News Column

TELESTE CORPORATION INTERIM REPORT 1 JAN TO 31 MAR 2014

April 23, 2014

Turku, Finland, 2014-04-24 07:30 CEST (GLOBE NEWSWIRE) -- TELESTE CORPORATION INTERIM REPORT 24.4.2014 AT 08:30 ORDERS RECEIVED INCREASED. NET SALES AND OPERATING PROFIT EXPECTEDLY BELOW THE COMPARABLE PERIOD, OUTLOOK UNCHANGED. First quarter of 2014 - Net sales amounted to EUR 43.5 (45.8) million, a decrease of 4.9% - Operating profit stood at EUR 1.3 (2.6) million, a decrease of 50.4% - Undiluted earnings per share were EUR 0.05 (0.10) per share, a decrease of 49.1% - Orders received totalled EUR 46.9 (43.4) million, an increase of 8.3% - Cash flow from operations was EUR 1.5 (0.2) million, an increase of 627% Outlook for 2014 We estimate net sales and operating profit for the first half of 2014 to fall clearly from the comparative period. Due to this, we estimate that net sales and operating profit for the full year of 2014 will not reach the 2013 level. Comments on the first quarter of 2014 by CEO Jukka Rinnevaara: "Net sales and operating profit for the first quarter fell from the comparative period, as expected. Demand for products by Video and Broadband Solutions increased after very quiet January. Orders received developed well towards the end of the first quarter and rose above the level of the comparative period. Orders for the optical access network products developed particularly well in the European market. However, this favourable development in net sales towards the end of the quarter was not enough to compensate for the quiet start of the year and, therefore, we fell expectedly from the net sales and operating profit of the reference period. As for Network Services, we were able to improve the operating profit over the comparative period, even if the result was burdened by investments to expand the business in the UK. Improvement on the operating profit was particularly successful in Germany on account of good resource management and successful project deliveries." Teleste Group in January-March 2014 Key figures (EUR million) 1-3/2014 1-3/2013 Change % 1-12/2013 -------------------------------------------------------------------- -------------------------------------------------------------------- Orders received 46.9 43.4 +8.3% 188.9 -------------------------------------------------------------------- Net sales 43.5 45.8 -4.9% 192.8 -------------------------------------------------------------------- EBIT 1.3 2.6 -50.4% 11.0 -------------------------------------------------------------------- EBIT % 3.0% 5.7% 5.7% -------------------------------------------------------------------- Profit for the period 0.9 1.8 -48.5% 8.1 -------------------------------------------------------------------- -------------------------------------------------------------------- Other important key figures -------------------------------------------------------------------- Earnings per share, EUR 0.05 0.10 -49.1% 0.47 -------------------------------------------------------------------- Cash flow from operations 1.5 0.2 +626.9% 10.0 -------------------------------------------------------------------- Net gearing, % 12.3% 17.8% 13.8% -------------------------------------------------------------------- Equity ratio, % 53.7% 52.2% 52.7% -------------------------------------------------------------------- Personnel at period-end 1,260 1,342 -6.1% 1,261 -------------------------------------------------------------------- The Group's first-quarter orders received totalled EUR 46.9 (43.4) million, up 8.3% from the comparable period last year. Order backlog grew by 13% to EUR 16.5 (14.6) million. Net sales amounted to EUR 43.5 (45.8) million, which is 4.9% below the comparable period. Compared to the same period in the previous year, operating profit decreased by 50.4% standing at EUR 1.3 (2.6) million, which is 3.0% (5.7%) of net sales. Personnel expenses amounted to EUR 14.0 (14.4) million. Undiluted earnings per share was EUR 0.05 (0.10). Operating cash flow stood at EUR 1.5 (0.2) million. The decrease in trade receivables improved operating cash flow from the comparable period in last year. Video and Broadband Solutions in January-March 2014 Key figures (EUR 1,000) 1-3/2014 1-3/2013 Change % 1-12/2013 ---------------------------------------------------------------- ---------------------------------------------------------------- Orders received 24,896 21,419 +16.2% 97,815 ---------------------------------------------------------------- Net sales 21,485 23,813 -9.8% 101,716 ---------------------------------------------------------------- EBIT 801 2,436 -67.1% 9,460 ---------------------------------------------------------------- EBIT % 3.7% 10.2% 9.3 % ---------------------------------------------------------------- Net sales decreased by 9.8% to EUR 21.5 (23.8) million. This decrease in net sales was brought about by the exceptionally low level of demand in January and the particularly good project sales in video surveillance solutions in the comparable period. The demand for products returned to normal in the second half of the quarter. In spite of the exceptionally quiet January, orders received in the quarter increased by 16.2% over the previous year and amounted to EUR 24.9 (21.4) million. Order backlog strengthened to EUR 16.5 (14.6) million. Operating profit stood at EUR 0.8 (2.4) million making 3.7% (10.2%) of net sales. This weakening of the operating profit percentage was mainly due to the decline in sales of the video surveillance solutions and the lower margin of access network products in comparison with the same period in the previous year. R&D expenses were 2.6 (2.4) million, i.e. 12.1% (10.1%) of the business area's net sales. Capitalized R&D expenses amounted to EUR 0.3 (0.3) million. The most significant R&D investments included further development of product families in production and customer-specific projects. Depreciation on capitalized R&D expenses amounted to EUR 0.3 (0.7) million. Network Services in January-March 2014 Key figures (EUR 1,000) 1-3/2014 1-3/2013 Change % 1-12/2013 ---------------------------------------------------------------- ---------------------------------------------------------------- Orders received 22,048 21,946 +0.5% 91,060 ---------------------------------------------------------------- Net sales 22,048 21,946 +0.5% 91,060 ---------------------------------------------------------------- EBIT 490 166 +195.9% 1,587 ---------------------------------------------------------------- EBIT % 2.2% 0.8% 1.7% ---------------------------------------------------------------- Net sales for the first quarter totalled EUR 22.0 (21.9) million, which was 0.5% higher than in the period of comparison. Operating profit stood at EUR 0.5 (0.2) million, a year-on-year increase of 196% (-60%). Operating profit equalled 2.2% (0.8%) of net sales. This growth in the operating profit was particularly affected by higher profitability in Germany over the comparative period. The most significant improvement was achieved in installation services of broadband connections and in successful project deliveries. The operating profit was weakened by preparations made for the expansion of services business in the UK. New business premises and personnel recruitment will allow for an expansion in operations in the second half of the year. Personnel and Organization in January-March 2014 In the period under review, the Group had an average of 1,262 people (1,335/2013, 1,316/2012), of whom 554 (536) were employed by Video and Broadband Solutions, and 708 (799) by Network Services. At the end of the review period, the Group had 1,260 (1,342/2013, 1,321/2012) people, of whom 71% (73%/2013, 72%/2012) were working outside Finland. Approximately 3% of the Group's employees were working outside Europe. In January, temporary layoffs were initiated involving the Operations unit personnel in Finland. Average length of these layoffs was three weeks, and they were implemented before the end of the first quarter. These temporary layoffs were launched within the framework of the adjustment program agreed earlier in the co-determination negotiations. As a result of the recovery in demand for the products, the third layoff week could be cancelled. Wages, salaries and social expenses decreased by 3.1% over the previous year and amounted to EUR 14.0 (14.4/2013, 15.1/2012) million. This reduction in personnel costs was achieved by adjustment measures in both Video and Broadband Solutions and Network Services. Investments and Product Development in January-March 2014 Investments by the Group for the period under review totalled EUR 0.9 (0.6) million accounting for 2.1% (1.3%) of net sales. Investments in product development equalled EUR 0.3 (0.3) million. Investments of EUR 0.1 (0.1) million were made under financial lease arrangements. Financing and Capital Structure in January-March 2014 Operating cash flow stood at EUR 1.5 (0.2) million. The decrease in trade receivables improved operating cash flow from the comparable period in last year. At the end of the period under review, the amount of unused binding stand-by credits amounted to EUR 17.0 (19.0) million. Credit limits are valid until August 2015. The Group's equity ratio equalled 53.7% (52.2%) and net gearing 12.3% (17.8%). Interest bearing debt on 31 March 2014 stood at EUR 24.2 (22.0) million. Key Risks Faced by the Business Areas Founded in 1954, Teleste is a technology and services company consisting of two business areas: Video and Broadband Solutions and Network Services. With Europe as the main market area, our clients include European cable operators and specified organizations in the public sector. As to Video and Broadband Solutions, client-specific and integrated deliveries of solutions create favourable conditions for growth, even if the involved resource allocation and technical implementation pose a challenge involving, therefore, also reasonable risks. Our customers' network investments vary based on the relevant need for upgrading and their financial structure. Significant part of Teleste's competition comes from the USA so the exchange rate of euro up against the US dollar affects our competitiveness. The exchange rate development of the Chinese renminbi to euro affects our material costs. The company hedges against short-term currency exposure by means of forward contracts. The situation in the European financial markets may slow down our customers' investment plans. Furthermore, a weakening in the consumer purchasing power in Europe could slow down the network investments by the cable operators. Competition increased by the new service providers (OTT) may undermine the cable operators' ability to invest. Availability of components is subject to natural phenomena, such as floods and earthquakes. Severe weather conditions have an impact on the business areas' ability to deliver products and services. Correct technological choices and their timing are vital for our success. Net sales of Network Services comes, for the most part, from a small number of large European customers, so a significant change in the demand for our services by any one of them is reflected in the actual deliveries and profitability. To ensure quality of services and cost-efficiency along with efficient service process management, customer satisfaction and improvements in productivity require innovative solutions in terms of processes, products and logistics. Smooth operation of cable networks requires effective technical management and functional hardware solutions in accordance with contractual obligations. This, in turn, demands continuous and determined development of skills and competences in Teleste's own personnel as well as those of our subcontractors. In addition, our ability to deliver and compete may be constrained by the adequacy of our sub-contractor network capacity. Tender calculation and management of larger projects with overall responsibility are complex and include risks. It is important for our business areas to take into account any market developments such as consolidations taking place among the clientele and competition. The threats to information systems must be minimized to ensure business continuity. The Board of Directors annually reviews any essential risks related to the company operation and their management. Risk management is an integral part of the strategic and operational activities of the business areas. Risks are reported to the Board on a regular basis. The company has covered any major risks of loss involving the business areas through insurance policies. Insurance will also cover credit loss risks related to sales receivables. In the period under review, no such legal proceedings or judicial procedures were pending that would have had any essential significance for the Group operation. Group Structure Parent company Teleste has branch offices in Australia, the Netherlands, and Denmark with subsidiaries in 14 countries outside Finland. Teleste Management Oy was merged with the parent company on 28 February 2014. Teleste Management II Oy, founded in December 2011, has been consolidated in the Teleste Group figures on account of financial arrangements. Shares and Changes in Share Capital On 31 March 2014, EM Group Oy was the largest single shareholder with a holding of 23.4%. In the period under review, the lowest company share price was EUR 4.25 (3.88) and the highest was EUR 4.86 (4.47). Closing price on 31 March 2014 stood at EUR 4.53 (3.92). According to Euroclear Finland Ltd the number of shareholders at the end of the period under review was 5,073 (5,245). Foreign ownership accounted for 4.8% (5.9%). From 1 January to 31 March 2014, trading with Teleste share at NASDAQ OMX Helsinki amounted to EUR 3.6 (3.5) million. In the period under review, 0.8 (0.8) million Teleste shares were traded on the stock exchange. At the end of March 2014, the Group held 1,189,654 of its own shares, of which the parent company Teleste Corporation had 647,654 shares and the controlled companies had 542,000 shares, respectively. At the end of the period, the Group's holding of the total amount of shares amounted to 6.30% (6.96%). On 31 March 2014, the registered share capital of Teleste stood at EUR 6,966,932.80 divided in 18,873,742 shares. Trading with stock options 2007C began on the NASDAQ OMX Helsinki Ltd on 2 April 2012. These options allow subscription for a maximum of 560,000 shares in the company. Valid authorizations at the end of the review period: - Authorization to purchase treasury shares: 1,400,000 - Disposal of own shares: 1,779,985, valid until the 2014 Annual General Meeting - Issue of new shares: 5,000,000, valid until the 2014 Annual General Meeting - Pursuant to the special rights granted by the company, the maximum number of shares is 2,500,000; these special rights are included in the authorization to issue 5,000,000 new shares. Events after the End of the Period The Annual General Meeting (AGM) of Teleste Corporation held on 1 April 2014 confirmed the financial statements for 2013 and discharged the Board of Directors and the CEO from liability for the financial period. The AGM confirmed the dividend of EUR 0.19 per share proposed by the Board. The dividend was paid out on 11 April 2014. Ms. Marjo Miettinen, Mr. Pertti Ervi, Ms. Jannica Fagerholm, Mr. Esa Harju, Mr. Kai Telanne and Mr. Petteri WalldÉn continue in Teleste's Board of Directors. Ms. Marjo Miettinen was elected Chair of the Board in the organizational meeting held immediately after the AGM. Authorized Public Accountants KPMG Oy Ab continues as the auditor until the next AGM. Mr. Esa Kailiala, accountant authorized by the Central Chamber of Commerce of Finland, was chosen auditor-in-charge. On 1 April 2014, the Annual General Meeting decided on the following authorizations of the Board of Directors: - Purchases of own shares: maximum of 1,200,000 shares. This authorization is valid for 18 months from the date of the decision. - Issue of new shares: a maximum of 4,000,000 shares, valid for three years from the date of the decision. - Disposal of own shares held: a maximum of 1,800,000 shares, valid for three years from the date of the decision. - By virtue of the special rights granted by the Company, the number of shares to be subscribed may not exceed 2,500,000 shares; the special rights are included in the above orders concerning the maximum number new shares and own shares held by the Group. This authorization is valid for three years from the date of the decision. Outlook for 2014 Video and Broadband Solutions aim at maintaining a strong market position in Europe and expand into selected new markets. Network capacity will continue to increase driven by the new broadband and video services provided by the operators. Limited product offering of the new Docsis 3.1 communications standard may delay the network investments in the beginning of the year. Price erosion in the market continues. The positive trend in the video surveillance market will continue, but the public sector decisions to start projects may be delayed in the current economic climate. We estimate the market conditions of Video and Broadband Solutions to fluctuate greatly during the year. The business objective of Network Services is to develop the operational efficiency and give up any unprofitable services activities during the year. These measures will be taken to create conditions for better business profitability over the reference year, but these will have a slight reducing effect on net sales. We estimate the demand for comprehensive network services in our key target markets to continue at par with the comparative year. We estimate net sales and operating profit for the first half of 2014 to fall clearly from the comparative period. Due to this, we estimate that net sales and operating profit for the full year of 2014 will not reach the 2013 level. 23 April 2014 Teleste Corporation Jukka Rinnevaara Board of Directors CEO This interim report has been compiled in compliance with IAS 34, as it is accepted within EU, using the recognition and valuation principles with those used in the Annual Report.Teleste has prepared this interim report applying the same accounting principles as those described in detail in its 2012 consolidated financial statements. The data stated in this report is unaudited. The changes in IAS1, IFRS13 and IAS19 have been applied in this interim report and they do not have any material impact on the financial reporting. STATEMENT OF COMPREHENSIVE INCOME 1-3/2014 1-3/2013 Change % 1-12/2013 (tEUR) Net Sales 43,533 45,759 -4.9 % 192,775 Other operating income 185 458 -59.5 % 840 Materials and services -21,001 -21,604 -2.8 % -94,456 Personnel expenses -13,985 -14,435 -3.1 % -56,949 Other operating expenses -6,417 -6,225 3.1 % -4,628 Depreciation -1,024 -1,351 -24.2 % -26,536 Operating profit 1,291 2,602 -50.4 % 11,047 Financial income and expenses -93 -82 13.3 % -386 Profit after financial items 1,198 2,520 -52.5 % 10,660 Profit before taxes 1,198 2,520 -52.5 % 10,660 Taxes -278 -733 -62.2 % -2,513 Net profit 920 1,787 -48.5 % 8,147 Attributable to: Equity holders of the parent 920 1,787 -48.5 % 8,147 Earnings per share for result of the year attributable to the equity holders of the parent (expressed in € per share) Basic 0.05 0.10 -49.1 % 0.47 Diluted 0.05 0.10 -48.9 % 0.46 Total comprehensive income for the period (tEUR) Net profit 920 1,787 -48.5 % 8,147 Possible items with future net profit effect Translation differences 92 45 104.4 % -559 Fair value reserve -7 24 n/a 16 Total comprehensive income for the 1,005 1,856 -45.8 % 7,604 period Attributable to: Equity holders of the parent 1,005 1,856 -45.8 % 7,604 STATEMENT OF FINANCIAL POSITION 31.03.2014 31.03.2013 Change % 31.12.2013 (tEUR) Non-current assets Property,plant,equipment 10,485 10,283 2.0 % 10,499 Goodwill 33,289 31,421 5.9 % 33,252 Other intangible assets 4,331 3,623 19.6 % 4,448 Deferred tax assets 1,828 2,126 -14.0 % 294 Available-for-sale Investments 294 294 0.0 % 2,002 50,227 47,747 5.2 % 50,494 Current assets Inventories 20,866 18,337 13.8 % 19,762 Trade and other receivables 37,214 42,697 -12.8 % 38,844 Cash and cash equivalents 16,008 10,862 47.4 % 15,229 74,088 71,896 3.0 % 73,835 Total assets 124,315 119,643 3.9 % 124,329 Shareholder's equity and liabilities Share capital 6,967 6,967 0.0 % 6,967 Other equity 59,381 54,785 8.4 % 58,160 Non-controlling interest 386 661 -41.6 % 425 66,734 62,413 6.9 % 65,552 Non-current liabilities Provisions 598 503 18.9 % 634 Deferred tax liabilities 1,203 1,297 -7.2 % 1,293 Non interest bearing 2,436 0 n/a 2,414 liabilities Interest bearing liabilities 434 683 -36.4 % 470 4,671 2,483 88.1 % 4,810 Current liabilities Trade payables and other 28,031 30,632 -8.5 % 28,130 liabilities Current tax payable 210 1,928 -89.1 % 1,206 Provisions 893 909 -1.8 % 832 Interest bearing liabilities 23,776 21,278 11.7 % 23,799 52,909 54,747 -3.4 % 53,967 Total shareholder's equity and 124,315 119,643 3.9 % 124,329 liabilities CONSOLIDATED CASH FLOW STATEMENT (tEUR) 1-3/ 1-3/ Change 1-12/ 2014 2013 % 2013 Cash flows from operating activities Profit for the period 920 1,787 -48.5 % 8,147 Adjustments 1,306 2,166 -39.7 % 4,711 Interest and other financial expenses and -93 -82 13.3 % 384 incomes Paid Taxes -1,155 -880 31.2 % -3,402 Change in working capital 482 -2,790 n/a 121 Cash flow from operating activities 1,461 201 626.9 % 9,961 Cash flow from investing activities A conditional supplementary contract price 0 -2,586 n/a -2,585 for prior subsidiary acquisition Purchases of property, plant and equipment -426 -189 125.4 % -1,180 (PPE) Purchases of intangible assets -372 -293 27.0 % -1,442 Acquisition of subsidiary, net of cash 0 0 n/a -965 acquired Net cash used in investing activities -798 -3,068 -74.0 % -6,172 Cash flow from financing activities Proceeds from borrowings 0 0 n/a 5,000 Payments of borrowings -152 -197 -22.8 % -4,178 Dividends paid 0 0 n/a -2,962 Proceeds from issuance of ordinary shares 176 0 n/a 270 Net cash used in financing activities 24 -197 n/a -1,870 Change in cash Cash in the beginning 15,229 13,880 9.7 % 13,880 Effect of currency changes 92 46 100.0 % -571 Change 687 -3,064 n/a 1,919 Cash at the end 16,008 10,862 47.4 % 15,229 KEY FIGURES 1-3/ 1-3/ Change % 1-12/ 2014 2013 2013 Earnings per share, EUR 0.05 0.10 -48.5 % 0.47 Earnings per share fully diluted, EUR 0.05 0.10 -50.4 % 0.46 Shareholders' equity per share, EUR 3.75 3.58 4.7 % 3.73 Return on equity 5.6 % 11.6 % -51.8 % 12.9 % Return on capital employed 5.9 % 12.6 % -53.2 % 13.0 % Equity ratio 53.7 % 52.2 % 2.8 % 52.7 % Gearing 12.3 % 17.8 % -30.8 % 13.8 % Investments, tEUR 912 579 57.5 % 6,313 Investments % of net sales 2.1 % 1.3 % 65.6 % 3.3 % Order backlog, tEUR 16,511 14,606 13.0 % 13,100 Personnel, average 1,262 1,335 -5.5 % 1,306 Number of shares (thousands) 18,874 18,729 0.8 % 18,744 including own shares Highest share price, EUR 4.86 4.47 8.7 % 4.47 Lowest share price, EUR 4.25 3.88 9.5 % 3.78 Average share price, EUR 4.48 4.21 6.4 % 4.17 Turnover, in million shares 0.8 0.8 -4.8 % 2.2 Turnover, in MEUR 3.6 3.5 1.7 % 9.2 Treasury shares Number % of % of of shares shares votes Possession of company’s own shares 1,189,654 6.30 % 6.30 % 31.3.2014 Contingent liabilities and pledged assets (tEUR) Leasing and rent liabilities 6,133 7,782 -21.2 % 6,748 Derivative instruments (tEUR) Value of underlying forward contracts 6,518 8,107 -19.6 % 7,633 Market value of forward contracts -139 296 n/a -209 Interest rate swap 11,000 11,000 0.0 % 11,000 Market value of interest swap -13 2 n/a -6 Taxes are computed on the basis of the tax on the profit for the period. OPERATING SEGMENTS (tEUR) 1-3/2014 1-3/2013 Change % 1-12/2013 Video and Broadband Solutions Orders received 24,896 21,419 16.2 % 97,815 Net sales 21,485 23,813 -9.8 % 101,716 EBIT 801 2,436 -67.1 % 9,460 EBIT% 3.7 % 10.2 % 9.3 % Network Services Orders received 22,048 21,946 0.5 % 91,060 Net sales 22,048 21,946 0.5 % 91,060 EBIT 490 166 195.9 % 1,587 EBIT% 2.2 % 0.8 % 1.7 % Total Orders received 46,944 43,365 8.3 % 188,875 Net sales 43,533 45,759 -4.9 % 192,775 EBIT 1,291 2,602 -50.4 % 11,047 EBIT% 3.0 % 5.7 % 5.7 % Financial items -93 -82 13.3 % -386 Operating segments net profit before 1,198 2,520 -52.5 % 10,660 taxes Information per quarter 1-3/14 10-12/13 7-9/13 4-6/13 1-3/13 4/2013- (tEUR) 3/2014 Video and Broadband Solutions Orders received 24,896 24,127 28,919 23,350 21,419 101,292 Net sales 21,485 28,020 24,258 25,625 23,813 99,388 EBIT 801 2,354 2,362 2,308 2,436 7,825 EBIT % 3.7 % 8.4 % 9.7 % 9.0 % 10.2 % 7.9 % Network Services Orders received 22,048 26,024 22,220 20,870 21,946 91,162 Net sales 22,048 26,024 22,220 20,870 21,946 91,162 EBIT 490 1,168 823 -570 166 1,911 EBIT % 2.2 % 4.5 % 3.7 % -2.7 % 0.8 % 2.1 % Total Orders received 46,944 50,151 51,139 44,220 43,365 192,454 Net sales 43,533 54,043 46,478 46,495 45,759 190,549 EBIT 1,291 3,521 3,185 1,738 2,602 9,735 EBIT % 3.0 % 6.5 % 6.9 % 3.7 % 5.7 % 5.1 % Attributable to equity holders of the parent (tEUR) A Share capital B Share premium C Translation differences D Retained earnings E Invested free capital F Other funds G Total H Share of non-controlling interest I Total equity A B C D E F G H I Shareholder's equity 6,967 1,504 126 53,079 3,457 -6 65,127 425 65,553 1.1.2014 Total comprehensive 92 920 -7 1,005 0 1,005 income for the period Used options 176 176 0 176 Interest, non 39 39 -39 0 controll party Equity-settled 0 0 0 0 share-based payments Shareholder's equity 6,967 1,504 218 54,038 3,633 -13 66,347 386 66,734 31.3.2014 ' Shareholder's equity 6,967 1,504 685 48,007 2,737 -22 59,878 678 60,557 1.1.2013 Total comprehensive 45 1,787 24 1,856 0 1,856 income for the period Interest, non 17 17 -17 0 controll party Shareholder's equity 6,967 1,504 730 49,811 2,737 2 61,751 661 62,413 31.3.2013 CALCULATION OF KEY FIGURES Return on equity: Profit/loss for the financial period ------------------------------ * 100 Shareholders’ equity (average) Return on capital Profit/loss for the period after financial items + employed: financing charges ------------------------------ * 100 Total assets - non-interest-bearing liabilities (average) Equity ratio: Shareholders' equity ----------------------------- * 100 Total assets - advances received Gearing: Interest bearing liabilities - cash in hand and in bank - interest bearing assets ----------------------------- * 100 Shareholders' equity Earnings per share: Profit for the period attributable to equity holder of the parent ---------------------------------------------- Weighted average number of ordinary shares outstanding during the period Earnings per share, Profit for the period attributable to equity holder of diluted: the parent (diluted) ----------------------------------------------- Average number of shares - own shares + number of options at the period-end Major shareholders 31.3.2014 Number of shares % of share capital EM Group Oy 4,409,712 23.36 Mandatum Life Insurance Company Limited 1,679,200 8.90 Ilmarinen Mutual Pension Insurance Company 953,854 5.05 Kaleva Mutual Insurance Company 824,641 4.37 Teleste Oyj 647,654 3.43 OP-Finland Small Firms Fund 630,712 3.34 Teleste Management II Oy 542,000 2.87 Varma Mutual Pension Insurance Company 521,150 2.76 The State Pension Fund 500,000 2.65 FIM Fenno Equity fund 271,288 1.44 Shareholders by sector Number of % of Number of Number of 31.3.2014 shareholders Owners shares shares % Households 4,722 93.08 4,595,577 24.3 Public sector 4 0.08 1,990,004 10.5 institutions Financial and insurance 16 0.32 3,690,710 19.6 institutions Corporations 262 5.16 7,311,250 38.7 Non-profit institutions 32 0.63 376,113 2.0 Foreign and nominee 37 0.73 910,088 4.8 registered owners Total 5,073 100.00 18,873,742 100.0 Number of shares Number of % of Number of % of 31.3.2014 shareholders shareholders shares shares 1 - 100 1,120 22.1 76,185 0.4 101 - 500 2,197 43.3 598,629 3.2 501 – 1,000 800 15.8 660,990 3.5 1,001 – 5,000 771 15.2 1,709,445 9.1 5,001 – 10,000 87 1.7 624,035 3.3 10,001 – 50,000 70 1.4 1,368,778 7.3 50,001 – 100,000 5 0.1 411,663 2.2 100,001 – 500,000 15 0.3 3,215,094 17.0 500,001 - 8 0.2 10,208,923 54.1 Total 5,073 100.0 18,873,742 100.0 of which nominee 771,879 4.1 registered ADDITIONAL INFORMATION: CEO Jukka Rinnevaara, phone +358 2 2605 866 or +358 400 747 488 DISTRIBUTION: NASDAQ OMX Helsinki Main Media www.teleste.com Copyright © 2014 OMX AB (publ).


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