporation : Revenio Group Corporation: FINANCIAL STATEMENTS BULLETIN, JANUARY 1 - DECEMBER 31, 2012 - HEALTH
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