COMPTEL CORPORATION S FINANCIAL STATEMENTS BULLETIN FOR 2012

Transcription

1 Stock exchange release 13 February 2013 at 8.00 am COMPTEL CORPORATION S FINANCIAL STATEMENTS BULLETIN FOR 2012 Net sales increased 7.4 per cent from the previous year. Goodwill impairment loss and investments in business operations weakened profitability especially during the first half of the year. Order backlog grew slightly from previous year. Key Figures for Fourth Quarter Net sales EUR 21.9 million (Q4 2011: 23.3) Operating profit EUR 1.8 million (2.7) Earnings per share EUR 0.02 (0.00) Order backlog EUR 48.4 million (47.2) Key Figures for Full Year Net sales EUR 82.4 million (2011: 76.8) Operating result EUR million (11.9) Operating result excluding one-off items EUR -0.8 million (3.1) Earnings per share EUR (0.07) Number of employees at the year-end 679 (639) Board of Directors proposes to the Annual General Meeting that no dividend payment will be made for Comptel s net sales are estimated to grow from the previous year in Operating profit is estimated to increase to 5-10 per cent of net sales. Characteristically a significant part of Comptel s operating profit and net sales is generated in the second half of the year. The full year financial information in this stock exchange release is based on the company s audited financial statements. The auditor's report was issued on 12 February Juhani Hintikka, President and CEO: The fourth quarter was the best for 2012 in terms of net sales and operating profit. We secured two orders of utmost importance. One was a fulfillment deal and the other an advanced analytics sale. Robi Axiata, a communications service provider in Bangladesh, automates its customer interaction and boosts the efficiency of its business operations by deploying Comptel Social Links analytics solution. The order was the largest analytics sale in Comptel s history. Comptel has currently 15 Social Links customers. We continued our strategy execution according to our plans in Our net sales growth was stronger than the market s. During the latter part of the year we centralised our sales in a global organisation with the aim at increasing the efficiency of our sales. Fulfillment and advanced analytics were the key investment areas in our R&D. The cost saving program initiated in June aiming at savings of approximately EUR 10 million annually proceeded according to our targets. We improved our profitability significantly during the second half of the year. The performance metrics of our services organisation have improved significantly as a result of the program. The savings measures taken and the positive development in the services organisation give us a good starting point to increase

2 our profitability in Consequently, improving our profitability is the most important target of During the year we got 13 new customers. We secured 15 significant orders, valued over EUR 500,000. Business Review In the fourth quarter, Comptel s net sales decreased from the previous year and were EUR 21.9 million (23.3). Net sales decreased as a result of lower than expected license sales in December. Full year net sales increased by 7.4 per cent compared to the previous year and were EUR 82.4 million (76.8). High services sales contributed to increase in net sales. In the fourth quarter, operating profit decreased to EUR 1.8 million (2.7), representing 8.2 per cent (11.5) of net sales. Profitability was impacted by lower license sales. Full year operating result was EUR million (11.9), which amounts to per cent (15.5) of net sales. The negative operating result was mainly due to the goodwill impairment loss of EUR 10.2 million booked during the first quarter. Additionally, measures taken to improve efficiency as well as restructuring of business operations affected the operating result by EUR 2.5 million. Full year operating result excluding these one-off items was EUR -0.8 million (3.1), equalling to -1.0 per cent (4.0) of net sales. The operating result excluding one-off items was weakened by increased personnel expenses, costs relating to project delivery and marketing as well as low licenses sales. However, profitability improved significantly during the second half of the year as a result of the costs savings program initiated. The aim is to achieve savings of approximately EUR 10 million annually. In 2012, net financial items were EUR -0.7 million (-0.8). Result before taxes was EUR million (11.0), which corresponds to per cent (14.3) of net sales. Net profit was EUR million (7.6). Earnings per share for the financial year were EUR (0.07). Tax expense for the financial year was EUR -1.2 million (3.4). Comptel booked a deferred tax asset of EUR 3.5 million due to the losses incurred in The tax expense included EUR 1.7 million (1.2) of withholding taxes due to double taxation. The cumulative amount of outstanding, non-credited and expensed double withholding taxes payment since 2004 is EUR 9.2 million. The Group s order backlog grew slightly from the previous year and was EUR 48.4 million (47.2) at the end of the financial year. Maintenance agreements represented EUR 27.2 million (24.9) and other order backlog EUR 21.2 million (22.3) of the total. Comptel has restated retrospectively the cost figures for 2010 and The correction lowered the option costs EUR 0.2 million in 2010 and EUR 0.3 million in Prior period reported financials have been corrected accordingly. The changes are described in detail in note 12 in the table part. During the period under review, Comptel Corporation acquired Xtract Oy, a software company specialising in analytics, for a total consideration of EUR 3.1 million (enterprise value). By combining the leading analytics capabilities with its existing software, Comptel will create an offering which will enable operators to react quickly to events from the network and transform them automatically into relevant and timely actions that improve customer experience. Xtract Group was consolidated into Comptel Group financials as of 10 February The acquisition was financed through Comptel Corporation's liquid assets. The 20 Xtract employees working in Finland have moved to the Comptel office in Helsinki and globally as part of the Comptel organisation.

3 Business Areas Net sales, EUR million Change % Change % Europe East Europe West Asia-Pacific Middle East and Africa Americas Total Operating profit by area, EUR million Europe East , Europe West Asia-Pacific Middle East and Africa Americas Unallocated costs Total Operating profit, % of net sales Europe East Europe West Asia-Pacific Middle East and Africa Americas Total Net sales increased significantly from the previous year in Europe East. The main contribution came from Eurasia. Net sales increased as a result of more project deliveries in Europe West. Net sales in Asia-Pacific and Middle East and Africa increased slightly from the previous year. Decrease in Americas net sales was a result of lower sales in North America. Increased net sales contributed to the higher operating profit margins in Europe East. Other business areas were affected by sales mix geared towards services as well as investments to sales organisation which resulted in lower operating profit compared to In October - December, Comptel received two significant orders. During the financial year, Comptel received 15 significant orders (23). Out of these 15 orders, 3 were fulfillment, 9 policy control & charge, 2 managed services and one was analytics order. As significant orders Comptel reports sold projects and licenses with a value of EUR 500,000 at the minimum. Net sales breakdown, EUR million Change % Change % Licenses Services Maintenance agreements Total License sales decreased from the previous year. Service sales experienced strong growth as a result of more project deliveries as well as sales from new services. Maintenance revenue consists of maintenance and support of the delivered systems. Net sales by sales channel, EUR million Change % Change % Direct sales Partner sales Total

4 Direct sales increased from the previous year. Partner sales remained at the same level compared to Financial Position EUR million 31 Dec Dec 2011 Change % Statement of financial position total Liquid assets Trade receivables, gross Bad debt provision Trade receivables, net Accrued income Deferred income related to partial debiting Interest-bearing debt ,402.2 Equity ratio, per cent Statement of financial position total on 31 December 2012 was EUR 68.5 million (71.8), of which liquid assets amounted to EUR 4.8 million (9.4). A dividend of EUR 3.2 million (7.2) was paid during the financial year. Operating cash flow was EUR -0.6 million (-3.5) in the last quarter and EUR 1.1 million (-0.0) during the financial year. The trade receivables were EUR 22.8 million (26.0) at the end of the period. The accrued income was EUR 12.6 million (10.2). The deferred income related to partial debiting was EUR 2.8 million (2.1). Comptel entered into a new loan facility arrangement during the review period. The facility contains two parts. It includes a term-loan of EUR 7.0 million and a revolving credit facility of EUR 13.0 million. The term-loan of EUR 7.0 was withdrawn in full and EUR 1.0 million had been utilised from the revolving credit facility. The loan facilities are valid until January The equity ratio was 46.8 per cent (66.5) and the gearing ratio was 13.1 per cent (-22.3). Research and Development (R&D) EUR million Change % Change % Direct R&D expenditure Capitalisation of R&D expenditure according to IAS R&D depreciation and impairment charges R&D expenditure, net Direct R&D expenditure, % of net sales R&D expenditure increased from the previous year as Comptel actively developed new products to the market. Direct R&D expenditure represented 22.5 per cent (20.1) of net sales in the period under review. Comptel s R&D expenditure was mainly targeted at the service fulfillment automation of telecom operators and to the management and real-time analysis of rapidly increasing data traffic. Comptel seeks global market leadership in these areas where key business challenges of operators and service providers will be solved. In addition, the company is developing an integrated software platform which will enable a cost-efficient and solutionbased R&D. In 2012, the company focused on developing its offering within the Fulfillment, Policy Control & Charging and Social Links product areas. In terms of Social Links, integrating the

5 acquired Xtract advanced analytics into the Comptel software platform is a priority. With a combined offering including real-time analytics, Comptel can help operators to improve customer loyalty as well as enable individually targeted marketing. Four major software releases were launched in these respective product areas during Investments EUR million Change % Change % Gross investments in property, plant and equipment and intangible assets During 2012 gross investments in intangible and tangible assets amounted to EUR 4.5 million (1.0) and comprised of investments in devices, software and furnishings as well as the acquisition of Xtract corporation. Gross investments excluding Xtract acquisition were EUR 1.7 million (1.0). The investments were funded through cash flow from operations. Personnel 31 Dec Dec 2011 Change % Number of employees at the end of period Average number of personnel during the period Change % The number of employees increased as Comptel invested in its R&D and services organisation. As a result of Xtract acquisition 27 Xtract employees transferred to Comptel during the review period. In the last quarter, the personnel expenses were 46.8 per cent of net sales (40.7). In the financial year, the personnel expenses were 53.5 per cent of net sales (47.5). At the end of the year, 31.7 per cent (32.2) of the personnel were located in Finland, 26.1 per cent (24.1) in Malaysia, 9.7 per cent (8.9) in Bulgaria, 7.7 per cent (6.4) in the United Arab Emirates, 6.8 per cent (7.8) in the United Kingdom, 3.2 per cent (5.8) in Norway, and 14.8 per cent (14.8) in other countries where Comptel operates. Comptel Share The closing share price of the financial year was EUR 0.40 (0.49). Comptel s market capitalisation at the end of the year was EUR 42.8 million (52.3). Comptel share Change Change % % Shares traded, million Shares traded, EUR million Highest price, EUR Lowest price, EUR Of Comptel s outstanding shares, 6.4 per cent (8.4) were nominee registered or held by foreign shareholders at the end of the financial year. During the year, Comptel Corporation allotted 111,186 shares to the members of the Board of Directors as part of their annual compensation and 25,000 shares to the President and CEO as per the 2011 share-based incentive scheme.

6 Elisa Corporation notified on 17 January 2012 that its direct ownership in Comptel Corporation had increased to over the 10% threshold following the merger of Saunalahti Group Oyj into Elisa Corporation. Elisa Group's ownership remained unchanged. Comptel has currently two option schemes. The share subscription period of 2006 share options A expired on 30 November 2010, share options B on 30 November 2011 and share options C on 30 November During the subscription period no shares were subscribed. The Annual General Meeting decided on 16 March 2009 to issue share options to the key personnel of the Comptel Group as a part of the incentive and commitment program. The total number of share options issued is 4,200,000. Of the share options, 1,400,000 are marked with the symbol A, 1,400,000 are marked with the symbol B and 1,400,000 are marked with the symbol C. The share options may be exercised to subscribe to a maximum of 4,200,000 new shares in the company or existing shares held by the company. The issued share options can be exchanged for shares constituting a maximum total of 3.8 per cent of the company's shares and votes of the shares, after the potential share subscription, if new shares are issued in the share subscription. The share subscription price will be based on the prevailing market price of the Comptel share on the NASDAQ OMX Helsinki Ltd in April 2009, April 2010 and April The current share subscription price for Comptel share option 2009A is EUR 0.43 per share, which corresponds to the trade volume weighted average quotation of the share on the NASDAQ OMX Helsinki during 1 April - 30 April 2009 deducted by the dividends and capital repayment paid. The current share subscription price for Comptel share option 2009B is EUR 0.70 per share, which corresponds to the trade volume weighted average quotation of the share on the NASDAQ OMX Helsinki during 1 April - 30 April 2010 deducted by the dividends and capital repayment paid. The current share subscription price for Comptel share option 2009C is EUR 0.54 per share, which corresponds to the trade volume weighted average quotation of the share on the NASDAQ OMX Helsinki during 1 April - 30 April 2011 deducted by the dividends and capital repayment paid. The share subscription period for share options 2009A is1 November November 2013, for share options 2009B 1 November November 2014, and for share options 2009C it will be 1 November November Comptel s 2009A share options were listed on NASDAQ OMX Helsinki commencing from 1 November The trading code is CTL1VEW109 and ISIN code is FI In 2012, a number of 38,500 options A were traded and the closing price was EUR Comptel s 2009B share options were listed on NASDAQ OMX Helsinki commencing from 1 November The trading code is CTL1VEW209 and ISIN code is FI In 2012, no options were traded. During the financial year 2012, a total of 100,000 share options 2009B and 100,000 share options 2009C have been distributed. During the financial year 2012, a total of number of 100,000 share options 2009B and a number of 150,000 share options 2009C were returned to the company. The rest of the 2009 share options have been granted to Comptel Communications Oy to be further distributed. The company has in its possession 540,000 share options 2009A, 275,000 share options 2009B and 155,000 share options 2009C. The Annual General Meeting of Shareholders has on 26 March 2012 decided on the issue of share options to the Comptel Group key personnel as a part of the incentive and commitment program. The Share Options 2012 are part of the share-based incentive plan

7 approved by the Board of Directors in February The option program 2012 differs from the previous option programs introduced by Comptel. The shareholding of the recipient of the options has impact on the share options being granted. The commencement of the subscription period for the share options depends on the fact whether the commercial or financial targets of Comptel set by the Board of Directors have been achieved. The targets are net sales growth and increase in earnings per share or the market capitalisation of Comptel. The total number of share options issued is 5,100,000. 2,550,000 of the share options are marked with the symbol A and 2,550,000 are marked with the symbol B. The share options may be exercised to subscribe to a maximum of 5,100,000 new shares in the company or existing shares held by the company. The issued share options can be exchanged for shares constituting a maximum total of 4.5 per cent of the company's shares and votes of the shares, after the potential share subscription, if new shares are issued in the share subscription. The share subscription price for share options 2012A and 2012B is based on the trade volume weighted average quotation of the share on NASDAQ OMX Helsinki Ltd. during 27 February - 23 March Each year dividends and repayments of equity will be deducted from the share subscription price. The current share subscription price is EUR 0.57 per share. The share subscription period for share options 2012A will be 2 May November 2017, and for share options 2012B, 2 May November During 2012 a total of 1,914,759 share options 2012A and 1,914,759 share options 2012B were distributed to the key personnel of Comptel Group. A number of 50,688 share options 2012A and a number of 50,688 share options 2012B were returned to the company during The rest of the 2012 share options have been granted to Comptel Communications Oy to be further distributed. The company holds a number of 685,929 share options 2012A and a number of 685,929 share options 2012B. The President and CEO has a share-based incentive plan. The aim of the plan is to combine the objectives of the shareholders and the CEO of Comptel Corporation in order to increase the value of the company and to commit the CEO to the company. The prerequisite for participation in the plan and receipt of reward from the performance periods is that the CEO owns company s shares or acquires them up to the number predetermined by the Board of Directors which is 230,000 shares. The ownership requirement is valid until 31 December Furthermore, the potential reward from the plan is tied to the validity of the CEO s employment contract. The Board of Directors of Comptel Corporation approved in February 2012 a new sharebased incentive plan for the Group key personnel. The aim of the new plan is to combine the objectives of the shareholders and the target people in order to increase the value of the company, to commit the target people to the company, and to offer them a competitive reward plan based on long-term shareholding in the company. The new plan includes a Matching Share Plan 2012 and Stock Options 2012, approved by the Annual General Meeting of Shareholders of the company in March The Matching Share Plan includes two performance periods, both beginning on 2 May The performance periods will end on 2 May 2015 and on 2 May The prerequisite for participation in the plan and receipt of reward for the performance periods provides that a target person owns the company s shares or acquires them up to the number predetermined by the Board of Directors. Furthermore, the potential reward from

8 the plan is tied to the validity of the target person s employment or service or contractual relation. No reward will generally be paid if a target person s employment or service ends before the reward payment. Rewards from the Plan will be paid partly in the company s shares and partly in cash in 2015 and in The cash proportion is intended to cover taxes and tax-related costs arising from the reward to a target person. The total amount of rewards to be paid on the basis of the Plan is an approximate maximum of 1,050,000 Comptel Corporation shares and a cash payment corresponding to the value of the shares, multiplied by 1.5, in the maximum. There were 35 persons in the plan at the end of The company held 161,219 of its own shares at the end of the financial year, which is 0.15 per cent of the total number of its shares. The total counter-book value of the shares held by the company was EUR 3,224. The Annual General Meeting (AGM), held on 26 March 2012, approved the proposal of Board of Directors that a dividend of EUR 0.03 per share be paid for The AGM authorised the Board of Directors to decide on share issues amounting to a maximum of 21,400,000 new shares and on repurchase of the company's own shares up to a maximum number of 10,700,000 shares. The authorisations are valid until 30 June However, the authorisations pertaining to the share-based incentive schemes are valid five years from the date of AGM. Corporate Governance The Annual General Meeting, held on 26 March 2012, elected the following members to the Board of Directors: Mr Pertti Ervi, Mr Hannu Vaajoensuu, Mr Petteri Walldén, Mrs Eriikka Söderström and Mr Antti Vasara. In its meeting held after the AGM, the Board of Directors elected Mr Pertti Ervi as chairman and Mr Hannu Vaajoensuu as vice chairman. The Board did not set up any committees in its first meeting. The Annual General Meeting appointed Ernst & Young Oy as the company s auditor. Mr Heikki Ilkka is acting as the principal auditor. After the organisation changes implemented in October 2012 the members of the Executive Board included, in addition to President and CEO Mr Juhani Hintikka, Mr Mauro Carobene (CMO), Mr Antti Koskela (CTO), Mr Kari Onniselkä (Services), Mr Mikko Hytönen (CFO), Mrs Niina Pesonen (HR) and Mrs Ulla Koivukoski (Marketing and Communications). In April, Comptel Corporation and Cisco Systems Inc. settled the dispute under arbitration concerning Comptel s use of a certain sub-set of Axioss software that was sold to Cisco and simultaneously licensed back to Comptel for use in the current release of Comptel Fulfillment. Cisco brought the matter to the London Court of International Arbitration in December In accordance with the settlement, the parties have agreed to withdraw all their claims against each other and the arbitration process has thereby been terminated. It has been agreed that no financial compensation will be paid between the parties. Comptel will continue in the fulfillment business and will, consistent with the terms of Cisco s license back to Comptel, support its existing Axioss and Comptel Fulfillment customers.

9 Near-term Risks and Uncertainties Comptel develops dynamic end-to-end solutions for leading operators globally in the telecom field. This requires Comptel to understand correctly the trends taking place in its business environment and the needs of its customers and resellers by each region. Failure to identify market conditions, address customers needs and develop its products in a timely way may significantly undermine the growth of Comptel s business and its profitability. Characteristics to Comptel s field of industry are significant quarterly variations of net sales and profit, which are related to customers purchasing behaviour and the timing of major single deals. Comptel's business consists of deliveries of large productised IT system and the value of a single project may be several million euros. Therefore, the risk or credit risk associated with a single project or an individual customer may be significant. Furthermore, some of Comptel's customers operate in countries that are or have been war zone which in part may increase credit risk. Comptel operates globally so it is exposed to risks arising from different currency positions. Exchange rate changes between the Euro, which is the company s reporting currency, and the US Dollar, UK Pound Sterling and Malaysian Ringgit affect the company s net sales, expenses and net profit. The application process to prevent Comptel s double taxation is still pending with the Ministry of Finance in Finland. However, the process between the states is very slow and the timing of a change is hard to forecast. The interpretation of tax treaties may result in different views between the countries in questions. This could mean that the double taxation will prevail. The risks and uncertainties of Comptel are described more in detail in the company s financial statements and the Board of Directors report for Events after the Reporting Period There were no significant events after the reporting period. Outlook Comptel s net sales are estimated to grow from the previous year in Operating profit is estimated to increase to 5-10 per cent of net sales. Characteristically a significant part of Comptel s operating profit and net sales is generated in the second half of the year. Board of Directors' Proposal for the Disposal of Profits The Group parent company s distributable equity on 31 December 2012 was EUR 1,840, (15,026,574.95). The Board of Directors proposes to the Annual General Meeting that no dividend payment will be made for 2012.

10 TABLE PART The full year financial information in this stock exchange release is based on the company s audited financial statements. The auditor s report was issued on 12 February The release has been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU. In fourth quarter of 2012 Comptel decided to discontinue applying hedge accounting as defined in IAS 39. Other changes in accounting principles and methods of calculation are described in note 1. Comptel has adopted IAS 8 to correct errors discovered in the figures for the reporting periods 2010, 2011 and Q1/2012. The nature of the error is described in note 12. All figures in the financial report have been rounded and consequently the sum of the individual figures can deviate from the sum figure. Consolidated Statement of Comprehensive Income (EUR 1,000) 1 Jan 31 Dec Jan 1 Oct 31 Dec 2012 * 31 Dec Oct 31 Dec 2011 * Net sales 82,428 76,751 21,889 23,269 Other operating income 9 19, Materials and services -5,477-5,285-1,121-1,997 Employee benefits -44,108-36,454-10,244-9,475 Depreciation, amortisation and impairment charges -14,619-13,635-1,320-1,005 Other operating expenses -31,749-29,277-7,423-8,194-95,954-84,651-20,108-20,672 Operating profit/loss -13,517 11,902 1,787 2,684 Financial income 1, Financial expenses -1,739-1, Share of result of associated companies Profit/loss before income taxes -13,955 10,963 1,975 1,955 Income taxes 1,152-3, ,584 Profit/loss for the period -12,804 7,590 2, Other comprehensive income Cash flow hedges Translation differences Income tax relating to components of other comprehensive income Total comprehensive income for the period -12,168 7,216 2, Profit/loss attributable to: Equity holders of the parent company -12,804 7,590 2, Total comprehensive income attributable to: Equity holders of the parent company -12,168 7,216 2, Shareholders of the parent company:

11 Earnings per share, EUR Earnings per share, diluted, EUR * Year 2011 error has been corrected. Consolidated Statement of Financial Position (EUR 1,000) 31 Dec Dec 2011 Assets Non-current assets Goodwill 2,646 10,832 Other intangible assets 13,350 9,255 Tangible assets 1,518 1,381 Investments in associates 1, Available-for sale financial assets Deferred tax assets 3, Other non-current receivables ,974 23,418 Current assets Trade and other current receivables 40,617 38,919 Current tax assets Cash and cash equivalents 4,817 9,401 45,476 48,343 Total assets 68,451 71,761 Equity and liabilities Equity attributable to equity holders of the parent company Share capital 2,141 2,141 Fund of invested non-restricted equity Translation differences Retained earnings 25,208 40,169 Total equity 26,956 41,805 Non-current liabilities Deferred tax liabilities 3,302 4,798 Provisions 787 1,529 Non-current financial liabilities 5, ,364 6,355 Current liabilities Provisions 1,511 1,221 Current financial liabilities 3, Trade and other current liabilities 27,230 21,615 Current tax liabilities ,130 23,600 Total liabilities 41,494 29,956 Total equity and liabilities 68,451 71,761

12 Consolidated Statement of Cash Flows (EUR 1,000) 1 Jan 31 Dec Jan 31 Dec 2011 * Cash flows from operating activities Profit/loss for the period -12,804 7,590 Adjustments: Non-cash transactions or items that are not part of cash flows from operating activities 15,815-4,756 Interest and other financial expenses Interest income Income taxes -1,152 3,373 Change in working capital: Change in trade and other current receivables ,903 Change in trade and other current liabilities 4,307 1,211 Change in provisions Interest paid Interest received Income taxes paid and tax returns received -3,551-3,350 Net cash from operating activities 1, Cash flows from investing activities Acquisition of subsidiaries, net of cash acquired -1,812 - Investments in tangible assets -1, Investments in intangible assets Investments in development projects -6,101-3,965 Proceeds from sale of intangible assets - 21,903 Change in other non-current receivables Net cash used in investing activities -9,406 16,888 Cash flows from financing activities Dividends paid -3,207-7,242 Capital repayment - -7,473 Proceeds from borrowings 29,000 - Repayment of borrowings -22,020 - Lease payments Net cash used in financing activities 3,735-14,753 Net change in cash and cash equivalents -4,579 2,088 Cash and cash equivalents at the beginning of the period 9,401 7,028 Cash and cash equivalents at the end of the period 4,817 9,401 Change -4,585 2,373 Effects of changes in foreign exchange rates * Year 2011 error has been corrected.

13 Consolidated Statement of Changes in Equity Equity attributable to equity holders of the parent company EUR 1,000 Share capital Other reserves Translation differences Fair value reserve Treasury shares Retained earnings Total Equity at 31 Dec ,141 7, ,927 49,146 Dividends -7,473-7,473 Capital repayment -7,473-7,473 Transfer of treasury shares Share-based compensation * Total comprehensive income for the period * ,590 7,216 Equity at 31 Dec , ,133 41,805 * Year 2011 error has been corrected. Consolidated Statement of Changes in Equity Equity attributable to equity holders of the parent company EUR 1,000 Share capital Other reserves Translation differences Fair value reserve Treasury shares Retained earnings Total Equity at 31 Dec , ,133 41,805 Dividends -3,207-3,207 Transfer of treasury shares Share-based compensation Total comprehensive income for the period ,804-12,168 Equity at 31 Dec , ,568 29,956

14 Notes 1. Application of new or amended standards and interpretations On 1 January 2012 the Group adopted the following new and amended standards and interpretations endorsed by the EU and that are applicable to Comptel: Amendments to IFRS 7 Financial Instruments: Disclosures (effective for financial years beginning on or after 1 July 2011). The amendments will promote transparency in the reporting of transfer transactions and improve users understanding of the risk exposures relating to transfers of financial instruments and the effect of those risks on an entity s financial position, particularly those involving securitisation of financial assets. 2. Segment information Net sales by segment EUR 1,000 1 Jan 31 Dec Jan 31 Dec Oct 31 Dec Oct 31 Dec 2011 Europe East 16,312 12,910 4,258 3,585 Europe West 20,975 19,074 5,715 6,125 Asia-Pacific 21,665 21,109 5,012 5,219 Middle East and Africa 14,541 13,716 4,362 3,900 Americas 8,934 9,942 2,542 4,441 Group total 82,428 76,751 21,889 23,269 Operating profit/loss by segment EUR 1,000 1 Jan 31 Dec Jan 1 Oct 31 Dec 2011 * 31 Dec Oct 31 Dec 2011 * Europe East 6,304 2,180 1, Europe West 9,712 11,442 2,828 4,813 Asia-Pacific 9,504 11,919 1,886 2,667 Middle East and Africa 2,967 5,458 1,398 1,496 Americas 3,782 5,657 1,186 3,007 Group unallocated expenses -45,786-24,753-7,316-9,264 Group operating profit/loss total -13,517 11,902 1,787 2,684 Financial income and expenses Share of result of associated companies Group profit/loss before income taxes -13,955 10,963 1,975 1,955 * Year 2011 error has been corrected. 3. Business combinations On 9 February 2012, Comptel Corporation acquired all shares of Xtract Oy, a Finnish software company specialising in analytics. By acquiring Xtract the company creates a unique offering by combining world class analytics capabilities with its existing assets. This offering enables operators to react quickly to events from the network and transform them automatically into relevant and timely actions that improve the customer experience. The total consideration (enterprise value) was EUR 3,100 thousand. The actual purchase price EUR 2,075 thousand was paid in cash.

15 The goodwill according to IFRS 3 is EUR 1,993 thousand after the fair value allocations reflected in net assets. EUR 215 thousand was recognised in intangible assets which are amortised over five years. The goodwill is attributable to the skilled workforce of Xtract and the utilisation potential of Comptel s existing sales channel to promote Xtract products. The values of the assets and liabilities arising from the acquisition were as follows: EUR 1,000 Recognised fair values on acquisition Technology (incl. in other intangible assets) 840 Other intangible assets 1 Machinery and equipment 6 Trade receivables and other receivables 842 Cash and cash equivalents 263 Total assets 1,952 Deferred tax liabilities 53 Other non-interest bearing liabilities 597 Interest bearing liabilities 1,220 Total liabilities 1,870 Net assets 82 Acquisition cost 2,075 Goodwill 1,993 Purchase price paid in cash 2,075 Cash and cash equivalents in acquired subsidiary -263 Total net cash outflow on the acquisition 1,812 Comptel has expensed acquisition-related consultation fees of EUR 145 thousand. The fees are included in other operating expenses. Xtract s net sales EUR 1,145 thousand and loss EUR 1,523 thousand for the period 10 February to 31 December 2012 are included in the comprehensive statement of income. Comptel Group net sales for 1 January 31 December 2012 would have been EUR 82,793 thousand and loss EUR 13,457 thousand if Xtract had been consolidated from the beginning of the year Impairment loss on goodwill Comptel changed the allocation method of goodwill during the first quarter of the year. Due to the change, an impairment testing was carried out on new cash generating unit level. Previously, it had not been possible to allocate goodwill specifically to any segment or cash generating unit. As a result of impairment testing Comptel recorded an impairment loss of EUR 10,179 thousand in the first quarter result. In the test, the recoverable amount of goodwill is determined based on value in use calculation. The value in use is computed based on discounted forecast cash flows. The cash flow forecasts rely on the plans approved by the Board of Directors and management concerning in particular profitability and the growth rate of net sales. The plans cover a fiveyear period taking into account the recent development of business. The used pre-tax discount rate is 16.4%. The cash flows after the five-year period have been forecast by estimating the future growth rate of net sales to be 0%.

16 The use of the testing model requires making estimates and assumptions concerning investments, market growth and general interest rate level. 5. Income tax Income tax according to the statement of comprehensive income for the period was EUR 1,152 thousand positive (EUR 3,373 thousand negative in 2011) as a change of EUR 2,494 thousand in deferred tax liabilities was booked in connection with the impairment of goodwill. Comptel booked a deferred tax asset of EUR 3,487 million due to the losses incurred in In 2006, Adjustment of the Tax Office for Major Corporations refused to accept the crediting of taxes withheld at source in taxation of 2004 and The application process to prevent Comptel s double taxation is still pending with the Ministry of Finance in Finland. However, the process between the states is very slow and the timing of a change is hard to forecast. The interpretation of tax treaties may result in different views between the countries in questions. This could mean that the double taxation will prevail. According to the Board of Adjustment s decision currently in force, Comptel Corporation has expensed taxes withheld at source amounting to EUR 1,680 thousand in January - December (EUR 1,189 thousand). 6. Tangible assets EUR 1,000 1 Jan 31 Dec Jan 31 Dec 2011 Additions 1, Disposals Related party transactions The Comptel Group have a related party relationship with its associate, the Board of Directors, the Executive Board and also with people and companies under Comptel management s influence. Transactions, which have been entered into with related parties are as follows: EUR 1,000 1 Jan 31 Dec Jan 31 Dec 2011 Associate Other operating income 2 - Purchases of goods and services Interest income 8 8 EUR 1, Dec Dec 2011 Associate Non-current receivables Trade receivables 1 -

17 Remuneration to key management The key management personnel compensation includes the employee benefits of the members of the Board of Directors and the Executive Board. EUR 1,000 1 Jan 31 Dec Jan 31 Dec 2011 Salaries and other short-term employee benefits 2,033 2,942 Share-based payments Total 2,267 3,148 Guarantees and other commitments EUR 1, Dec Dec 2011 Guarantees Commitments Minimum lease payments on non-cancellable office facilities and other operating leases are payable as follows: EUR 1, Dec Dec 2011 Less than one year 2,934 3,377 Between one and five years 6,087 7,909 Total 9,021 11,286 The group had no material capital commitments for the purchase of tangible assets at 31 December 2012 and 31 December Contingent liabilities EUR 1, Dec Dec 2011 Bank guarantees 2,969 1,847 Corporate mortgages EUR 1, Dec Dec 2011 Contingent liabilities on behalf of others Guarantees 123 -

18 10. Key figures Financial summary 1 Jan 31 Dec Jan 31 Dec 2011 * Net sales, EUR 1,000 82,428 76,751 Net sales, change % Operating profit/loss, EUR 1,000-13,517 11,902 Operating profit/loss, change % Operating profit/loss, as % of net sales Profit/loss before taxes, EUR 1,000-13,955 10,963 Profit/loss before taxes, as % of net sales Return on equity, % Return on investment, % Equity ratio, % Gross investments in tangible and intangible assets, EUR 1,000 1) 4,484 1,037 Gross investments in tangible and intangible assets, as % of net sales Capitalisations according to IAS 38 to intangible assets 6,170 3,965 Research and development expenditure, EUR 1,000 18,581 15,419 Research and development expenditure, as % of net sales Order backlog, EUR 1,000 48,368 47,217 Average number of employees during the period Interest-bearing net liabilities, EUR 1,000 3,541-9,334 Gearing ratio, % * Year 2011 error has been corrected. Per share data 1 Jan 31 Dec Jan 31 Dec 2011 * Earnings per share (EPS), EUR EPS diluted, EUR Equity per share, EUR Dividend per share, EUR 2) Dividend per earnings, % Effective dividend yield, % P/E ratio Adjusted number of shares at the end of the period 107,054, ,054,810 of which the number of treasury shares 161, ,685 Outstanding shares 106,893, ,762,125 Adjusted average number of shares during the period 106,863, ,775,223 Average number of shares, dilution included 107,650, ,775,223 * Year 2011 error has been corrected. 1) The figure does not include investments in development projects. 2) The Board s proposal

19 11. Definition of key figures Operating margin % = Operating profit/loss x100 Net sales Profit margin (before income taxes) % = Profit/loss before taxes x100 Net sales Return on equity % (ROE) = Profit/loss x100 Total equity (average during year) Return on investment % (ROI) = Profit/loss before taxes + financial expenses Total equity + interest bearing liabilities (average during the year) x100 Equity ratio % = Total equity x100 Statement of financial position total advances received Gross investments in tangible and intangible assets, as % of net sales = Gross investments in tangible and intangible assets Net sales x100 Research and development expenditure, as % of net sales = Research and development expenditure Net sales x100 Gearing ratio % = Interest-bearing liabilities cash and cash equivalents Total equity x100 Earnings per share (EPS) = Profit/loss for the financial year attributable to equity shareholders Average number of outstanding shares for the financial year Equity per share = Equity attributable to the equity holders of the parent company Adjusted number of shares at the end of period Dividend per share = Dividend Adjusted number of shares at the end of period Dividend per earnings % = Dividend per share x100 Earnings per share (EPS) Effective dividend yield % = Dividend per share x100 Share closing price at end of period P/E ratio = Share closing price at end of period Earnings per share (EPS)

20 12. Corrections to figures reported in 2010, 2011 and Q1/2012 An error was discovered in the line item Employee benefits for the periods 2010, 2011 and Q1/2012. The errors have been corrected retrospectively according to IAS 8. The errors were related to the calculation of option costs. The correction of the error in 2010 did not have an impact on the amount of equity and no restated opening balances are presented. The key figures for the financial year 2010 have been restated and are presented in the financial statements for The statement of comprehensive income for 2011 was changed as follows: Consolidated Statement of Comprehensive Income (EUR 1,000) Reported Corrected 1 Jan 31 Dec Jan 31 Dec 2011 Net sales 76,751 76,751 Other operating income 19,802 19,802 Materials and services -5,285-5,285 Employee benefits -36,747-36,454 Depreciation, amortisation and impairment charges -13,635-13,635 Other operating expenses -29,277-29,277-84,944-84,651 Operating profit/loss 11,609 11,902 Financial income Financial expenses -1,289-1,289 Share of result of associated companies Profit/loss before income taxes 10,669 10,963 Income taxes -3,373-3,373 Profit/loss for the period 7,297 7,590 Other comprehensive income Cash flow hedges Translation differences Income tax relating to components of other comprehensive income Total comprehensive income for the period 6,922 7,216 Profit/loss attributable to: Equity holders of the parent company 7,297 7,590 Total comprehensive income attributable to: Equity holders of the parent company 6,922 7,216 Shareholders of the parent company: Earnings per share, EUR Earnings per share, diluted, EUR The earnings per share figure has also been restated. Due to the rounding it did not have impact on the key figure. The correction did not impact the amount of equity.

21 The restated quarterly figures for 2011 and Q1/2012 are as follows: Consolidated Statement of Comprehensive Income (EUR 1,000) 1-3/ / / / /2012 Net sales 16,825 20,016 16,640 23,269 76,751 19,926 Other operating income , ,802 1 Materials and services ,244-1,271-1,997-5,285-1,622 Employee benefits -8,783-8,986-9,210-9,475-36,454-10,541 Depreciation, amortisation and impairment charges -1,359-1,243-10,027-1,005-13,635-11,128 Other operating expenses -6,006-7,279-7,796-8,194-29,277-8,538-16,921-18,753-28,305-20,672-84,651-31,829 Operating profit/loss -92 1,275 8,035 2,684 11,902-11,901 Financial income Financial expenses , Share of result of associated companies Profit/loss before income taxes ,175 8,092 1,955 10,963-12,379 Income taxes -1, ,584-3,373 2,094 Profit/loss for the period -1, , ,590-10,285 Other comprehensive income Cash flow hedges Translation differences Income tax relating to components of other comprehensive income Total comprehensive income for the period -1, , ,216-9,721 Profit/loss attributable to: Equity holders of the parent company -1, , ,590-10,285 Total comprehensive income attributable to: Equity holders of the parent company -1, , ,216-9,721 Shareholders of the parent company: Earnings per share, EUR Earnings per share, diluted, EUR Comptel Corporation s Annual General Meeting will be held on 20 March 2013 at 3 pm in Helsinki. The annual report for 2012 can be obtained from Comptel s website in week 9.

22 Schedule for Comptel s interim reports in 2013: January-March 17 April 2013 January-June 16 July 2013 January-September 16 October 2013 COMPTEL CORPORATION Board of Directors Additional information: Mr Juhani Hintikka, President and CEO, tel Mr Mikko Hytönen, CFO, tel Ms Ulla Koivukoski, SVP Marketing and Communications, tel Distribution: NASDAQ OMX Helsinki Major media