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CENCORP CORPORATION'S FINANCIAL STATEMENT RELESE 2013(OMX Via Acquire Media NewsEdge) Cencorp Corporation Financial Statement Release 19 February 2014 at 13.45 Finnish time The net sales of Cencorp Corporation’s (“Cencorp”) continuing operations for the reporting period January – December 2013 was EUR 11.1 million (EUR 15.4 million in 2012). The operating profit of continuing operations was EUR -5.2 million (-3.9), profit for the period EUR -7.0 million (-4.8), earnings per share were EUR -0.02 (-0.01) and EBITDA was EUR -2.7 million (-1.6). Major part of the loss (EUR 2.6 million) comes from the Beijing entity that is part of the Cencorp Clean Energy segment. Production volumes of mobile phone components and RFID antennas have decreased continuously and were clearly on too low level in 2013. At the Beijing factory the company is trying to exit production of all other products, except Conductive Back Sheets (CBS), as soon as possible. In 2013 the company wrote down EUR 0.4 million in LAS business goodwill and a total of EUR 0.1 million in inventories. GENERAL Cencorp belongs to the Finnish Savcor Corporation (“Savcor”). Savcor Group companies owned approximately 78.0 % of the Cencorp shares on 31 December 2013. More information on principle activities and events during the reporting period can be found in the stock exchange releases published on Cencorp’s website at www.cencorp.com. The Financial Statement Release has been drawn up in compliance with the IAS 34 Interim Financial Reporting standard. In the Interim Report Cencorp has applied the same accounting principles as in the annual report 2012. The Interim Report has not been audited. FINANCIAL DEVELOPMENT 14 May 2013 Cencorp announced that the company changes its reporting system to comply with the company’s Cleantech strategy. As from 1 January 2013 Cencorp reports of three business segments. The segments are Laser and Automation Applications (LAS), Life Cycle Management (LCM) and Cencorp Clean Energy (CCE). CCE also includes the former Special Components segment. The comparison figures for the corresponding period in 2012 are only available of the net sales. Other figures that would be comparable and reliable enough are not available. Cencorp’s new segment information is based on the management’s internal reporting and on the organisation structure of the company. The figures in brackets are comparison figures for the corresponding period in 2012, unless stated otherwise. 29 May 2012 Cencorp announced that it exits from its unprofitable decoration business and closes down its plant in Guangzhou, China, producing components for decorative applications. Thus, comparison figures for the last year do not include operations in Guangzhou. October - December 2013 (continuing operations) - Cencorp Group’s net sales decreased by 34.1 per cent to EUR 2.2 million (EUR 3.3 million). - EBITDA was EUR -1.3 million (EUR -0.8 million). - Operating profit was EUR -2.3 million (EUR -1.5 million). - The Group’s profit before taxes was EUR -3.0 million (EUR -1.9 million). - Profit for the period was EUR -3.0 million (EUR -1.9 million). - Earnings per share were EUR -0.01 (EUR -0.005) and diluted earnings per share EUR -0.01 (EUR -0.005). - Net sales of the Laser and Automation Applications segment (LAS) decreased by 39.1 per cent to EUR 0.8 million (EUR 1.3 million) and operating profit was EUR -0.9 million. The segment’s EBITDA was EUR -0.4 million. - Net sales of the Life Cycle Management segment (LCM) decreased by 10.2 per cent to EUR 0.8 million (EUR 0.9 million) and operating profit was EUR -0.02 million. The segment’s EBITDA was EUR 0.1 million. - Net sales of the Cencorp Clean Energy segment (CCE) decreased by 42.1 per cent to EUR 0.7 million (EUR 1.1 million) due to reduction in antenna production at the Beijing factory and operating profit was EUR -1.4 million. The segment’s EBITDA was EUR -1.0 million. January - December 2013 (continuing operations) - Cencorp Group’s net sales decreased by 27.9 per cent to EUR 11.1 million (EUR 15.4 million). - EBITDA was EUR -2.7 million (EUR -1.6 million). - Operating profit was EUR -5.2 million (EUR -3.9 million). - The Group’s profit before taxes was EUR -7.0 million (EUR -4.8 million). - Profit for the period was EUR -7.0 million (EUR -4.8 million). - Earnings per share were EUR -0.02 (EUR -0.01) and diluted earnings per share EUR -0.02 (EUR -0.01). - Net sales of the Laser and Automation Applications segment (LAS) decreased by 17.4 per cent to EUR 4.9 million (EUR 5.9 million) and operating profit was EUR -2.1 million. The segment’s EBITDA was EUR -1.1 million. - Net sales of the Life Cycle Management segment (LCM) decreased by 16.4 per cent to EUR 3.1 million (EUR 3.7 million) and operating profit was EUR 0.1 million. The segment’s EBITDA was EUR 0.3 million. - Net sales of the Cencorp Clean Energy segment (CCE) decreased by 43.1 per cent to EUR 3.3 million (EUR 5.9 million) and operating profit was EUR -3.2 million. The segment’s EBITDA was EUR -1.9 million. MANAGING DIRECTOR IIKKA SAVISALO’S REVIEW In the near future Cencorp’s success will depend on the development of the Cencorp Clean Energy segment and on Photovoltaic (PV) related business, in particular. There are high expectations for this business, however, they did not yet realized in 2013. Cencorp’s traditional laser and automation business (LAS and LCM) will be continuously developed and streamlined to improve its profitability and to enable structural changes. The company has reduced both fixed and operational costs during the financial year 2013. The company used a lot of effort to improve profitability particularly in the traditional LAS and LCM segments. In September and October Cencorp carried out statutory negotiations in order to further focus its business model and to decrease costs. The targeted savings were achieved with lay-offs carried out in phases, by adding flexibility in working time and by decreasing certain allowances as well as by outsourcing ramp up functions. The lay-offs did not concern the Cencorp Clean Energy (CCE) segment. Cencorp intended to further increase profitability by adding more resources to improved service for key customers. Arrangements for exit from low-profit or unprofitable operations were made and costs in support functions were decreased. Investments in products for Cencorp’s industrial automation customers will from now on be focused on the company’s key areas: solutions for depaneling, odd-form assembly for special components, laser applications and final assembly. By focusing on these core business areas Cencorp believes it can provide its customers with automation offering that is one of the most modern and most competitive in the world, and further, with less costs than earlier. REVIEW BY SEGMENTS The net sales for the reporting period October - December decreased by 34 per cent to EUR 2.2 million compared to the corresponding period in 2012. The EBITDA decreased to EUR -1.3 million from the previous year’s EUR -0.8 million. CENCORP CLEAN ENERGY (CCE) In the CCE segment deliveries of the mobile phone components continued to decrease. In the financial year 2013 the delivery volumes were clearly below the break-even point. As Cencorp has previously announced the production of the mobile phone components is no longer part of the company’s core business. Cencorp is reviewing its options to exit the production of these components as soon as possible. Test deliveries of Cencorp’s Conductive Back Sheets (CBS) for solar modules, produced at the Beijing factory were continued for Chinese module manufacturers but the CBS business did not yet generate any remarkable net sales during the reporting period. Since the end of the reporting period CBS deliveries to Cencorp’s own module factory in Mikkeli have started. The Cencorp Clean Energy segment is the key factor of the company’s growth strategy and the company continued its significant investments according to its strategy. In the reporting period the gross investments in the Cencorp Clean Energy totaled EUR 3.0 million as the other investments amounted to EUR 0.4 million. The company expects to generate remarkable net sales from the new business in the financial year 2014. The company has had a good start in building a partnership network. On the third quarter Cencorp and ProxEnergy signed a distribution agreement on selling photovoltaic modules, manufactured by Cencorp, in Cape Verde and the Netherlands. The first order based on the distribution agreement values for ca. EUR 0.15 million. Since the end of the reporting period Cencorp has signed another cooperation agreement, which got a lot of attention in global business journals, with Vikram Solar that is one of the biggest module manufacturers in India. LASER AND AUTOMATION SOLUTIONS SEGMENT (LAS) In the LAS segment the equipment sales did not materialize in the summer 2013 as expected due to which the amount of deliveries did not reach the target level set for the fourth quarter. This was mainly consequence of delayed customer projects. The renewal of Cencorp’s automation product families launched in the last quarter of 2013 brought totally new and significantly improved depaneling solutions and odd-form assembly for special components in the market. This product development has tied a lot of recourses. In the last quarter of 2013 Cencorp’s organization was rewarded for its efforts; the company received more orders for new machines than in any other quarter since the first quarter of 2011. The new products have got very good feedback in the market and there is no need to further develop Cencorp’s traditional key products for now. Thus, the research and development resources can be focused on customer projects improving the company’s utilization of capacity and the profitability as well. LIFE CYCLE MANAGEMENT (LCM) The net sales of the LCM segment decreased slightly on annual level but the EBITDA stayed profitable. Notably, in the financial year 2013 Cencorp’s subsidiary in North America succeeded in its operations and its EBITDA was profitable. OPERATING ENVIRONMENT Cencorp operates in industries applying electronics and Cleantech technology. Cencorp’s operating environment is global. The company’s traditional customers in the electronics industry as well as new CCE customers are companies that provide products and services worldwide. 93.2 per cent of Cencorp’s automation products and services are either exported from Finland or they are manufactured by Cencorp in the US and in China. MARKET OUTLOOK In Cencorp’s LAS segment the short and middle-term outlook has improved. The new orders received in the last quarter of 2013 will mainly be delivered in the first half of the year 2014. The amount of Cencorp’s quotations has clearly risen compared to the last year and opportunities for growth can been seen in odd-form assembly applications, in particular. The new industrial automation solutions Cencorp brought in the market in the last quarter of 2013 give Cencorp’s long-term customers a good opportunity to bring the automation applications the customers have bought at the beginning of the 21st century up to date and to meet the latest technological requirements. There are still hundreds of these automation applications that are coming to the end of their life cycle in the market. The high quality and long economical life time of Cencorp’s automation applications have created reasonable large and loyal customer base for Cencorp. The company believes it will renew major part of these applications within the next five years. Thus, the LAS segment’s future growth will be driven by taking maximum advantage of this “new” customer potential. Even though the LCM segment’s operation has been profitable it has not yet succeeded to meet the growth and profitability targets. The demand has stayed on a reasonable level. The company’s organization and products are ready to meet the growing demand. The company will pay a special attention to increasing the volume of the business and to focusing the resources to increase the LCM sales, in particular. Cencorp has its biggest growth expectations for the CCE segment. Cencorp’s key products and services have been designed for the photovoltaic market. Cencorp has its own “recipe” for module manufacturing including detailed material selection and process parameters. With its module recipe and automated production Cencorp is able to manufacture modern next generation solar modules based on conductive back sheet. In the market general attitude towards solar energy investments was clearly improving towards the end of the financial year. Many solar module manufacturers with solid market position have started to plan investing in capacity, partially to increase the amount of their production capacity and partially to replace old production capacity for old H-pattern solar modules. Vikram Solar, India’s leading solar module manufacturer, is one of these manufacturers. On 7 February 2014 Cencorp published that it has signed a Term Sheet with Vikram Solar on reviewing business and partnership opportunities. Cencorp continues negotiating with other companies too. Many new local operators are entering the industry as well. Their interest towards the latest production automation and Cencorp’s module recipe is increasing. Cencorp is actively negotiating with several new operators on technology transfer agreements. Cencorp and its offering are very well prepared to meet the demand. According to the information available to the company at the moment there is no other provider for full-scale offering with turnkey delivery. The first phase of Cencorp’ pilot production line for solar modules has been started in Mikkeli. The first commercial sample modules have been delivered to partners. However, Cencorp emphasizes that the focus of the company’s future strategy is in delivering production technology to the global markets. In the near future the developing markets will be among the most interesting market areas for the company. The company is having negotiations on technology transfer to India, Japan, China, Dominican Republic and to several African countries. For about two years Cencorp has been developing fully automated production technology for CBS modules. The technology has been introduced to almost all of the most significant solar module manufacturers. Innovations relating to the technology have been protected by applying several patents. There is only a limited amount of competitors in the market and the customer feedback on Cencorp’s production technology has been positive. Cencorp’s production technology has special features: production lines have high level of automation, they are easy to use and require only little space. Start-up cost for setting up solar module production from zero amounts to only EUR 6 – 15 million depending on the existing level of the infrastructure and required capacity. Cencorp is negotiating with several existing module manufacturers as well as with companies planning to establish local module production. Cencorp’s first full-size production plant, based on the company’s own design, planned to operate as the company’s sample factory, is expected to be opened in Mikkeli in 2014, provided the company has sufficient capital for the project. Cencorp’s Cleantech strategy, if realized, will remarkably change the company’s cost structure and the targets set for the near future. As Cencorp is now in a strong transition phase, following the new strategy, Cencorp cannot assess how the change in company’s business focus will impact to the company and Cencorp has decided not to give any financial guidance for the time being, as stated in the release of 21 August 2012. As the transition phase is still continuing Cencorp does not give any financial guidance either for the 2014. Cencorp informed of its Cleantech strategy in more detail in a separate release of 13 November 2013. Cencorp’s future outlook will be highly dependent on the company’s ability to reach the targeted market position in the global photovoltaic module market as well as on the company’s long-term and short-term financing. Risks are handled in more detail in the item Risk management, risks and uncertainties of this Interim Report. LONG-TERM OBJECTIVES FOR MANAGING DIRECTOR On 21 August 2012 Cencorp’s Board of Directors published its long-term financial and other objectives for Managing Director as follows: - Thorough but fast transition from a company manufacturing only production automation systems and special components into a company that develops and provides Cleantech applications using laser and automation technology, a company with a strong market position as a provider, of locally, produced, high-quality photovoltaic modules and a company operating in various geographical markets. - Cencorp’s goal is to increase its shareholder value with growth and profitability. Cencorp aims for growth in Cleantech business where the company has good possibilities to achieve a strong global position and faster growth. - Laser and Automation Applications segment has its main focus on the Life Cycle Management of systems and on equipment with growth expectations for service business. - In the long run Cencorp is aiming for remarkable growth in its net sales with net sales target of more than EUR 200 million for 2016, with growth coming mainly from Cleantech operations, especially from solar photovoltaic and fuel cell applications, provided the company has sufficient capital. The long-term objectives set for the Managing Director involve also risks and the long-term objectives should not be considered as the company’s financial guidance. Even though the objectives are based on market knowledge and technical surveys, the risks are significant and it is not certain if the Managing Director reaches all or part of the targets set for him. FINANCING Cash flow from business operations before investments in January – December was EUR -0.7 million (EUR -0.5 million). Trade receivables at the end of the reporting period were EUR 1.6 million (EUR 2.0 million). Net financial items amounted to EUR -1.8 million (EUR -0.8 million). At the end of December, the equity ratio was -6.9 per cent (25.2 %) and equity per share was EUR -0.000004 (EUR 0.00001). The equity ratio including capital loans was 17.1 per cent (38.0 %). At the end of the reporting period, the Group’s liquid assets totaled EUR 0.1 million (EUR 0.6 million) unused export credit limits, bank guarantee limits and factoring loans amounted to EUR 1.1 million (EUR 1.7 million). Keskinäinen Eläkevakuutusyhtiö Etera and Oy Ingman Finance Ab subcribed all of the convertible bond I/2013 of EUR 2.1 million, issued by Cencorp 17 May 2013. As previously announced, Cencorp’s financing position has been tight and it involves risks. As the investments are still continuing and the company is preparing for significant increase in its net sales, working capital is probably to be tight until the operations turn into profit in terms of EBITDA. However, the company will have a deficit in its working capital until the first delivery of production technology for solar modules will start to generate cash flow. Based on an authorisation given to Cencorp’s Board of Directors on 4 December 2013 by the extraordinary general meeting, the Board of Directors resolved on 9 December 2013 on a share issue to the shareholders of the company and to the holders of the convertible bonds of I/2010, I/2012 and I/2013 with maximum number of 508,151,045 new shares to be issued. The subscription period ended on 24 January 2014. According to the final result of the Share Issue, the total amount of subscriptions was 627.064.325 shares, which represents 123 per cent of the 508.151.045 shares offered in the Share Issue. Due to the oversubscription, the Board had to reject part of the subscriptions made on the basis of the secondary subscription rights in accordance with the terms of the Share Issue. As a result of the Share Issue, the number of the Company's shares shall increase by 508.151.045 to 854.312.315 shares. In total, 2.413 subscribers participated in the Share Issue. The Company collected 4,911,973 Euros of new equity through the Share Issue. Approximately 2.4 million Euros of the total subscription price was paid by the capital and/or interest receivables related to loans with interest that the Company owed to the respective subscribers. This includes the subscription of approximately 2.1 million Euros by Savcor Group Oy. The subscription price of 4,911,973 Euros for the Share Issue shall be in whole entered into the fund of the invested unrestricted equity of the Company. The Share Issue has no effects to the registered share capital of the company. The new shares were registered with the Trade Register on 4 February 2014 and were entered into public trading on 5 February 2014. Cencorp agreed with its financiers on amendment of the financial agreements and announced on 10 January 2014 that: - Danske Bank Oyj’s financial facility agreement totaling EUR 4 million was continued until 31 March 2015. However, the extension is subject to Finnvera extending accordingly its guarantee connected to the facility agreement. Finnvera's current guarantee, connected to the facility agreement, is valid until 29 June 2014. If Finnvera does not extend its guarantee, Danske Bank's facility agreement signed on 10 January 2014 will be valid until 27 June 2014. - The maturity date of a convertible bond of some EUR 1.2 million from Savcor Group Oy was extended until 31 March 2015 provided Danske Bank's facility agreement shall be valid until 31 March 2015. Should Danske Bank's facility agreement be due already on 27 June 2014, Savcor Group Oy's loan shall be due 27 June 2014 accordingly. - The maturity date of a loan of EUR one million from Savcor Invest BV, a daughter company of Savcor Group Oy, was extended until 31 March 2015 provided Danske Bank's facility agreement shall be valid until 31 March 2015. Should Danske Bank's facility agreement be due already on 27 June 2014, Savcor Invest B.V.'s loan shall be due 27 June 2014 accordingly. Based on the current information available to the Company, the Company believes that the cash flow of the business operations of the Company will turn positive during the second half of the year 2014 with the Company's current costs structure, provided that the Company achieves its minimum turnover objective for 2014 the likelihood of which is in the Company's view reasonable given its previous turnover levels, recent order book and tender activity. In case the cash flow of the Company will not turn positive at the latest during the second half of the year 2014 pursuant to the objective of the Company; and/ or the Company does not have at least the credit limits corresponding to the current limits of 4.0 million Euros; or the Company does not manage to negotiate postponement of the maturity dates for its maturing loans; and/or the Company does not manage to acquire separate financing for its investments pursuant to the investment program of the Company (from clients, partners, venture capital investors or from other third parties such as Tekes - the Finnish Funding Agency for Technology and Innovation), the Company may be obliged to reconsider the scope of its clean energy business and to lower its growth target for the future. As other alternatives, the Company has considered, and will consider in the future, the possibilities to divest such business operations that do not belong to its key business operations pursuant to the current strategy of the Company. Such business operations are i.e. RFID and flexible electronics for mobile phones businesses. At the moment, the Company is investigating possible buyers for these business operations as disclosed previously. RESEARCH AND DEVELOPMENT The Group’s research and development costs during the January – December period amounted to EUR 2.0 million (EUR 1.5 million) or 18.0 (9.4) per cent of net sales. INVESTMENTS Gross investments during the January – December period amounted to EUR 3.4 million (EUR 1.8 million). The largest investments were EUR 2.8 million in development costs. PERSONNEL At the end of December the Group employed 149 (168) people, out of which 55 persons worked in Finland, 81 persons in China and 13 persons in other countries. During the reporting period, salaries and fees totalled EUR 4.2 million (EUR 5.1 million). SHARES AND SHAREHOLDERS Cencorp’s share capital amounted to EUR 3 425 059.10 at the end of the reporting period. The number of shares was 346 161 270. The company has one series of shares, which confer equal rights in the company. Cencorp did not own any of its own shares at the end of the reporting period. The company had a total of 5017 shareholder at the end of December 2013, and 0.8 per cent of the shares were owned by foreigners. The ten largest shareholders held 88.3 per cent of the company’s shares and voting rights on 31 December 2013. The largest shareholders on 31 December 2013 Shares Votes ----------------------------------------------------------- 1. SAVCOR GROUP LIMITED 133 333 333 38,5 ----------------------------------------------------------- 2. SAVCOR GROUP OY 119 235 078 34,4 ----------------------------------------------------------- 3. SAVCOR INVEST BV 17 499 999 5,1 ----------------------------------------------------------- 4. KESKINÄINEN ELÄKEVAKUUTUSYHTIÖ ETERA 16 394 735 4,7 ----------------------------------------------------------- 5. GASELLI CAPITAL OY 8 830 000 2,6 ----------------------------------------------------------- 6. NORDEA PANKKI SUOMI OYJ 4 053 911 1,2 ----------------------------------------------------------- 7. GASELLI CAPITAL PARTNERS OY 2 050 000 0,6 ----------------------------------------------------------- 8. JOKELA MARKKU 1 804 728 0,5 ----------------------------------------------------------- 9. PARPOLA VILLE 1 478 759 0,4 ----------------------------------------------------------- 10. FRATELLI OY 877 000 0,3 ----------------------------------------------------------- OTHERS 40 603 727 11,7 ----------------------------------------------------------- TOTALLY 346 161 270 100,0 ----------------------------------------------------------- The members of the Board of Directors and the President and CEO, either directly or through companies under their control, held a total of 270 068 410 shares in the company on 31 December 2013, representing about 78.0 per cent of the company’s shares and voting rights. Iikka Savisalo, Cencorp’s Managing Director, either directly or through companies under his control, held a total of270 068 410 shares in the company, 8,931,000 options connected to bond I/2010 and 21,428,571 options connected to bond I/2012. The price of Cencorp’s share varied between EUR 0.03 and 0.09 during the January – December period. The average price was EUR 0.07 and the closing price at the end of December EUR 0.04. A total of 31.4 million Cencorp shares were traded at a value of EUR 2.1 million during the January – December period. The company’s market capitalization at the end of December stood at EUR 13.8 million. No share options were granted to the company’s management during the reporting period. On 31 December 2013, the company had 8,931,000 options connected to bond I/2010 with a subscription period ending on 25 May 2015. Savcor Group Oy holds the options connected to bond I/2010. On 31 December 2013 the company hold 21,428,571 options connected to bond I/2012 with subscription period ending on 7 December 2014. Options connected to bond I/2012 are held by SCI Invest Oy and Savcor Group Oy. On 31 December 2013 the company had 30,000,000 options connected to bond I/2013 with a subscription period ending on 2 June 2015. The options connected to bond I/2013 are held by Keskinäinen Vakuutusyhtiö Etera and Oy Ingman Finance Ab. The aforesaid information presented in this section corresponds to the situation at the end of the reporting period on 31 December 2013. Cencorp’s oversubscribed share issue that has been described in the item “Financing” of this Financial Statement Release and that ended on 24 January 2014 has changed remarkably the company’s shareholding at the end of the reporting period. SHARE ISSUE AUTHORIZATIONS IN FORCE Cencorp’s Extraordinary General Meeting held on 30 January 2012 decided to authorize the Board of Directors to issue 100,000,000 new shares. 48,571,429 shares remain under the authorization. 4,000,000 shares, under the authorization, were issued on 28 November 2013 in a directed share issue for Sunweb Solar Energy Holding to pay part of the purchase price of the transaction carried out in January. There remain 44,571,429 shares under the authorisation. The Extraordinary General Meeting of Cencorp Corporation held on 4 December 2013 authorized the Board of Directors of the company to decide on a share issue to the shareholders of the company and to the holders of the convertible bonds of the company, so that the maximum number of new shares to be issued based on the authorization is 510 000 000 new shares of the company. The Board of Directors is entitled to resolve on any other terms and conditions of the share issue. The authorization is in force until further notice, however, in maximum for five years as of the resolution of the General Meeting. The authorization does not revoke the earlier authorizations. 508,151,045 shares, under the authorization, were issued in the share issue ended on 24 January 2014. There remain 1,848,955 shares under the authorization. EVENTS ON THE FINANCIAL YEAR 2013 Decisions at the annual general meeting Cencorp Corporation's Annual General Meeting held on 29 April 2013 approved the 2012 financial statements. According to the Board' proposal, it was decided that no dividend for the financial year 2012 will be distributed. It was also decided that the loss for the financial period that ended on 31 December 2012 will be entered in retained earnings. The members of the Board and the President and CEO were discharged from liability for the financial year 2012. Mrs Marjukka Karttunen, Hannu Savisalo and Iikka Savisalo were elected to the Board of Directors of Cencorp Corporation. At its organizing meeting followed the AGM, Cencorp's Board of Directors elected Hannu Savisalo as the Chairman and Marjukka Karttunen as the Vice Chairman of the Board. The AGM decided that an annual remuneration of EUR 40,000 will be paid to the Chairman and to the Vice Chairman of the Board, and EUR 30,000 to the members of the Board of Directors. Ernst & Young Oy, Authorized Public Accounting Firm, was elected as the Company auditor and Mikko Rytilahti, APA, as the responsible auditor. Change in the company’s reporting system On 14 May 2013 the company announced it changes its reporting system to comply with its Cleantech strategy and reports of three business segments. The business segments are Cencorp Clean Energy (CCE) (including also the former Special Components segment), Laser and Automation Applications (LAS) and Life Cycle Management (LCM). The two latter segments formed previously the former Laser and Automation Applications segment. Cencorp's new segment information complies with the management's internal reporting and the organization structure. Negotiations with Avery Dennison closed On 21 August 2012 Cencorp announced that the company and Avery Dennison Corporation, a US based company, have signed a Memorandum of Understanding (MOU) according to which Cencorp acquires Avery Dennison Corporation’s conductive back sheet business and related intellectual property rights. The MOU was non-binding. On 21 August 2013 the company announced that the negotiations between Avery Dennison and Cencorp have been closed for now. The Memorandum of Understanding with a major Chinese photovoltaic module manufacturer on delivering conductive back sheets On 5 November 2012 Cencorp announced that the company has signed a Memorandum of Understanding on delivering Conductive Back Sheets (CBS) to one of the leading Chinese PV (photovoltaic) module manufacturers. The Memorandum of Understanding is non-binding. According to the customer's written estimate received from the customer at the end of January 2013 CBS mass deliveries should have commenced during the first half of 2013. Commencing of the mass production always requires customer's internal evaluating process which still continues and the customer has not yet started mass production. However, CBS components have passed Cencorp´s internal technical requirements. The risks related to the non-binding MOU signed with the Chinese solar photovoltaic module manufacturer have been handled in more detail in the item “Risk management, risks and uncertainties” of this Interim Report. Convertible Bond I/2013 On 27 May 2013 the company received subscription forms and payments from Keskinäinen Eläkevakuutusyhtiö Etera and Oy Ingman Finance Ab in connection with the convertible bond I/2013. Cencorp's Board of Directors approved the subscriptions. Keskinäinen Eläkevakuutusyhtiö Etera subscribed a convertible bond for EUR 1.5 million and Oy Ingman Finance Ab for EUR 0.6 million. The total amount of the subscriptions equaled to the maximum amount of the convertible bond i.e. EUR 2.1 million. The company issued totally 30,000,000 stock options against the subscriptions free of charge. One stock option was issued against each subscribed loan capital amount of EUR 0.07. The terms of the TEKES loan were fulfilled On 20 December 2012 Cencorp announced that the Finnish Funding Agency for Technology and Innovation - Tekes gave Cencorp a loan, of ca. EUR 3 million, to develop business and production model relating to the design and production of cost effective photovoltaic modules as well as to the development of module components. The loan was subject to capital investments, amounting totally to EUR 3 million at the minimum, to be made in Cencorp during the period from 20 September 2012 to 30 June 2013. The loan term was fulfilled as the company secured investments of EUR 3.6 million with the convertible bonds I/2012 and I/2013 between 3 December 2012 and 25 May. Decisions of the extraordinary general meeting held on 4 December 2013 The Extraordinary General Meeting of Cencorp Corporation held on 4 December 2013 in Mikkeli, authorized the Board of Directors of the company to decide on a share issue to the shareholders of the company and to the holders of the convertible bonds of the company, so that the maximum number of new shares to be issued based on the authorization is 510 000 000 new shares of the company. The Board of Directors is entitled to resolve on any other terms and conditions of the share issue. The authorization is in force until further notice, however, in maximum for five years as of the resolution of the General Meeting. The authorization does not revoke the earlier authorizations. Share issue On 9 December 2013 the company’s Board of Directors resolved on a share issue to its shareholders and to the holders of its convertible bonds in order to strengthen the capital structure of the company and to carry out investments related to the business plan for clean energy. The company offers at the most 508,151,045 new shares of the company for subscription to its shareholders and to the holders of its convertible bonds with a subscription price of EUR 0.01 per share. The share issue amounted totally to approximately EUR 4.9 million taking into account the discount given to certain subscribers of the new shares under the terms of the share issue and the subscription period was from 17 December 2013 to 24 January 2014. The subscription period ended on 24 January 2014 and it was oversubscribed Reverse stock split The Board of Directors has commenced preparations for convening an extraordinary general meeting to decide on reduction of the number of the shares without reducing the value of the shares (so called reverse stock split). The purpose of the reverse stock split is to boost trading and pricing of the shares of the company. According to the current knowledge the issue will be handled either in an extraordinary general meeting to be held during the spring 2014 or in Cencorp’s general meeting that will take place on 29 April 2014. Share issue to Sunweb Solar Energy Holding Cencorp Corporation issued 4.000.000 new shares of the company to Sunweb Solar Energy Holding B.V. on 28 November 2013. The ground for the directed share issue was the acquisition of photovoltaic module business disclosed on 29 January 2013 pursuant to the strategy of the Company from Sunweb Solar Energy Holding B.V. in which the purchase price has been agreed, pursuant to the Assets Purchase Agreement, to be paid partly by issuing a directed share issue of 4,000,000 (four million) shares to Sunweb Solar Energy Holding B.V. The purchase of the photovoltaic module business consisted of the business and related pilot production line, the Sunweb trademark as well as the patents and other intellectual property rights relating to the business. Liquidity providing in Cencorp Corporation’s share ended FIM Pankki Oyj's liquidity providing in Cencorp Corporation's share ended on 29 November 2013. On the date of this Financial Statement Release there is no liquidity providing in the company’s share. Approval of the Registration Document and the Securities Note On 9 December 2013 the company’s Board of Directors approved the Registration Document and the Securities Note as well as the Summary. EVENTS SINCE THE END OF THE FINANCIAL YEAR 2013 Cencorp’s share issue oversubscribed In Cencorp’s share issue, ended on 24 January 2014, the total amount of subscriptions was 627,064,325 shares, which represents 123 per cent of the 508,151,045 shares offered in the Share Issue. Due to the oversubscription, the Board had to reject part of the subscriptions made on the basis of the secondary subscription rights in accordance with the terms of the Share Issue. As a result of the Share Issue, the number of the Company's shares shall increase by 508,151,045 to 854,312,315 shares. In total, 2,413 subscribers participated in the Share Issue. The Company collected 4,911,973 Euros of new equity through the Share Issue. Approximately 2.4 million Euros of the total subscription price was paid by the capital and/or interest receivables related to loans with interest that the Company owed to the respective subscribers. This includes the subscription of approximately 2.1 million Euros by Savcor Group Oy. The subscription price of 4,911,973 Euros for the Share Issue shall be in whole entered into the fund of the invested unrestricted equity of the Company. The Share Issue has no effects to the registered share capital of the company. The new shares were registered with the Trade Register on 4 February 2014 and were entered into public trading on 5 February 2014. Vikram Solar and Cencorp consider opportunities for business and partnership collaboration Vikram Solar Pvt, Ltd ("Vikram Solar"), an Indian company, and Cencorp have started to review collaboration opportunities for using Cencorp's MWT (Metal Wrap Through) technology for photovoltaic modules in Vikram Solar's solar energy projects. MWT technology refers to Conductive Back Sheet (CBS) based module structure. The parties have signed a Term Sheet on collaboration on 7 February 2014. As agreed in the Term Sheet consideration of collaboration options shall take six months, at the most. During that time the parties negotiate both business opportunities in photovoltaic module business and opportunities for ownership arrangements between the companies. Vikram Solar is the leading provider of solar energy projects in India and it belongs to a technology group Vikram Group (www.vikram.in). The non-binding Term Sheet Cencorp has signed with Vikram Solar involves risks which have been handled in the item “Risk management, Risks and Uncertainties” of this Financial Statement Release. RISK MANAGEMENT, RISKS AND UNCERTAINTIES Cencorp’s Board of Directors is responsible for the control of the company’s accounts and finances. The Board is responsible for internal control, while the President and CEO handles the practical arrangement and monitors the efficiency of internal control. Business management and control are taken care of using a Group-wide reporting and forecasting system. The purpose of risk management is to ensure that any significant business risks are identified and monitored appropriately. The company’s business and financial risks are managed centrally by the Group’s financial department, and reports on risks are presented to the Board of Directors as necessary. Due to the small size of the company and its business operations, Cencorp does not have an internal auditing organization or an audit committee. The sufficiency of the company’s financing and working capital involve risks that are handled in more detail in the item “Financing” of this Financial Statement Release. Pursuant to the understanding of the management of the company on the date hereof, with the share issue and the extension of the financial agreements described in the item “Financing”, the company has ensured the sufficiency of its working capital for the period of next twelve months, provided that the Company has at its disposal at least the credit limits corresponding to the current limits of 4.0 million Euros; the aforesaid Finnvera guarantee will be extended and will be valid also after 29 June 2014; the company has in its use separate financing for the investments pursuant to its investment program as planned; and the cash flow of the business operations of the company will turn positive during the second half of the year 2014, at the latest. However, the company will have a deficit in its working capital until the first delivery of production technology for solar modules will start to generate cash flow. Based on the current information available to the company, the company believes that the cash flow of the business operations of the company will turn positive during the second half of the year 2014 with the company's current costs structure, provided that the company achieves its minimum turnover objective for 2014 the likelihood of which is in the company's view reasonable given its previous turnover levels, recent order book and tender activity. In case the cash flow of the company will not turn positive at the latest during the second half of the year 2014 pursuant to the objective of the company; and/ or the company does not have at least the credit limits corresponding to the current limits of 4.0 million euros; or the company does not manage to negotiate postponement of the maturity dates for its maturing loans; and/or the company does not manage to acquire separate financing for its investments pursuant to the investment program of the company (from clients, partners, venture capital investors or from other third parties such as Tekes - the Finnish Funding Agency for Technology and Innovation), the company may be obliged to reconsider the scope of its clean energy business and to lower its growth target for the future. As other alternatives, the company has considered, and will consider in the future, the possibilities to divest such business operations that do not belong to its key business operations pursuant to the current strategy of the Company. Such business operations are i.e. RFID and flexible electronics for mobile phones businesses. The company is investigating possible buyers for these business operations as disclosed previously. As it is difficult to make forecasts in an industry that is dependent on economic cycles, the biggest business risks are related to fluctuations in the demand for products and to the adjustment of operations to meet demand. In terms of profitability, the most essential risks are related to the achievement of a sufficient invoicing volume in all three business segments and the success achieved with the programs underway at Cencorp to improve profitability, such as improvements in productivity and business flexibility through outsourcing production. Cencorp has announced that its objective is to transform from a company manufacturing only production automation systems and special components into a company that develops and provides cleantech applications using laser and automation technology as well as into a company that has a strong market position as a provider of, in various geographical areas, locally produced high-quality photovoltaic modules. Achievement of the objectives as well as realization of the transformation involves risks. Even though Cencorp's strategy and objectives are based on market knowledge and technical surveys, the risks are significant and it is not certain if the company reaches all or part of the targets set for it. Cencorp's future outlook will be highly dependent on the company's ability to reach the targeted market position in the global photovoltaic module market as well as on the company's long-term financing. The execution of the non-binding Memorandum of Understanding signed with a major Chinese photovoltaic module manufacturer involves risks. The final terms of an agreement are still under negotiations, thus execution of the agreement is not yet guaranteed. Additionally, the agreement is subject to Cencorp's short-term and long-term financing. Thus, Cencorp is not yet able to estimate the agreement's possible execution, effective date neither the agreement's impact in Cencorp nor the final risks relating to it. However, in regard to the Memorandum of Understanding on delivering CBS to the Chinese photovoltaic module manufacturer, the estimated minimum value of EUR 20 million for three years’ period from the start of mass production will probably stay non-binding even though the actual Memorandum of Understanding turns into a binding supply contract. In this business customers do not give binding order estimations. The execution of the non-binding cooperation agreement signed between Cencorp and Vikram Solar involves risks. The negotiations for business and partnership collaboration between the parties, including detailed terms, are still under negotiations, thus it is not yet certain that the transactions will be materialized. Further, realization of the transactions defined in the non-binding Term Sheet is subject to several issues such as due diligence and especially to Cencorp's short and long term financing. Therefore, Cencorp is not yet able to estimate possible realization and effective date of the transactions, the transactions' influence in Cencorp or risks relating to them. Cencorp will announce further information as soon as the negotiations have been finished. The long-term objectives set for the Managing Director involves also risks and the long-term objective should not be considered as the company’s financial guidance. Even though the objectives are based on market knowledge and technical surveys, the risks are significant and it is not certain if the Managing Director reaches all or part of the targets set for him. Other risks connected to Cencorp have been presented in more detail in the Share Issue Registration Document and its appendixes published on 9 December 2013. GOVERNANCE PRINCIPLES Cencorps Board of Directors handled and approved the company’s Corporate Governance Statement on 18 February 2014. The statement describes the main features of the internal control and risk management related to the company’s financial reporting process, and the operations and composition of the Board of Directors, including information on the President and CEO. The Annual Report for the financial year 2013 will be published on 25 March 2014 at www.cencorp.com and will include the Financial Statements, the Report of the Board of Directors and the Auditors Report. The company’s Corporate Governance Statement will be published as a separate report in the same connection. It is also available on the company’s website. THE BOARD OF DIRECTORS’ PROPOSAL CONCERNING THE DISTRIBUTION OF PROFIT The Board of Directors proposes to the Annual General Meeting that the loss for the period ended on 31 December 2013 be entered in retained earnings and that no dividend be paid. In Mikkeli, 19 February 2014 Cencorp Corporation BOARD OF DIRECTORS For more information please contact: Cencorp: Iikka Savisalo, President and CEO, tel. +358 40 521 6082, [email protected] Distribution: NASDAQ OMX, Helsinki Main media www.cencorp.com Consolidated statement of comprehensive income (unaudited) 1 000 EUR 10-12/2013 10-12/2012 1-12/2013 1-12/2012 -------------------------------------------------------------------------------- Continuing operations Net sales 2 182 3 312 11 126 15 441 Cost of sales -2 275 -3 335 -10 662 -14 731 Gross profit -94 -23 464 710 -------------------------------------------------------------------------------- Other operating income 1 365 933 1 791 Product development -631 -470 -2 002 -1 458 expenses Sales and marketing -288 -619 -1 512 -2 072 expenses Administrative expenses -508 -595 -1 945 -2 669 Other operating -821 -179 -1 103 -235 expenses Operating profit -2 341 -1 520 -5 165 -3 932 Financial income 159 -875 460 380 Financial expenses -781 523 -2 247 -1 224 Profit before taxes -2 963 -1 871 -6 953 -4 776 from continuing operations Income taxes 3 -1 -11 26 Profit/loss for the -2 960 -1 872 -6 964 -4 750 period from continuing operations Discontinued operations Profit/loss after tax 0 473 -44 -8 606 for the period from discontinued operations Profit/loss for the -2 960 -1 399 -7 008 -13 356 period -------------------------------------------------------------------------------- Profit/loss attributable to: Shareholders of the -2 960 -1 399 -7 008 -13 356 parent company Earnings/share -0,009 -0,004 -0,02 -0,04 (diluted), eur Earnings/share (basic), -0,009 -0,004 -0,02 -0,04 eur Continuing operations: Earnings/share -0,009 -0,005 -0,02 -0,01 (diluted), eur Earnings/share (basic), -0,009 -0,005 -0,02 -0,01 eur Profit/loss for the -2 960 -1 399 -7 008 -13 356 period Other comprehensive income Translation difference 96 34 155 93 Net other comprehensive income to be reclassified to profit or loss in 96 34 155 93 subsequent periods Total comprehensive -2 864 -1 366 -6 853 -13 263 income for the period -------------------------------------------------------------------------------- Total comprehensive income attributable to: Shareholders of the -2 864 -1 366 -6 853 -13 263 parent company Consolidated statement of financial position (unaudited) 1 000 EUR 31.12.2013 31.12.2012 -------------------------------------------------------------------------------- ASSETS Non-current assets Property, plant and equipment 5 604 6 688 Consolidated goodwill 2 538 2 967 Other intangible assets 5 512 2 979 Available-for-sale investment 9 10 Deferred tax assets 7 9 Total non-current assets 13 670 12 652 -------------------------------------------------------------------------------- Current assets Inventories 2 198 2 693 Trade and other non-interest-bearing receivables 2 514 2 695 Cash and cash equivalents 116 583 Total current assets 4 828 5 971 -------------------------------------------------------------------------------- Assets classified as held for sale 0 79 Total assets 18 498 18 702 -------------------------------------------------------------------------------- EQUITY AND LIABILITIES Equity attributable to shareholders of the parent company Share capital 3 425 3 425 Other reserves 44 568 43 691 Translation difference 833 677 Retained earnings -50 095 -43 091 Total equity -1 269 4 703 -------------------------------------------------------------------------------- Non-current liabilities Non-current loans 3 222 2 095 Deferred tax liabilities 7 26 Total non-current liabilities 3 229 2 121 -------------------------------------------------------------------------------- Current liabilities Current interest-bearing liabilities 6 795 4 731 Trande and other payables 9 594 6 850 Current provisions 150 257 Total current liabilities 16 538 11 839 -------------------------------------------------------------------------------- Liabilities directly associated with assets 0 40 classified as held for sale Total liabilities 19 768 14 000 -------------------------------------------------------------------------------- Equity and liabilities total 18 498 18 702 -------------------------------------------------------------------------------- Consolidated statement of cash flows (unaudited) 1 000 EUR 1-12/2013 1-12/2012 -------------------------------------------------------------------------------- Cash flow from operating activities Income statement profit/loss from continuing -6 953 -4 776 operations before taxes Income statement profit/loss from discontinued -44 -8 606 operations before taxes Income statement profit/loss before taxes -6 997 -13 382 --------------------- Non-monetary items adjusted on income statement -------------------------------------------------------------------------------- Depreciation and impairment + 2 463 8 682 Gains/losses on disposals of non-current assets +/- -8 -655 Unrealized exchange rate gains (-) and losses (+) +/- 259 108 Other non-cash transactions +/- 21 -1 181 Financial income and expense + 1 564 845 Total cash flow before change in working capital -2 698 -5 583 -------------------------------------------------------------------------------- Change in working capital Increase (-) / decrease (+) in inventories 319 827 Increase (-) / decrease (+) in trade and other 161 4 863 receivables Increase (+) / decrease (-) in trade and other 2 248 -210 payables Change in provisions -108 48 Change in working capital 2 620 5 529 -------------------------------------------------------------------------------- Adjustment of financial items and taxes to cash-based accounting Interest paid - -361 -257 Interest received + 2 4 Other financial items - -300 -258 Taxes paid - -11 18 Financial items and taxes -670 -492 -------------------------------------------------------------------------------- NET CASH FLOW FROM BUSINESS OPERATIONS -748 -547 CASH FLOW FROM INVESTING ACTIVITIES Investments in tangible and intangible assets - -2 963 -1 757 Proceeds on disposal of tangible and intangible + 55 4 465 assets Repayment of loan receivables + 0 0 NET CASH FLOW FROM INVESTMENTS -2 875 2 708 -------------------------------------------------------------------------------- CASH FLOW FROM FINANCING ACTIVITIES Proceeds from non-current borrowings + 2 425 1 559 Stock options of the convertible bond + 432 347 Proceeds from current borrowings + 5 399 5 404 Repayment of current borrowings - -5 102 -9 174 Dividends paid - 0 0 -------------------------------------------------------------------------------- NET CASH FLOW FROM FINANCING ACTIVITIES 3 141 -1 865 INCREASE (+) OR DECREASE (-) IN CASH FLOW -483 296 Consolidated statement of changes in equity (unaudited) 1 000 EUR Share Other Translati Distributable Retaine Total capit reser on non-restricted d al ves differen equity fund earnin ce gs -------------------------------------------------------------------------------- 31.12.2012 3 425 4 908 677 38 783 -43 091 4 703 Stock options of 432 432 the convertible bond Share related - - - 480 0 480 payments Decrease from - - - -34 - -34 share issue Translation - - 155 3 158 difference, comprehensive income Profit/loss for - - - - -7 008 -7 008 the period 31.12.2013 3 425 4 908 833 39 661 -50 095 -1 269 1 000 EUR Share Other Translati Distributable Retaine Total capit reser on non-restricted d al ves differen equity fund earnin ce gs -------------------------------------------------------------------------------- 31.12.2011 3 425 4 908 584 38 436 -29 735 17 618 Stock options of - - - 347 0 347 the convertible bond Translation - - 93 - - 93 difference, comprehensive income Profit/loss for - - - - -13 356 -13 356 the period 31.12.2012 3 425 4 908 677 38 783 -43 091 4 703 Segment information (unaudited) 14 May 2013 Cencorp announced that the company changes its reporting system to comply with the company's Cleantech strategy and as from 1 January 2013 Cencorp reports of three business segments. The segments are Laser and Automation Applications, Life Cycle Management and Clean Energy Solutions (including also the former Special Components segment). The comparison figures for the corresponding period in 2012 concern only the net sales. Other figures that would be compareble and reliable enough are not available. Cencorp's new segment information is based on the management's internal reporting and on the organisation structure. The segment information include only continuing operations. Information regarding discontinued operations is given in attachment "Discontinued operations". -------------------------------------------------------------------------------- 1 000 EUR 1-12/2013 1-12/2012 -------------------------------------------------------------------------------- Net sales Laser and Automation 4 881 5 909 Applications Life Cycle Management of Laser 3 101 3 708 and Automation Applications Clean Energy Solutions 3 340 5 865 Eliminations -196 -41 Total 11 126 15 441 Operating profit Laser and Automation -2 063 - Applications Life Cycle Management of Laser 94 - and Automation Applications Clean Energy Solutions -3 197 - Eliminations 2 - Total -5 165 - EBITDA Laser and Automation -1 129 - Applications Life Cycle Management of Laser 281 - and Automation Applications Clean Energy Solutions -1 856 - Eliminations 2 - Total -2 703 - Depreciation Laser and Automation 492 - Applications Life Cycle Management of Laser 138 - and Automation Applications Clean Energy Solutions 1 288 - Total 1 919 - Impairment Laser and Automation 442 - Applications Life Cycle Management of Laser 49 - and Automation Applications Clean Energy Solutions 53 - Total 544 - Segment information (unaudited) When the comparison figures that would be comparable and reliable enough are not available for the corresponding period in 2012, Cencorp reports the segment information also according the old reporting system with two segments. The segment information include only continuing operations. The Group had two reporting segments till 31 December 2012: Laser and Automation Applications, and Special Components. The Laser and Automation Applications segment comprised Cencorp’s former business and the Special Components segment the business acquired through the Face transaction in 2010. 1 000 EUR 1-12/2013 1-12/2012 -------------------------------------------------------------------------------- Net sales Laser and Automation Applications 7 924 9 624 Special Components 3 272 5 858 Eliminations -70 -41 Total 11 126 15 441 Operating profit Laser and Automation Applications -2 740 -3 221 Special Components -2 436 -712 Eliminations 11 1 Total -5 165 -3 932 EBITDA Laser and Automation Applications -1 581 -2 401 Special Components -1 133 812 Eliminations 11 1 Total -2 703 -1 588 Profit/loss for the period Laser and Automation Applications -4 074 -3 644 Special Components -2 893 -1 120 Eliminations 3 14 Total -6 964 -4 750 Assets Laser and Automation Applications 16 050 27 995 Special Components 9 337 10 964 Assets classified as held for sale 0 79 Eliminations -6 888 -20 336 Total 18 498 18 702 Liabilities Laser and Automation Applications 16 946 11 873 Special Components 9 699 8 003 Liabilities directly associated with 0 40 assets held for sale Eliminations -6 876 -5 917 Total 19 768 14 000 Gross investments Laser and Automation Applications 2 272 849 Special Components 1 122 989 Assets classified as held for sale 0 4 Total 3 394 1 842 Depreciation Laser and Automation Applications 668 675 Special Components 1 250 1 434 Total 1 919 2 109 Impairment Laser and Automation Applications 491 145 Special Components 53 90 Total 544 235 Discontinued operations (unaudited) 29 May 2012 Cencorp announced that it exits from its unprofitable decoration business and closes down its plant in Guangzhou, China, producing decoration applications. In consequence of the closing down of the Guangzhou plant and the exit from decoration business Cencorp reports the financial figures relating to the Guangzhou plant’s decoration business as discontinued operations from now on. The assets of Savcor Face (Guangzhou) Technologies Co., Ltd, reported as discontinued operation, were written- off at fair value in the second quarter of 2012 and sold in the fourth quarter of 2012. The results and major classes of assets and liabilities of Savcor Face (Guangzhou) Technolgies Co., are as follows: 1 000 EUR 1-12/2013 1-12/2012 -------------------------------------------------------------------------------- Revenue 0 1 878 Expenses -8 -5 620 Other opeating income 0 1 031 Loss recognised on the 0 -5 833 remeasurement to fair value Operating profit -8 -8 544 ------------------------------------------------------- Finance costs -36 -62 Profit/loss before tax -44 -8 606 from discontinued operation Income tax 0 0 Profit/loss after tax -44 -8 606 from discontinued operation ------------------------------------------------------- Assets Property, plant and 0 0 equipment Other intangible assets 0 0 Inventories 0 0 Trade and other 0 39 non-interest-bearing receivables Cash and cash 0 40 equivalents Assets classified as 0 79 held for sale ------------------------------------------------------- Liabilities Trande and other 0 40 payables Provisions 0 0 Liabilities directly 0 40 associated with assets classified as held for sale ------------------------------------------------------- Net assets directly 0 39 associated with disposal group ------------------------------------------------------- Savcor Face (Guangzhou) Technolgies Co., Ltd:n net cash flow: 1 000 EUR 1-12/2013 1-12/2012 -------------------------------------------------------------------------------- Operating -41 17 Investing 0 -20 Financing 0 0 Net cash flow -41 -3 ------------------------------------------------------- Earnings/share (basic), -0,0001 -0,03 from discontinued operations Earnings/share (diluted) -0,0001 -0,03 from discontinued operations Key figures (unaudited) 1 000 EUR 10-12/201 10-12/20 1-12/2013 1-12/20 3 12 12 -------------------------------------------------------------------------------- Net sales 2 182 3 312 11 126 15 441 Operating profit -2 341 -1 520 -5 165 -3 932 % of net sales -107,3 -45,9 -46,4 -25,5 EBITDA -1 318 -803 -2 703 -1 588 % of net sales -60,4 -24,3 -24,3 -10,3 Profit before taxes -2 963 -1 871 -6 953 -4 776 % of net sales -135,8 -56,5 -62,5 -30,9 Balance Sheet value 18 498 18 702 18 498 18 702 Equity ratio, % -6,9 25,2 -6,9 25,2 Net gearing, % -779,9 132,7 -779,9 132,7 Gross investments 436 690 3 394 1 842 % of net sales 20,0 20,8 30,5 11,9 Research and development costs 631 470 2 002 1 458 % of net sales 28,9 14,2 18,0 9,4 Order book 3 703 1 438 3 703 1 438 Personnel on average 150 171 155 241 Personnel at the end of the period 149 168 149 168 Non-interest-bearing liabilities 9 594 6 850 9 594 6 850 Interest-bearing liabilities 10 017 6 825 10 017 6 825 Share key indicators Earnings/share (basic) -0,01 -0,004 -0,02 -0,04 Earnings/share (diluted) -0,01 -0,004 -0,02 -0,04 Earnings/share (basic), from continuing -0,01 -0,005 -0,02 -0,01 operations Earnings/share (diluted) from -0,01 -0,005 -0,02 -0,01 continuing operations Equity/share -0,003706 0,01374 -0,003706 0,01374 P/E ratio -4,64 -14,67 -1,96 -1,54 Highest price 0,09 0,09 0,09 0,12 Lowest price 0,03 0,05 0,03 0,05 Average price 0,05 0,07 0,07 0,08 Closing price 0,04 0,06 0,04 0,06 Market capitalisation, at the end of 13,8 20,5 13,8 20,5 the period, MEUR Calculation of Key Figures EBITDA, %: Operating profit + depreciation + impairment ---------------------------------------- Net sales Equity ratio, %: Total equity x 100 ---------------------------------------- Total assets - advances received Net gearing, %: Interest-bearing liabilities - cash and cash equivalents and marketable securities x 100 ---------------------------------------- Shareholders' equity + minority interest Earnings/share (EPS): Profit/loss for the period to the owner of the parent company ---------------------------------------- Average number of shares adjusted for share issue at the end of the financial year Equity/share: Equity attributable to shareholders of the parent company ---------------------------------------- Undiluted number of shares on the balance sheet date P/E ratio: Price on the balance sheet date ---------------------------------------- Earnings per share Related party transactions (unaudited) Cencorp Corporation is part of Savcor Group Oy. The Group has purchased goods and services from companies in which the majority holding and/or power of decision granting control of the company is held by members of the Group's related parties. Sales of goods and services carried out with related parties are based on market prices. The Group entered into the following transactions with related parties: 1 000 EUR 1-12/2013 1-12/2012 -------------------------------------------------------------------------------- Sales of goods and services Savcor companies 175 120 Others 9 0 Yhteensä 184 120 Purchases of goods and services Savcor companies 474 548 Savcor Face Ltd 81 4 Idem Finland Oy 15 0 Others 2 2 Total 571 552 Interest income Savcor companies 2 1 Interest expenses and other financial expenses Savcor companies 354 348 SCI Invest Oy 60 10 Iikka Savisalo 2 0 Total 416 358 Discontinued operations Sales of goods and services Savcor companies 0 143 Purchases of goods and services Savcor companies 0 20 Other non-current 185 519 liabilities to related parties Convertible subordinated 2 598 2 400 loan from related parties Interest payable to 795 480 related parties Other current liabilities 1 455 1 000 to related parties Trade payables and other 916 685 non-interest-bearing liabilities to related parties Trade receivables from 136 87 related parties SCI Invest Oy is a company under control of Iikka Savisalo, Cencorp's CEO. 1 000 EUR 1-12/2013 1-12/2012 -------------------------------------------------------------------------------- Wages and remuneration Salaries of the management 730 807 and Board Fair values (unaudited) Carrying Fair value amount 1 000 EUR 31.12.2013 31.12.2013 -------------------------------------------------------------------------------- Financial assets Available-for-sale investments 9 9 Trade and other receivables 2 514 2 514 Cash and cash equivalents 116 116 The fair value of trade and other receivables is expected to correspond to the carrying amount due to their short maturity. Financial liabilities R&D loan, non-current 1 216 1 216 Other liabilities, non-current 2 006 2 006 Loans from financial institutions, current 2 596 2 596 Other liabilities, current 4 199 4 199 Trade payables and other non-interest-bearing 8 553 8 553 liabilities The fair value of non-current liabilities is expected to correspond to the carrying amount as the loans were withdrawn in late 2012 and in 2013 and recognized to their fair value when recorded. There has been no significant change in common interest rate after the withdrawal of the loans. Change in intangible and tangible assets (unaudited) 1 000 EUR 31.12.2013 31.12.2012 -------------------------------------------------------------------------------- Includes tangible assets, consolidated goodwill and other intangible assets Carrying amount, beginning of period 12 634 22 609 Depreciation and impairment -2 221 -2 109 Additions 3 691 1 838 Disposals -356 -2 989 Discontinued operations 0 -6 654 Exchange rate difference -94 -61 Carrying amount, end of period 13 654 12 634 Commitments and contingent liabilities (unaudited) 1 000 EUR 31.12.2013 31.12.2012 -------------------------------------------------------------- Loans from financial institutions 1 245 1 247 Promissory notes secured by pledge 12 691 12 691 Mortgages on real estate 0 0 Factoring loan and export credit limit 1 338 1 090 Trade receivables 499 695 Promissory notes secured by pledge 12 691 12 691 Operating leases Payable within one year 17 50 Payable over one year 1 38 Commitments Payable within one year 948 922 Payable over one year 830 849 Copyright © 2014 OMX AB (publ). 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