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News Article | March 2, 2017
Site: www.marketwired.com

EDMONTON, ALBERTA--(Marketwired - March 2, 2017) - EPCOR Utilities Inc. (EPCOR) today filed its annual and fourth quarter results for 2016. "2016 was a defining year for EPCOR with consolidated net income at the highest in a decade reaching $309 million. This, in part, reflected a gain on the sale of EPCOR's remaining ownership interest in Capital Power Corporation," said Stuart Lee, EPCOR President & CEO. "As well, EPCOR entered Texas with its investment in the 130 Pipeline, a water supply pipeline, near Austin and is set to re-enter the Ontario market with the pending acquisition of the assets of Natural Resource Gas Limited utility in southwestern Ontario. EPCOR also reached substantial completion of the City of Regina's upgraded wastewater treatment plant - on time and on budget. EPCOR will operate and finance the new infrastructure under a 30-year contract with the City." Backed by a strong and sustainable long-term growth outlook, EPCOR increased its annual dividend to its Shareholder, the City of Edmonton, by $5 million to $146 million commencing in 2017. "In addition to a strong growth outlook and excellent financial results, EPCOR recorded its best safety performance and highest employee engagement scores in company history. These results were among the most gratifying of the year," said Mr. Lee. Highlights of EPCOR's financial performance are as follows: Management's discussion and analysis (MD&A) of the annual and fourth quarter results are shown below. The MD&A and the audited annual consolidated financial statements are available on EPCOR's website (www.epcor.com) and SEDAR (www.sedar.com). EPCOR's wholly owned subsidiaries build, own and operate electrical transmission and distribution networks, water and wastewater treatment facilities and infrastructure in Canada and the United States. The Company's subsidiaries also provide electricity, natural gas and water products and services to residential and commercial customers. EPCOR, headquartered in Edmonton, is an Alberta Top 70 employer. EPCOR's website address is www.epcor.com. This management's discussion and analysis (MD&A), dated March 2, 2017, should be read in conjunction with the audited consolidated financial statements of EPCOR Utilities Inc. for the years ended December 31, 2016 and 2015, including related party transactions (note 27) and financial instruments (note 28), and the cautionary statement regarding forward-looking information at the end of this MD&A. In this MD&A, any reference to "the Company", "EPCOR", "it", "its", "we", "our" or "us", except where otherwise noted or the context otherwise indicates, means EPCOR Utilities Inc., together with its subsidiaries. In this MD&A, Capital Power refers to Capital Power Corporation and its directly and indirectly owned subsidiaries including Capital Power L.P., except where otherwise noted or the context otherwise indicates. Financial information in this MD&A is based on the audited consolidated financial statements, which were prepared in accordance with International Financial Reporting Standards (IFRS), and is presented in Canadian dollars unless otherwise specified. In accordance with its terms of reference, the Audit Committee of the Company's Board of Directors reviews the contents of the MD&A and recommends its approval by the Board of Directors. This MD&A was approved and authorized for issue by the Board of Directors on March 2, 2017. EPCOR is wholly owned by The City of Edmonton (the City). EPCOR, through wholly owned subsidiaries, builds, owns and operates electrical transmission and distribution networks and provides Regulated Rate Option (RRO) and default supply electricity related services. EPCOR sells electricity and natural gas to Alberta residential consumers under contracts through its Encor brand. In addition, EPCOR builds, owns and operates water and wastewater treatment facilities and infrastructure in Canada and the Southwestern United States (U.S.). The water business includes design, build, finance, operating and maintenance services for municipal and industrial customers in Western Canada. Net income was $88 million and $309 million for the three and twelve months ended December 31, 2016, respectively, compared with net income of $65 million and $260 million, for the comparative periods in 2015, respectively. The increase of $23 million in the quarter is primarily due to the recognition of the fair value gain resulting from the sale of Capital Power shares (also referred to as the "available-for-sale investment in Capital Power") and greater favorable fair value adjustments related to financial electricity purchase contracts and interest rate swaps, partially offset by lower income from core operations, as described below. The increase of $49 million for the twelve months ended December 31, 2016 was primarily due to the recognition of the fair value gain resulting from the sale of Capital Power shares, greater favorable fair value adjustments related to financial electricity purchase contracts and higher income form core operations as described below. Net income from core operations was $51 million and $255 million for the three and twelve months ended December 31, 2016, respectively, compared with $74 million and $251 million for the comparative periods in 2015, respectively. The decrease of $23 million in the quarter is primarily due to lower transmission customer rates, lower billing charge rates, higher depreciation, and lower income related to industrial services contracts, partially offset by higher approved distribution and water customer rates. The increase of $4 million for the twelve months ended December 31, 2016 was primarily due to higher approved distribution, transmission and water customer rates, gains on sale of surplus land, and water customer growth, partially offset by higher depreciation, lower billing charge rates and lower water volumes in Canada due to higher precipitation. EPCOR's vision is to be a premier essential services utility company in North America, trusted by our customers and valued by our shareholder. To achieve this vision, EPCOR must excel at its utility operations and be successful in its pursuit of new business growth opportunities. EPCOR's electricity strategy includes maintaining and developing new distribution and transmission infrastructure in its franchise service area as well as the development and / or acquisition of new rate-regulated or contracted assets and operations outside of its service area. EPCOR's water strategy includes maintaining and developing new water and wastewater infrastructure within its municipal franchise service areas and the development and / or acquisition of new rate-regulated or contracted assets and operations outside of its service areas. This includes design, build, finance and operate services for municipal water and wastewater treatment infrastructure and the provision of water and wastewater treatment services and potable and process water for industrial customers. We believe the long-term outlook for the North American electricity and water and wastewater treatment businesses remains strong. The demand for electricity and water and wastewater infrastructure in North America is expected to increase due to population growth, aging infrastructure, water scarcity and increased consumer expectations for reliable power, safe, high quality water and environmentally responsible wastewater treatment. Over the next five years we plan to invest in electricity and water and wastewater treatment assets where appropriate returns are expected, operational excellence can be delivered and the environmental impact is acceptable. We will seek growth opportunities within our existing utility footprint, in addition to the new geographies in which we have made recent acquisitions. This includes exploring opportunities in natural gas distribution through acquisitions and greenfield development. EPCOR also intends to invest in the area of renewable energy generation, including solar and bio gas facilities to enhance our environmental performance. Maintaining our investment grade credit rating to ensure access to capital through existing and new credit facilities and public or private debt financing offerings remains a priority. We recognize that we are not immune to recessionary trends and will remain vigilant to maintain a prudent balance of rate-regulated and contracted operations within our financial capacity. Operational and financial performance is measured through financial and non-financial measures that are approved by the Board of Directors. The measures fall under four broad categories composed of: health, safety and environment; people; growth (financial); and operational excellence, and are applied across the Company. There are specific measures established for each business unit and the corporate shared service group in alignment with the Company's strategy. For example, under the health, safety and environment category, safety performance is based on total recordable injury frequency. Business unit measures under the operational excellence category are focused on customer related measures relevant to the particular business unit, such as customer satisfaction survey results and service reliability. Recordable injury frequency rates for EPCOR overall were better (lower) in 2016 as compared to 2015. We remain committed to building a culture that supports a workplace free of occupational injury and illness with minimized harm to the environment. Segment performance measures are discussed under Segment Results of this MD&A. The Company sold 5,901,850 and 9,141,636 common shares of Capital Power, respectively, for net proceeds of $135 million and $204 million for the three and twelve months ended December 31, 2016, respectively. As a result of the sale of Capital Power shares, for the three months and twelve months ended December 31, 2016, the Company reclassified fair value gains of $30 million and $42 million, respectively, from other comprehensive income to net income. These sales were consistent with the Company's intention to sell the shares over time as market conditions permit. At December 31, 2016, the Company owned 249,364 common shares of Capital Power which were subsequently sold for net proceeds of $6 million in January 2017. Acquisition of the Assets of Blue Water Project 130 L.P. and Cross County Water Supply Corporation On August 19, 2016, the Company completed the acquisition of the assets of Blue Water Project 130 L.P. (Blue Water) and Cross County Water Supply Corporation (CCWSC) through EPCOR 130 Project Inc., a wholly owned U.S. subsidiary, and 130 Regional Water Supply Corporation, a Texas Water Supply Corporation of which EPCOR 130 Project Inc. is the sole member. The total consideration was $82 million (US$64 million). The Blue Water and CCWSC assets include an 85 kilometer water supply pipeline, near Austin, Texas, U.S., with designed capacity of nearly 68 million liters per day, along with groundwater well production systems and long term wholesale water supply agreements (collectively the EPCOR 130 Pipeline). $48 million (US$37 million) of the total consideration was paid at closing with the balance to be paid in the future, the majority of which is contingent on securing new long term contracts for the supply of water. The Company has recorded the full amount of this contingent consideration at fair value based on expected growth in the region. The Company funded the closing payment by issuing US$40 million of private debt notes with a 25-year term. The allocation of the purchase price was determined based on the relative fair values of the acquired assets and liabilities. For further information on the fair value estimates, refer to the audited consolidated financial statements of EPCOR Utilities Inc. for the years ended December 31, 2016 and 2015. During 2016, Water Services reached substantial completion of the wastewater treatment facility for the City of Regina under a public-private partnership. The construction was completed on time and on budget and the Company continued to operate the existing wastewater treatment facility during the construction period. The upgraded facility meets higher effluent standards as established by the Saskatchewan Water Security Agency, in response to the Federal Wastewater Systems Effluent Regulations, in addition to meeting the needs of a growing population. Water Services will continue to operate the wastewater treatment facility for the City of Regina for a total term of 30 years. In February 2015, Suncor gave the Company notice that it would exercise its contractual rights to buy back the leased assets and terminate the related financing and operating agreements including the transfer of assets and operations back to Suncor over an 18-month period. The transfer of assets and operations back to Suncor was completed in August 2016 in accordance with the terms of the notice. This event did not have a material impact on the Company or its operations. Consolidated revenues were lower by $49 million and $64 million for the three and twelve months ended December 31, 2016, respectively, compared with the corresponding periods in 2015 primarily due to the net impact of the following: We use income from core operations to distinguish operating results from the Company's water and electricity businesses from results with respect to its investment in Capital Power and changes in the fair value of financial instruments. In the first quarter of 2016, the definition of income from core operations was revised to exclude changes in the fair value of financial instruments. The change in the fair value of financial instruments is the difference between the opening fair value of the derivative instruments for the period and the closing fair value of the derivative instrument. Income from core operations is a non-IFRS financial measure which does not have any standardized meaning prescribed by IFRS and is unlikely to be comparable to similar measures published by other entities. However, it is presented below as it provides a useful income performance measure of the Company's core operations and may be referred to by debt holders and other interested parties in evaluating the Company's financial performance and in assessing its creditworthiness. Changes in each business segment's operating results compared with the corresponding periods in 2015 are described in Segment Results below. Explanations of the remaining variances in net income for the three and twelve months ended December 31, 2016 are as follows: EPCOR's Water business segment's primary objective is to provide safe and reliable water and wastewater services while meeting or exceeding all environmental requirements and delivering value to customers and the shareholder. Water Services operates in Canada and the U.S. The majority of Water Services' income in Canada is earned through a performance based rate tariff charged to its Edmonton customers. The performance based rate (PBR) tariff is intended to allow Water Services the opportunity to recover its costs and earn a fair rate of return while providing an incentive to manage costs below inflation and other prescribed adjustments built into the tariff. In October 2016, EPCOR's Water Services segment received the decision related to its 2017 - 2021 Edmonton water and wastewater PBR application. The decision reduced the return on equity (ROE) from 10.875% to 10.175%. The decision is not expected to have a material impact on the Company's results. Water Services also operates in the U.S. states of Arizona, New Mexico and Texas. Customer rates in Arizona and New Mexico are subject to approval by the Arizona Corporation Commission and the New Mexico Public Regulation Commission respectively. Customer rates are intended to allow EPCOR the opportunity to recover costs and earn a reasonable rate of return under a historical cost-of-service framework. At December 31, 2016, Water Services owned three and operated 14 other water treatment and / or distribution facilities in Alberta and British Columbia. Additionally, Water Services owned one wastewater treatment facility and operated 18 other wastewater treatment and / or collection facilities in Alberta, British Columbia and Saskatchewan. In Arizona and New Mexico, EPCOR owned operations in 14 water utility districts, each containing one or more water treatment and / or distribution facilities, and six wastewater utility districts, each containing one or more wastewater treatment and / or collection facilities. The EPCOR 130 Pipeline delivers water through a 30 inch pipeline to four municipal customers near Austin, Texas under long-term contracts. While these wholesale water contracts are technically subject to Texas Public Utilities Commission appellate review, they are considered to be effectively unregulated. Water Services' core market is stable as Water Services is the supplier of water and provider of wastewater services within its various operating districts. Operationally, the facilities owned or managed by Water Services generally performed according to plan in 2016. In the third quarter of 2016, persistent rainfall throughout the North Saskatchewan River watershed significantly impacted the river's water quality. Edmonton and region residents were asked to reduce water consumption for a short period of time. EPCOR was able to maintain the required quality of Edmonton's drinking water throughout the period. In addition, Water Services provides competitive contract-based water and wastewater services, including financing, in certain arrangements, to municipal and industrial customers. In August 2016, several agreements with Suncor were terminated and all financing arrangements and leases were settled and repaid to the Company. Work on several significant projects within Edmonton progressed in 2016. These projects include the annual water main renewal program to improve Edmonton's water distribution system, water distribution line relocation as a result of the City's light rail transit expansion, construction of a hydrovac sanitary grit treatment facility at Gold Bar and upgrades to pre-treatment and other infrastructure at the Gold Bar wastewater treatment facility. Water Services' operating income decreased by $4 million for the three months ended December 31, 2016, compared with the corresponding period in 2015 primarily due to lower income related to industrial services contracts, higher chemical and power costs, and higher depreciation, partially offset by higher approved customer rates and growth. Water Services' operating income increased by $13 million for the twelve months ended December 31, 2016, compared with the corresponding period in 2015 primarily due to higher approved customer rates and growth, gains on sale of surplus land, higher income related to industrial services contracts and foreign exchange translation gains, partially offset by higher chemical and power costs, lower municipal service margin, lower water volumes in Canada due to higher precipitation and higher depreciation. Edmonton water sales decreased in 2016 compared with 2015 mainly due to higher precipitation, partially offset by customer growth. Arizona and New Mexico water sales increased in 2016 compared with 2015 primarily due to higher average temperatures and lower precipitation during the summer months. In addition, water sales were higher due to the acquisition of the EPCOR 130 Pipeline which delivers wholesale water to customers in Texas. Distribution and Transmission's priority is to be a trusted provider of safe and reliable electricity, known for operational excellence through innovative and practical solutions. Distribution and Transmission earns income principally by transmitting high-voltage electricity through its facilities that form part of the Alberta Interconnected Electrical System to points of distribution, and from there, distributing lower voltage electricity to end-use customers. The transmission services are provided to the Alberta Electric System Operator (AESO). The distribution services are provided to electricity retailers such as Energy Services and other competitive retailers. Distribution and Transmission's assets are located in and around Edmonton and are rate-regulated by the Alberta Utilities Commission (AUC). Transmission charges a rate-regulated tariff intended to allow recovery of prudent costs and earn a fair rate of return on invested capital. Distribution earns income through a performance based rate tariff charged to its customers. The PBR tariff is intended to allow Distribution the opportunity to recover its costs and earn a fair return on capital while providing an incentive to manage costs below inflation and other prescribed adjustments built into the tariff. This segment also provides competitive contract-based commercial services related to installation, maintenance and repair of street lighting, traffic signals and light rail transit, primarily to the City. The AUC issued its 2016 Generic Cost of Capital decision in October 2016. The AUC directed that the ROE for 2016 remain at 8.3% and increase to 8.5% in 2017 for all Alberta natural gas and electricity distribution and transmission utilities. The AUC also set a deemed equity ratio of 37% for both distribution and transmission utilities targeting the utilities' maintenance of a credit rating in the A category. This decision results in a 3% decrease and a 1% increase in the deemed equity ratios for the EPCOR distribution and transmission utilities, respectively. The various true-ups related to the decision will occur over the next several years. The decision will not have a material impact on the financial results of the Company. Distribution and Transmission's operating income decreased by $13 million for the three months ended December 31, 2016, compared with the corresponding period in 2015 primarily due to lower transmission customer rates resulting from an interim to final rate true-up in 2015 and higher depreciation in 2016. This was partially offset by higher distribution approved customer rates and higher net system access collections. Distribution and Transmission's operating income increased by $11 million for the twelve months ended December 31, 2016, compared with the corresponding period in 2015, primarily due to higher distribution approved customer rates, higher net system access collections and higher transmission customer rates. This was partially offset by higher depreciation. Distribution and Transmission's primary measure of distribution system reliability is the System Average Interruption Duration Index (SAIDI), which it focuses on minimizing. This measure captures the annual average number of hours of interruption experienced by Distribution and Transmission's customers, including scheduled and unscheduled interruptions to its primary distribution circuits. In 2016, the SAIDI was 0.92 hours which is comparable to 0.91 in 2015. Distribution and Transmission will continue with its reliability improvement programs to further address controllable factors and help maintain and improve overall system reliability. Electricity distribution volumes in 2016 were relatively flat year over year. The Energy Services' business focuses on providing cost effective retail electricity service and efficient customer care through a highly skilled, knowledgeable, caring and engaged customer service team. Energy Services earns income from selling electricity to customers under a regulated rate tariff (RRT) and default rate (customers with higher electricity volumes that are not under a competitive contract) in the EPCOR Distribution and Transmission Inc. and FortisAlberta Inc. service areas and several Rural Electrification Association service territories. The RRT is intended to allow Energy Services to recover its prudent costs and earn a return margin. Customers under the RRT are residential, farm and small commercial customers who are not under a competitive contract and receive their electricity under the RRO. Energy Services also provides billing, collection, and contact center services to other EPCOR operations and the City Waste and Drainage Services departments. Energy Services focuses on providing excellent service experiences for its customers and measures call answer performance, billing performance, and customer satisfaction. These results are reported to the AUC on a quarterly basis. Energy Services' allowed electricity revenue is determined in accordance with an energy price setting plan (EPSP) approved by the AUC. Under the EPSP, Energy Services manages its exposure to customer load and fluctuating wholesale electricity spot prices by entering into financial electricity purchase contracts up to 120 days in advance of the month of consumption under a well-defined risk management process. Energy Services received approval of their 2016 - 2018 EPSP in the first quarter of 2016 and the Company implemented the new plan in the third quarter of 2016. The plan will adapt more quickly to changes in wholesale market conditions thereby reducing EPCOR's risk with commensurately lower risk compensation. Energy Services filed the next iteration of the EPSP applicable for 2018 - 2021 in January 2017. In May 2014, Energy Services entered the competitive retail market by offering electricity and natural gas contracts to Alberta consumers under the Encor brand in order to mitigate the impact of RRO customer attrition. The expanded service offering, including green energy options, provides customers wishing to move from the RRO to a competitive contract with an EPCOR offering. Energy Services' operating income, excluding change in the fair value of contracts-for-differences, decreased by $9 million for the three months ended December 31, 2016, compared with the corresponding period in 2015 primarily due to lower billing charge rates and lower EPSP margins. Energy Services' operating income excluding change in the fair value of contracts-for-differences decreased by $8 million for the twelve months ended December 31, 2016, compared with the corresponding period in 2015 primarily due lower billing charge rates, partially offset by higher EPSP margins and growth in competitive business. Energy Services' retail sales volumes were as follows: Energy Services' RRT sales volume decreased in 2016 compared with 2015 primarily due to a decrease in the average consumption per site. The increased default and competitive supply sales volume was primarily due to an increase in the number of competitive supply sites served, partially offset by a decrease in the number of default sites served. In 2016, we continued to invest in our infrastructure assets to improve reliability and meet increasing electricity and treated water and wastewater demands. Total capital spending and investment was higher in 2016 compared with 2015 primarily due to the acquisition of the assets of Blue Water and CCWSC, increased spending in the Distribution and Transmission segment on the installation of advance meter infrastructure for customers in Edmonton and renovations to its major work centre, and increased spending in the Water Services segment on lifecycle projects. This was partially offset by decreased spending in the Distribution and Transmission segment on growth projects and decreased spending in the Water Services segment primarily due to the completion of construction of the new laboratory and office building at the Rossdale location in 2015 as well as decreased spending at Gold Bar and at the Walker and Big Lake booster stations in Edmonton. The Company maintains its financial position through rate-regulated utility and contracted operations which generate stable cash flows. The Company expects to have sufficient liquidity to finance its plans and fund its obligations in 2017 with a combination of cash on hand, cash flow from operating activities, interest and principal payments related to long-term loans receivable from Capital Power, the issuance of commercial paper, public or private debt offerings and draws upon existing credit facilities described below under Financing. Cash flows from operating activities would be impaired by events that cause severe damage to our facilities and would require unplanned cash outlays for system restoration repairs. Under those circumstances, more reliance would be placed on our credit facilities for working capital requirements until a regulatory approved recovery mechanism or insurance proceeds were in place. EPCOR's projected capital requirements for 2017 include $500 million to $650 million for investment in existing businesses and new business development. The following table represents the Company's contractual obligations by year: Under the terms of the lease, the Company's annual lease commitments, net of annual payments to be paid to the Company by Capital Power and another company under the sub-leases receivable are as follows: All of the Company's operating lease obligations for premises, net of subleases receivable, are included in the contractual obligations table above. If Drainage is transferred to EPCOR under the current proposal, as described in more detail in the Outlook section, EPCOR will assume assets and liabilities of approximately $3.3 billion and $0.7 billion, respectively. As well, EPCOR has proposed an increase in the dividend of $20 million subject to Board and Shareholder approval. For the first year of operations, capital spending is expected to be approximately $120 million to $200 million. As a result of the acquisition of the Blue Water and CCWSC assets, the Company is committed to pay Blue Water a fee which is contingent on securing new long term contracts for the supply of water. This fee is capped at US$32 million with no time limit for payment of the fee. The Company is reasonably certain that it will be required to settle this commitment by way of cash payment and has accordingly recognized the liability for contingent consideration in the consolidated statement of financial position. During the year, the Company terminated the long term "pay fixed, receive floating" interest rate swap, related to Regina, by settlement of the outstanding liability of $14 million to the counterparty. Subsequent to the year ended December 31, 2016, the remaining short term interest rate swap was also settled. As at March 3, 2016, there were three common shares of the Company outstanding, all of which are owned by the City. In 2016, the annual dividend was set at $141 million (2015 - $141 million). As a result of EPCOR's consistent and sustainable performance, EPCOR's Board of Directors proposed to EPCOR's shareholder that the EPCOR annual dividend paid to the City be increased by $5 million to $146 million commencing in 2017. EPCOR's Shareholder approved this recommendation, and in accordance with the EPCOR Dividend Policy, this amount will remain in effect until such time as the EPCOR Board recommends that it be changed. In the normal course of business, EPCOR provides financial support and performance assurances, including guarantees, letters of credit and surety bonds, to third parties in respect of its subsidiaries. Generally, our external capital is raised at the corporate level and invested in the operating business units. Our external financing has consisted of commercial paper issuance, borrowings under committed syndicated bank credit facilities, debentures payable to the City, publicly issued medium-term notes, U.S. private debt notes and issuance of preferred shares. In the third quarter of 2016, the Company issued US$40 million private debt notes to fund the acquisition of the Blue Water and CCWSC assets. The U.S. dollar denominated private debt notes were issued with a term-to-maturity of 25 years and three months and an interest rate of 3.63% per annum. The Company has bank credit facilities, which are used principally for the purpose of backing the Company's commercial paper program and providing letters of credit, as outlined below: Letters of credit are issued to meet the credit requirements of energy market participants and conditions of certain service agreements. Letters of credit totaling $73 million (2015 - $48 million) were issued and outstanding at December 31, 2016. The committed syndicated bank credit facilities cannot be withdrawn by the lenders until expiry, provided that the Company operates within the related terms and covenants. The extension feature of EPCOR's committed syndicated bank credit facilities gives the Company the option each year to re-price and extend the terms of the facilities by one or more years subject to agreement with the lending syndicate. The Company regularly monitors market conditions and may elect to enter into negotiations to extend the maturity dates. In November 2016, the $200 million committed syndicated bank credit facility was extended by one year to November 2019. At this time, the covenants attached to both credit facilities were renegotiated. The Company has a Canadian base shelf prospectus under which it may raise up to $1 billion of debt with maturities of not less than one year. At December 31, 2016, the available amount remaining under this base shelf prospectus was $1 billion (December 31, 2015 - $1 billion). The base shelf prospectus expires in December 2017. No commercial paper was issued and outstanding at December 31, 2016 (December 31, 2015 - $98 million). If the economy were to deteriorate in the longer term, particularly in Canada and the U.S., the Company's ability to extend the maturity or revise the terms of bank credit facilities, arrange long-term financing for its capital expenditure programs and acquisitions, or refinance outstanding indebtedness when it matures could be adversely impacted. We believe that these circumstances have a low probability of occurring. We continually monitor our capital programs and operating costs to minimize the risk that the Company becomes short of cash or unable to honor its debt servicing obligations. If required, the Company would look to reduce capital expenditures and operating costs. In August 2016, DBRS confirmed its A (low) / stable senior unsecured debt and R-1 (low) / stable short-term debt ratings for EPCOR and Standard & Poor's Ratings Services confirmed its A- / stable long-term corporate credit and senior unsecured debt ratings for EPCOR. These credit ratings reflect the Company's ability to meet its financial obligations given the stable cash flows generated from the rate-regulated water and electricity businesses. The Company's continued sell-down of its interest in Capital Power in addition to the initial sale of the power generation assets in 2009 served to improve certain creditworthiness measures. The Company will continue to be indirectly exposed to power generation related risks primarily through its remaining long-term loans receivable from Capital Power until they are entirely repaid to EPCOR in 2018. Once the long-term loans receivable are repaid, the Company's creditworthiness is expected to improve even further. Improvement in the Company's creditworthiness may not result in further credit rating upgrades. A credit rating downgrade for EPCOR could result in higher interest costs on new borrowings and reduce the availability of sources and tenor of investment capital. EPCOR is currently in compliance with all of its financial covenants in relation to its syndicated bank credit facilities, Canadian public medium-term notes and U.S. private debt notes. Based on current financial covenant calculations, the Company has sufficient borrowing capacity to fund current and long-term requirements. Although the risk is low, breaching these covenants could potentially result in a revocation of EPCOR's credit facilities causing a significant loss of access to liquidity or result in the Company's publicly issued medium-term notes and private debt notes becoming immediately due and payable causing the Company to find a means of funding which could include the sale of assets. The key financial covenants and their thresholds, as defined in the respective agreements, and EPCOR's actual measures at December 31, 2016 and December 31, 2015 were as follows: In 2017, we will continue to focus on growth in rate-regulated water and electricity infrastructure. We expect this investment to come from new infrastructure to accommodate customer growth and lifecycle replacement of existing infrastructure primarily related to the Edmonton and U.S. based operations. EPCOR intends to expand our water and electricity commercial services activities and to invest in the area of renewable energy generation, including solar and bio gas facilities to enhance our environmental performance. Demand for water is expected to continue to increase and we anticipate escalating requirements for better water management practices including watershed management and conservation. We will pursue expansion of our portfolio of commercial water contracts. In January 2017, Edmonton City Council asked its administration to prepare a Letter of Intent (LOI) for the potential transfer of its Drainage Utility Services (Drainage) to EPCOR. The LOI is intended to outline the terms of a possible transfer, and is to include assurances from EPCOR on matters such as transparency into operations, public consultation, audit rights and the requirement for a public hearing should a divestiture occur in the future. It will be brought back to Council in April 2017 for further consideration. EPCOR currently operates three of the four components of the City's water utility cycle - water treatment, water distribution and wastewater treatment. The City's Drainage department operates the fourth component of the water system, the wastewater and storm water collection system. In November 2016, the Alberta government released several announcements impacting the electricity industry including the details of its Climate Change Plan. Among other things, these announcements included a cap on the RRO, a ban on door-to-door sales, and a shift to a capacity market framework from the existing energy-only market regime. These initiatives may lower the risk of RRO customer attrition in the long term. EPCOR's preliminary view is that these changes will not have a material impact. Energy Services will continue to evaluate these changes and determine any further course of action after consultations with the government and the AUC. Also in November 2016, the Company entered into a definitive asset purchase agreement to acquire substantially all of the assets of Natural Resource Gas Limited (NRGL) for consideration of $21 million, subject to certain adjustments. NRGL is a natural gas distributor in southwestern Ontario near London, providing services to approximately 8,000 residential, commercial and industrial customers in the counties of Elgin, Middlesex, Oxford and Norfolk. The arrangement requires regulatory approval from the Ontario Energy Board, for which an application has been filed. The Company expects to complete the transaction by mid-2017. EPCOR has been awarded franchises by three municipalities in the Southern Bruce region of Ontario near Kincardine to build and operate a natural gas distribution system. In March 2016, EPCOR applied to the Ontario Energy Board (OEB) for the approval of these franchise agreements. In January 2017 the OEB requested indications of interest from any parties interested in servicing these areas. A single company did indicate an interest and the OEB is now developing a process for hearing competing applications. To view an image associated with this release, please visit the following link: http://media3.marketwire.com/docs/1087660_image.jpg Our approach to Enterprise Risk Management (ERM) is to manage the key controllable risks facing the Company and consider appropriate actions to respond to uncontrollable risks. ERM includes the controls and procedures implemented to reduce controllable risks to acceptable levels and the identification of the appropriate management actions in the case of events occurring outside of management's control. Acceptable levels of risk and risk appetite for EPCOR are established by the Board of Directors, representing the shareholder, and are embodied in the decisions and corporate policies associated with risk management. EPCOR's framework for ERM is aligned with the Committee of Sponsoring Organizations 2004 Integrated ERM Framework and the ERM process follows CAN / CSA ISO 31000-10 Risk Management - Principles and Guidelines. EPCOR's ERM program and the risk management framework and process it supports is designed to identify, assess, measure, manage, mitigate and report on EPCOR's significant risks. The goal is to create and sustain business value by helping the Company reach its business objectives and strategies through better management of risk. The program promotes a common framework and language for managing risk across EPCOR. General ERM framework oversight, reviews and recommendations of risk compliance are provided by management and are based upon the objectives, targets and policies approved by the Board of Directors. The Corporate Treasurer is responsible for developing the framework and assessing risk at an enterprise level and in conjunction with the Company's internal audit function, monitoring compliance with risk management policies. The Corporate Treasurer provides the Board of Directors with an enterprise risk assessment quarterly. The business units and shared service units are responsible for carrying out the risk management and mitigation activities associated with the risks in their respective operations. These risk management activities are integral aspects of the business units' and shared service units' operations. EPCOR believes that risk management is a key component of the Company's culture and we have put into place cost-effective risk management practices. At the same time, EPCOR views risk management as an ongoing process and we continually review our risks and look for ways to enhance our risk management processes. Large scale emergencies resulting from various events discussed below may have a significant impact on the Company's ability to provide services that are considered essential services to the public. Maintaining essential services is critical to EPCOR's customers and EPCOR's reputation. The Company manages its ability to continually deliver services with emergency response protocols and business continuity plans which are periodically tested through various exercises and scenarios. These procedures provide assurance that the Company has the coordination, capacity and competence to respond appropriately to emergency situations arising from various forms of risk. The Company's Ethics Policy includes procedures which provide for confidential disclosure of any wrong-doing relating to accounting, reporting and auditing matters. The policy prohibits any retaliation against any person making a complaint. During 2016, no significant substantiated complaints with respect to accounting, financial reporting and auditing matters were received under the Ethics Policy. Our growth strategy is dependent on the development, acquisition and operation of linear infrastructure for municipal, commercial and industrial customers in Canada and the U.S. Opportunities in Canada may be impacted by depressed oil prices and the weak Canadian economy for the foreseeable future. This could slow or delay the Company's growth plans. Such growth is dependent on opportunities in the marketplace which will be impacted by the willingness of parties to sell such assets, political and public sentiment regarding third party ownership and EPCOR's cost competitiveness. These risks could result in delays or curtailment of EPCOR's growth plans. Business development projects, including acquisitions, can take a relatively long period of time to execute, exposing such projects to event and external factor risks that may emerge and thereby alter project economics or completion. For each new business development project, EPCOR seeks to ensure project success by addressing project risks, including events and external factors, as part of its due diligence process and project execution. EPCOR is subject to risks associated with changing political conditions and changes in federal, provincial, state, local or common law, regulations and permitting requirements in Canada and the U.S. It is not always possible to predict changes in laws or regulations that could impact the Company's operations, income tax status or ability to renew permits as required. In December 2016, the Government of Alberta enacted Bill 21: the Modernized Municipal Government Act which could impose restrictions on the ability of a municipally controlled corporation (MCC) to conduct its business. EPCOR, which is a MCC of the City of Edmonton, was previously exempted from the MGA and a similar exemption is not present in the new MGA. EPCOR is working to ensure the previous exemption is re-instated as the related regulations are developed. The risk could materially impact EPCOR's ability to execute on its Long Term Plan. EPCOR is subject to risks associated with the rate regulation of the majority of its operations. Such processes can result in significant lags between the time when customer rates or tariffs are applied for and the time that regulatory decisions are received. Furthermore, the regulator may deny or alter the applied for customer rates or tariffs. EPCOR's water treatment and distribution services to customers within Edmonton are rate regulated by Edmonton City Council pursuant to the 2012 - 2016 PBR Bylaw. In October 2016, EPCOR's Water Services segment received the decision related to its 2017 - 2021 Edmonton water and wastewater performance-based rate application for the five year period commencing April 1, 2017. The renewal also incorporated the costs associated with the provision of wastewater treatment services supplied from the Gold Bar wastewater treatment plant. Our ability to fully recover operating and capital costs and to earn a fair return is dependent upon achieving the performance targets prescribed in the bylaw, maintaining cost increases below inflation, managing operational risks and not exceeding approved capital additions. Rates for water sales to regional water commissions surrounding Edmonton are regulated by the AUC on a complaints-only basis. EPCOR sets the rates it charges to the regional water commissions to recover actual operating and capital costs including a fair rate of return. Water and wastewater services provided by EPCOR's U.S. subsidiaries are subject to state laws and regulation by the state regulatory commissions within Arizona, New Mexico and Texas. Our ability to fully recover operating and capital costs and earn a fair return is dependent upon achieving our capital and operating cost targets built into the rates, and meeting the customer growth and water usage targets built into the rates. Since rates are established on a historical cost basis, any new capital additions for water or wastewater infrastructure must be carefully planned and evaluated before commencement since the addition of such costs to the regulatory rate base for subsequent recovery will only take place after the new infrastructure is built and the regulator approves the rate base additions through the rate application process. The AUC utilizes a PBR structure for electricity and natural gas distribution utilities in Alberta. Under PBR, EPCOR's annual electricity distribution rates are set by a formula that is generally equal to last year's rate plus an inflation factor less a productivity factor plus a provision for additional approved capital additions. Capital projects may be applied for annually in a separate capital application (capital tracker). Our ability to recover the actual costs of providing service and to earn a fair return is dependent upon maintaining cost increases at or below inflation, achieving the productivity factor and not exceeding the approved capital additions, all as defined by the PBR formula or approved in a capital tracker application. The current performance based framework will set rates to December 31, 2017. In December 2016, the AUC issued its 2018-2022 PBR decision (Next Generation PBR) continuing the use of a performance based framework to December 31, 2022. EPCOR's electricity distribution rates for 2018 will be based on approved capital additions to the end of 2017 and actual operating and capital expenditures incurred during the 2013-2017 PBR term. The productivity factor in the Next Generation PBR term will be 0.3%, down from 1.16% currently. In addition, the Next Generation PBR decision also revised the criteria for capital tracker applications which will limit the volume of eligible capital projects. In November 2013, the AUC issued a decision in the Utility Asset Disposition Review proceeding directing that certain gains or losses due to extraordinary retirement of assets be borne by shareholders and not to be reflected in customer rates. In September 2015, the Alberta Court of Appeal (the Court) upheld the AUC's decision. The Company is responsible for ensuring that the potable water it sells to customers is safe to drink. Water Services performs continuous and rigorous quality control testing of water purification consistent with government and industry standards to prevent public health issues due to inadequately treated, stored or distributed drinking water. The ability of the water treatment plants to meet potable water quality standards is dependent on continuous water testing in order that the prescribed requirements under regulation or conventional industry standards are met. Failure to properly maintain fully functioning treatment and measurement systems could result in regulatory fines or the occurrence of public health issues. In Alberta, water quality for EPCOR's operations is regulated under the provincial Environmental Protection and Enhancement Act (EPEA). Regulation under the EPEA takes the form of an "Approval to Operate" which, among other things, specifies the quality of the treated water, the number, frequency and form of water quality testing, as well as mandatory standards for the water treatment process. The drinking water quality requirements in Alberta meet or exceed the National Guidelines for Canadian Drinking Water Quality recommended by Health Canada. Raw water quality is an important factor in the treatment of potable water. In Edmonton, we obtain surface water from the North Saskatchewan River to treat and sell to customers in the greater Edmonton area. The North Saskatchewan Watershed Alliance, among other things, aims to protect and improve North Saskatchewan River water quality by developing and sharing knowledge and facilitating workshops with members and interested parties. Drinking water quality and wastewater standards for EPCOR's U.S. operations are regulated by the U.S. Environmental Protection Agency (U.S. EPA) under the Safe Drinking Water Act and Clean Water Act, respectively. Among other things, the U.S. Environmental Protection Agency sets drinking water standards specifying the treatment, source water protection, operator training and funding for water system improvement and relies on the states and localities to carry out the standards. Oversight of water and wastewater systems is conducted by state and county authorities to the degree that they establish standards at least as stringent as the U.S. EPA. In Arizona, we obtain surface water primarily from the Central Arizona Project canal to treat and sell to customers. The Central Arizona Project conducts water quality testing upstream of the take-off points and has a formal notification process in place to notify our Arizona operations of any water quality issues that may arise. Process and compliance sampling results are stringently analyzed and trended for all groundwater and surface water systems in Arizona and New Mexico to ensure systems continue to meet all regulatory standards. Each system in Arizona and New Mexico has an Emergency Operations Plan which addresses water quality issues and provides further risk mitigation. There are no formal watershed protection groups in the Arizona and New Mexico service areas. The Arizona Department of Environmental Quality and New Mexico Environment Department oversee the water systems in their states, respectively. Water wells in Arizona, New Mexico and Texas are protected from contamination by proper well construction and system operation and management. Our operations have hazardous elements, such as high voltage electricity and hazardous chemicals that could have adverse health and safety consequences to our employees, on-site suppliers and customers. We manage health, safety and environment (HSE) risks through a management system and measure HSE performance against recognized industry and internal performance measures. We conduct external and internal compliance and conformance audits to verify that we meet or exceed all regulatory requirements. We are committed to working with industry partners to share and improve health, safety and environment practices within the industry. In 2016, all of our Edmonton water and wastewater treatment facilities, and electricity distribution and transmission operations remain OHSAS 18001 registered. We use several key information technology systems to support our core operations such as electricity and water distribution network control systems, electricity and water plant control systems and electricity settlement and utility billing systems. These systems and the associated hardware are vulnerable to malfunction and unauthorized access including cyber-attacks, which could lead to loss or unauthorized disclosure of sensitive customer or EPCOR information or extortion or otherwise disrupt operations. We take measures to reduce the risk of malicious corruption or failure of these systems, data and the hardware and network infrastructure on which they operate. EPCOR's security program is based on the ISO 27002 control framework. In applying this framework, EPCOR has implemented a series of complementary defense mechanisms, starting from the external IT perimeter down to the end user. Each layer is designed to prevent, detect and report on malicious activity. We regularly monitor our information technology protection systems and periodically employ third-party security providers to test the effectiveness and to strengthen the system as new cyber threats arise. Financial exposures associated with cyber-attacks are partly mitigated through our insurance programs. EPCOR has controls and strategies in place to mitigate the exposure to the various risks that could result in damage to EPCOR's reputation should an event occur. The company proactively maintains positive and transparent interactions with stakeholders. In addition, EPCOR communicates with stakeholders and the media when issues first arise and actively monitors social media in order to address reputational matters before they escalate. There are a variety of environmental risks associated with EPCOR's water and wastewater operations and its electricity distribution and transmission businesses. EPCOR's power and water operations are subject to laws, regulations, and operating approvals which are designed to reduce the impacts on the environment. An environmental event could materially and adversely impact EPCOR's business, prospects, reputation, financial condition, operations or cash flow. Furthermore, such incidents could result in spills or emissions in excess of those permitted by law, regulations or operating approvals. Environmental risks associated with water and wastewater operations include wastewater discharge, biogas release, and residuals management. EPCOR's wastewater operations are regulated with stringent wastewater treatment standards and controls covering quality of treated wastewater effluent as well as mandatory improvements to the wastewater treatment processes. Water and wastewater technologies and supporting processes are continuing to evolve and are influenced by more stringent regulation and environmental challenges. Failure to identify and deploy viable new technologies to meet these regulations and challenges could undermine the competitiveness of EPCOR's market position and exclude it from some market opportunities. Risks associated with electricity distribution and transmission operations include the unintended environmental release of substances such as oil from its oil-filled pipe-type cable, hydraulic oil and polychlorinated biphenyl transformer fluid. To the best of our knowledge we comply, in all material respects, with the laws, regulations and operating approvals affecting our facilities, and minimize the potential for incidents by incorporating environmental management practices in our strategy, policies, processes and procedures. To achieve this, we require each facility to have an environmental management system (EMS) which is based on the ISO 14001 standard. These systems encompass the identification of the scope, objectives, training and stewardship of our environmental responsibility. Each plant and facility is also subject to third party environmental audits to help ensure conformance with the EMS and compliance with all regulations. The Edmonton waterworks system (including the Rossdale and E.L. Smith water treatment plants) achieved EnviroVista Champion status as of June 2011. In 2016, all of our Edmonton water treatment facilities and reservoirs, the Gold Bar wastewater treatment plan, the Evan-Thomas water and wastewater treatment facility in Kananaskis, Alberta, our electricity distribution and transmission operations and our street lighting, traffic signal, light rail transit, hydrovac and cathodic protection operations remain ISO 14001 registered. The Company is also in the process of obtaining ISO 14001 registration for its Canadian water distribution and transmission operations. Compliance with future environmental legislation may require material capital and operating expenditures. Failure to comply could result in fines and penalties or the regulator could force the curtailment of operations. There can be no assurances that compliance with or changes to environmental legislation will not materially and adversely impact EPCOR's business, prospects, financial conditions, operations or cash flow. A variety of intentional, accidental or natural occurrences could cause interruption of EPCOR's operations and result in lost revenues or additional costs to resume operations including repair costs. Business interruption due to operational failure in Water Services and Distribution and Transmission is managed through inherent redundancy and sound maintenance practices. The quality of raw source water can be affected by such things as hydrocarbons and other inorganic or organic contaminants entering water ways and aquifers. Depending on the type and concentration of the contaminant, their removal may be beyond the capabilities of water treatment plant processes. This could result in the water treatment plants being shut down until the contaminants become diluted to the point where they can be treated within the water treatment plant capabilities. The ability of the water treatment plants to meet potable water quality standards is dependent on continuous water testing in order that the prescribed requirements under regulation or conventional industry standards are met. Failure to properly maintain fully functioning treatment and measurement systems could result in regulatory fines, lost revenue or the occurrence of public health issues. Our maintenance practices are augmented by an inventory of strategic spare parts, which can reduce down-time considerably in the event of power or water system interruptions. Maintenance and capital plans are determined annually based on rigorous assessment of its equipment and by continually monitoring the condition of assets. Although water and power facilities have operated in accordance with expectations, there can be no assurance that they will continue to do so. To the extent we experience insufficient raw water supply or extreme raw water conditions, delivery of water and associated revenues may be negatively affected. To the extent our electricity facilities experience outages due to equipment failure, blackouts or constraints on the transmission system, delivery of power and associated revenues may be negatively affected. The Company's business continuity plans aim to enable EPCOR to continue providing critical services to customers in the event a crisis. The Company's emergency response protocols are designed to ensure EPCOR can expeditiously resume operations following a business interruption. Financial exposures associated with business interruption are partly mitigated through our insurance programs. Our ability to continuously operate and grow the business is dependent upon attracting, retaining and developing sufficient labor and management resources. As with most organizations, the Company is facing the demographic shift where a large number of employees are expected to retire over the next few years. Failure to secure sufficient qualified technical and leadership talent may impact EPCOR's operations or increase expenses. We believe that we employ good human resource practices and in 2016, we were named a top 70 employer in Alberta, by Mediacorp Canada Inc. We continue to monitor developments and review our human resource strategies so that we have an adequate supply of labor and management. EPCOR plans to diversify its utility infrastructure investments across investment types and North American geographies to reduce investment risk. The Company is planning to accomplish this through expansion into natural gas distribution and its pursuit of the Drainage transfer from the City to EPCOR. These types of utility businesses are new to EPCOR which introduces risk to the Company due to unfamiliarity with the associated operational, safety and regulatory risks in addition to the risks associated with integrating these businesses into EPCOR. EPCOR develops comprehensive integration plans and ensures that personnel with appropriate skills are in place to manage all of the various risks when integrating any new businesses into the Company. Water scarcity is the risk of inadequate raw water supply, particularly in the desert region of the Southwestern U.S. This is primarily related to drought conditions which could potentially impact EPCOR's water operations in Arizona, New Mexico and Texas. In Arizona in particular, a number of water management and supply augmentation strategies are employed to mitigate this risk including enacting some very progressive policies to protect groundwater supplies. While EPCOR is not obligated to demonstrate long term water adequacy for new customer growth, EPCOR actively manages its sources of water including replenishing reserves by injecting water into its wells when opportunity arises and working with regulators on rate rebalancing to mitigate the effects of declining consumption should it occur. Despite these efforts, continued drought in the Southwestern U.S. could result in legislated measures to further reduce customer water consumption, potentially impacting financial performance in Arizona and New Mexico. EPCOR sells electricity to RRO customers under a RRT. All electricity for the RRO customers is purchased in real time from the AESO in the spot market. Under the RRT, the amount of electricity to be economically hedged, the hedging method and the electricity selling prices to be charged to these customers is determined by the EPSP. Under the EPSP, the Company uses financial contracts to economically hedge the RRO requirements and incorporate the price into customer rates for the applicable month. Fixed volumes of electricity are economically hedged using financial contracts-for-differences up to 120 days in advance of the month in which the electricity (load) is consumed by the RRO customers. The volume of electricity economically hedged in advance is based on load (usage) forecasts for the consumption month. When consumption varies from forecast consumption patterns, EPCOR is exposed to prevailing market prices when the volume of electricity economically hedged is short of actual load requirements or greater than the actual load requirements (long). Exposure to variances in electricity volume can be exacerbated by other events such as unexpected generation plant outages and unusual weather patterns. Under contracts-for-differences the Company agrees to exchange, with a single creditworthy and adequately secured counterparty, the difference between the AESO electricity spot market price and the fixed contract price for a specified volume of electricity up to 120 days in advance of the consumption date, all in accordance with the EPSP. The contracts-for-differences are referenced to the AESO electricity spot price and any movement in the AESO price results in changes in the contract settlement amount. If the risks of the EPSP were to become untenable, EPCOR could test the market and potentially re-contract the procurement risk under an outsourcing arrangement at a certain cost that would likely increase procurement costs and reduce margins. The Company may enter into additional financial electricity purchase contracts outside the EPSP to further economically hedge the price of electricity. Our construction and development of water and wastewater treatment facilities and electricity transmission and distribution infrastructure and acquisition activities are subject to various engineering, construction, stakeholder, government and environmental risks. These risks can translate into performance issues, delays and cost overruns. Project delays may defer expected revenues and project cost overruns could make projects uneconomic. Many of the water and wastewater growth projects currently pursued by the Company require design and construction capabilities that are provided by third parties. In order to pursue these projects, strategic partnerships have been established with reputable firms that have an established track record of infrastructure design and construction. Should these partnerships dissolve or are not recognized by the market as a viable approach, the Company's growth plans could potentially be curtailed. We attempt to mitigate project risks by performing detailed project analysis and due diligence prior to and during construction or acquisition, and by entering into appropriate contracts for various services to be provided as required. Our ability to complete projects successfully depends upon numerous factors such as weather, civil disobedience, availability of skilled labor, strikes and regulatory matters. Weather can have a significant impact on our operations. Melting snow, freeze / thaw cycles and seasonal precipitation in the North Saskatchewan River watershed affect the quality of water entering our Edmonton water treatment plants and the resulting cost of purification. Weather variability and seasonality also impact the demand and supply of water and electricity in our respective businesses in Canada and the U.S. Extreme weather can cause damage to electricity distribution and transmission equipment and wires, temporarily disrupting the reliable supply of power to customers and can cause unpredictability in the demand for power. Unseasonal temperature changes can cause water main breaks temporarily disrupting the reliable supply of water to customers. Weather that varies significantly from historical norms can result in changes in the quantity of provincial power consumption. EPCOR procures power to service its RRO customers in advance of the consumption month and the quantity procured is based on historical weather and usage patterns. Unseasonal temperatures can cause a mismatch between the power procured in advance of the consumption month and actual customer usage, resulting in unexpected variances in income from the RRO business. Financial exposures associated with extreme weather are partly mitigated through our insurance programs. EPCOR's internally generated cash flows from operating activities do not provide sufficient capital to undertake or complete ongoing or future development, enhancement opportunities or acquisition plans and accordingly, the Company requires additional financing from time to time. The ability of the Company to arrange such financing will depend in part upon prevailing market conditions at the time and the Company's business performance. If the Company's revenues or cash flows decline, it may not have the capital necessary to undertake or complete all the initiatives. There can be no assurance that debt or equity financing will be available or sufficient to meet these requirements or for other corporate purposes. Furthermore, if financing is available, there can be no assurance that it will be on terms acceptable to the Company. The inability of the Company to access sufficient capital for its operations could have a material adverse effect on the Company's business, prospects and financial condition. Further discussion is included in Liquidity and Capital Resources in this MD&A. The Company manages liquidity risk through regular monitoring of cash and currency requirements by preparing short-term and long-term cash flow forecasts and also by matching the maturity profiles of financial assets and liabilities to identify financing requirements. EPCOR's financial risks are governed by a Board-approved financial exposure management policy, which is administered by EPCOR's Treasurer. Counterparty and credit risk is the possible financial loss associated with the ability of counterparties to satisfy their contractual obligations to EPCOR, including payment and performance including the long-term loans receivable from Capital Power. We manage credit risk and limit exposures through our credit policies and procedures. These include an established credit review, rating and monitoring process, specific terms and limits, appropriate allowance provisioning and use of credit mitigation strategies, including collateral arrangements. EPCOR's credit risks are governed by a Board-approved counterparty credit risk management policy, which is administered by EPCOR's treasury function. Significant reliance is placed on the capacity of Capital Power to honor its remaining back-to-back debt obligations with EPCOR. Should Capital Power fail to satisfy these obligations, EPCOR's capacity to satisfy its debt obligations would be reduced and would need to be satisfied by other means. The back-to-back debt obligations may be called for repayment by EPCOR at any time now that the principal outstanding is less than $200 million and the repayment must occur within 180 days of notice. Capital Power has indemnified EPCOR for any losses arising from its inability to discharge its liabilities, including any amounts owing to EPCOR in relation to the long-term loans receivable. Exposure to credit risk for residential RRO customers and commercial customers under default electricity supply rates are generally limited to amounts due from the customers for electricity consumed but not yet paid for. This portfolio is reasonably well diversified with no significant credit concentrations. Historically, credit losses in these customer segments have not been significant and depend in large part on the strength of the economy and the ability of the customers to effectively manage their financial affairs through economic cycles and competitive pressures. While electricity is considered an essential service, EPCOR may experience credit losses in the future should economic conditions deteriorate. EPCOR's exposure to RRO and default customer credit risk, which is primarily the risk of non-payment for electricity consumed by these end-use customers, is summarized below. Exposures represent the accounts receivable value for this portfolio. The year-over-year decrease in exposure relates to lower customer rates and consumption. Exposures to credit risk in our rate-regulated and non-rated-regulated water businesses are generally limited to amounts due from the customers for water consumed and wastewater discharged but not yet paid for, as well as amounts for water management services provided under contracts to municipal and industrial customers. This portfolio is reasonably well diversified with no significant credit concentrations. While water is considered an essential service, EPCOR may experience credit losses in the future should economic conditions deteriorate. EPCOR's exposure to rate-regulated and non-rate-regulated customer credit risk, which is primarily the risk of non-payment for water consumed by these end-use customers, is summarized below. Exposures represent a 60-day potential accounts receivable value for this portfolio. The customer consumption data used to bill utility customers is voluminous plus the sources and types of customer billing data are varied, requiring large, complex systems to process customer billings. In addition, the Company relies on third parties to provide customer meter data in certain circumstances and to produce bills for its U.S. customers. All of this contributes to the potential for billing errors caused by poor customer consumption data quality, billing system computational errors, incorrect customer rates being used or transactions and adjustments being applied incorrectly to customer accounts. The Company applies numerous manual and automated controls to ensure the quality of customer billings including a routine to identify various exceptions in the electricity meter data used to produce bills. The Company is exposed to foreign exchange risk on foreign currency denominated transactions, firm commitments, monetary assets and liabilities denominated in a foreign currency and on its net investments in foreign entities. The Company's financial exposure management policy attempts to minimize economic and material transactional exposures arising from movements in the Canadian dollar relative to the U.S. dollar or other foreign currencies. The Company's direct exposure to foreign exchange risk arises on capital expenditure commitments denominated in U.S. dollars or other foreign currencies and U.S. operations. The Company coordinates and manages foreign exchange risk centrally, by identifying opportunities for naturally occurring opposite movements and then dealing with any material residual foreign exchange risks. The Company's exposure to foreign exchange risk on its investment in foreign entities is partially mitigated by foreign-denominated financing. The Company may use foreign currency forward contracts to fix the functional currency of its non-functional currency cash flows thereby reducing its anticipated U.S. dollar denominated transactional exposure. The Company looks to limit foreign currency exposures as a percentage of estimated future cash flows. Certain conflicts of interest could arise as a result of EPCOR's relationship with the City, EPCOR's sole common shareholder and regulator for water and wastewater utility rates in Edmonton. The following factors could materially adversely impact EPCOR's business, prospects, financial condition, results of operations or cash flows: fluctuations in interest rates, product supply and demand, market competition, risks associated with technology, general economic and business conditions, EPCOR's ability to make capital investments and the amounts of capital investments, risks associated with existing and potential future lawsuits and other regulations, assessments and audits (including income tax) against EPCOR and its subsidiaries, political and economic conditions in the geographic regions in which EPCOR and its subsidiaries operate, difficulty in obtaining necessary regulatory approvals, a significant decline in EPCOR's reputation and such other risks and uncertainties described from time to time in EPCOR's reports and filings with the Canadian Securities authorities. The following table outlines our estimated sensitivity to specific risk factors as at December 31, 2016. Each sensitivity factor provides a range of outcomes assuming all other factors are held constant and current risk management strategies are in place. Under normal circumstances, such sensitivity factors will not be held constant but rather, will change at the same time as other factors are changing. In addition, the degree of sensitivity to each factor will change as the Company's mix of assets and operations subject to these factors changes. The Company is not involved in any material litigation at this time. For purposes of certain Canadian securities regulations, EPCOR is a venture issuer. As such, it is exempt from certain of the requirements of National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings. The Chief Executive Officer and Chief Financial Officer have reviewed the annual information form, annual financial statements and annual MD&A, for the year ended December 31, 2016. Based on their knowledge and exercise of reasonable diligence, they have concluded that these materials fairly present in all material respects the financial condition, results of operations and cash flows of the Company for the periods presented. A number of new standards, amendments to standards and interpretations have been issued by the IASB and the International Financial Reporting Interpretations Committee the application of which is effective for periods beginning on or after January 1, 2017. Those which may be relevant to the Company and may impact the accounting policies of the Company are set out below. The Company does not plan to adopt these standards early. The extent of the impact of adoption of the standards has not yet been determined. IFRS 9 - Financial Instruments (IFRS 9), which replaces IAS 39 - Financial Instruments: Recognition and Measurement, eliminates the existing classification of financial assets and requires financial assets to be measured based on the business model in which they are held and the characteristics of their contractual cash flows. Gains and losses on re-measurement of financial assets at fair value will be recognized in profit or loss, except for an investment in an equity instrument which is not held-for-trading. Changes in fair value attributable to changes in credit risk of financial liabilities measured under the fair value option will be recognized in other comprehensive income with the remainder of the change recognized in profit or loss unless an accounting mismatch in profit or loss occurs at which time the entire change in fair value will be recognized in profit or loss. Derivative liabilities that are linked to and must be settled by delivery of an unquoted equity instrument must be measured at fair value. The impairment model has also been amended by introducing a new 'expected credit loss' model for calculating impairment, and new general hedge accounting requirements. The effective date for implementation of IFRS 9 has been set for annual periods beginning on or after January 1, 2018. IFRS 15 - Revenue from Contracts with Customers (IFRS 15), which replaces IAS 11 - Construction Contracts and IAS 18 - Revenue and related interpretations, is effective for annual periods commencing on or after January 1, 2018. IFRS 15 introduces a new single revenue recognition model for contracts with customers and two approaches to recognizing revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and / or timing of revenue recognized. The requirements of the standard also apply to the recognition and measurement of gains and losses on sale of some non-financial assets that are not part of the entity's ordinary activities. IFRS 16 - Leases (IFRS 16), which replaces IAS 17 - Leases (IAS 17), is effective for annual periods commencing on or after January 1, 2019. IFRS 16 combines the existing dual model of operating and finance leases in IAS 17 into a single lessee model. Under the new single lessee model, a lessee will recognize lease assets and lease liabilities on the statement of financial position initially measured at the present value of unavoidable lease payments. IFRS 16 will also cause expenses to be higher at the beginning and lower towards the end of a lease, even when payments are consistent throughout the term. Leases for duration of twelve months or less and leases of low value assets are exempted from recognition on the statement of financial position. Lessors will continue with a dual lease classification model and the classification will determine how and when a lessor will recognize lease revenue and what assets will be recorded. In preparing the consolidated financial statements, management necessarily made estimates in determining transaction amounts and financial statement balances. The following are the items for which significant estimates were made in the financial statements. Due to the lag time between customer electricity consumption and receipt of final billing consumption information from the load settlement agents, the Company must use estimates for determining the amount of electricity consumed but not yet billed. These estimates affect accrued revenues and accrued electricity costs of the Energy Services segment. There are a number of variables and judgments required in the computation of these significant estimates, and the underlying electricity settlement processes within EPCOR and the Alberta electric systems are complex. Such variables and judgments include the number of unbilled sites, and the amount of and rate classification of the unbilled electricity consumed. Owing to the factors above and the statutory delays in final load settlement determinations and information, adjustments to previous estimates could be material. Estimates for unbilled consumption averaged approximately $51 million at the end of each month in 2016 (2015 - $53 million). These estimates varied from $35 million to $68 million (2015 - $42 million to $67 million). Adjustments of estimated revenues to actual billings were not higher than $5 million per month in 2016 (2015 - $6 million). We are required to estimate the fair value of certain assets or obligations for determining the valuation of certain financial instruments, asset impairments, asset retirement obligations and purchase price allocations for business combinations, and for determining certain disclosures. Significant judgment is applied in the determination of fair values including the choice of discount rates, estimating future cash flows, and determining goodwill. Following are the descriptions of the key fair value methodologies relevant for 2016. Fair values of financial instruments are based on quoted market prices when these instruments are traded in active markets. In illiquid or inactive markets, the Company uses appropriate price modeling to estimate fair value. Fair values determined using valuation models require the use of assumptions concerning the amounts and timing of future cash flows and discount rates. The Company reviews the valuation of long-lived assets subject to amortization when events or changes in circumstances may indicate or cause a long-lived asset's carrying amount to exceed the total undiscounted future cash flows expected from its use and eventual disposition. An impairment loss, if any, will be recorded as the excess of the carrying amount of the asset over its fair value, measured by either market value, if available, or estimated by calculating the present value of expected future cash flows related to the asset. Estimates of fair value for long-lived asset impairments are mainly based on depreciable replacement cost or discounted cash flow techniques employing estimated future cash flows based on a number of assumptions, including the selection of an appropriate discount rate. The cash flow estimates will vary with the circumstances of the particular assets or reporting unit and will primarily be based on the lives of the assets, revenues and expenses, including inflation, and required capital expenditures. EPCOR follows the asset and liability method of accounting for income taxes. Income taxes are determined based on estimates of our current taxes and estimates of deferred taxes resulting from temporary differences between the carrying values of assets and liabilities in the financial statements and their tax values. Deferred tax assets are assessed and significant judgment is applied to determine the probability that they will be recovered from future taxable income. For example, in estimating future taxable income, judgment is applied in determining the Company's most likely course of action and the associated revenues and expenses. To the extent recovery is not probable a deferred tax asset is not recognized. Estimates of the provision for income taxes and deferred tax assets and liabilities might vary from actual amounts incurred. Estimated fair values and useful lives are used in determining potential impairments for each long-lived asset, which will vary with each asset and market conditions at the particular time. Similarly, income taxes will vary with taxable income and, under certain conditions, with fair values of assets and liabilities. Accordingly, it is not possible to provide a reasonable quantification of the range of these estimates that would be meaningful to readers. Although the current condition of the economy has not impacted our methods of estimating accounting values, it has impacted the inputs in those determinations and the resulting values. Future cash flow estimates for assessing long-lived assets (cash generating units or CGUs) for impairment were updated to reflect any increased uncertainties of recoverability. The assessments did not result in any impairment losses because a large portion of the Company's long-lived assets are subject to rate-regulation. Similarly, the assessment of the useful lives of our long-lived assets did not change since many of our distribution and transmission assets and water assets are amortized based on rates approved by the applicable regulator. Our valuation models for estimating the fair value of long-lived asset impairments depend partly on discount rates which were updated to reflect changes in credit spreads and market volatility. Our methods for determining the allowance for doubtful accounts are based on historical rates of bad debts in relation to the aged accounts receivable balances by customer group for RRO and default customer bases. These analyses did not reveal any significant changes in our assessment of the recoverability of accounts receivable at December 31, 2016. For the three and twelve months ended December 31, 2016, the Company's transactions in other comprehensive income included the following: Events for the past eight quarters compared to the same quarter of the prior year that have significantly impacted net income included: The comparative information in the line of business information have been reclassified, where applicable, to conform to current year presentation. Certain information in this MD&A is forward-looking within the meaning of Canadian securities laws as it relates to anticipated financial performance, events or strategies. When used in this context, words such as "will", "anticipate", "believe", "plan", "intend", "target", and "expect" or similar words suggest future outcomes. The purpose of forward-looking information is to provide investors with management's assessment of future plans and possible outcomes and may not be appropriate for other purposes. Material forward-looking information within this MD&A, including related material factors or assumptions and risk factors, are noted in the table below: The following table provides a comparison between actual results and future-oriented-financial information previously disclosed: Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks and uncertainties, which could cause actual results to differ from expectations and are discussed in the Risk Factors and Risk Management section above. Readers are cautioned not to place undue reliance on forward-looking statements as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements. Except as required by law, EPCOR disclaims any intention and assumes no obligation to update any forward-looking statement even if new information becomes available, as a result of future events or for any other reason. Additional information relating to EPCOR, including the Company's 2016 Annual Information Form, is available on SEDAR at www.sedar.com.


News Article | February 23, 2017
Site: globenewswire.com

Valko-Venäjän liiketoimintaympäristö on säilynyt haastavana. Kuluttajien ostovoima on laskenut, mikä on näkynyt markkinoiden laskuna ja vaikuttanut myös Olvin Valko-Venäjän yksikön myyntiin ja tuloskehitykseen. Yhtiössä on kiinnitetty huomiota kustannusten hallintaan ja pystytty parantamaan yhtiön paikallis­valuutassa mitattua liikevoittoa 10 prosenttia. Euromääräisessä liikevoitossa kuitenkin jäätiin edellisvuodesta, sillä vuoden 2016 valuuttakurssi oli erityisesti ensimmäisellä vuosipuoliskolla edellisvuoden valuuttakurssia heikommalla tasolla. Olvi–konserni on panostanut aktiivisesti toiminnan kehittämiseen hyödyntäen muun muassa Lean–johtamisfilosofiaa liiketoiminnan ohjaamisessa ja kehittämisessä. Tunnustuksena määrätietoisesta työstä Olvi sai toisen palkinnon Lean-yhdistyksen valtakunnallisessa Vuoden Lean–teko 2016 –kilpailussa. Tunnustuksen lisäksi tehty työ näkyy muun muassa hyvänä tuottavuuden kasvuna, joka mahdollistaa kasvavien myyntivolyymien tuottamisen sujuvasti vähentäen samanaikaisesti ympäristö­kuormitusta entisestään. Kehitystyötä on tehty kaikissa konsernin yksiköissä sekä eri toiminnoissa. Leanin ohella kehitysteemana konsernissamme on ollut vastuullisuus ja siihen liittyvä raportointi ja tätä panostusta jatkamme myös vuonna 2017. Riskienhallinta on osa Olvi-konsernin jokapäiväistä johtamista ja toimintaa. Riskienhallinnan tavoitteena on varmistaa strategian toteutuminen ja turvata yhtiön taloudellista kehitystä ja liiketoiminnan jatkuvuutta. Riskienhallinnan tehtävänä on toimia ennakoivasti ja luoda toiminnalle olosuhteet, joissa liiketoimintaan kohdistuvia riskejä hallitaan kokonaisvaltaisesti ja systemaattisesti kaikissa konserniyhtiöissä ja organisaation kaikilla tasoilla. Tilinpäätös ajalta 1.1.—31.12.2016 on laadittu kansainvälisten tilinpäätösstandardien (International Financial Reporting Standards, IFRS) mukaisesti, ja sitä laadittaessa on noudatettu 31.12.2016 voimassa olevia IAS- ja IFRS- standardeja sekä niistä annettuja virallisia SIC- ja IFRS-tulkintoja. Olvi-konserni esittää 1.1.2016 alkaen alan yleisen käytännön mukaisesti kierrätettävät juomapakkaukset aineellisissa hyödykkeissä niiden täyttäessä IAS 16 -standardin kriteerit. Tällöin aineelliseen käyttöomaisuuteen tulee siirtymään 1.1.2016 vaihto-omaisuuteen sisältyvien kierrätettävien päällysteiden lisäksi Olvi Oyj:n osuus päällystekannasta Ekopulloyhdistys ry:n määrittelemien osuuksien mukaan sekä tytäryhtiöiden asiakkailla olevat päällysteet, joiden osalta konsernilla on lunastusvelvollisuus. Asiakkaiden käytössä olevien päällysteisiin liittyvä lunastusvelvollisuus esitetään taseessa lyhytaikaisena velkana. Vertailuvuoden tase on oikaistu vastaamaan uutta kirjanpitokäytäntöä. Muutoksen johdosta vertailuvuoden käyttöomaisuus on kasvanut 13,0 miljoonaa euroa, vaihto-omaisuus on pienentynyt 11,2 miljoonaa euroa, siirtovelat on kasvaneet 3,2 miljoonaa euroa ja oma pääoma pienentynyt 1,4 miljoonaa euroa. Vertailukauden tunnusluvut ja liitetiedot on myös muutettu vastaamaan edellä mainittuja muutoksia. Laadintaperiaatteen muutoksella ei ole olennaista vaikutusta konsernin liikevoittoon eikä tilikauden tulokseen. Olvi Oyj:n hallitus on 24.2.2016 tehnyt päätöksen uudesta konsernin avain­henkilöiden osakepohjaisesta kannustinjärjestelmästä. Osakepalkkio­järjestelmän ansaintajakson pituus on kaksi vuotta. Palkkion saaminen edellyttää, että avainhenkilö ostaa yhtiön A-sarjan osakkeita hallituksen päättämän enimmäismäärän rajoissa. Lisäksi palkkion saaminen on sidottu avainhenkilön työ- tai toimisuhteen voimassaoloon palkkion maksuhetkellä. Palkkiot maksetaan vuonna 2018 osittain yhtiön A-sarjan osakkeina ja osittain rahana. Rahaosuudella pyritään kattamaan palkkiosta avainhenkilölle aiheutuvia veroja ja veronluonteisia maksuja. Hallitus voi päättää osakkeina maksettavan osuuden maksamisesta kokonaan tai osittain rahana. Osakepalkkiojärjestelmän kohderyhmään kuuluu noin 50 henkilöä. Järjestelmän perusteella maksettavat palkkiot ovat yhteensä enintään 36 280 Olvi Oyj:n A-osaketta sekä rahaa se määrä, joka tarvitaan osakkeista aiheutuviin veroihin ja veronluonteisiin maksuihin. Järjestelmän kustannukset kirjataan ansaintajaksolle 1.7.2016—30.6.2018. Tammi-joulukuussa 2016 kirjattiin 24.2.2016 päätettyyn järjestelmään liittyviä kustannuksia yhteensä 363,8 tuhatta euroa. Konserni on soveltanut ESMA:n (the European Securities and Markets Authority) uutta 3.7.2016 voimaan tullutta ohjeistusta vaihtoehtoisista tunnusluvuista ja määrittänyt vaihtoehtoiset tunnusluvut alla esitetyn mukaisesti.


News Article | February 15, 2017
Site: globenewswire.com

ASPO Plc      FINANCIAL STATEMENT RELEASE   February 15, 2017, at 11:00 a.m.      ASPO GROUP FINANCIAL STATEMENT RELEASE, JANUARY 1 TO DECEMBER 31, 2016 (Figures from the year 2015 are presented in brackets.) January-December 2016 - Aspo's net sales amounted to EUR 457.4 (445.8) million. - Operating profit stood at EUR 20.4 (20.6) million. - Profit for the period was EUR 15.9 (19.8) million. - Earnings per share were EUR 0.49 (0.61). - The operating profit of ESL Shipping stood at EUR 12.6 (14.7) million. The operating profit of Leipurin was EUR 2.0 (2.4) million. The operating profit of Telko stood at EUR 10.1 (10.4) million and the operating profit of Kauko was EUR -0.1 (-1.2) million. - Net cash from operating activities was EUR 16.2 (25.0) million The 2015 operating profit and profit for the period include items that affect comparability as presented in the table of key figures below. October-December 2016 - Aspo's net sales amounted to EUR 124.5 (122.1) million. - Operating profit stood at EUR 6.3 (6.2) million. - Profit for the quarter was EUR 5.2 (3.7) million. - Earnings per share were EUR 0.17 (0.11). - The operating profit of ESL Shipping stood at EUR 4.1 (4.5) million. The operating profit of Leipurin was EUR 0.7 (0.4) million. The operating profit of Telko stood at EUR 2.5 (1.9) million and the operating profit of Kauko was EUR 0.0 (0.6) million. October-December 2015 operating profit and profit for the period include items that affect comparability as presented in the table of key figures below. - Net sales in Russia, Ukraine and other CIS countries increased by 21% during the fourth quarter from the comparative period, being record-high at EUR 42.0 (34.7) million. - Telko's net sales increased by 21% and operating profit improved to EUR 2.5 (1.9) million during the fourth quarter. The most significant reason for this improvement was the general increase in western markets which accelerated towards the end of the year and the improved profitability. - During the period under review, ESL Shipping received a decision on the EU's funding for energy efficiency and environmental investments of at most EUR 5.9 million, of which the company received EUR 2.1 million during the fourth quarter. - Aspo specified its financial targets on November 24, 2016, so that the aim is to reach the targets by 2020. ESL Shipping expects to reach an operating profit level of 20-24% by 2020. Guidance for 2017 Aspo's operating profit will be EUR 22-27 (20.4) million in 2017. The Board of Directors' dividend proposal The Board of Directors proposes that EUR 0.42 (0.41) per share be paid in dividends for the 2016 financial year, and that the dividend be paid in two installments, in April and in November. Further information about the dividend proposal can be found under "Dividend proposal". General outlook for 2017 Uncertainty in markets has decreased. Industrial production is expected to grow in the main market areas of Aspo's businesses in 2017. Prices of raw materials are expected to remain low. In Russia, the national economy and industrial production are estimated to turn into growth. Political risks have increased, which may quickly affect the operating environment or decrease free trade in the long term. KEY FIGURES Items affecting comparability *) The operating profit 1-12/2015 includes an impairment loss of EUR 1.3 million related to Kauko goodwill, and EUR 0.6 million in charges imposed on Telko by Finnish Customs and related advisor fees, of which EUR 0.2 million were recognized in the fourth quarter. **) The profit 1-12/2015 includes an impairment loss of EUR 1.3 million related to Kauko goodwill, a sales gain of EUR 4.9 million recognized in financial items and EUR 2.0 million in charges imposed by Finnish Customs and related advisor fees, of which EUR 1.6 million were recognized in the fourth quarter. AKI OJANEN, CEO OF ASPO GROUP, COMMENTS ON THE FOURTH QUARTER AND THE FINANCIAL YEAR: "All in all, 2016 was a good and dynamic year. The growth of Aspo's net sales and operating profit accelerated during the second half of the year. We expect this positive development to continue and our financial guidance for 2017 estimates the operating profit to be EUR 22-27 (20.4) million in 2017. We developed the management of our subsidiaries on many levels. Their Boards of Directors were strengthened, Mikko Laavainen was appointed Managing Director of Leipurin Plc, starting from March 1, 2016, Kauko revised its identity in accordance with its strategy, and Telko invested in its regional strategy and both expanded and grew heavily in eastern markets. ESL Shipping received a decision on an EU funding of at most EUR 5.9 million for energy efficiency and environmental investments in vessels. The company carried out extensive groundwork for the future development of its results. The shipping company faced an exceptionally challenging operating environment in 2016. Unhealthy levels of international cargo prices also reduced the results of ESL Shipping. Even though other vessel categories improved their profitability, the losses produced by Supramax vessels during the spring and summer reduced the full-year results.  However, the operating profit of EUR 4.1 (4.5) million produced during the fourth quarter can be regarded as a good achievement, considering the market situation. We estimate that the productivity of Supramax vessels is higher in 2017 than what it was in 2016. Telko was able to significantly improve its net sales and profitability during the fourth quarter. We already saw in the spring that the decline in the Russian economy had stopped and expected the market situation to improve. Telko's strong investments in growth paid off in the eastern markets in the form of an increase in net sales of 26%. Its operating profit improved during the quarter to EUR 2.5 (1.9) million. Telko improved its profitability, particularly in the western markets. The profitability of Leipurin is far from its potential, even though its operating profit improved during the fourth quarter to EUR 0.7 (0.4) million. Leipurin continued its strong growth in Russia, where its profitability remained high, with the operating profit rate being approximately 9%. Machine operations produced a loss in 2016. Heavy investments in improving the competitiveness of machine operations and entering new market areas resulted in a record-high order book at the end of the year, which ensures that the result of machine operations can develop positively in 2017. Aspo's administrative costs reached the target level in 2016. The improved outlook for different businesses and the higher cost efficiency enable us to be determined and move forward in 2017 towards reaching our financial targets by 2020."  ASPO GROUP NET SALES Net sales by segment There is no considerable inter-segment net sales. Net sales by market area The market area of Russia, Ukraine and other CIS countries increased its net sales by 21% during the fourth quarter, making it the largest market area. At an annual level, net sales grew by 13.5% in the market area. In October-December, net sales in the market area of other countries fell by 22.1%, which can be explained by the timing of Kauko's project deliveries to China in the fourth quarter of 2015. EARNINGS Operating profit by segment Earnings per share Earnings per share were EUR 0.49 (0.61) during the financial year. Equity per share was EUR 3.75 (3.36). The result for the comparative period was significantly improved by a sales gain of EUR 4.9 million recognized in financial items through the sale of shares in Alandia Insurance owned by ESL Shipping. Its effect on earnings per share was approximately EUR 0.16. Financial targets Aspo's objective is to reach an average return on equity of over 20%, gearing of up to 100% and an operating profit of 7% with the current structure by 2020. The operating profit rate for the financial year was 4.5% (4.6), return on equity was 14.6% (19.1), and gearing was 89.8% (101.4). OUTLOOK FOR 2017 Global economic growth is expected to speed up in 2017. General uncertainty and a poor economic situation in eastern growth markets that are important areas for Aspo have turned into growth. However, the future development of Russia, Ukraine and other CIS countries is difficult to estimate. The values of currencies are expected to continue to fluctuate heavily.  Oil prices are expected to remain at their low level. In general, prices of production raw materials are expected to remain low. The Group will continue to increase its market share profitably in the strategically important eastern growth markets. Industrial production is expected to grow in the main market areas of Aspo's businesses in 2017. While international dry cargo prices are expected to remain low, the shipping company has secured the use of its capacity mainly through long-term agreements. It has been ensured that one Supramax vessel will operate in the Baltic Sea area in 2017, which significantly reduces the volume of spot traffic. The loss-producing machine operations of Leipurin will turn to produce a profit as a result of the record-high order book. ASPO'S BUSINESS OPERATIONS ESL SHIPPING ESL Shipping is the leading dry bulk cargo company in the Baltic Sea region. At the end of the year, the company's fleet consisted of 14 vessels, of which the company owned 13 in full and one was leased. ESL Shipping's service range is based on the company's ability to operate effectively and reliably in Nordic ice regions and to load and unload vessels at sea. During the last quarter, ESL Shipping's vessels mainly operated in the Baltic Sea and Northern Europe, and offered loading and unloading services at sea. Transportation operations in the Baltic Sea and the North Sea are based on long-term customer agreements and established customer relationships. The general market prices of dry bulk cargo increased at the end of 2016, while they are still low when evaluated in the long term. During the fourth quarter, the shipping company signed an annual agreement with a Russian steel company on the transportation of iron pellets to European markets, using a Supramax vessel. Key factors for the agreement include the excellent ice strengthening of ESL Shipping's vessels and their ability to handle loads independently. The transportation volume of renewable bioenergy was higher than estimated. The results of the Supramax vessels turned to produce a profit during the fourth quarter. One vessel was docked as scheduled during the fourth quarter. ESL Shipping's net sales in the fourth quarter increased to EUR 20.6 (19.9) million as a result of transportation volumes that were higher than in the comparative period and increased ship fuel prices. The strengthened US dollar increased the euro-denominated prices of fuel. Profitability remained high, considering the market situation, and operating profit was EUR 4.1 (4.5) million. Loading and unloading operations for large ocean liners at sea were at a normal level during the fourth quarter. The occasionally difficult weather conditions during the period extended the duration of operations and reduced the profitability of loading and unloading operations, compared with the comparative period. The volume of cargo carried by ESL Shipping in October-December amounted to 3.2 (3.1) million tons. Transportation volumes for the steel industry were at the comparative period's level, whereas transportation volumes for the energy industry increased from the comparative period, both in terms of renewable energy and coal. ESL Shipping maintained its high profitability in 2016, regardless of the exceptionally challenging market environment at the beginning of the year, with operating profit being EUR 12.6 (14.7) million. The shipping company's net sales decreased in January-December to EUR 71.4 (76.2) million. This decrease was affected heavily by the historically difficult market situation involving large dry bulk cargo vessels at the beginning of the year, which forced the shipping company's Supramax vessels to operate in the loss-producing spot market. On an annual level, the Supramax vessels produced a small loss, regardless of the good fourth quarter. However, their profitability was much higher than on average in the market. The volume of cargo carried by ESL Shipping in 2016 amounted to 10.7 (11.1) million tons. On an annual level, the decrease in volume was mainly caused by the distances traveled by the Supramax vessels, which were longer than in the comparative period. The shipping company's newbuilding project of two of the world's first LNG-fueled handy-size dry bulk cargo vessels has proceeded according to schedule, and its cooperation with the shipyard of Sinotrans & CSC Jinling has been productive. The new vessels will start operating in the Baltic Sea in the first half of 2018. The new vessels will operate in the northern Baltic Sea, improving the efficiency of the transportation chain and significantly reducing the environmental load of operations. The EU supports energy-efficiency and environmental investments in ships. ESL Shipping will receive funding of at most EUR 5.9 million in 2016-2019, of which EUR 2.1 million was paid during the fourth quarter. In addition to ESL Shipping, the Bothnia Bulk project involves SSAB Europe Oy, Luleå Hamn AB, Oxelösunds Hamn AB, Raahen Satama Oy and Raahen Voima Oy. The EU funding has been awarded from the Connecting Europe Facility Transport instrument. Outlook for ESL Shipping for 2017 During the past six months, the market cargoes of large dry cargo vessels have increased notably from the historically low level of a year ago, while they are expected to remain fairly low in 2017. As not many new dry cargo vessels have been ordered, the balance between demand and supply is expected to improve in the next few years. Changes are also accelerated by tighter environmental regulations on shipping that may reduce the availability of the oldest tonnage in the future. Most of the shipping company's transportation capacity has been secured in the Baltic Sea and Northern Europe through long-term agreements. Similarly, the profitable employment of one of the shipping company's two Supramax vessels has already been secured for the current year through a long-term agreement in the Baltic Sea region. Transportation volumes for the steel industry are expected to improve or remain unchanged. The seasonal variation in demand may require that the capacity of the pusher-barge system be adapted later in spring, similarly to previous years. Demand in the mining and metal industries may increase, partly as a result of increased raw material prices. Transportation volumes for the energy industry are expected to be higher than in the previous year, which is mainly attributable to the growing demand for the transportation of biofuels. Transportation volume of coal is expected to remain at the previous year's level and its use will focus on the co-production of power and heat, the volumes of which are easier to estimate. The shift is due to the poor profitability of the production of condensate power and the previously announced closings of condensate power plants. Demand for loading and unloading services for large ocean liners at sea is expected to be high. If required, the shipping company will adapt its capacity in accordance with variation in demand and the needs of any new customer groups by chartering additional external capacity. The company aims to continue its operations in arctic areas, as in previous years. According to its strategy, the shipping company will continue to expand its customer base, in particular, to customer transportation, where the load range and the company's operating area can be increased while utilizing the independent load handling capability and the exceptionally high ice strengthening of its vessels. In 2017, four ship units will be docked as planned. LEIPURIN Leipurin is a unique provider of solutions for bakery and confectionery products, the food industry and the out of home (OOH) market. The solutions offered by Leipurin range, for example, from product development, recipes, raw materials, training and equipment all the way to the design of sales outlets. As part of its full-range services, Leipurin designs, delivers and maintains production lines for the baking industry, baking units and other machinery and equipment required in the food industry. Leipurin uses leading international manufacturers as its raw material and machinery supply partners. Leipurin operates in Finland, Russia, the Baltic countries, Poland, Ukraine, Kazakhstan and Belarus. Prices of raw materials that are important to Leipurin remained at the comparative period's level. The net sales of Leipurin in October-December were short of the comparative period, totaling EUR 30.7 (31.5) million. The operating profit grew to EUR 0.7 (0.4) million. The operating profit rate during the quarter was 2.3% (1.3%). The net sales decreased in bakery machine operations and significantly in raw material operations in Poland. The net sales of bakery raw materials grew by 18% in Russia, Ukraine and other CIS countries, while the operating profit rate fell to 7%. The net sales of bakery raw materials grew in Finland, mainly because of artisanal and OOH customer accounts. The increase in operating profit in October-December is mainly attributable to the growth of net sales in eastern markets in terms of bakery raw materials and the improved profitability of machine operations. Machine operations turned to produce a profit after a long loss-producing period which started from the steep decline in the Russian ruble. During the fourth quarter, net sales in Russia, Ukraine and other CIS countries, including machine sales, increased by 5% to EUR 9.6 (9.1) million, with the operating profit rate being approximately 7% (7%). The full-year net sales of Leipurin stood at EUR 112.7 (117.8) million, and operating profit was EUR 2.0 (2.4) million. The net sales generated in Russia, Ukraine and other CIS countries totaled EUR 30.6 million (30.6). The net sales of raw material operations remained at the previous year's level. The net sales of machine operations fell, producing a loss in 2016. Investments associated with the implementation of the new strategy reduced the operating profit.   Mikko Laavainen started as the Managing Director of Leipurin Plc on March 1, 2016.  Outlook for Leipurin for 2017 The market situation is expected to remain unchanged in the key markets of Leipurin. The company's market position is expected to remain strong in the industrial baking sector in Finland, the Baltic countries and Russia, and its net sales and operating profit are expected to improve. Russia's poor economic situation is estimated to turn into growth, and the purchasing power of consumers is expected to improve. The local procurement of bakery raw materials has increased in Russia to replace imported raw materials. This aims to respond to changes in demand by developing a product range with more competitive prices and to the ongoing campaign to favor domestic products in Russia. The aim is to increase the proportion of local raw materials above 50%. Local procurement has been decentralized and there are already dozens of significant local production partners. In this market area, Leipurin will maintain its high profitability, strengthen its market position and seek growth in the bread, confectionery and OOH sectors. The OOH market is a significant new area for Leipurin, and the company will continue its growth in this sector, particularly in Finland and the western markets. In machine operations, machine investments are expected to increase in Finland and the Baltic countries. In addition, a moderate increase in investments is expected in Russia. In terms of machine operations, Leipurin will continue to strengthen its agent network in Western Europe and the Middle East. The company's strong investments in the improved profitability of machine operations and expansion of sales into new market areas produced a record-high order book at the end of the year, which ensures that the result of machine operations will develop positively in 2017. TELKO Telko is a leading expert and supplier of plastic raw materials and industrial chemicals. Business is based on representation of the best international principals and on the expertise of the personnel. Telko has subsidiaries in Finland, the Baltic countries, Scandinavia, Poland, Russia, Belarus, Ukraine, Kazakhstan, Azerbaijan and China. *) The operating profit of the year 2015 includes EUR 0.6 million in charges imposed by Finnish Customs and related advisor fees, of which EUR 0.2 million were recognized in the fourth quarter. The prices of plastic raw materials continued to decrease during the fourth quarter, while the prices of chemicals essential to Telko increased during the quarter. In the fourth quarter, Telko's net sales grew by 21% to EUR 64.9 million (53.6). Operating profit improved to EUR 2.5 million (1.9). The most significant reason for this increase in the operating profit was the improved profitability in western markets. The operating profit rate increased from the corresponding period in the previous year. In Russia, Ukraine and other CIS countries, net sales increased during the fourth quarter by 26% compared with the comparative period. The operating profit decreased notably, with the operating profit rate being clearly below 5%. The Russian ruble, a currency important to Telko, strengthened by approximately 9% from the previous quarter, which temporarily reduced the profitability of the Russian unit. Main reasons for this poor profitability were the relatively larger proportion of volume products from net sales, compared with the western markets, and decrease in their prices. In addition, changes in exchange rates between the sale and procurement of products temporarily reduced the profitability of products sold in eastern markets. Furthermore, strategic investments in the local sales network covering the whole of Russia increased costs. However, this investment following the regional growth strategy is expected to have a positive impact on net sales and operating result in Russia. In the eastern markets, the operating environment continued to be a challenging one in 2016, even though the increase in oil prices strengthened the value of the ruble nearly throughout the year and also improved Russia's economic outlook. In the western markets, improvements in the operating environment supported demand, which increased profitability in the area. In 2016, net sales increased to a record-high level at EUR 240.3 (215.3) million. The increase in the net sales accelerated towards the end of the year and the full-year net sales grew by 12%, regardless of the prices of plastic and industrial chemical raw materials being lower than on average. The increase in the net sales was mainly attributable to new customer accounts, new principals and growth in sales volumes. In 2016, operating profit stood at EUR 10.1 (10.4) million. Net sales in the eastern markets grew by 16% in 2016, amounting to EUR 110.8 (95.5) million. Telko's net sales grew by 13% in Russia, by 18% in Ukraine and by 5% in the western markets. Sales volumes of plastics and chemicals grew both in the east and the west. In the western markets, the operating profit and the operating profit rate increased, while they fell in the eastern markets. Outlook for Telko for 2017 The prices of oil and petrochemical products are expected to remain low. The expected positive recovery of the eastern markets supports Telko's profitability development in the region. Telko's financial development in the western markets is expected to recover during 2017. In addition to growth, Telko focuses on improving its relative profitability. Increasing the proportion of technical products of a higher value will improve relative profitability, especially in the western markets. Telko will continue to operate in the eastern markets in accordance with its regional strategy by establishing and strengthening its regional units. Telko will investigate possible new operating countries in growth markets in the east and Middle East. KAUKO Kauko is a specialist in demanding mobile knowledge work environments. It supplies the best tools, solutions for improving productivity and services for securing effective use for the needs of industries, logistics, healthcare sector and the authorities. Kauko solutions combine customized applications, devices and services. Its product range also includes products that improve energy efficiency. Kauko has companies in Finland and Germany.  *) In 2015, the operating profit included a EUR 1.3 million goodwill impairment loss recognized in the first quarter. Total sales of computers decreased in Finland from the comparative period. However, sales of special rugged computers and tablets designed for demanding mobile knowledge work increased during 2016. In terms of decentralized energy production, the sales of solar power systems, in particular, have increased, and this increase is expected to continue. Kauko's net sales fell by 52% in the fourth quarter, amounting to EUR 8.3 (17.1) million. During the comparative period, the net sales and operating profit were increased by project deliveries in China. Operating profit stood at EUR 0.0 (0.6) million. The net sales of mobile knowledge work fell slightly from the comparative period, while the operating profit, including deliveries to healthcare sector, produced positive results. The net sales of energy-efficiency equipment grew. IT deliveries to the healthcare sector decreased clearly, net sales fell and the operations produced a loss during the fourth quarter. Key employees resigned from the organization of mobile IT units delivered to hospitals in Finland and Germany. Kauko will investigate and identify whether the non-compete clause has been breached and whether confidential positions have been misused. The organizational changes reduced the net sales of the unit during the fourth quarter. Reorganizations have been made in Finland and Germany. In 2016, Kauko's net sales fell by 10%, amounting to EUR 33.0 (36.5) million. Operating result stood at EUR -0.1 (-1.2) million. During the comparative period, operating result decreased due to the divestment of the Industrial business, in conjunction with which Aspo assessed the goodwill of the Kauko segment, and recognized an impairment loss of EUR 1.3 million. In 2016, the sale of energy-efficiency equipment developed well, compared with the comparative period. Solar power systems showed the fastest growth. The sale of air source heat pumps was at the level of the comparative period. Project deliveries in China fell clearly from the comparative period, due to the smaller number of projects. In the spring, the name Kaukomarkkinat was changed to Kauko, and the company underwent revised its identity and completely changed its customer communications in accordance with the new strategy. According to its new strategy, Kauko continued to expand its service range and invested in the development and sale of solutions for demanding mobile knowledge work. In addition, the company launched new business development projects that required the recruitment of new technical and commercial specialists and the further development of internal operating models. Outlook for Kauko for 2017 The net sales and profitability of solutions for mobile knowledge work are expected to improve. Kauko offers effectively integrated and customized complete solutions that combine application, hardware and other services. Application operations, in particular, are expected to improve their profitability. Service operations will be expanded by making a stronger shift towards complete solutions. In the markets of rugged computers, the sale of laptops is expected to decrease and the sale of tablets to increase. Kauko offers different mobile IT solutions for healthcare sector to improve the efficiency of the nursing staff. Kauko's German-built computer is expected to be available for sale during the first quarter. This new computer allows sales to other OEM channels, as well. The market of decentralized energy production solutions is expected to continue its growth, especially with regard to solar power. The order book is at an exceptionally good level. OTHER OPERATIONS Other operations include Aspo Group's administration, the financial and ICT service center, and a small number of other functions not covered by business units.  The operating profit of other operations was EUR -1.0 (-1.2) million for the fourth quarter and EUR -4.2 (-5.7) million for the financial year. The cost efficiency of other operations rose to the target level during the financial year. FINANCING The Group's cash and cash equivalents amounted to EUR 22.6 (23.9) million. The consolidated balance sheet included a total of EUR 125.4 (127.9) million in interest-bearing liabilities. The average rate of interest-bearing liabilities was 1.8% (1.7%) at the end of the financial year. Non-interest-bearing liabilities totaled EUR 69.8 (74.3) million. Aspo Group's gearing was 89.8% (101.4%) and its equity ratio was 37.4% (33.8%).   The Group's net cash from operating activities in January-December stood at EUR 16.2 (25.0) million. During the financial year, the change in working capital was EUR -10.6 (-4.2) million. Working capital was tied, in particular, to the strong growth of Telko. Net cash from investing activities totaled EUR -6.1 (-9.9) million and was affected positively by the EU subsidy of EUR 2.1 million received by ESL Shipping. During the comparative period, the net cash from investing activities was positively affected by a sales gain of EUR 4.9 million from Alandia shares. The Group's free cash flow (net cash from operating activities + net cash from investing activities) was EUR 10.1 (15.1) million. In November, ESL Shipping Ltd signed vessel financing agreements of EUR 50 million to finance its newbuilding projects.The loan period of the two separate agreements is seven years, and the repayment schedule includes a grace period of three years and a payback profile corresponding to a loan period of 12 years. The financing agreements will be fully used after the completion of the vessels, no later than in 2018. The new agreements extend the average maturity of Aspo Group's financing and, on their part, reduce the average interest rate of financing. In June, Aspo signed a revolving credit facility agreement of EUR 20 million. Its maturity is three years, and the agreement replaced an expiring revolving credit facility agreement of the same amount. On May 27, 2016, Aspo issued a new hybrid bond of EUR 25 million, treated as equity in the consolidated balance sheet. The fixed coupon rate of the bond is 6.75% per annum. The bond has no specified maturity date, but the company may exercise an early redemption option after four years of its issuance date. In May 2016, Aspo issued a tender offer to redeem EUR 15.4 million of the EUR 20 million hybrid bond issued in November 2013. The remaining capital of EUR 4.6 million was redeemed on November 18, 2016, in compliance with the terms and conditions of the loan. The amount of committed revolving credit facilities signed between Aspo and its main financing banks stood at EUR 40 million at the end of the financial year. At the end of the year, the revolving credit facilities remained fully unused. A revolving credit facility EUR 20 million will mature in 2017. Aspo's EUR 80 million commercial paper program remained fully unused. Aspo has hedged its interest rate risk by means of an interest rate swap. Its fair value on December 31, 2016 was EUR -0.6 (-0.7) million. The financial instrument is on level 2 of the fair value hierarchy. Aspo Group has hedged its currency-denominated cash flows associated with the acquisition of new vessels using currency forward agreements, to which hedge accounting is applied. The nominal value of these currency forward agreements was EUR 36.2 million, and their fair value was EUR 1.7 (0.1) million on December 31, 2016. The financial instrument is on level 2 of the fair value hierarchy. INVESTMENTS In 2016, the Group's investments stood at EUR 6.9 (15.1) million, mainly consisting of ESL Shipping's ship docking and maintenance investments, and advance payments for the shipping company's upcoming LNG-fueled dry cargo vessels. The EU supports energy-efficiency and environmental investments in ships. ESL Shipping will receive, at most, EUR 5.9 million in subsidies in 2016-2019, of which EUR 2.1 million was paid during the fourth quarter. In addition, investments were increased by the takeover of Telko's new business operation in Finland. Investments by segment, acquisitions excluded At the end of the year Aspo Group had 895 employees (857). The number of personnel has increased as a result of the expansion of Leipurin and Telko in the east. Rewarding Aspo Group applies a profit bonus system which was adopted in 2013. The profit bonus system applied to Finnish personnel is linked with the personnel fund so that the bonus can be invested in the personnel fund or withdrawn in cash. The long-term goal of the funding system is that the personnel will become a significant shareholder group in the company. All persons working at Aspo Group's Finnish companies are members of the personnel fund. In 2015, the Board of Directors of Aspo Plc approved a share-based incentive plan for about 30 persons. The plan includes three earnings periods, the calendar years 2015, 2016 and 2017. The Board of Directors will decide on the plan's performance criteria and required performance levels for each criterion at the beginning of each earnings period. The reward from the earnings period 2015 was based on the Group's earnings per share (EPS). In 2016, on the basis of the 2015 earnings period, employees included in the plan received 88,970 treasury shares as a share-based reward, as well as cash equaling the value of the shares in order to pay taxes. The reward from the 2016 earnings period was based on the Group's earnings per share (EPS). On the basis of the 2016 earnings period, employees included in the plan will receive 26,040 treasury shares as a share-based reward, as well as cash equaling the value of the shares at most in order to pay taxes. In accordance with the rules of incentive plans a total of 5,275 treasury shares, originally granted on the basis of share-based incentive plans, were returned due to ended contracts of employment. RESEARCH AND DEVELOPMENT Aspo Group's R&D focuses, according to the nature of each segment, on developing operations, procedures and products as part of the customer-specific operations, which means that the development inputs are included in normal operational costs and are not itemized. ENVIRONMENT Aspo Group's operations do not have any significant environmental impact. The Group companies follow Aspo's environmental policy with the main principle of continuously improving operations. Throughout its operations, Aspo supports the principles of sustainable development. Aspo looks after the environment by taking initiatives and continuously monitoring the laws and recommendations connected to its operation and any revisions to these. Aspo wants to be a pioneer in all of its operations and also anticipates future developments in environmental regulations. RISKS AND RISK MANAGEMENT Aspo's operating environment remained a highly challenging one throughout the year. In general, the economy of each of Aspo's operating countries decreased throughout the year, but at the end of the year there were signs of recovery in different areas. In western countries, national economies are growing slowly, while the decline has slowed down in the east. During the fourth quarter, imports in Russia, a country important to Aspo, turned into an increase and the full-year increase in oil prices strengthened the ruble. In Russia, the rate of inflation stopped at the 2012 level during the fourth quarter and, in particular, the prices of food products are increasing more slowly than in previous years. Cargo prices increased slowly throughout the year. A slow turn for the better can also be seen in decreasing risks in all of Aspo's businesses. Nevertheless, quick changes in international politics, exchange rates or commodities markets may have an impact on demand for and the competitiveness of products of Aspo's companies. Growth in eastern and western markets was still limited by the slow demand for investment assets. Strategic risks In addition to the western markets, Aspo operates in areas where financial development may quickly become negative or positive, as a result of which there may be significant changes in business preconditions. Due to an increase in the prices of imported products in Russia and Ukraine, consumer demand slowed down and the economy contracted. During the fourth quarter, the Russian economy only contracted to a small extent and inflation slowed down significantly. According to estimates, the Russian economy will start growing during 2017. Slower consumption demand has affected trade, but the increase in nominal salaries gives signs of growing consumption. No signs of further decline were visible in the financial markets and payments in Russia and Ukraine. Companies are more eager to make investments, while caution still slows down the sale of investment commodities. In Russia, the impact of increased prices of imported goods and financial sanctions has been reduced through the means of local procurement and production. An increasing volume of raw materials and goods produced in Russia has been entered into use by the industry, regardless of their lower quality. This may reduce the position of imported raw materials in the value chain and the margin level. However, an increase in import volumes may correspondingly reduce related risks faced by Aspo. Political risks have increased, which may quickly affect Aspo's operating environment or decrease free trade in the long term. The weaker economic and political situation in Aspo's market areas may have made it more difficult to implement the structural changes defined in Aspo's strategy. This situation may continue unchanged, but, if the economic and political pressure alleviates, it may be reversed fairly quickly. Financial sanctions or any other obstacles caused by the current situation in Russia may, in part, reduce transportation volumes from Russia and there may be a decrease in unloading services for large ocean liners at sea. The social objective to reduce the consumption of coal in energy production in Finland and the rest of Europe has increased in significance, which may reduce the need to transport coal. Correspondingly, the need for replacement energy products may increase transportation. For these reasons, it is difficult to estimate future transportation volumes. The low level of international cargo indices and a global increase in vessels, especially in larger size categories, have increased uncertainty over the long-term profitability of shipping companies, even though there are signs of stabilization in cargo indices and the number of vessels. In addition to the internationally poor economic situation and the political atmosphere, strategic risks are caused by the outlook and production solutions of industrial customers. Decisions on energy production structures affected by the environmental policy and other political choices may cause changes in industry and energy production that may decrease the use of fossil fuels and increase the use of alternative forms of energy. The flow of goods in the Baltic Sea may change as a result of steel production, cost structures, changes in the customer structure, such as consolidation, or other reasons. These changes may have negative consequences on operations as the need for transportation decreases, but they may also be seen as significant opportunities. As a result of low cargo prices in international shipping, competition over cargoes may also intensify in the Baltic Sea and also because of mild and iceless winters. To improve its competitive position, ESL Shipping is building new low-emission vessels with a high fuel economy suitable for this area and for customers operating in this area. Strategic risks are affected by long-term changes in cargo prices, investment trends, and changes in trade structures, especially in western markets. In the eastern markets, risks are increased by such factors as political instability, social structures or the lack of any reaction to the difficulties encountered by business operations. Any accumulation and discharge of investments in the long term may cause changes in the competitive situation and customer behavior. Rapid changes in financial structures may cause risks due to changes in the customer or principal structure or technologies, and due to unutilized opportunities that require a quick response. Aspo's strategic risks are evened out by the distribution of business operations over four segments, its engagement in business operations in a broad geographical area, and its ability to react quickly to changing situations. Operational risks Even though economic uncertainty in Aspo's operating environment decreased during the period under review, operational risks have remained unchanged. These include risks related to supply chains and individuals. The focus of Aspo's growth has for long been on emerging market areas, where risks that decelerate growth are affected by factors such as the exchange and interest rates, level of and changes in the global market prices for raw materials, industrial and commercial investments, customer liquidity, changes in legislation and import regulations, and inactivity or non-neutrality of the authorities or corruption. Economic growth and, alternatively, any decrease in production may have an impact on demand for raw materials in the eastern markets. Political and economic instability makes commercial activities more difficult and, if the situation prolongs, it may also decelerate the growth of Aspo's businesses. Consumer behavior is also reflected in the risks generated through B-to-B customers and their risk levels. The growth opportunities presented by emerging markets boost interest among competitors in launching or expanding business in these areas. The challenging emerging markets and the escalated situation in Ukraine have also caused competitors to withdraw from the area, which has created new potential for Aspo's businesses, increased their market shares and, in some business areas, even improved profitability. The competition has returned to normal level, for example, in Ukraine. Hedging against exchange rate changes is not possible in all situations, and especially without interruptions. Changes in exchange rates may weaken results and also reduce equity on the balance sheet as a result of translation differences. On the other hand, changes in exchange rates may strengthen results and the balance sheet. As changes in credit loss risks are diversified across businesses and customers, Aspo's businesses have not been subjected to any significant credit losses, even though credit loss risks have increased. The quantity and probability of the Group's loss risks are assessed regularly. A bidding process was launched for non-life insurance and the amounts insured were updated in 2016. The amounts insured are sufficient in view of the scope of Aspo's operations, but insurance companies may restrict the validity of insurance policies, as a result of risks increasing for various reasons for example military operations. Internal control and risk management One of the responsibilities of Aspo's Audit Committee is to monitor the efficiency of the Group's internal supervision, internal audits, and risk management systems. The Audit Committee monitors the risk management process and carries out necessary measures to prevent strategic risks in particular. In accordance with the internal control principles approved by the Board of Directors, risk management is part of Aspo's internal control, and its task is to ensure the implementation of the Group's strategy, development of financial results, shareholder value, dividend payment ability, and continuity in business operations. The operational management of each business is responsible for risk management. The management is responsible for specifying sufficient measures and their implementation, and for monitoring and ensuring that the measures are implemented as part of day-to-day management of operations. The risks of Telko and ESL Shipping were re-assessed during the fourth quarter, and those of other businesses will be updated at the beginning of 2017. Risk management is coordinated by Aspo's CFO, who reports to the Group CEO. Aspo Group's financing and financing risk management are centralized in the parent company in accordance with the treasury policy approved by the Board of Directors. A more detailed account of the risk management policy and the most significant risks is available on the company's website. More detailed information on financing risks can be found in the notes to the financial statements.  SHARE CAPITAL AND SHARES Aspo Plc's share capital on December 31, 2016 was EUR 17,691,729.57 and the total number of shares was 30,975,524 of which the company held 396,226 shares; that is 1.3% of the share capital. Aspo Plc has one share series. Each share entitles the shareholder to one vote at the shareholders' meeting. Aspo's share is quoted on Nasdaq Helsinki Oy's Mid Cap segment under industrial products and services. During January-December 2016, a total of 2,490,725 Aspo Plc shares with a market value of EUR 17.3 million were traded on Nasdaq Helsinki, in other words, 8.0% of the shares changed hands. During January-December 2016, the share price reached a high of EUR 8.21 and a low of EUR 6.00. The average price was EUR 6.95 and the closing price at year-end was EUR 8.18. At the end of the year, the market value excluding treasury shares was EUR 250.1 million.  The number of Aspo Plc shareholders was 9.236 at year-end. A total of 697.919 shares, or 2.3% of the share capital, were nominee registered or held by non-domestic shareholders. Aspo Plc's new trading code (stock symbol) in Nasdaq Helsinki is ASPO. Previously it was ASU1V. The new trading code was effective on June 27, 2016. Flagging notification On May 31, 2016 shareholder Tatu Vehmas informed that Aatos Vehmas and Liisa Vehmas have authorized him to use the voting rights of Aspo shares owned by them so that his share of the voting rights in Aspo Plc has increased above five per cent (5%). DIVIDEND PROPOSAL The Board of Directors proposes that EUR 0.42 (0.41) per share be paid in dividends for the 2016 financial year and that no dividend be paid for treasury shares held by Aspo Plc. The parent company's distributable funds totaled EUR 31,495,378.54, of which the profit for the financial year amounted to EUR 12,804,309.73. There are a total of 30,579,298 shares entitling to dividends on the publication date of this financial statement release. The dividend will be paid in two installments. The first installment of EUR 0.21 per share will be paid to shareholders who are registered in the shareholders' register maintained by Euroclear Finland Oy on the record date of April 7, 2017. The Board of Directors proposes that the dividend be paid on April 18, 2017. The second installment of EUR 0.21 per share will be paid in November 2017 to shareholders who are registered in the shareholders' register maintained by Euroclear Finland Oy on the record date. At its meeting to be held on October 26, 2017, the Board of Directors will decide on the record and payment dates of the second installment, in accordance with the rules of the Finnish book-entry securities system. According to the current system, the dividend record date would be October 30, 2017 and the payment date would be November 6, 2017. If Euroclear Finland Oy adopts the new core system before the meeting of the Board of Directors, the dividend is expected to be paid a few days earlier. Before the Board of Directors implements the resolution of the Annual Shareholders' Meeting, the Board of Directors must, in accordance with the Finnish Companies Act, assess whether the company's solvency and/or financial position has changed after the resolution of the Annual Shareholders' Meeting so that the requirements for dividend distribution in the Finnish Companies Act are no longer fulfilled. It is a prerequisite for the implementation of the resolution of the Annual Shareholders' Meeting that the requirements in the Finnish Companies Act are fulfilled. MANAGEMENT AND AUDITORS In 2016, the Annual Shareholders' Meeting re-elected to the Board of Directors LL.M, MBA Mammu Kaario, LL.M. Roberto Lencioni, B.Sc. (Econ.), eMBA Gustav Nyberg and M.Sc. (Tech.) Risto Salo and M.Sc. (Econ.) Mikael Laine and D.Sc. (Econ.) Salla Pöyry were elected as new members of the Board of Directors. At the Board's organizing meeting held after the Annual Shareholders' Meeting, Gustav Nyberg was elected as Chairman of the Board and Roberto Lencioni as Vice-Chairman. At the meeting the Board also decided to appoint Roberto Lencioni Chairman of the Audit Committee and Mammu Kaario, Mikael Laine and Salla Pöyry as committee members. In 2016, the Board of Directors arranged 11 meetings, of which four were teleconferences. The average participation rate was 99%.  eMBA Aki Ojanen has acted as the CEO of the company. The authorized public accountant firm Ernst & Young Oy has been the company's auditor. Harri Pärssinen, APA, has acted as the auditor in charge. DECISIONS OF THE SHAREHOLDERS' MEETINGS Dividend The Annual Shareholders' Meeting of Aspo Plc on April 7, 2016, approved the payment of a dividend totaling EUR 0.41 per share according to the Board's proposal. The dividend's payment date was April 18, 2016. Shareholders' Nomination Board The Annual Shareholders' Meeting decided to establish a permanent Shareholders' Nomination Board to prepare proposals to the Annual Shareholders' Meeting for the election and remuneration of the members of the Board of Directors and the remuneration of the Board committees. In addition, the Meeting adopted the Charter of the Shareholders' Nomination Board. Board authorizations Authorization of the Board of Directors to decide on the acquisition of treasury shares The Annual Shareholders' Meeting on April 7, 2016 authorized the Board of Directors to decide on the acquisition of no more than 500,000 of the treasury shares using the unrestricted equity of the company. The authorization includes the right to accept treasury shares as a pledge. The authorization will remain in force until the Annual Shareholders' Meeting in 2017 but not more than 18 months from the approval at the Shareholders' Meeting. The Board of Directors has not used the authorization. Authorization of the Board of Directors to decide on a share issue of treasury shares The Annual Shareholders' Meeting on April 9, 2015 authorized the Board of Directors to decide on a share issue, through one or several instalments, to be executed by conveying treasury shares. An aggregate maximum amount of 900,000 shares may be conveyed based on the authorization. The authorization will remain in force until September 30, 2018. The Board of Directors has used the authorization on March 18, 2016 and granted 88,970 treasury shares to employees included in the earnings period 2015 of the share-based incentive plan 2015-2017. Authorization of the Board of Directors to decide on a rights issue The Annual Shareholders' Meeting on April 9, 2015. authorized the Board of Directors to decide on a rights issue for consideration. The authorization is proposed to include the right of the Board of Directors to decide on all of the other terms and conditions of the conveyance and thus also includes the right to decide on a directed share issue, in deviation from the shareholders' pre-emptive right, if a compelling financial reason exists for the company to do so. The total number of new shares to be offered for subscription may not exceed 1,500,000. The authorization will remain in force until September 30, 2018. The Board of Directors has not used the authorization. PROPOSALS OF THE NOMINATION BOARD TO THE SHAREHOLDERS' MEETING The Shareholders' Nomination Board consists of the representatives of the four largest shareholders. According to the list of shareholders as of August 31, 2016, the following representatives of the largest shareholders were members of the Nomination Board which prepared proposals for the Annual Shareholders' Meeting 2017: Tatu Vehmas, Chairman (Vehmas family); Veronica Timgren (Nyberg family, including Oy Havsudden Ab); Reima Rytsölä (Varma Mutual Pension Insurance Company); and Mikko Mursula (Ilmarinen Mutual Pension Insurance Company). In addition, Gustav Nyberg, Chairman of Aspo Board of Directors, has acted as an expert member of the Nomination Board. The Nomination Board of Aspo Plc's shareholders proposes to the Annual Shareholders' Meeting of Aspo Plc to be held on April 5, 2017 that the Board of Directors will have six members. Members of the Board The Nomination Board proposes that Mammu Kaario, Mikael Laine, Roberto Lencioni, Gustav Nyberg, Salla Pöyry and Risto Salo, current members of the company's Board of Directors, be re-elected as members of the Board of Directors for the term closing at the end of the Annual Shareholders' Meeting 2018. Remuneration paid to the members of the Board The Nomination Board proposes that members of the Board of Directors receive the following monthly remuneration: The Nomination Board proposes that the meeting fees paid to members of the Audit Committee remain unchanged, i.e. EUR 700 per meeting. However, the Nomination Board proposes that 1.5 × the meeting fee paid to members of the Audit Committee be paid to the Chairman of the Audit Committee, i.e. EUR 1,050 per meeting (EUR 700 per meeting in 2016). If the Chairman of the Audit Committee is also the Vice Chairman or the Chairman of the Board of Directors, the Nomination Board proposes that the fee paid to the Chairman of the Audit Committee is the same as that paid to members of the Audit Committee. Board members having a full-time position in an Aspo Group company are not paid a fee. LEGAL PROCEEDINGS On February 27, 2015, the Helsinki District Court announced its judgement in the case between ESL Shipping and the Finnish State regarding fairway dues levied during the years 2001-2004. According to the judgement, the Finnish State will be required to refund to ESL Shipping approximately EUR 3,0 million in accordance with the company's claim, as well as legal expenses and interest. The State lodged an appeal against the District Court's judgement and, in its ruling issued on August 8, 2016, the Court of Appeal overruled the Helsinki District Court's judgement and dismissed ESL Shipping's legal action as time-barred. The company has applied for a leave to appeal from the Supreme Court. The shipping company won legal proceedings against Indian ABG Shipyard concerning the compensation payable for repairs made to m/s Alppila during the warranty period. The vessel was delivered to ESL Shipping in 2011. According to the ruling of the arbitration court, ABG Shipyard was required to refund the repair expenses and interest to ESL Shipping according to the company's claims. The impact of ruling will be taken into account during the financial year over which the imposed payment is received. Helsinki February 15, 2017 ASPO Plc Board of Directors ASPO GROUP CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ACCOUNTING PRINCIPLES Aspo Plc's financial statement release has been prepared in accordance with the principles of IAS 34 Interim Financial Reporting. As of January 1, 2016, Aspo applies certain new or amended IFRS standards and IFRIC interpretations as described in the 2015 financial statements. The adoption of these new or amended standards has not had any substantial impact on the reported figures. In other respects, the same accounting principles have been adopted as in the consolidated financial statements on December 31, 2015. The information in this report is unaudited. Aspo Plc has adopted the guidance on alternative key figures issued by the European Securities and Market Authority (ESMA). In addition to IFRS figures, the company releases other commonly used key figures which are mainly derived from the statement of comprehensive income and balance sheet. According to the management, key figures clarify the picture drawn by the statement of comprehensive income and balance sheet of Aspo's financial performance and financial position. The calculation formulas of key figures have been described on page 70 of the Year 2015 report. SEGMENT REPORTING Aspo Group's operational segments are ESL Shipping, Leipurin, Telko and Kauko. Other operations consists of Aspo Group's administration, the financial and ICT service center, and a small number of other functions not covered by business units.  The Group reports its net sales on the basis of the following geographical division: Finland; Scandinavia; the Baltic countries; Russia, Ukraine and other CIS countries; and other countries. PRESS AND ANALYST CONFERENCE A press and analyst conference will be arranged today, Wednesday February 15, 2017 at 14.00 at the Paavo Nurmi cabinet at Hotel Kämp, Pohjoisesplanadi 29, 00100 Helsinki. ANNUAL SHAREHOLDERS' MEETING The Aspo Plc Annual Shareholders' Meeting is scheduled to be held on Wednesday, April 5, 2017, at 14.00 in Helsinki.  FINANCIAL INFORMATION IN 2017 Aspo's financial statement will be published on March 15, 2017 at the latest in Finnish and in English. You can read and order the report on our website at www.aspo.com. In 2017, Aspo Plc will publish two interim reports and a half year financial report: - interim report for January-March on Tuesday, May 9, 2017 - half year financial report for January-June on Tuesday, August 15, 2017 - interim report for January-September on Thursday, October 26, 2017. Helsinki, February 15, 2017 ASPO Plc For more information: Aki Ojanen, 09 521 4010, 0400 106 592, aki.ojanen (a)aspo.com DISTRIBUTION: Nasdaq Helsinki Key media www.aspo.com Aspo is a conglomerate that owns and develops businesses in Northern Europe and growth markets focusing on demanding B-to-B customers. The aim of our strong corporate brands - ESL Shipping, Leipurin, Telko and Kauko - is to be the market leaders in their sectors. They are responsible for their own operations, customer relationships and the development of these. Together they generate Aspo's goodwill. Aspo's Group structure and business operations are developed persistently without any predefined schedules.


News Article | February 23, 2017
Site: globenewswire.com

"We liggen op schema om een geïntegreerd biofarmaceutisch bedrijf te worden. Samen met Gilead zijn we het afgelopen jaar drie Fase 3 programma's met filgotinib gestart. Onze FITZROY studies hebben het potentieel van filgotinib aangetoond voor de ziekte van Crohn, met bemoedigende endoscopie en histopathologie resultaten. We zijn klinische studies gestart voor onze drievoudige combinatietherapie in cystic fibrosis en liggen op schema om deze drievoudige combinatie in de eerste helft van dit jaar te testen op veiligheid, met als doel om medio 2017 op werkzaamheid in patiënten te testen. Het CF programma is substantieel versterkt door de competitieve patiënten-data die de SAPHIRA Fase 2 studies hebben laten zien. We zijn het jaar geëindigd met een brede pijplijn, waarvan we in de komende 18 maanden nieuwe patiënten-data verwachten. We bevinden ons in een zeer sterke positie, zowel financieel als operationeel," aldus CEO Onno van de Stolpe. Bart Filius, CFO, voegde toe: "Galapagos heeft een fantastisch jaar achter de rug met sterke financiële resultaten. We sloten 2016 af met de grootste kaspositie in onze geschiedenis, en de cash burn is onder controle. Op dit moment is onze kaspositie hoger dan de som van alle investeringen gedaan door investeerders in Galapagos sinds haar oprichting in 1999. We zullen onze ontwikkelingsactiviteiten dit jaar verder opvoeren en meer gaan investeren in de ontwikkeling van filgotinib en CF; ook gaan we meer klinische studies starten in programma's die volledig onze eigendom zijn. Dit alles zal resulteren in een verwachte operationele cash burn in 2017 van tussen de €135 en 155 miljoen." R&D kosten voor de Groep bedroegen €139,6 miljoen in 2016, in vergelijking met €129,7 miljoen in 2015. Deze geplande verhoging was het gevolg van toegenomen inspanningen in klinische en preklinische programma's, vooral in de programma's gerelateerd aan taaislijmziekte, en de eigen preklinische programma's inzake in ontstekingsziektes, HBV en fibrose. Non-cash aanpassing van vlottende financiële activa Galapagos heeft in 2015 na ondertekening van de Subscription Agreement met Gilead een vlottend financieel actief en een overeenkomstige uitgestelde opbrengst ter waarde van €39 miljoen geboekt, conform IAS 39. Dit financieel actief vertegenwoordigde in eerste instantie de aandelenpremie die Gilead had toegezegd bovenop de slotkoers van Galapagos op de dag van ondertekening van de Subscription Agreement. Conform IAS 39 werd de reële waarde van het financieel actief aan het einde van het jaar 2015 opnieuw gemeten, en nogmaals bij de inwerkingtreding van de Subscription Agreement, te weten op 19 januari 2016, op de vervaldatum van het financieel actief. Wijzigingen in de reële waarde van het financieel actief werden in de resultatenrekening opgenomen. De afname van de reële waarde van het financieel actief als gevolg van onze gestegen aandelenkoers in de periode tussen het ondertekenen van de Subscription Agreement en 31 december 2015, resulteerde in 2015 in een negatief financieel resultaat van €30,6 miljoen, zonder effect op de kaspositie. De daaropvolgende toename van de reële waarde van het financieel actief, te wijten aan de daling van onze aandelenkoers in de periode tussen 1 januari 2016 en 19 januari 2016 leidde tot een positief financieel resultaat van €57,5 miljoen in 2016, wederom zonder effect op de kaspositie. In 2016 stegen de geldmiddelen, kasequivalenten en in pand gegeven geldmiddelen met €632,7 miljoen. Netto kasstromen uit financieringsactiviteiten genereerden €391,8 miljoen via een onderschrijving van aandelen door Gilead, alsook een kasstroom van €4,3 miljoen door de uitoefening van warranten. Bovendien werd er in 2016 een netto inkomende kasstroom uit bedrijfsactiviteiten gegenereerd van €239,4 miljoen, bestaande uit een licentievergoeding van Gilead van $300 miljoen (€275,6 miljoen) en, per verschil, een operationele cash burn van €36,2 miljoen. Tenslotte werd €7,3 miljoen gebruikt bij investeringsactiviteiten en werd er een wisselkoerswinst van €4,8 miljoen geboekt op geldmiddelen en kasequivalenten. Vooruitzichten 2017 Galapagos hoopt mid-2017 te kunnen starten met de evaluatie van de triple combinatie therapie in CF patiënten. Daarnaast verwachten we in 2017 meerdere nieuwe klinische studies met CF kandidaatmedicijnen en combinaties te starten. Met onze samenwerkingspartner Gilead zijn wij van plan om meerdere proof-of-concept studies met filgotinib te starten. Resultaten van de FLORA Fase 2a studie met GLPG1690 in IPF en de Fase 1b studie met MOR106 in patiënten met atopische dermatitis worden verwacht in de tweede helft van 2017. Galapagos verwacht een Fase 1b studie met GLPG1972 in patiënten met artrose te starten in de Verenigde Staten, evenals Fase 1 studies met GLPG2938 en GLPG2534. Jaarverslag 2016 Op dit moment is Galapagos haar jaarrekening voor het jaar eindigend op 31 december 2016 aan het afronden. De Commissaris heeft bevestigd dat de audit, die vrijwel klaar is, geen correcties heeft opgeleverd die zouden moeten worden doorgevoerd in de financiële informatie in dit persbericht. Als er toch nog correcties zouden komen tijdens de afrondingsfase van de controle, dan zal een aanvullend persbericht worden uitgebracht. Galapagos gaat ervan uit dat het volledig geauditeerde Jaarverslag over 2016 op of rond 24 maart 2017 gepubliceerd zal worden. Galapagos zal morgen, 24 februari 2017, om 14:00 CET/8 AM ET een voor iedereen toegankelijke conference call houden. Deze conference call wordt ook via audio-webcast uitgezonden. Voor deelname aan de teleconferentie kunt u een van de volgende telefoonnummers bellen, minstens tien minuten voor de start: Over Galapagos Galapagos (Euronext & NASDAQ: GLPG) is een biotechnologiebedrijf in de klinische fase, gespecialiseerd in het ontdekken en ontwikkelen van geneesmiddelen met nieuwe werkingsmechanismen. Onze pijplijn bestaat uit Fase 3, Fase 2, Fase 1, preklinische studies en onderzoeksprogramma's in cystic fibrosis, ontstekingsziekten, fibrose, artrose en andere ziekten. Wij hebben filgotinib ontdekt en ontwikkeld: in samenwerking met Gilead streven we ernaar om deze selectieve JAK1-remmer in ontstekingsziekten wereldwijd voor patiënten beschikbaar te maken. We richten ons op het ontwikkelen en het commercialiseren van nieuwe medicijnen die het leven van mensen verbeteren. De Galapagos groep, met inbegrip van fee-for-service dochter Fidelta, heeft ongeveer 510 medewerkers in het hoofdkantoor in Mechelen, België en in de vestigingen in Nederland, Frankrijk en Kroatië. Meer informatie op www.glpg.com. Toekomstgerichte verklaringen Dit bericht bevat toekomstgerichte verklaringen, die bepaalde risico's en onzekerheden inhouden, zoals onder andere verklaringen betreffende de verwachtingen uitgesproken door het management van Galapagos (onder andere met betrekking tot de verwachte operationele cash burn tijdens het boekjaar 2017), financiële resultaten, de timing van geauditeerde financiële resultaten, de timing van klinische studies, en de interacties met autoriteiten. Galapagos waarschuwt de lezer dat toekomstgerichte verklaringen geen garanties inhouden voor toekomstige prestaties. Toekomstgerichte verklaringen kunnen gekende en ongekende risico's en onzekerheden en andere factoren inhouden die ertoe zouden kunnen leiden dat de werkelijke resultaten, financiële toestand en liquiditeitspositie, prestaties of realisaties van Galapagos, of de ontwikkeling van de sector waarin zij actief is, beduidend verschillen van historische resultaten of van toekomstige resultaten, financiële toestand, prestaties of realisaties die door dergelijke toekomstgerichte verklaringen expliciet of impliciet worden uitgedrukt. Zelfs indien Galapagos' resultaten, financiële toestand en liquiditeitspositie, prestaties of realisaties van Galapagos, of de ontwikkeling van de sector waarin zij actief is wel overeenstemmen met deze toekomstgerichte verklaringen, kunnen deze toekomstgerichte verklaringen nog steeds geen voorspellende waarde hebben voor resultaten en ontwikkelingen in de toekomst. Onder andere volgende factoren zouden aanleiding kunnen geven tot dergelijke verschillen: dat de verwachtingen van Galapagos betreffende haar kosten voor 2017 niet correct zouden zijn (bijvoorbeeld omdat één of meer van haar assumpties waarop haar verwachtingen zijn gebaseerd omtrent kosten niet zouden worden verwezenlijkt), de inherente onzekerheden die gepaard gaan met concurrentiële ontwikkelingen, klinische studies en activiteiten op het gebied van productontwikkeling en goedkeuringsvereisten van toezichthouders (met inbegrip van, maar niet beperkt tot, dat data van de ontwikkelingsprogramma's de registratie of verdere ontwikkeling van haar kandidaatproducten niet zouden ondersteunen omwille van veiligheid, werkzaamheid of andere redenen), Galapagos' afhankelijkheid van samenwerkingen met derden en inschattingen betreffende het commercieel potentieel van haar kandidaatmedicijnen. Een meer uitgebreide lijst en omschrijving van deze risico's, onzekerheden, en andere risico's kan worden gevonden in de documenten en verslagen die Galapagos indient bij de U.S. Securities and Exchange Commission (SEC), inclusief Galapagos' meest recente jaarverslag op formulier 20-F en andere documenten en rapporten ingediend door Galapagos bij de SEC. Gelet op deze onzekerheden wordt de lezer aangeraden om geen overdreven vertrouwen te hechten aan deze toekomstgerichte verklaringen. Deze toekomstgerichte verklaringen gelden slechts op de datum van publicatie van dit document. Galapagos wijst uitdrukkelijk elke verplichting af om toekomstgerichte verklaringen in dit document bij te werken als weerspiegeling van enige wijziging van haar verwachtingen aangaande deze toekomstgerichte verklaringen of van enige wijziging in de gebeurtenissen, voorwaarden en omstandigheden waarop dergelijke verklaringen zijn gebaseerd of die een impact kunnen hebben op de waarschijnlijkheid dat de werkelijke resultaten zullen verschillen van degene die in de toekomstgerichte verklaringen worden vermeld, tenzij dit specifiek wettelijk of reglementair verplicht is.


News Article | March 3, 2017
Site: globenewswire.com

The information was submitted for publication at 08.45 CET on 3 March 2017 Shareholders of Ratos AB (publ), reg.nr 556008-3585, are hereby invited to the Annual General Meeting to be held at 14.00 CET on Thursday 6 April 2017 at Skandiascenen at Circus, Djurgårdsslätten 43-45, Stockholm. Registration to the Annual General Meeting, combined with serving of coffee, starts at 13.00 CET. Shareholders who wish to attend the Annual General Meeting must (i)    be recorded in the register of shareholders maintained by Euroclear Sweden AB on Friday, 31 March 2017, (ii)   give notice of attendance to the company no later than Friday, 31 March, 2017. Notice of attendance may be made via the company's website at www.ratos.se, by telephone +46 8 18 01 550 on weekdays 09.00-16.00 CET or by writing to Computershare AB, "Ratos årsstämma 2017", Box 610, SE-182 16 Danderyd. A notice of attendance shall include name, personal or company registration number, address, telephone number and any assistants. In order to be entitled to participate in the Meeting and exercise their voting rights, shareholders whose shares are registered in the name of a nominee must re-register their shares in their own names. Such registration, which can be temporary, must be effected at Euroclear Sweden AB by Friday, 31 March 2017. Shareholders are requested to inform their nominees in good time prior to this date. Powers of attorney, certificates of incorporation and other authorisation documents should be submitted to the company by writing to Computershare AB, "Ratos årsstämma 2017", Box 610, SE-182 16 Danderyd, no later than Friday, 31 March 2017 in order to facilitate access to the Meeting. Power of attorney forms are available on the company's website www.ratos.se. a) to adopt a zero vision regarding workplace accidents within the company, b) to instruct the Board of Directors of the company to set up a working group to implement this this zero vision, c) that the result annually shall be reported in writing to the Annual General Meeting, as a suggestion by including the report in the printed version of the Annual Report, d) to adopt a vision on absolute equality between men and women on all levels within the company, e) to instruct the Board of Directors to set up a working group with the task of implementing also this vision in the long term as well as closely monitor the development on both the equality and the ethnicity area, f) to annually submit a report in writing to the Annual General Meeting, as a suggestion by including the report in the printed version of the Annual Report, g) to instruct the Board of Directors to take necessary action to establish a shareholders' association in the company, h) to resolve that board members should not be allowed to invoice their board fees from a legal entity, Swedish or foreign, i) in adherence to h) above instruct the Board of Directors to approach the competent authority (the Swedish Government or the Swedish Tax Agency) in order to draw attention to the need for an amendment of the rules in this area, j) to resolve that the Nomination Committee in performing its duties should pay particular attention to issues associated with ethics, gender and ethnicity, k) to instruct the Board of Directors to approach the Government of Sweden in order to call attention to the need for the legal framework meaning that the possibility of "voting power differences" is abolished, l) to instruct the Board of Directors to approach the Government of Sweden in order to draw attention to the need for implementing rules on a national "cool-off period" for politicians, and m) to instruct the Board of Directors to prepare a proposal to be referred to the Annual General Meeting 2018 - or at any Extraordinary General Meeting held prior to that - regarding representation on the Board and the Nomination Committee for small and medium-sized shareholders, Proposals by the Nomination Committee regarding Board of Directors, etc. (items 1, 12-14) The Nomination Committee has unanimously agreed that at the 2017 Annual General Meeting with regard to items 1 and 12-14 in the agenda, it will put forward the following proposals: Item 1:        The Chairman of the Board, Jonas Wikström, is appointed Chairman of the meeting. Item 12:      Seven directors. No deputy directors. Item 13:      Remuneration to the Board amounts unchanged to a total of SEK 4,860,000 to be allocated to the Chairman of the Board in the amount of SEK 1,450,000 and to each other Board member with SEK 485,000. For the members of the Audit Committee unchanged remuneration is proposed to be SEK 150,000 to the chairman of the Committee and SEK 100,000 to each other member of the Committee. For the Compensation Committee unchanged remuneration is proposed to be SEK 50,000 to the chairman and SEK 50,000 to each other member of the Committee.                    The auditor shall be paid in accordance with approved account. Item 14:      For the period until the next Annual General Meeting has been held, re-election is proposed of Board members Ulla Litzén, Annette Sadolin, Karsten Slotte, Charlotte Strömberg, Jan Söderberg, Per-Olof Söderberg and Jonas Wikström. Jonas Wikström is proposed to be re-elected as Chairman of the Board. For the period until the next Annual General Meeting has been held, re-election is proposed of the audit firm PricewaterhouseCoopers AB. PricewaterhouseCoopers has announced that Peter Clemedtson will be appointed as chief auditor for the audit. The Board's proposal regarding dividend and record dates (item 11) Dividend on Class A and Class B shares The Board proposes a dividend for 2016 of SEK 2.00 per Class A share and SEK 2.00 per Class B share. The proposed record date for the dividend is 10 April 2017 and payments from Euroclear Sweden AB are expected to be made on 13 April 2017. The total dividend to holders of shares of Class A and Class B as above, amounts to SEK 638 million based on the 319,014,634 outstanding shares on 16 February 2017. The number of treasury shares of Class B on this date is 5,126,262, which might change during the period up until the record date for dividends. Dividend on outstanding Class C preference shares The Board proposes that a dividend on outstanding Class C preference shares before the 2018 Annual General Meeting shall be paid quarterly in an amount of SEK 30 per Class C preference share, although a maximum of SEK 120. Dividends to holders of Class C preference shares amount to a maximum of SEK 85 based on 707 408 outstanding Class C preference shares on 16 February 2017. The number of treasury shares of Class C on this date is 122 592, which might change during the period until the record date for dividends. The following dates are proposed as record dates for the quarterly dividends: 15 May 2017, 15 August 2017, 15 November 2017 and 15 February 2018. Payments are expected to be made by Euroclear Sweden AB on 18 May 2017, 18 August 2017, 20 November 2017 and 20 February 2018. Dividend on Class C and Class D preference shares which may be issued The Board has proposed that the 2017 Annual General Meeting resolves to authorise the Board to decide on a new issue of Class C and/or Class D preference shares in the Company (item 21). Provided the Company issues Class C and/or Class D preference shares during the period until the 2018 Annual General Meeting, the Board proposes that a dividend on new Class C and/or Class D preference shares which may be issued by the Board pursuant to the Authorisation - a maximum total of 1,250,000 Class C and/or Class D preference shares  - prior to the 2018 Annual General Meeting, shall be paid quarterly in an amount of SEK 30 per Class C preference share, although a maximum of SEK 120, and in an amount of SEK 25 per Class D preference share, although a maximum of SEK 100, with effect from the date they are entered in the share register kept by Euroclear Sweden AB in accordance with the provisions in the Company's Articles of Association. The following dates are proposed as record dates for the quarterly dividends: 15 May 2017, 15 August 2017, 15 November 2017 and 15 February 2018. Payments are expected to be made by Euroclear Sweden AB on 18 May 2017, 18 August 2017, 20 November 2017 and 20 February 2018. The first time payment of a dividend on Class C and/or Class D preference shares that may be issued in the event of utilisation of the Authorisation may be made is on the payment date which occurs after the first record date after the shares have been registered with the Swedish Companies Registration Office. Dividends on Class C and/or Class D preference shares that may be issued in the event of maximum utilisation of the Authorisation, may amount to a maximum of SEK 150 million. Funds remaining after dividends on shares of Class A, Class B and, in the event of full utilisation of the Authorisation, Class C and/or Class D preference shares, at least SEK 7,049 million, will be carried forward to new account. The Board's proposal for decision on guidelines for remuneration to senior executives (item 15) The Board proposes that the Annual General Meeting resolves, for the period until the 2018 Annual General Meeting, to adopt the following guidelines for remuneration to senior executives. The proposed guidelines are essentially comparable to the guidelines resolved at the 2016 Annual General Meeting. The incentive system for the company's business organisation is of major strategic importance for Ratos. Against this background, a remuneration and incentive system has been drawn up designed to offer competitive terms at the same time as the company's employees are motivated to work in the interests of the shareholders. The incentive system comprises a number of components - basic salary, variable salary in cash, pension provisions, call options and synthetic options - and rests on five basic principles. With regard to the costs for the proposed option programs, see the Board's proposal regarding call options (item 16) and synthetic options (item 17). Pension benefits shall, as far as possible, be pre-defined pension cost solutions, however some pension benefits which is in accordance with the ITP Plan are defined benefits. If the Company decides to terminate the CEO's employment, the period of notice is 2 months, if instead the CEO decides to terminate the employment, the period of notice is 6 months. All previously resolved remunerations pending payment is within the guidelines previously decided. The Board shall be entitled to deviate from these guidelines if special circumstances should prevail in an individual case. The Board's proposal for decision regarding issue of call options and transfer of treasury shares (item 16) The Board proposes that the Annual General Meeting decides on the issue of a maximum of 800,000 call options on treasury shares in the Company and that a transfer of a maximum of 800,000 Class B shares in the Company be made in connection with possible exercise of the call options. The call option program conforms in all material respects with the call option program decided by the 2016 Annual General Meeting. The reason for deviation from the pre-emptive rights of shareholders and the Board's motivation for the proposal are as follows. The incentive system for the Company's business organisation is of major strategic importance for Ratos. Against this background, the Board is of the opinion that an effective share-based incentive for the company's key people is highly significant for the Company's development. The Board's aim is that all key people should be given an opportunity to participate in an option program every year and acquire and hold options from five different series. The program is deemed to be advantageous for the Company and its shareholders. On 16 February 2017, the Company had the following share-based incentive programs. The exercise period for call option series 2017 shall be 1 October 2020-18 March 2022. The price per share (exercise price) shall initially correspond to 125 per cent of the average of the for each trading day during the period 11-15 September 2017 calculated average volume-weighted price paid for Ratos B shares on Nasdaq Stockholm. The number of shares and the exercise price for the shares included in the decision for transfer according to this item is, if appropriate, restated on the basis of a dividend paid, bonus issue, reversed split or split of shares, new issue or reduction of share capital or similar measures. A market premium shall be paid for the options based on a market accepted valuation model (Black & Scholes) based on the average of the for each trading day during the period 11-15 September 2017 calculated average volume-weighted price paid for Ratos B shares on Nasdaq Stockholm, rounded to the nearest full ten öre whereby five öre shall be rounded up. The calculation will be performed by two independent valuation institutes whereby the average of the valuations, rounded off to the nearest full ten öre whereby five öre shall be rounded up, shall be regarded as the market premium. The purchase of options may subsidised by the option purchaser receiving an extra cash compensation corresponding to a maximum of 50 per cent of the option premium after deduction for 55 per cent standard tax, whereby the compensation will be divided into equal components over five years and normally provided the person concerned is still working in the Ratos Group and still holds options acquired from Ratos or shares acquired through the options. The right to purchase options shall apply to the CEO and other key people (investment managers and others) with a maximum of between 10,000 and 300,000 options per person. Members of the Board of Ratos are not included in this offer. A maximum total of approximately 25 people will be included in this offer. Allocation will be made by the Board in accordance with the principles adopted by the Annual General Meeting and based on position and experience. Notification of purchase of options shall be made during the period 11-18 September 2017. Transfer of shares may only be made to holders of call options who during the period 1 October 2020-18 March 2022 backed by call options request such a transfer. Payment for shares acquired backed by call options shall be made within 10 banking days from the request to purchase. Complete terms and conditions for the options are provided in Appendix 1 of the proposal. Based on a price for Ratos shares of SEK 42,65, and on other market conditions that prevailed on 20 February 2017 and the Board's proposal for a dividend for the 2016 financial year, the value per option has been estimated by Nordea Bank AB (publ) and Deloitte AB to SEK 5,10, which provides a value for all options of approximately SEK 4,1million. Subsidy of the option premium, calculated on the basis of the above-mentioned estimated option value, gives rise of a maximum cost of SEK 6 million including social security costs. The Board's proposal will result - applying IAS 33 - in a decrease in earnings per share of SEK 0,07 to SEK -1,86 per share and an unchanged equity per share of SEK 31 for 2016 pro forma. In the event of exercise of the proposed options, the number of outstanding shares will increase. These new shares will comprise, in the event of full exercise of the options, 0.3 per cent of the number of shares and 0.1 per cent of voting rights, based on shares outstanding (i.e. total number of issued shares reduced by the Company's holding of treasury shares). In the event of full exercise of the options now proposed together with existing options, the number of shares will comprise 1.3 per cent of shares and 0.4 per cent of voting rights, based on shares outstanding. The proposal was prepared by the Company's Compensation Committee together with external advisors, and adopted by the Board. A decision under this item is only valid if it is supported by shareholders representing at least nine-tenths of both votes cast and shares represented at the Meeting. The Board's proposal for decision regarding the issue of synthetic options to senior executives and other key people at Ratos (item 17) The Board proposes that the Annual General Meeting resolves to introduce a cash-based option program related to Ratos's investments in the portfolio companies. It is proposed that the program is carried out through the issue of synthetic options ("2017 Option Program"). The 2017 Option Program is expected to lead to greater involvement and increased motivation for the participants in the program and result in those included in the program having stronger ties to Ratos. The 2017 Option Program is intended to include approximately 25 present and future senior executives and key people at Ratos. Ratos's Board is of the opinion that the Program will benefit Ratos's shareholders and that it will contribute to opportunities to recruit and retain competent employees. The Board shall be responsible for the detailed design and management of the 2017 Option Program within the framework of the following terms and conditions: The options will be transferred at a market price. A part of Ratos's cost for the program consists of the cost of the subsidy including social security contributions. In addition, the future costs or revenue for Ratos attributable to issued options are added, which will depend on the value growth of Ratos's investment in the portfolio company concerned. If the value growth is less than 8 per cent per year, the options will be worthless and the paid-in premium will be revenue for Ratos. If the value growth on Ratos's investment in the portfolio company concerned exceeds 8 per cent per year, the options will have a value. The total value of the issued options as for the 2017 Option Program at the closing date will be a maximum of 5 per cent of the difference between the actual realised value for Ratos's investment at the closing date and the acquisition value increased by 8 per cent per year. The total value of the issued options as for the 2017 Additional Program at the end time amounts to a maximum of 2 per cent of the divergence between the value increased for Ratos's investment from the acquisition and the paid-in premium recounted by 8 per cent per year. The value of the options on the closing date, with deduction of paid-in premium and addition of costs for the proposed subsidy, will be the total cost to Ratos. Any gains for option holders will be paid at Ratos's exit or no later than after 10 years. Based on the average outcome of previous years' option programs, the cost for the subsidy is estimated to amount to a maximum of approximately SEK 6 million, including social contributions. The proposal has been prepared together with external advisers and has been examined by the Compensation Committee and the Board. A decision under this item is only valid if it is supported by shareholders representing more than half of votes cast at the Meeting. The Board's proposal for decision on amendments to the Articles of Association (item 18) In order to enable the issue of preference shares in accordance with the Authorisation proposed in item 21, the Board proposes that the Annual General Meeting resolves on changes in the Articles of Association's article 6, whereby it will contain the following wording: Preferential rights to dividend per Class C preference share ("Preference Dividend C") shall: If the Annual General Meeting resolves on a dividend, Class D preference shares shall carry the same preferential rights as Class C preference shares before Class A and Class B shares to an annual dividend as set out below. Preferential rights to dividend per Class D preference share ("Preference Dividend D") shall: Payment of dividends on Class C and Class D preference shares shall be made quarterly. Record dates shall be 15 February, 15 May, 15 August and 15 November. In the event such day is not a banking day, i.e. a day that is not a Saturday, Sunday or a public holiday, the record date shall be the closest preceding banking day. Dividend payments will be made on the third banking day after the record date. The first time payment of dividends on Class D preference shares may be made is on the payment date that occurs after the first record date after the preference shares are registered with the Swedish Companies Registration Office. If no dividend is paid on Class C or Class D preference shares, or if only a dividend lower than the Preference Dividend C and D is paid, Class C and Class D preference shares shall, provided the Annual General Meeting resolves on a dividend, carry entitlement to in addition to future Preference Dividends C and D to receive an amount, evenly distributed on each Class C and Class D preference share, corresponding to the difference between what would have been paid and the amount paid ("Outstanding Amount) before dividends are paid on Class A or Class B shares. The Outstanding Amount shall be adjusted upwards by a factor corresponding to an annual interest rate of 10 per cent, whereby upward adjustment shall start from the quarterly date when payment of part of the dividend was made (or should have been made, in the event no dividend was paid at all). Class C and Class D preference shares shall not otherwise carry entitlement to a dividend. Redemption of Class C and Class D preference shares A reduction of the share capital, although not below the minimum capital, may be effected through redemption of a certain number or all Class C and/or Class D preference shares following a decision by the Board. When a decision on redemption is made, an amount corresponding to the reduction amount shall be placed in a reserve if requisite funds for this purpose are available. The allocation of which Class C preference shares shall be redeemed shall be made pro rata in relation to the number of Class C preference shares which each preference shareholder owns on the date of the Board's decision on redemption. If the allocation as set out above is not even, the Board shall decide on allocation of surplus Class C preference shares which shall be redeemed. If the decision is approved by all holders of Class C preference shares the Board may decide, however, which Class C preference shares are to be redeemed. The redemption amount for each redeemed Class C preference share shall be an amount as follows: Until the first quarterly record date for dividends after the 2017 Annual General Meeting, an amount corresponding to 115 per cent of the amount paid for each Class C preference share at the first issue of Class C preference shares ("Initial Subscription Price C") plus the Outstanding Amount adjusted upwards by an annual rate as set out in paragraph 4 above. The redemption amount for each redeemed Class C preference share shall, however, never be lower than the share's quota value. With effect from the first quarterly record date for dividends after the 2017 Annual General Meeting and for the subsequent period, an amount corresponding to 105 per cent of the Initial Subscription Price C plus the Outstanding Amount adjusted upwards by an annual rate as set out in paragraph 4 above. The redemption amount for each redeemed Class C preference share shall, however, never be lower than the share's quota value. The allocation of which Class D preference shares shall be redeemed shall be made pro rata in relation to the number of Class D preference shares which each preference shareholder owns on the date of the Board's decision on redemption. If the allocation as set out above is not even, the Board shall decide on allocation of surplus Class D preference shares which shall be redeemed. If the decision is approved by all holders of Class D preference shares the Board may decide, however, which Class D preference shares are to be redeemed. The redemption amount for each redeemed Class D preference share shall be an amount as follows: Until the first quarterly record date for dividends after the 2021 Annual General Meeting, an amount corresponding to 115 per cent of the amount paid for each Class D preference share at the first issue of Class D preference shares ("Initial Subscription Price D") plus the Outstanding Amount adjusted upwards by an annual rate as set out in paragraph 4 above. The redemption amount for each redeemed Class D preference share shall, however, never be lower than the share's quota value. With effect from the first quarterly record date for dividends after the 2021 Annual General Meeting and for the subsequent period, an amount corresponding to 100 per cent of the Initial Subscription Price D plus the Outstanding Amount adjusted upwards by an annual rate as set out in paragraph 4 above. The redemption amount for each redeemed Class D preference share shall, however, never be lower than the share's quota value. Owners of Class C and Class D preference shares which shall be redeemed shall be obliged within three months of receipt of a written notification of the Board's decision on redemption to accept the redemption amount for the shares or, where permission for the reduction is required from the Swedish Companies Registration Office or the court, after receipt of notification that a decision on such permission has gained legal force. 6.   Dissolution of the Company If the Company is liquidated Class C and Class D preference shares shall carry preferential rights before Class A and Class B shares to receive from the Company's assets an amount per Class C and Class D preference share corresponding to the redemption amount calculated in accordance with paragraph 5 above as per the liquidation date, prior to distribution to owners of Class A or Class B shares. Class C and Class D preference shares shall otherwise not carry any entitlement to a share of distribution. 7.   Recalculation in the event of certain company events In the event the number of Class C or Class D preference shares is changed through a merger, demerger or other similar company event, the amount to which Class C and Class D preference shares carry entitlement according to paragraphs 4-6 in this Article 6 of the Articles of Association shall be recalculated to reflect such change. 8.   Conversion of Class A shares to Class B shares Owners of Class A shares shall be entitled to request conversion of Class A shares to Class B shares. Such request for conversion, which shall be made in writing and specify the number of shares to be converted, shall be made to the Company. The Company shall without delay notify the conversion to the Swedish Companies Registration Office for registration. The conversion is effected upon registration. The Company will take the necessary measures for conversion free of charge for shareholders four times a year. Such measures will be taken at the end of each quarter for requests received by the Company no later than seven days prior to the end of the quarter. Shareholders are also entitled to have such conversion carried out at other times but in such case a charge will be made." The Board of Directors, the CEO or the person appointed by one of them shall be entitled to make any minor adjustments to the above decision which might be required in conjunction with registration with the Swedish Companies Registration Office. A decision under this item is only valid if it is supported by shareholders representing at least two-thirds of both votes cast and shares represented at the Meeting. The Board's proposal that the Board be authorised to decide on purchase of treasury shares (item 19) The Board proposes that the Annual General Meeting authorises the Board during the period before the next Annual General Meeting to decide on acquisition of treasury shares in accordance with the following conditions: The purpose of the purchase of treasury shares is to give the Board more alternatives in its work to create value for the company's shareholders. This includes hedging of call options issued within the framework of Ratos's incentive program. A decision under this item is only valid if it is supported by shareholders representing at least two-thirds of both votes cast and shares represented at the Meeting. The Board's proposal that the Board be authorised to decide on new issue of Class B shares in conjunction with company acquisitions (item 20) The Board proposes that the Annual General Meeting resolves, during the period until the next Annual General Meeting, to authorise the Board in conjunction with agreements on company acquisitions, on one or several occasions, with or without deviation from the pre-emptive rights of shareholders, for a cash payment, through set-off or non-cash, to make a decision on new issue of class B shares in the company. This authorisation shall comprise a maximum of 35 million class B shares. The new issue amount received may, for each individual agreement on company acquisition, amount to a maximum of Ratos's capital contribution for the acquisition. The reason for deviation from pre-emptive rights is that the company shall be able to issue shares as payment in conjunction with company acquisitions, alternatively procure capital for such acquisitions. The issue price will be determined in accordance with current market conditions. The Board of Directors, the CEO or the person appointed by one of them shall be entitled to make any minor adjustments to the above decision which might be required in conjunction with registration with the Swedish Companies Registration Office. A decision under this item is only valid if it is supported by shareholders representing at least two-thirds of both votes cast and shares represented at the Meeting. The Board's proposal that the Board be authorised to decide on new issue of Class C and/or Class D preference shares in conjunction with company acquisitions (item 21) The Board proposes that the Annual General Meeting resolves, during the period until the next Annual General Meeting, to authorise the Board in conjunction with agreements on company acquisitions, on one or several occasions, with or without deviation from the pre-emptive rights of shareholders, for a cash payment, through set-off or non-cash, to make a decision on new issue of Class C and/or Class D preference shares in the company. This authorisation shall comprise a maximum total of 1,250,000 Class C and/or Class D preference shares. The new issue amount received may, for each individual new issue, amount to a maximum of Ratos's capital contribution for the acquisition. The reason for deviation from pre-emptive rights is that the company shall be able to issue shares as payment in conjunction with company acquisitions, alternatively procure capital for such acquisitions. The issue price will be determined in accordance with current market conditions. The Board of Directors, the CEO or the person appointed by one of them shall be entitled to make any minor adjustments to the above decision which might be required in conjunction with registration with the Swedish Companies Registration Office. The Meeting's resolution on authorisation for the Board to decide on a new issue of Class D preference shares in accordance with this item 21 is conditional on the Meeting resolving in accordance with the Board's proposal for amendments to the Articles of Association in accordance with item 18 above. A decision under this item is only valid if it is supported by shareholders representing at least two-thirds of both votes cast and shares represented at the Meeting. Shareholder Thorwald Arvidsson's proposal for decision on amendment to the Articles of Association (article 6.2) (item 23) Shareholder Thorwald Arvidsson proposes that article 6.2 in the Articles of Association be amended as follows: "All shares - ordinary shares as well as preference shares - carry entitlement to one vote." A decision under this item is only valid if it is approved by all shareholders present at the Annual General Meeting and that these represent at least nine-tenths of all the shares in the company, alternatively if it is approved by shareholders with at least two-thirds of both votes cast and shares represented at the Meeting provided owners of half of all Class A shares and nine-tenths of the Class A shares represented at the Meeting agree to the amendment. Shareholder Thorwald Arvidsson's proposal for decision on amendment to the Articles of Association (article 9) (item 24) Shareholder Thorwald Arvidsson proposes that article 9 in the Articles of Association be amended by the addition of a third and a fourth paragraph as follows: "Former members of the Swedish Government may not be appointed board members until two years have passed since the person concerned left their position as a member of the Swedish Government. Other full-time politicians paid by the state may not be appointed board members until one year has passed since the person concerned left his or her assignment, unless exceptional circumstances dictate otherwise." A decision under this item is only valid if it is supported by shareholders representing at least two-thirds of both votes cast and shares represented at the Meeting. On the date this notice was issued there are a total of 324,970,896 shares in the company, of which 84,637,060 are Class A shares with one vote each, 239,503,836 are Class B shares with one-tenth of a vote each, and 830,000 are Class C preference shares with one-tenth of a vote each, corresponding to a total of 108,670,443.6 votes. The Company's treasury shares on the same date amount to 5,126,262 Class B shares and 122,592 Class C preference shares, corresponding to a total of 524,885.4 votes, which cannot be represented at the Meeting. The Board and CEO shall, if so requested by a shareholder, and the Board is of the opinion that this can be done without material damage to the company, make disclosures on (i) circumstances that might have an effect on assessment of an item on the agenda, (ii) circumstances that might affect assessment of the financial situation of the company or a subsidiary, (iii) the company's relations to another group company. The annual report, audit report, power of attorney forms and other documents for the Annual General Meeting will be available at the company at Drottninggatan 2, in Stockholm, and on the company's website www.ratos.se from 16 March 2017, at the latest. Documents will also be sent free of charge to shareholders who so request. For further information, please contact: Jonas Wiström, styrelseordförande Ratos, +46 8 700 17 98 Jan Andersson, valberedningens ordförande, +46 76 139 55 00 Financial calendar from Ratos: Annual General Meeting                                 6 April 2017 Interim report January-March 2017                   8 May 2017 Interim report January-June 2017                      17 August 2017 Interim report January-September 2017             14 November 2017 Ratos is an investment company that owns and develops unlisted medium-sized Nordic companies. Our goal as an active owner is to contribute to the long-term and sustainable business development in the companies we invest in and to make value-generating transactions. Ratos's portfolio consists of 19 medium-sized Nordic companies and the largest segments in terms of sales are Consumer goods/Retail, Construction and Energy. Ratos is listed on Nasdaq Stockholm and has a total of approximately 15,000 employees.


News Article | February 16, 2017
Site: globenewswire.com

2016 was een zeer belangrijk jaar voor Leasinvest Real Estate, niet alleen omwille van het feit dat één van de beste resultaten werd behaald, maar ook omdat onze strategie van focus op retail en kantoren en geografische diversificatie werd verdergezet met de acquisitie van het Frun® retailpark in Asten, Oostenrijk. Verder worden bestaande panden herontwikkeld om de kwaliteit van onze portefeuille te verbeteren opdat deze beter zouden beantwoorden aan de huidige vraag van onze huurders en de markt. Voorbeelden zijn het retailpark in Strassen in het Groothertogdom Luxemburg, Treesquare en Montoyer 63, beide in de CBD van Brussel. Ondertussen werd ook het prestigieuze kantoorgebouw Royal20 aan de boulevard Royal te Luxemburg opgeleverd (ex-hotel Rix) en gedesinvesteerd ingevolge een in 2015 afgesloten verkoopovereenkomst ingevolge een opportuniteit, die resulteerde in een belangrijke meerwaarde. Naast een stijging van de EPRA Winst*[2] (exclusief waardeschommelingen op financiële instrumenten en meerwaarden op de vastgoedportefeuille) tot € 27,9 miljoen of € 5,65 per aandeel van 9% t.o.v. 31/12/2015, noteren we eveneens een stijging van het netto resultaat van € 30,6 miljoen tot € 31,1 miljoen of € 6,30 per aandeel* (+ 2% t.o.v. 31/12/2015). In het kader van onze financiële strategie werden diverse kredieten die vervielen in 2016 alsook begin 2017, hernieuwd en gehernegocieerd, en dit aan lagere marges, waardoor de financieringskost 2,90% bedraagt versus 3,38% eind 2015. Leasinvest Real Estate beschikt eind 2016 over € 608 miljoen beschikbare kredietlijnen met een marge van € 90 miljoen aan onbenutte beschikbare kredietlijnen voor bijkomende investeringen. Op 8/11/2016 heeft Leasinvest Real Estate het Frun® retailpark verworven in Asten, Oostenrijk. Het park in U-vorm werd geopend eind oktober 2013 en betreft een efficiënt concept dat bestaat uit een ruim, gratis en centraal gelegen parkeerterrein met daarrond een groepering van nationale en internationale merken, een aanpak die de commerciële doeltreffendheid en de duurzame ontwikkeling van het park versterkt. Het dak van het Frun® retailpark in Asten werd ook uitgerust met zonnepanelen om de duurzaamheid van het park te optimaliseren. Hierdoor wordt jaarlijks op de site meer dan 500.000 KWh groene stroom geproduceerd met een CO² uitstoot reductie van 400 ton tot gevolg. Op basis van o.a. de stabiele economie, de AAA-rating, een hoog BBP per capita en een gezonde vastgoedsector, is Oostenrijk het 4e land geworden waarin Leasinvest Real Estate actief is. Op 30/06/2016 werd, volgens de vooropgestelde planning, de 2e notariële akte verleden betreffende de verkoop op termijn[4] van het opgeleverde kantoorgebouw Royal20 gelegen aan de boulevard Royal in het centrum van de stad Luxemburg in het Groothertogdom Luxemburg, voor een bedrag van € 62,5 miljoen (exclusief BTW), wat hoger is dan de reële waarde, aan een privé investeerder. Het gebouw was volledig voorverhuurd sinds eind 2014. Deze succesvolle realisatie is een perfect voorbeeld van gedurfd en berekend ondernemerschap van de Vennootschap om van het oude 'Hôtel Rix' een nieuwbouwkantoor als referentiepunt op de Boulevard Royal te maken. De uitstraling van dit door het Franse gerenommeerde architectenbureau Agences Elizabeth et Christian de Portzamparc in diamantvorm ontworpen nieuw kantoorgebouw is een sterk architectonisch ijkpunt voor de Stad Luxemburg. De herontwikkeling verloopt in 2 fasen teneinde rekening te houden met de bestaande huurders Adler Mode, Bâtiself en Roller, met wegeniswerken en de heraanleg van de parking. De aangevangen verbouwingswerken van de 1ste fase zullen beëindigd worden in Q2 2017. Voor de 2de fase is de oplevering voorzien in 2020. Dit gebouw, dat nog tot december 2016 verhuurd was aan het Europees Parlement, zal na volledige afbraak en heropbouw 6.052 m2 state-of-the-art kantoorruimte omvatten. Montoyer 63 is gelegen in de Brusselse Leopoldswijk (CBD) te midden van de Europese instellingen waar nog steeds schaarste heerst aan nieuwe kwalitatieve kantoorgebouwen. De stedenbouwkundige vergunning werd begin 2016 afgeleverd en het objectief is om voor dit gebouw een BREEAM 'excellent' te bekomen. De afbraakwerken zullen aanvangen in Q1 2017 en de oplevering ervan is voorzien in het tweede kwartaal van 2018. De stedenbouwkundige vergunning werd afgeleverd in januari 2016 en de afbraakwerken van het kantoorgebouw dat vrijkwam sinds het tweede kwartaal 2015 zijn ondertussen gefinaliseerd. De bouwwerken zijn aangevangen in september 2016 en het bouwproject heeft ondertussen de naam Treesquare gekregen, verwijzend naar de groene oase die gelegen is op de square. Treesquare geniet een unieke ligging te midden van de Brusselse Leopoldswijk (CBD), die nog altijd als de beste kantoorlocatie van België wordt beschouwd. Dit gebouw van 5.936 m2 wordt volledig heropgebouwd als AAA-gebouw, dat zal voldoen aan de hoogste kwaliteitsnormen inzake technologie en duurzaamheid (verwacht BREEAM 'excellent' certificaat). De oplevering van het nieuwe duurzame kantoorgebouw is voorzien in Q4 2017. Door de schaarste aan nieuwe kwalitatieve gebouwen in de Leopoldswijk wordt verwacht dat het gebouw bij oplevering volledig verhuurd zal zijn. De totale bezettingsgraad bleef de laatste jaar constant hoog en bedraagt op heden 96,80% versus 95,80% eind 2015 dankzij ons commercieel beleid dat erop gericht is proactief huurverlengingen of -vernieuwingen na te streven. Voor enkele logistieke panden en het retailgedeelte van het Brixton Business Park (België) werden huurverlengingen ondertekend waardoor de bezettingsgraad hiervan respectievelijk 97,48% en 100% bedraagt. De belangrijkste huurvervaldagen in 2016 (10,7% van het totale huurincasso van de portefeuille) werden succesvol verlengd en vervangen. De globale bezettingsgraad van de portefeuille is daardoor gestegen van 95,8% naar 96,8% einde 2016. In het derde kwartaal 2016 werd met de bestaande huurder een overeenkomst ondertekend voor de verlenging voor de helft van de kantoorruimte in het kantoorgebouw gelegen in het Ragheno Park te Mechelen. Een deel van de resterende kantooroppervlakte zal ingericht worden als een business center naar het voorbeeld van The Crescent in Anderlecht en Gent. Voor het andere deel zullen nieuwe huurders worden gezocht. Het beheer van de financiële middelen in 2016 stond voor Leasinvest hoofdzakelijk in het teken van capital recycling met enerzijds de voltooiing en de verkoop van het prestigieuze project Royal 20 te Luxemburg en anderzijds de aankoop van Frun® retailpark Park te Asten Oostenrijk en de lopende kapitaalsbestedingen in de projecten Montoyer 63, Treesquare en Retailpark Strassen. Hierdoor stagneerde de schuldgraad over het afgelopen jaar op 58%. In 2016 werden € 126,2 miljoen vervallen kredieten hernieuwd bij verschillende banken, bovendien werd voor de helft van de kredieten reeds succesvol geanticipeerd op vervaldagen in 2017 (herfinancieringen werden afgesloten voor 53% van de openstaande vervaldagen in 2017). Deze kredieten werden genegotieerd aan lagere marges. Hierdoor beschikt de vennootschap eind 2016 over € 608 miljoen beschikbare kredietlijnen met een marge van € 90 miljoen aan onbenutte beschikbare kredietlijnen voor bijkomende investeringen. Verder werden in de loop van het laatste kwartaal een aantal rente-indekkingen verlengd voor een notioneel bedrag van €85 miljoen waardoor de rentevoet van deze indekkingen eveneens werd verlaagd. Bijgevolg daalde de gemiddelde fundingkost van 3,38% einde 2015 naar 2,90% per jaareinde 2016. De globale directe en indirecte vastgoedportefeuille (inclusief de participatie in GVV Retail Estates NV) bedraagt per einde 2016 een fair value ten belope van € 930,7 miljoen. Per jaareinde 2016 werden drie logistieke panden (Heesterveldweg in Tongeren, Nijverheidsstraat in Wommelgem en Canal Logistics fase 1 nabij Brussel) geclassificeerd van vastgoedbeleggingen naar activa bestemd voor verkoop in overeenstemming met de gangbare rapporteringsstandaard IFRS 5. Het resultaat op de portefeuille* bedraagt € 2,6 miljoen eind 2016 (2015: € 9,9 miljoen, inclusief een meerwaarde van € 4,1 miljoen op de Zwitserse portefeuille als gevolg van de opwaardering van de Zwitserse frank), dankzij € 3,1 miljoen gerealiseerde meerwaarde op de verkoop van Royal 20 in Luxemburg en van Zeutestraat in Mechelen,en de variatie in reële waarde op de rest van de portefeuille blijft beperkt tot -€ 0,5 miljoen. Het globaal resultaat aandeel groep[8] * is gedaald van € 48,9 miljoen naar € 18,1 miljoen als gevolg van de variaties in het effectief deel van de reële waarde van de toegelaten indekkingsinstrumenten ten belope van - € 10,3 miljoen (t.o.v. € 3 miljoen eind 2015) en anderzijds de variatie in de reële waarde van de financiële vaste activa beschikbaar voor verkoop ten belope van - € 3,2 miljoen (t.o.v. € 14,9 miljoen eind 2015). De EPRA Winst* (voorheen netto courant resultaat) eind 2016 bedraagt € 27,9 miljoen (hetzij € 5,65 per aandeel), in vergelijking met € 25,6 miljoen (hetzij € 5,18 per aandeel) eind 2015. De zijn dankzij de volledige jaarimpact van het eind 2015 verworven T&T Koninklijk Pakhuis en het opnieuw volledig verhuurd kantoorgebouw Monnet (Luxemburg) en het verworven Frun® retailpark Asten (Oostenrijk) in november 2016, toegenomen tot het hoogste niveau ooit en bedragen eind 2016 € 56,65 miljoen in vergelijking met € 50,5 miljoen eind december 2015 (toename 12%). Bij gelijkblijvende portefeuille 'like-for-like'* blijven de huurinkomsten stabiel (toename met 1% of € 0,49 miljoen in vergelijking met dezelfde periode vorig jaar, excl. ontvangen huurgaranties en huurkortingen). De bedraagt 96,8% (eind 2015: 95,8%). De toename over het lopende boekjaar wordt verklaard door gerealiseerde verhuringen in verschillende gebouwen (o.a. het gebouw Monnet dat na renovatie in 2015 progressief volledig werd herverhuurd). De [10] van de directe vastgoedportefeuille is licht gedaald en bedraagt € 859,93 miljoen eind 2016 t.o.v. € 869,36 miljoen eind december 2015, wat in hoofdzaak wordt verklaard door de gerealiseerde verkoop van het opgeleverde gebouw Royal 20 (boekwaarde 31/12/2015 € 50,75 miljoen) en van het logistieke gebouw Mechelen Zeutestraat (boekwaarde 31/12/2015 € 4,39 miljoen), en de herinvestering van deze middelen in de aankoop van Frun® Retailpark te Asten in Oostenrijk (op 31/12/2016 gewaardeerd aan een reële waarde van € 37,36 miljoen). De eind 2016 bedraagt - € 0,53 miljoen in vergelijking met een positieve waardeschommeling van € 9,55 miljoen eind 2015. Hierbij dient vermeld dat dit portefeuilleresultaat in 2015 gevoelig beïnvloed werd door een tussentijdse niet-gerealiseerde meerwaarde op de Luxemburgse projecten Royal 20 en Monnet in functie van hun percentage of completion (€ 12,21 miljoen per 31/12/2015) enerzijds, en een positieve impact van de koersstijging van de Zwitserse Frank op de waardering van de Zwitserse panden in de portefeuille (€ 4,3 miljoen) anderzijds. Tegenover de waardetoename van de Zwitserse panden stond vorig jaar een evenredige stijging (- € 4,09 miljoen) van de reële waarde van de financiële instrumenten ter afdekking van het wisselkoersrisico waardoor deze waardestijging bijna volledig werd tenietgedaan in de financiële resultaten op 31/12/2015. Het bedraagt - € 10,2 miljoen eind 2016 in vergelijking met - € 17,01 miljoen voor het vorig boekjaar. De financiële inkomsten bedragen € 4,0 miljoen en worden in belangrijke mate beïnvloed door de recuperatie van de in 2015 ingehouden roerende voorheffing op het dividend op de aandelen Retail Estates die door Leasinvest Real Estate worden aangehouden en waarbij Leasinvest Real Estate geniet van de door het Grondwettelijk Hof herbevestigde moeder-dochter vrijstelling. De intrestkosten zijn over het boekjaar 2016 met € 318 duizend gestegen van - € 13,1 miljoen tot - € 13,4 miljoen. De gemiddelde financieringskost daalde hiermee van 3,38% eind 2015 naar 2,90% (inclusief reserveringskosten op de ongebruikte kredietlijnen van 0,25%, opgenomen in de overige bankkosten ten belope van - € 1,5 miljoen) per eind 2016. De variaties in de reële waarde van de financiële activa en passiva zijn geëvolueerd van - € 4,82 miljoen eind december 2015 naar + € 0,68 miljoen vnl. als gevolg van de gestabiliseerde wisselkoers Euro - Zwitserse Frank. De [11] eind 2016 bedraagt € 27,87 miljoen (hetzij € 5,65 per aandeel), in vergelijking met € 25,56 miljoen (hetzij € 5,18 per aandeel) eind 2015. Deze toename is vnl. het gevolg van een hoger netto resultaat en beperkte waardeschommelingen op de reële waarde van de vastgoedportefeuille (IAS 40) en de reële waarde van de niet effectieve indekkingsinstrumenten en bijgevolg over P&L worden verrekend. Het over het boekjaar bedraagt € 31,12 miljoen t.o.v. € 30,62 miljoen eind 2015. In termen van nettoresultaat per aandeel geeft dit resultaat een verhouding van € 6,30 per aandeel op eind 2016, tegenover € 6,20 eind 2015. De (IAS 39) die in het eigen vermogen worden verwerkt zijn gedaald met - € 10,3 miljoen als gevolg van de gedaalde swapcurve in de loop van het afgelopen boekjaar. De negatieve marktwaarde van de indekkingsinstrumenten die in het eigen vermogen worden verwerkt bedraagt eind 2016 - € 44,5 miljoen ten opzichte van - € 34,2 miljoen op het einde van het vorige boekjaar. Eind 2016 bedraagt de intrinsieke waarde per aandeel € 72,2 (31/12/15: € 73,4). De EPRA NAW daarentegen bedraagt € 82,0 (2015: € 81,3) en de slotkoers van het aandeel van Leasinvest Real Estate op 31 december 2016 bedroeg € 105,5 hetzij een premie van 29%. Einde 2016 bedraagt de schuldgraad na de gerealiseerde verkopen van het gebouw Royal 20 en Zeutestraat Mechelen en na de aankoop van Frun® retailpark te Asten Oostenrijk 58,0% (idem einde 2015), en dit na betaling van € 23,2 miljoen dividend over het afgelopen boekjaar. Er blijven € 20,7 miljoen beschikbare liquide middelen op de balans per 31 december 2016 gezien het in voege zetten van een extra krediet op afsluitdatum; deze middelen laten intrinsiek een verdere afbouw van de schuldgraad toe tot 57,0%. Dit betekent dat de nominale opgenomen in de balans per 31/12/2016 licht zijn toegenomen tot € 541,1 miljoen ten opzichte van € 532,2 miljoen op het einde van het vorige boekjaar. Zoals gebruikelijk binnen de sector van de Gereglementeerde Vastgoedvennootschappen hanteert Leasinvest Real Estate in de presentatie van de financiële resultaten een aantal Alternatieve Prestatie Maatstaven (APM's) in overeenstemming met de richtlijnen van de Europese Autoriteit van de Financiële Markten (ESMA; European Securities and Markets Authority) van 5 oktober 2015. Een aantal van deze APM's worden aanbevolen door de Europese Vereniging van Beursgenoteerde Vastgoedvennootschappen (EPRA; European Public Real Estate Association), andere APM's worden als gangbaar beschouwd binnen de sector teneinde een beter inzicht te verschaffen in de gerapporteerde financiële resultaten en prestaties. De APM's in dit persbericht zijn aangeduid met een asterisk (*), we vermelden hierbij dat noch de prestatie-indicatoren die bij IFRS-regels of bij wet zijn bepaald, noch de indicatoren die niet gebaseerd zijn op rubrieken uit de resultatenrekening of de balans, als APM's worden beschouwd. De gedetailleerde berekeningen van de APM's opgenomen in dit persbericht worden verduidelijkt in bijlage achteraan in dit bericht. Vanaf 31 december 2016 zullen de statutaire participaties van Leasinvest Real Estate Comm. VA in Leasinvest Immo Lux SA, T&T Koninklijk Pakhuis NV, Leasinvest Services NV, Haven Invest NV en RAB Invest NV in de statutaire jaarrekening, opgesteld in overeenstemming met IFRS worden opgenomen via toepassing van de vermogensmutatiemethode conform IAS 28, en dit in plaats van waardering aan historische kostprijs. Deze wijziging van verwerkingsmethode heeft een belangrijke impact op de enkelvoudige jaarrekening, meer bepaald op het statutaire eigen vermogen, het enkelvoudig balanstotaal, de enkelvoudige schuldgraad en de berekening van artikel 617 W.Venn. Dit zal omstandig verder worden toegelicht in de statutaire jaarrekening in het jaarlijks financieel verslag 2016 op basis van vergelijkende cijfers en dit conform IAS 8. De commissaris Ernst & Young Bedrijfsrevisoren, vertegenwoordigd door dhr. Pierre Vanderbeek, heeft bevestigd dat zijn controlewerkzaamheden van de geconsolideerde jaarrekening, opgemaakt in overeenstemming met de International Financial Reporting Standards zoals aanvaard binnen de Europese Unie, ten gronde zijn afgewerkt en dat deze geen betekenisvolle correcties hebben aan het licht gebracht die aan de boekhoudkundige gegevens, overgenomen uit de geconsolideerde jaarrekening, en opgenomen in dit persbericht, zouden moeten doorgevoerd worden. Over Leasinvest Real Estate Comm.VA Openbare Gereglementeerde Vastgoedvennootschap Leasinvest Real Estate Comm. VA investeert in hoogkwalitatieve en goedgelegen winkels en kantoren in het Groothertogdom Luxemburg, België, Zwitserland en Oostenrijk. Op heden (inclusief de recente aankoop) bedraagt de totale reële waarde van de direct aangehouden vastgoedportefeuille van Leasinvest € 860 miljoen verdeeld over het Groothertogdom Luxemburg (49%), België (42%), Zwitserland (5%) en Oostenrijk (4%). Leasinvest is bovendien een van de grootste vastgoedinvesteerders in Luxemburg. De totale directe portefeuille is geïnvesteerd in retail (48%), kantoren (37%) en logistiek (15%). De GVV noteert op Euronext Brussel en heeft een marktkapitalisatie van meer dan € 510 miljoen (waarde 15/02/2017).


News Article | February 15, 2017
Site: globenewswire.com

Tammi-joulukuu 2016 - Aspon liikevaihto oli 457,4 Me (445,8 Me). - Liikevoitto oli 20,4 Me (20,6 Me). - Tilikauden voitto oli 15,9 Me (19,8 Me). - Osakekohtainen tulos oli 0,49 euroa (0,61 euroa). - ESL Shippingin liikevoitto oli 12,6 Me (14,7 Me), Leipurin 2,0 Me (2,4 Me), Telkon 10,1 Me (10,4 Me) ja Kaukon -0,1 Me (-1,2 Me). - Liiketoiminnan rahavirta oli 16,2 Me (25,0 Me). Vuoden 2015 liikevoitto ja tilikauden voitto sisältävät jäljempänä avainlukutaulukossa esitettävät vertailukelpoisuuteen vaikuttavat erät. Loka-joulukuu 2016 - Aspon liikevaihto oli 124,5 Me (122,1 Me) - Liikevoitto oli 6,3 Me (6,2 Me). - Vuosineljänneksen voitto oli 5,2 Me (3,7 Me). - Osakekohtainen tulos oli 0,17 euroa (0,11 euroa). - ESL Shippingin liikevoitto oli 4,1 Me (4,5 Me), Leipurin 0,7 Me (0,4 Me), Telkon 2,5 Me (1,9 Me) ja Kaukon 0,0 Me (0,6 Me). Loka-joulukuun 2015 liikevoitto ja vuosineljänneksen voitto sisältävät jäljempänä avainlukutaulukossa esitettävät vertailukelpoisuuteen vaikuttavat erät. - Liikevaihto Venäjän, Ukrainan ja muiden IVY-maiden alueella kasvoi neljännellä neljänneksellä 21 % vertailukauteen nähden ja oli ennätyssuuri 42,0 Me (34,7 Me). - Telkon liikevaihto kasvoi neljännellä neljänneksellä 21 % ja liikevoitto parani 2,5 Me:oon (1,9). Merkittävin syy oli länsimarkkinoilla loppuvuotta kohden kiihtynyt kasvu ja kannattavuuden parantuminen. - ESL Shipping sai katsauskaudella päätöksen enintään 5,9 Me:n EU:n energiatehokkuus- ja ympäristöinvestointituesta, josta yhtiö vastaanotti neljännellä neljänneksellä 2,1 Me. - Aspo tarkensi taloudellisia tavoitteitaan 24.11.2016 siten, että taloudelliset tavoitteet pyritään saavuttamaan vuoteen 2020 mennessä. ESL Shipping arvioi saavuttavansa liikevoittotason 20-24 % vuoteen 2020 mennessä. Ohjeistus vuodelle 2017   Aspon liikevoitto on 22-27 miljoonaa euroa vuonna 2017 (20,4). Hallituksen osinkoehdotus Hallitus ehdottaa, että tilikaudelta 2016 jaetaan osinkoa 0,42 euroa osakkeelta (0,41), ja että osinko maksetaan kahdessa erässä: huhtikuussa ja marraskuussa. Tarkemmat tiedot osinkoehdotuksesta ovat tässä tiedotteessa kohdassa "Osinkoehdotus". Vuoden 2017 yleisnäkymät Markkinoiden epävarmuus on vähentynyt. Teollisuustuotannon odotetaan kasvavan Aspon liiketoimintojen päämarkkina-alueilla 2017 aikana. Raaka-ainehintojen odotetaan säilyvän matalalla tasolla. Venäjällä kansantalouden ja teollisuustuotannon odotetaan kääntyvän kasvuun. Poliittiset riskit ovat kohonneet, mikä voi vaikuttaa toimintaympäristöön nopeasti tai heikentää vapaakauppaa pitemmällä aikavälillä. AVAINLUVUT Vertailukelpoisuuteen vaikuttavat erät *) Liikevoittoon 1-12/2015 sisältyy Kaukon liikearvosta kirjattu arvonalennus 1,3 Me sekä Telkolle Tullin määräämiä maksuja ja asian käsittelyyn liittyviä asiantuntijakuluja 0,6 Me, joista viimeiselle neljännekselle kohdistuu 0,2 Me.   **) Tilikauden 1-12/2015 voittoon sisältyy Kaukon liikearvosta kirjattu arvonalennus 1,3 Me, rahoituseriin kirjattu 4,9 Me:n myyntivoitto sekä Tullin määräämiä maksuja sekä asiantuntijakuluja 2,0 Me, joista viimeiselle neljännekselle kohdistuu 1,6 Me.  ASPO-KONSERNIN TOIMITUSJOHTAJA AKI OJANEN KOMMENTOI NELJÄTTÄ NELJÄNNESTÄ JA TILIKAUTTA: "Kokonaisuutena 2016 oli hyvä ja dynaaminen vuosi. Aspon liikevaihdon ja liikevoiton kasvu kiihtyi toisella vuosipuoliskolla. Odotamme hyvän kehityksen jatkuvan ja ohjeistamme vuoden 2017 liikevoiton olevan 22-27 miljoonaa euroa (20,4). Omistamiemme tytäryhtiöiden johtamista kehitettiin monella tasolla. Yhtiöiden hallituskokoonpanoja vahvistettiin, Leipurin Oyj:n toimitusjohtajaksi nimitettiin 1.3.2016 alkaen Mikko Laavainen, Kauko uusi ilmeensä strategiansa mukaiseksi ja Telko panosti aluestrategiaan ja laajentui sekä kasvoi voimakkaasti idässä. ESL Shipping sai päätöksen enintään 5,9 miljoonan euron EU:n tuesta laivojen energiatehokkuus- ja ympäristöinvestointeihin. Pohjatyötä tulevalle tuloskehitykselle vietiin vahvasti eteenpäin. Varustamon toimintaympäristö oli vuonna 2016 poikkeuksellisen haastava. Epäterveen heikot kansainväliset rahtihintojen tasot heikensivät myös ESL Shippingin tulosta. Vaikka muut alusluokat paransivat kannattavuuttaan, supramax-alusten tappiollisuus kevään ja kesän aikana heikensi koko vuoden tulosta. Neljännen neljänneksen liikevoittoa, 4,1 miljoonaa euroa (4,5), voi kuitenkin pitää markkinatilanne huomioiden hyvänä suorituksena. Arvioimme supramax-alusten kannattavuuden olevan vuonna 2017 parempi kuin vuonna 2016. Telko paransi merkittävästi liikevaihtoaan ja kannattavuuttaan neljännellä neljänneksellä. Näimme jo keväällä, että Venäjän talouden lasku oli pysähtynyt ja odotimme markkinatilanteen paranevan. Telkon voimakas panostus kasvuun palkittiin itämarkkinoilla 26 %:n liikevaihdon kasvulla. Neljänneksen liikevoitto parani ja oli 2,5 miljoonaa euroa (1,9). Telko paransi kannattavuuttaan erityisesti länsimarkkinoilla. Leipurin-liiketoiminnan kannattavuus on kaukana potentiaalistaan vaikka liikevoitto paranikin neljännellä neljänneksellä ja oli 0,7 miljoonaa euroa (0,4). Leipurin kasvu Venäjällä jatkui vahvana ja kannattavuus säilyi hyvänä liikevoittoprosentin ollessa noin 9 %. Koneliiketoiminta oli vuonna 2016 tappiollinen. Voimakas panostus koneliiketoiminnan kilpailukyvyn parantamiseen sekä uusille markkina-alueille suuntaaminen tuottivat vuoden lopussa ennätyskorkean tilauskannan, joka varmistaa koneliiketoiminnan positiivisen tuloskehityksen vuonna 2017. Aspon hallinnon kulutaso on saatu tavoitetasolle vuoden 2016 aikana. Liiketoimintojen paremmat näkymät ja entistä parempi kuluteho mahdollistavat määrätietoisen etenemisen vuoden 2017 aikana kohti taloudellisten tavoitteiden saavuttamista vuoteen 2020 mennessä."  ASPO-KONSERNI LIIKEVAIHTO Liikevaihto segmenteittäin Osakekohtainen tulos Tilikauden tulos/osake oli 0,49 euroa (0,61). Oma pääoma/osake oli 3,75 euroa (3,36). Vertailukauden tulosta paransi merkittävästi ESL Shippingin omistamien vakuutusosakeyhtiö Alandian osakkeiden kaupassa syntynyt 4,9 miljoonan euron rahoituseriin kirjattu myyntivoitto, jonka vaikutus osakekohtaiseen tulokseen oli noin 0,16 euroa. Taloudelliset tavoitteet Aspo tavoittelee keskimäärin yli 20 prosentin oman pääoman tuottoa, enintään 100 prosentin nettovelkaantumisastetta sekä nykyrakenteella 7 prosentin liikevoittoa vuoteen 2020 mennessä. Tilikauden liikevoittoprosentti oli 4,5 % (4,6), oman pääoman tuotto oli 14,6 % (19,1) ja nettovelkaantumisaste 89,8 % (101,4). VUODEN 2017 NÄKYMÄT Kansainvälisen talouden kasvun odotetaan kiihtyvän 2017. Epävarmuus ja heikko suhdanne Aspolle tärkeillä idän kasvumarkkinoilla on kääntynyt kasvuksi. Venäjän, Ukrainan, ja muiden IVY-maiden tulevaa kehitystä on kuitenkin haastavaa ennustaa. Valuuttojen arvojen arvioidaan edelleen vaihtelevan voimakkaasti.  Öljyn hinta säilynee matalalla tasolla. Yleisesti tuotannollisten raaka-aineiden hintojen odotetaan pysyvän matalina. Konserni jatkaa markkinaosuuksien kasvattamista kannattavasti strategisesti tärkeillä idän kasvumarkkinoilla. Teollisuustuotannon odotetaan kasvavan Aspon liiketoimintojen päämarkkina-alueilla 2017 aikana. Kansainvälisten kuivarahtihintojen odotetaan säilyvän matalina mutta varustamo on varmistanut kapasiteettinsa käytön pääosin pitkäaikaisin sopimuksin. Toisen supramax-aluksen liikennöinti on varmistettu Itämeren alueella 2017 aikana, mikä vähentää merkittävästi ns. spot-liikennöintiä. Leipurin tappiollinen koneliiketoiminta kääntyy voitolliseksi ennätyskorkean tilauskannan seurauksena. ESL Shippingin palvelukokonaisuus perustuu kykyyn operoida tehokkaasti ja luotettavasti jääalueilla sekä lastata ja keventää aluksia merellä. Vuoden viimeisellä neljänneksellä varustamon alukset ovat operoineet pääosin Itämerellä ja Pohjois-Euroopan liikenteessä sekä suorittaneet merilastausta ja -purkausta. Kuljetukset Itämerellä ja Pohjanmerellä perustuvat pitkäkestoisiin asiakassopimuksiin ja vakiintuneisiin asiakassuhteisiin. Yleiset kuivien irtolastien markkinarahtihinnat nousivat loppuvuonna 2016, mutta ovat pidemmän aikavälin tarkastelussa edelleen matalalla tasolla. Varustamo solmi neljännellä neljänneksellä vuosisopimuksen venäläisen teräsyhtiön kanssa rautapellettien kuljettamisesta supramax-aluksella Euroopan markkinoille. Sopimuksen kannalta ratkaisevia tekijöitä ovat ESL Shippingin alusten korkea jäävahvistus ja kyky itsenäiseen lastinkäsittelyyn. Uusiutuvan bioenergian kuljetukset jatkuivat aiemmin ennustettua korkeammalla volyymitasolla. Supramax-alusten tulos kääntyi neljännellä neljänneksellä voitolliseksi. Vuoden viimeisellä neljänneksellä määräaikaistelakoitiin yksi alus. ESL Shippingin neljännen neljänneksen liikevaihto nousi 20,6 miljoonaan euroon (19,9) vertailukautta korkeampien kuljetusmäärien ja kohonneen laivapolttoaineen hinnan vuoksi. Dollarin vahvistuminen nosti osaltaan polttoaineen euromääräisiä hintoja. Kannattavuus säilyi markkinatilanne huomioiden hyvänä ja liikevoitto oli 4,1 miljoonaa euroa (4,5). Merellä tapahtuva suurten valtamerialusten lastaus- ja purkaustoiminta oli vuoden viimeisellä neljänneksellä normaalilla tasolla. Kaudella aika ajoin vallinneet vaikeat sääolosuhteet pidensivät operaatioiden kestoa ja heikensivät lastaus- ja purkaustoiminnan kannattavuutta vertailukauteen nähden. Loka-joulukuussa ESL Shipping kuljetti lasteja 3,2 miljoonaa tonnia (3,1). Terästeollisuuden kuljetusmäärät olivat vertailukauden tasolla ja energiateollisuuden kuljetusmäärät nousivat edellisvuoden vastaavasta ajanjaksosta niin uusiutuvan energian kuin kivihiilenkin osalta. ESL Shipping säilytti vuonna 2016 hyvän kannattavuuden alkuvuoden poikkeuksellisen vaikeasta markkinaympäristöstä huolimatta liikevoiton ollessa 12,6 miljoonaa euroa (14,7). Varustamon liikevaihto laski tammi-joulukuussa 71,4 miljoonaan euroon (76,2). Liikevaihdon laskuun vaikutti voimakkaasti alkuvuonna vallinnut suurten irtolastialusten historiallisen vaikea markkinatilanne, joka pakotti varustamon supramax-alukset operoimaan tappiollisella spot-markkinalla. Hyvästä viimeisestä neljänneksestä huolimatta supramax-alusten tulos oli vuositasolla niukasti tappiollinen. Niiden kannattavuus oli kuitenkin selvästi vallinnutta markkinakeskiarvoa korkeampi. Vuonna 2016 ESL Shipping kuljetti lasteja 10,7 miljoonaa tonnia (11,1). Vuositasolla lastimäärän alentuminen johtui pääosin supramax-alusten vertailukautta pitemmistä merimatkoista. Varustamon uudisrakennusprojekti kahden maailman ensimmäisen LNG-käyttöisen handy-size irtolastialuksen rakentamiseksi on edennyt suunnitellussa aikataulussa ja yhteistyö Sinotrans & CSC Jinlingin telakan kanssa on sujunut hyvin. Uudet alukset tulevat Itämeren liikenteeseen vuoden 2018 alkupuoliskolla. Uudet alukset tulevat liikennöimään pohjoisella Itämerellä tehostaen kuljetusketjua ja vähentävät merkittävästi toiminnan ympäristörasitusta. EU tukee alusten energiatehokkuus- ja ympäristöinvestointeja. ESL Shippingin saama tuki on vuosien 2016-2019 aikana enintään 5,9 miljoonaa euroa, josta 2,1 miljoonaa euroa maksettiin neljännellä neljänneksellä. Bothnia Bulk -hankkeen muut osapuolet ovat SSAB Europe Oy, Luleå Hamn AB, Oxelösunds Hamn AB, Raahen Satama Oy ja Raahen Voima Oy. EU-tuki on myönnetty Verkkojen Eurooppa -rahoitusinstrumentin liikennesektorin hausta. ESL Shippingin näkymät 2017 Suurten kuivarahtialusten markkinarahdit ovat viimeisen puolen vuoden aikana nousseet merkittävästi vuoden takaiselta historiallisen heikolta tasolta, mutta niiden ennustetaan vuonna 2017 pysyvän edelleen verraten alhaisella tasolla. Uusia kuivarahtialuksia ei juurikaan ole tilattu, mistä syystä kysynnän ja tarjonnan tasapainon on ennustettu paranevan tulevina vuosina. Muutosta kiihdyttävät myös merenkulun tiukentuvat ympäristömääräykset, jotka voivat vähentää vanhimman tonniston tarjontaa tulevaisuudessa. Pääosa yhtiön kuljetuskapasiteetista on varmistettu Itämerellä ja Pohjois-Euroopassa pitkäaikaisin sopimuksin. Samoin varustamon toisen supramax-aluksen kannattava työllisyys kuluvalle vuodelle on jo varmistettu pitempiaikaisella sopimuksella Itämerelle. Terästeollisuuden kuljetusten odotetaan kehittyvän positiivisesti tai säilyvän ennallaan. Kysynnän sesonkivaihtelu saattaa edellyttää puskuproomujärjestelmän kapasiteetin sopeuttamista myöhemmin keväällä edellisten vuosien tapaan. Kaivos- ja metalliteollisuuden kysyntä voi lisääntyä, osaksi kohonneiden raaka-ainehintojen seurauksena. Energiateollisuuden kuljetustarpeen arvioidaan kokonaisuudessaan olevan edellisvuotta korkeamman lähinnä biopolttoaineiden kasvavan kuljetuskysynnän johdosta. Kivihiilen kuljetusmäärien ennakoidaan säilyvän edellisvuoden tasolla ja käyttö keskittyy ennustettavampaan sähkön ja lämmön yhteistuotantoon lauhdesähkön tuotannon heikosta kannattavuudesta ja lauhdevoimaloiden aiemmin ilmoitetuista sulkemisista johtuen. Merellä tapahtuvan suurten alusten lastaus- ja purkaustoiminnan kysynnän odotetaan olevan vilkasta. Tarvittaessa varustamon kapasiteettia sopeutetaan kysynnän vaihtelun ja mahdollisten uusien asiakasryhmien tarpeiden mukaisesti myös rahtaamalla lisää ulkopuolista kapasiteettia. Yhtiön pyrkimyksenä on jatkaa liiketoimintaa arktisilla alueilla edellisvuosien tapaan. Strategiansa mukaisesti varustamo jatkaa työtä asiakaspinnan laajentamiseksi erityisesti sellaisiin asiakaskuljetuksiin, joissa voidaan laajentaa sekä lastivalikoimaa että yhtiön toiminta-aluetta hyödyntäen alusten itsenäistä lastinkäsittelykykyä ja poikkeuksellisen hyvää jäävahvistusta. Vuoden 2017 aikana neljä alusyksikköä tullaan telakoimaan suunnitelman mukaisesti. LEIPURIN Leipurin on ainutlaatuinen ratkaisujen tarjoaja leipomo- ja konditoriatuotteiden, elintarviketeollisuuden sekä kodin ulkopuolisen syömisen (out of home, OOH) markkinoilla. Leipurin tarjoamat ratkaisut käsittävät muun muassa tuotevalikoiman kehityksen, reseptiikan, raaka-aineet, koulutuksen ja laitteet aina myyntipisteiden suunnitteluun saakka. Osana kokonaisratkaisuja Leipurin suunnittelee, toimittaa ja huoltaa leipomoteollisuuden valmistuslinjoja, paistopisteitä sekä muita elintarviketeollisuudessa tarvittavia koneita ja laitteita. Leipurin raaka-aineita ja koneita toimittavat kumppanit ovat alansa johtavia kansainvälisiä valmistajia. Leipurin toimii Suomessa, Venäjällä, Baltiassa, Puolassa, Ukrainassa, Kazakstanissa ja Valko-Venäjällä. Venäjän taloustilanteen heikkenemisen arvioidaan kääntyneen kasvuksi ja kuluttajien ostovoiman odotetaan paranevan. Leipomoraaka-aineiden paikallista hankintaa Venäjällä on lisätty korvaamaan tuontiraaka-aineita. Tällä pyritään vastaamaan kysynnän muutokseen kehittämällä hintakilpailukykyisempää tarjoomaa ja vastaamaan Venäjällä olevaan kotimaisuuskampanjaan. Tavoitteena on kasvattaa paikallisten raaka-aineiden osuus yli 50 %:iin. Paikallinen hankinta on hajautettu ja merkittäviä alueellisia tuotantokumppaneita on kymmeniä. Leipurin säilyttää alueella hyvän kannattavuuden, vahvistaa markkina-asemaansa ja hakee kasvua niin leipä-, kahvileipä- kuin OOH-sektoreilta. *) Vuonna 2015 liikevoittoon sisältyi ensimmäisellä vuosineljänneksellä liikearvosta kirjattu arvonalennus -1,3 Me Tietokoneiden kokonaismyynti on laskenut Suomessa vertailukaudesta. Erikoiskäyttöisten, vaativiin liikkuviin tietotyön tehtäviin soveltuvien vahvennettujen tietokoneiden ja tablet-tietokoneiden myynti kasvoi kuitenkin vuoden 2016 aikana. Hajautetussa energiantuotannossa erityisesti aurinkosähköjärjestelmien myynti on kasvanut ja kasvun odotetaan jatkuvan vahvana. Kaukon liikevaihto laski neljännellä neljänneksellä 52 % ja oli 8,3 miljoonaa euroa (17,1). Vertailukaudella liikevaihtoa ja liikevoittoa kasvattivat projektitoimitukset Kiinassa. Liikevoitto oli 0,0 miljoonaa euroa (0,6). Liikkuvan tietotyön liikevaihto laski hieman vertailukaudesta mutta liikevoitto oli positiivinen, mukaan lukien tietotekniikan toimitukset terveydenhuoltosektorille. Energiatehokkuuslaitteiden liikevaihto kasvoi. Tietotekniikan toimitukset terveydenhuoltosektorille vähenivät merkittävästi, liikevaihto laski ja toiminta oli tappiollista neljännellä neljänneksellä. Sairaaloihin toimitettavien liikkuvien tietotekniikkayksiköiden organisaatiosta irtisanoutui avainhenkilöitä Suomessa ja Saksassa. Kauko tutkii ja selvityttää onko tapahtunut kilpailukiellon rikkomuksia ja luottamuksellisen aseman väärinkäytöksiä. Organisaation muutokset laskivat yksikön liikevaihtoa neljännellä neljänneksellä. Toiminta on organisoitu uudelleen Suomessa ja Saksassa. Kaukon liikevaihto vuonna 2016 laski 10 % ja oli 33,0 miljoonaa euroa (36,5). Liiketulos oli -0,1 miljoonaa euroa (-1,2). Vertailukauden liiketulosta heikensi Industrial-liiketoiminnan myynti, minkä yhteydessä Aspo arvioi Kauko-segmentin liikearvoa ja kirjasi siitä 1,3 miljoonan euron arvonalentumisen. Vuonna 2016 energiatehokkuuslaitteiden myynti kehittyi hyvin vertailukauteen verrattuna. Nopeinta kasvu oli aurinkosähköjärjestelmissä. Ilmalämpöpumppujen myynti oli vertailukauden tasolla. Projektitoimitukset Kiinaan jäivät merkittävästi vertailukaudesta normaalia pienemmästä projektimäärästä johtuen. Kauko muutti keväällä nimensä Kaukomarkkinoista Kaukoksi sekä uudisti yritysilmeensä ja asiakasviestinnän kokonaisuudessaan uuden strategian mukaisiksi. Kauko jatkoi uuden strategian mukaisesti yhtiön palvelutarjooman laajentamista sekä panosti vaativan liikkuvan tietotyön ratkaisujen kehittämiseen ja myyntiin. Lisäksi käynnistettiin uusia liiketoimintakehityshankkeita, jotka edellyttivät sekä teknisten ja kaupallisten osaajien lisärekrytointeja että sisäisten toimintamallien edelleenkehittämistä. Kaukon näkymät 2017 Liikkuvan tietotyön kokonaisratkaisujen liikevaihdon ja kannattavuuden odotetaan paranevan. Kauko tarjoaa tehokkaasti integroituja ja räätälöityjä kokonaisratkaisuja, joissa yhdistyvät sovellus-, laite- ja muut palvelut. Erityisesti sovellusliiketoiminnan odotetaan parantavan kannattavuutta. Palveluliiketoimintaa tullaan laajentamaan siirtymällä entistä enemmän kokonaisratkaisuihin. Vahvennettujen tietokoneiden markkinoilla arvioidaan kannettavien tietokoneiden myynnin pienenevän ja tablet-tietokoneiden myynnin kasvavan. Kauko tarjoaa terveydenhuoltosektorille erilaisia liikkuvia tietoteknisiä ratkaisuja tehostamaan hoitohenkilöstön työtä. Kaukon Saksassa valmistuttaman tietokoneen odotetaan tulevan myyntiin ensimmäisen neljänneksen aikana. Uusi terveydenhuoltosektorille soveltuva tietokone mahdollistaa myynnin aloittamisen myös muihin OEM-kanaviin. Hajautetun energiatuotannon ratkaisujen markkinan odotetaan jatkavan kasvua erityisesti aurinkoenergian osalta. Tilauskanta on poikkeuksellisen hyvä. MUU TOIMINTA Muu toiminta sisältää Aspon konsernihallinnon, talous- ja ICT-palvelukeskuksen sekä vähäisiä määriä muita toimialoille kuulumattomia toimintoja. Muun toiminnan liikevoitto oli neljännellä neljänneksellä -1,0 miljoonaa euroa (-1,2) ja tilikaudella -4,2 miljoonaa euroa (-5,7). Muun toiminnan kuluteho on parantunut tavoitetasolleen tilikauden aikana. RAHOITUS Konsernin rahavarat olivat 22,6 miljoonaa euroa (23,9). Konsernitaseen korolliset velat olivat 125,4 miljoonaa euroa (127,9). Korollisten velkojen keskikorko oli tilikauden päättyessä 1,8 % (1,7). Korottomat velat olivat 69,8 miljoonaa euroa (74,3). Aspo-konsernin nettovelkaantumisaste oli 89,8 % (101,4) ja omavaraisuusaste 37,4 % (33,8).   Konsernin liiketoiminnan rahavirta oli tammi-joulukuussa 16,2 miljoona euroa (25,0). Käyttöpääoman muutos oli tilikauden aikana -10,6 miljoonaa euroa (-4,2). Käyttöpääomaa sitoutui erityisesti Telkon voimakkaaseen kasvuun. Investointien rahavirta oli -6,1 miljoonaa euroa (-9,9). Investointien rahavirtaan vaikutti positiivisesti ESL Shippingin EU:lta saama 2,1 miljoonan euron tuki. Investointien rahavirtaan vertailukaudella vaikutti positiivisesti osakkeiden myyntitulo 4,9 miljoonaa euroa. Konsernin vapaa rahavirta (liiketoiminnan rahavirta + investointien rahavirta) oli 10,1 miljoonaa euroa (15,1). ESL Shipping Oy allekirjoitti marraskuussa yhteensä 50 miljoonan euron laivarahoitussopimukset uudisrakennusten rahoittamiseksi. Kahden erillisen sopimuksen laina-aika on 7 vuotta ja takaisinmaksuohjelma sisältää 3 vapaavuotta sekä lyhennysohjelman, joka vastaa 12 vuoden laina-aikaa. Rahoitussopimukset tulevat käyttöön täysimääräisesti alusten valmistuttua viimeistään vuonna 2018. Uudet sopimukset pidentävät Aspo-konsernin rahoituksen keskimaturiteettia ja osaltaan alentavat rahoituksen keskikorkoa. Aspo allekirjoitti kesäkuussa valmiusluottolimiittisopimuksen, jonka määrä on 20 miljoonaa euroa. Sopimuksen laina-aika on kolme vuotta ja se korvasi erääntyvän vastaavan suuruisen valmiusluottolimiittisopimuksen. Aspo laski 27.5.2016 liikkeeseen uuden 25 miljoonan euron hybridilainan eli oman pääoman ehtoisen joukkovelkakirjalainan. Lainan vuotuinen kuponkikorko on kiinteä 6,75 %. Lainalla ei ole eräpäivää, mutta yhtiöllä on oikeus lunastaa se takaisin neljän vuoden kuluttua liikkeeseenlaskupäivästä. Aspo lunasti takaisin toukokuussa 2016 julkisella ostotarjouksella marraskuussa 2013 liikkeeseen lasketusta 20 miljoonan euron hybridilainasta yhteensä 15,4 miljoonaa euroa. Hybridilainan jäljellä oleva pääoma 4,6 miljoonaa euroa lunastettiin takaisin lainaehtojen mukaisesti 18.11.2016. Aspon ja päärahoittajapankkien kesken allekirjoitettujen sitovien valmiusluottolimiittien määrä oli tilikauden päättyessä yhteensä 40 miljoona euroa. Valmiusluottolimiitit olivat tilikauden päättyessä kokonaisuudessaan käyttämättömiä. Vuoden 2017 aikana erääntyy 20 miljoonan euron valmiusluottolimiittisopimus. Aspon 80 miljoonan euron yritystodistusohjelma oli kokonaisuudessaan käyttämätön. Aspo on suojannut korkoriskiään koronvaihtosopimuksella, jonka käypä arvo 31.12.2016 oli -0,6 miljoonaa euroa (-0,7). Rahoitusinstrumentti on käyvän arvon hierarkian tasolla 2. Aspo-konserni on suojannut uusien alusten hankintaan liittyviä valuuttamääräisiä rahavirtoja valuuttatermiineillä, joihin sovelletaan suojauslaskentaa. Näiden valuuttatermiinien nimellisarvo 31.12.2016 oli 36,2 miljoonaa euroa ja käypä arvo oli 1,7 miljoonaa euroa (0,1). Rahoitusinstrumentti on käyvän arvon hierarkian tasolla 2. INVESTOINNIT Konsernin investoinnit vuonna 2016 olivat 6,9 miljoonaa euroa (15,1) ja koostuivat pääosin ESL Shippingin alusten telakoinneista ja ylläpitoinvestoinneista sekä varustamon tilaamien maakaasukäyttöisten irtolastialusten ennakkomaksuista. EU tukee alusten energiatehokkuus- ja ympäristöinvestointeja. ESL Shipping tulee saamaan vuosien 2016-2019 aikana tukea enintään 5,9 miljoonaa euroa, josta 2,1 miljoonaa euroa maksettiin neljännellä neljänneksellä. Lisäksi investointeja kasvatti Telkon uuden liiketoiminnan haltuunottaminen Suomessa. Investoinnit segmenteittäin ilman yritysostoja   Aspo-konsernin henkilöstömäärä oli tilikauden lopussa 895 (857). Henkilöstön määrä on kasvanut Leipurin ja Telkon itälaajentumisen myötä. Palkitseminen Aspo-konsernissa on käytössä tulospalkkiojärjestelmä, joka otettiin käyttöön vuonna 2013. Suomen henkilöstöä koskeva tulospalkintajärjestelmä on kytketty henkilöstörahastoon niin, että tulospalkkion voi sijoittaa henkilöstörahastoon tai nostaa rahana. Rahastoinnin pitkän aikavälin tavoitteena on, että henkilöstöstä tulee yhtiön merkittävä omistajaryhmä. Henkilöstörahaston jäseninä ovat kaikki Aspo-konsernin suomalaisissa yhtiöissä työskentelevät henkilöt. Aspo Oyj:n hallitus päätti vuonna 2015 noin 30 henkilöä koskevasta osakepohjaisesta kannustinjärjestelmästä. Järjestelmässä on kolme ansaintajaksoa, kalenterivuodet 2015, 2016 ja 2017. Hallitus päättää järjestelmän ansaintakriteerit ja kullekin kriteerille asetettavat tavoitteet kunkin ansaintajakson alussa. Ansaintajakson 2015 palkkio perustui konsernin osakekohtaiseen tulokseen (EPS). Vuoden 2015 ansaintajakson perusteella luovutettiin vuonna 2016 osakepalkkiona järjestelmään kuuluneille henkilöille yhteensä 88 970 kappaletta yhtiön hallussa olleita omia osakkeita sekä osakkeiden arvoa vastaava määrä rahaa verojen kattamiseen. Vuoden 2016 ansaintajakson palkkio perustui konsernin osakekohtaiseen tulokseen (EPS). Vuoden 2016 ansaintajakson perusteella tullaan luovuttamaan osakepalkkiona järjestelmään kuuluneille henkilöille yhteensä 26 040 kappaletta yhtiön hallussa olevia omia osakkeita ja enintään osakkeiden arvoa vastaava määrä rahaa verojen kattamiseen. Kannustinjärjestelmien sääntöjen mukaisesti Aspolle palautui työsuhteen päättymisen perusteella vuonna 2016 yhteensä 5 275 kpl osakepalkkiojärjestelmien perusteella luovutettuja omia osakkeita. TUTKIMUS- JA TUOTEKEHITYSTOIMINTA Aspo-konsernin tutkimus- ja kehittämistoiminta kohdistuu segmenttien luonteen mukaisesti pääosin toiminnan, menetelmien ja tuotteiden kehittämiseen osana asiakaskohtaista liiketoimintaa, mistä johtuen kehityspanokset sisältyvät erittelemättöminä normaaleihin liiketoiminnan kuluihin. YMPÄRISTÖ Aspo-konsernin toiminta ei aiheuta merkittäviä haittoja ympäristölle. Konserniyhtiöt noudattavat ympäristöasioiden hoidossa Aspon ympäristöpolitiikkaa, jonka keskeisenä periaatteena on toimintojen jatkuva parantaminen. Aspo tukee kaikessa toiminnassaan kestävän kehityksen periaatteita. Aspo huolehtii ympäristöstä toimimalla aloitteellisesti ja seuraamalla jatkuvasti liiketoimintaansa liittyviä lakeja ja suosituksia ja niihin tehtäviä muutoksia. Aspo haluaa olla edelläkävijä kaikessa toiminnassaan ja pyrkii myös ennakoimaan ympäristömääräysten tulevaa kehitystä. RISKIT JA RISKIENHALLINTA Aspon liiketoimintaympäristö oli koko vuoden hyvin haastava. Aspon toimintamaissa taloudet heikentyivät yleisesti koko vuoden, mutta loppuvuoden aikana nähtiin eri alueilla piristymisen merkkejä. Länsimaiden kansantaloudet kasvavat hitaasti ja idässä supistuminen on hidastunut. Viimeisellä neljänneksellä Aspolle tärkeän Venäjän tavarantuonti kääntyi kasvuun ja koko vuoden jatkunut öljyn hinnan kohoaminen on vahvistanut ruplaa. Venäjällä inflaatio hidastui viimeisellä neljänneksellä vuoden 2012 tasolle ja erityisesti elintarvikkeiden hintojen nousu on hitaampaa kuin edeltävinä vuosina. Rahtihinnat nousivat hitaasti koko vuoden. Varovainen käänne parempaan päin näkyy myös Aspon kaikkien toimialojen riskien alenemisena. Nopeat liikkeet kansainvälisessä politiikassa, valuuttojen arvoissa tai hyödykemarkkinoilla voivat silti vaikuttaa Aspon yhtiöiden tuotteiden kysyntään ja kilpailukykyyn. Sekä itä- että länsimarkkinoiden kasvua rajoitti edelleen investointihyödykkeiden heikko kysyntä. Strategiset riskit Aspo toimii länsimarkkinoiden lisäksi alueilla, joiden talouskehitys voi muuttua hyvin nopeasti negatiiviseksi tai positiiviseksi, minkä seurauksena liiketoiminnan harjoittamisen edellytykset voivat muuttua merkittävästi. Venäjällä ja Ukrainassa ulkomaisten tuotteiden hintojen nousun seurauksena kulutuskysyntä vähentyi ja talous supistui. Viimeisen vuosineljänneksen aikana Venäjän talous supistui enää hyvin vähän ja inflaatio hidastui merkittävästi. Ennusteiden mukaan Venäjän talous on kääntymässä kasvuun vuoden 2017 aikana. Heikentynyt kulutuskysyntä on vaikuttanut kauppaan, mutta nimellispalkkojen kasvu ennakoi kulutuksen kasvua. Venäjän ja Ukrainan rahoitusmarkkinoilla ja maksuliikenteessä ei ole nähty enää heikkenemisen merkkejä. Yritysten investointihalukkuus on lisääntynyt, mutta varovaisuus hidastaa vielä investointihyödykkeiden myyntiä. Venäjällä tuontitavaran hintojen nousua ja pakotteiden vaikutusta on vähennetty paikallisella hankintatoimella ja tuotannolla. Venäjällä tuotettuja raaka-aineita ja tarvikkeita on lisääntyvässä määrin otettu tuotantoon teollisuudessa laadun heikkenemisestä huolimatta. Tämä saattaa heikentää tuontiraaka-aineiden asemaa arvoketjussa ja alentaa katetasoa, mutta tuonnin määrän kasvu voi vastaavasti vähentää tähän liittyviä Aspon riskejä. Poliittiset riskit ovat kohonneet, mikä voi vaikuttaa Aspon toimintaympäristöön nopeasti tai heikentää vapaakauppaa pitemmällä aikavälillä. Aspon markkina-alueen heikentynyt taloudellinen ja poliittinen tilanne on saattanut vaikeuttaa Aspon strategiaan kuuluvien rakenteellisten muutosten toteuttamista. Tilanne voi jatkua samanlaisena edelleen, mutta taloudellisen ja poliittisen paineen hellittäessä se voi muuttua päinvastaiseksi nopeastikin. Talouspakotteet tai muut Venäjän nykytilanteesta johtuvat esteet voivat osaltaan vähentää kuljetuksia Venäjältä sekä suurten alusten keventämistoiminta merellä voi vähentyä. Suomessa ja muualla Euroopassa yhteiskunnallinen tavoite hiilen kulutuksen vähentämiseen energiantuotannossa on lisääntynyt, mikä saattaa vähentää hiilen kuljetustarvetta. Korvaavien energiatuotteiden tarve voi vastaavasti lisätä kuljetuksia ja tulevaisuuden kuljetusmäärien arviointi on näistä syistä vaikeutunut. Kansainvälisten rahti-indeksien matala taso ja kansainvälisesti kaluston lisääntyminen erityisesti suurissa kokoluokissa ovat lisänneet varustamojen pitkän aikavälin kannattavuuteen liittyvää epävarmuutta, joskin sekä rahti-indekseissä että kaluston määrissä voidaan nähdä jo vakiintumista. Strategisia riskejä aiheuttavat kansainvälisesti heikon taloudellisen tilanteen sekä poliittisen ilmapiirin lisäksi teollisuusasiakkaiden näkymät ja tuotannolliset ratkaisut. Päätökset energiantuotannon rakenteista, joihin vaikuttavat ympäristöpolitiikka ja muut poliittiset valinnat, saattavat aiheuttaa teollisuuteen ja energiantuotantoon muutoksia, jotka voivat vähentää fossiilisten polttoaineiden käyttöä ja lisätä vaihtoehtoisia energiamuotoja. Itämeren tavaravirrat voivat muuttua teräksen tuotannon, kustannusrakenteiden, asiakasrakenteen muutosten, kuten omistuksen keskittymisen tai muiden syiden vaikutuksesta. Muutokset voivat aiheuttaa negatiivisia seurauksia liiketoiminnalle kuljetustarpeiden vähentyessä, mutta niissä nähdään myös kasvavia mahdollisuuksia. Kansainvälisen meriliikenteen matalien rahtihintojen seurauksena kilpailu rahdeista voi kiristyä myös Itämerellä ja kilpailu voi lisääntyä myös osaltaan leutojen ja jäättömien talvien seurauksena. Kilpailuasemansa parantamiseksi Aspon ESL Shipping on rakentamassa uusia tälle alueelle ja asiakaskuntaan soveltuvia vähän polttoainetta kuluttavia ja vähäpäästöisiä aluksia. Strategisiin riskeihin vaikuttavat rahtihintojen pitkän aikavälin muutokset, investointitrendit ja kaupan rakenteen muutokset erityisesti länsimarkkinoilla. Itämarkkinoilla riskejä kasvattavat muun muassa poliittinen epävakaus, yhteiskunnalliset rakenteet tai niiden reagoimattomuus liiketoiminnan kohtaamiin vaikeuksiin. Investointien patoutuminen ja purkautuminen voi aiheuttaa pitkällä aikavälillä muutoksia kilpailutilanteessa ja asiakkaiden käyttäytymisessä. Nopeat muutokset talouden rakenteissa voivat aiheuttaa riskejä asiakas- tai päämiesrakenteen tai teknologian muuttuessa sekä nopeita reaktioita edellyttävien mahdollisuuksien jäädessä hyödyntämättä. Aspon strategisia riskejä tasoittaa liiketoiminnan jakautuminen neljälle toimialalle ja liiketoiminnan harjoittaminen laajalla maantieteellisellä alueella sekä kyky reagoida nopeasti muuttuviin olosuhteisiin. Operatiiviset riskit Vaikka Aspon toimintaympäristön taloudellinen epävarmuus on katsauskauden aikana vähentynyt, ovat operatiiviset riskit säilyneet. Näitä ovat esimerkiksi toimitusketjuihin ja henkilöihin liittyvät riskit. Aspon liiketoimintojen kasvun painopiste on pitkään ollut kehittyvien markkinoiden alueilla, joissa kasvua hidastaviin riskeihin vaikuttavat mm. valuuttakurssit ja korkotaso, raaka-aineiden maailmanmarkkinahintojen taso ja muutokset, teollisuuden ja kaupan investoinnit, asiakkaiden maksuvalmius, lainsäädännön ja maahantuontiasetusten muutokset sekä viranomaistahojen toimimattomuus, epäneutraalius tai korruptio. Talouden kasvu ja vaihtoehtoisesti tuotannon supistuminen voivat vaikuttaa raaka-aineiden kysyntään itämarkkinoilla. Poliittinen ja taloudellinen epävakaus vaikeuttaa kaupallista toimintaa ja tilanteen edelleen pitkittyessä voi hidastaa Aspon liiketoimintojen kasvua. Kuluttajakäyttäytyminen heijastuu myös B-to-B-asiakkaiden kautta syntyviin riskeihin ja niiden tasoihin. Kehittyvien markkinoiden kasvumahdollisuudet lisäävät kilpailijoiden halua aloittaa liiketoiminta tai laajentaa liiketoimintaansa näillä alueilla. Kehittyvien markkinoiden haastavuus ja kärjistynyt tilanne Ukrainassa ovat myös aiheuttaneet kilpailijoiden vetäytymistä, mikä on luonut Aspon liiketoiminnoille uusia mahdollisuuksia sekä lisännyt markkinaosuuksia ja joillakin liiketoiminnan alueilla parantanut kannattavuutta. Kilpailun normalisoitumista esimerkiksi Ukrainassa on jo tapahtunut. Valuuttakurssimuutoksilta suojautuminen ei kaikissa olosuhteissa ja erityisesti jatkuvana ole mahdollista. Valuuttakurssien muutokset voivat heikentää tulosta sekä pienentää taseen omaa pääomaa muuntoerojen vaikutuksesta. Valuuttakurssien muutokset voivat myös vaikuttaa tulosta ja tasetta vahvistavasti. Luottotappioriskien muutos hajautuu liiketoiminnoittain ja asiakkaittain, joten Aspon liiketoiminnat eivät ole kärsineet suuria luottotappioita vaikka luottotappioriskit ovat kasvaneet. Konsernin vahinkoriskien määrää ja todennäköisyyttä arvioidaan säännöllisesti. Vahinkovakuutukset kilpailutettiin ja vakuutusmäärät päivitettiin vuonna 2016. Vakuutusmäärät ovat Aspon toiminnan laajuuteen nähden riittävät, mutta vakuutusyhtiöt voivat rajoittaa vakuutusten voimassaoloa eri syistä lisääntyneiden riskien seurauksena esimerkiksi sotatoimialueilla. Sisäinen valvonta ja riskienhallinta Aspon tarkastusvaliokunnan yhtenä tehtävänä on yhtiön sisäisen valvonnan, sisäisen tarkastuksen ja riskienhallintajärjestelmien tehokkuuden seuranta. Tarkastusvaliokunta seuraa riskienhallintaprosessia ja tekee tarvittavia toimenpiteitä erityisesti strategisten riskien ehkäisemiseksi. Hallituksen hyväksymien sisäisen valvonnan periaatteiden mukaisesti riskienhallinta on osa Aspon sisäistä valvontaa ja sen tehtävänä on varmistaa konsernin strategian toteutumista, taloudellisen tuloksen kehittymistä, omistaja-arvoa, osingonmaksukykyä ja liiketoiminnan jatkuvuutta. Vastuu riskienhallinnasta on toimialojen liiketoimintajohdolla. Johto vastaa riittävien toimenpiteiden määrittämisestä, toteuttamisesta sekä toimenpiteiden toteutumisen seurannasta osana päivittäistä toiminnan ohjausta. Telkon ja ESL Shippingin riskien päivitys tehtiin vuoden viimeisellä neljänneksellä, ja muiden liiketoimintojen riskit päivitetään vuoden 2017 alussa. Riskienhallintaa koordinoi Aspon talousjohtaja, joka raportoi konsernin toimitusjohtajalle. Aspo-konsernin rahoitus ja rahoitusriskien hallinta hoidetaan keskitetysti emoyhtiössä hallituksen hyväksymän rahoituspolitiikan mukaisesti. Yksityiskohtaisempi selvitys riskienhallintapolitiikasta ja merkittävimmistä riskeistä on julkistettu yhtiön kotisivuilla. Rahoitusriskeistä kerrotaan tarkemmin tilinpäätöksen liitetiedoissa.     OSAKEPÄÄOMA JA OSAKKEET Aspo Oyj:n rekisteröity osakepääoma 31.12.2016 oli 17 691 729,57 euroa ja osakkeiden kokonaismäärä 30 975 524, joista yhtiön hallussa oli 396 226 osaketta eli 1,3 % osakepääomasta. Aspo Oyj:llä on yksi osakesarja. Kukin osake oikeuttaa yhteen ääneen yhtiökokouksessa. Aspon osake noteerataan Nasdaq Helsinki Oy:n keskisuurten yritysten ryhmän toimialaluokassa teollisuustuotteet ja -palvelut. Aspo Oyj:n osakkeiden vaihto Nasdaq Helsingissä oli tammi-joulukuussa 2016 yhteensä 2 490 725 osaketta ja 17,3 miljoonaa euroa, eli 8,0 % osakekannasta vaihtoi omistajaa. Tilikauden ylin kurssinoteeraus oli 8,21 euroa ja alin 6,00 euroa. Keskikurssi oli 6,95 euroa ja tilikauden päätöskurssi 8,18 euroa. Tilikauden päättyessä osakekannan markkina-arvo omat osakkeet vähennettynä oli 250,1 miljoonaa euroa. Yhtiöllä oli tilikauden päättyessä yhteensä 9 236 osakkeenomistajaa. Hallintarekisterissä ja ulkomaisessa omistuksessa oli 697 919 osaketta eli 2,3 % osakekannasta. Aspo Oyj:n uusi kaupankäyntitunnus (osaketunnus) Nasdaq Helsingissä on ASPO. Aikaisempi kaupankäyntitunnus oli ASU1V. Muutos tuli voimaan 27.6.2016. Liputusilmoitus Osakkeenomistaja Tatu Vehmas ilmoitti 31.5.2016, että Aatos Vehmas ja Liisa Vehmas ovat valtuuttaneet hänet käyttämään omistamiensa Aspon osakkeiden äänivaltaa, minkä seurauksena hänen osuutensa Aspo Oyj:n osakkeiden äänimäärästä on kasvanut yli viiden prosentin (5 %). OSINKOEHDOTUS Hallitus ehdottaa, että tilikaudelta 2016 jaetaan osinkoa 0,42 euroa osakkeelta (0,41) ja ettei Aspo Oyj:n hallussa oleville omille osakkeille makseta osinkoa. Emoyhtiön jakokelpoiset varat 31.12.2016 olivat 31.495.378,54 euroa, josta tilikauden voitto on 12.804.309,73 euroa. Osinkoon oikeuttavien osakkeiden määrä tilinpäätöstiedotteen julkaisupäivänä on 30 579 298 kappaletta. Osinko maksetaan kahdessa erässä. Ensimmäinen erä 0,21 euroa/osake maksetaan osakkeenomistajille, jotka ovat täsmäytyspäivänä 7.4.2017 merkitty Euroclear Finland Oy:n pitämään osakasluetteloon. Hallitus ehdottaa osingonmaksupäiväksi 18.4.2017. Toinen erä 0,21 euroa/osake maksetaan marraskuussa 2017 osakkeenomistajille, jotka ovat täsmäytyspäivänä merkitty Euroclear Finland Oy:n pitämään osakasluetteloon. Hallitus päättää 26.10.2017 pidettäväksi sovitussa kokouksessaan toisen erän osingon täsmäytyspäivän ja osingonmaksupäivän suomalaisen arvo-osuusjärjestelmän sääntöjen mukaisesti. Nykyisen järjestelmän mukaan osingon täsmäytyspäivä olisi 30.10.2017 ja osingon maksupäivä 6.11.2017. Mikäli Euroclear Finland Oy on ottanut uuden arvopaperikeskuksen ydinjärjestelmän käyttöön ennen hallituksen kokousta, osingon maksupäivän odotetaan aikaistuvan muutamalla päivällä. Ennen kuin hallitus panee yhtiökokouksen päätöksen täytäntöön, sen on osakeyhtiölain edellyttämällä tavalla arvioitava, onko yhtiön maksukyky ja/tai taloudellinen asema muuttunut yhtiökokouksen päätöksenteon jälkeen niin, että osakeyhtiölain mukaiset osingonjaon edellytykset eivät enää täyty. Osakeyhtiölain mukaisten edellytysten täyttyminen on edellytys yhtiökokouksen päätöksen täytäntöönpanolle. JOHTO JA TILINTARKASTAJAT Aspo Oyj:n varsinainen yhtiökokous 2016 valitsi uudelleen hallitukseen VT, MBA Mammu Kaarion, OTK Roberto Lencionin, DE, eMBA, kauppaneuvos Gustav Nybergin ja DI Risto Salon sekä uusina jäseninä KTM Mikael Laineen ja KTT Salla Pöyryn. Yhtiökokouksen jälkeen pitämässään järjestäytymiskokouksessa hallitus valitsi puheenjohtajaksi Gustav Nybergin ja varapuheenjohtajaksi Roberto Lencionin. Kokouksessa hallitus päätti lisäksi valita tarkastusvaliokunnan puheenjohtajaksi Roberto Lencionin sekä jäseniksi Mammu Kaarion, Mikael Laineen ja Salla Pöyryn. Hallituksella oli vuoden 2016 aikana 11 kokousta, joista neljä oli puhelinkokouksia. Kokouksiin osallistumisprosentti oli 99. Yhtiön toimitusjohtajana on toiminut eMBA Aki Ojanen. Tilintarkastajana on toiminut tilintarkastusyhteisö Ernst & Young Oy. Vastuullisena tilintarkastajana toimi KHT Harri Pärssinen. YHTIÖKOKOUSPÄÄTÖKSIÄ Osinko Aspo Oyj:n 7.4.2016 pidetty varsinainen yhtiökokous päätti hallituksen ehdotuksen mukaisesti osingoksi 0,41 euroa osakkeelta. Osingon maksupäivä oli 18.4.2016. Osakkeenomistajien nimitystoimikunta Yhtiökokous päätti perustaa pysyvän osakkeenomistajien nimitystoimikunnan, jonka tehtävänä on valmistella hallituksen jäsenten valintaa ja palkitsemista sekä hallituksen valiokuntien jäsenten palkitsemista koskevat ehdotukset varsinaiselle yhtiökokoukselle. Lisäksi yhtiökokous hyväksyi osakkeenomistajien nimitystoimikunnan työjärjestyksen. Hallituksen valtuutukset Hallituksen valtuuttaminen päättämään omien osakkeiden hankkimisesta Yhtiökokous 7.4.2016 valtuutti hallituksen päättämään enintään 500 000 oman osakkeen hankkimisesta yhtiön vapaalla omalla pääomalla. Valtuutus käsittää oikeuden ottaa omia osakkeita pantiksi. Valtuutus on voimassa vuoden 2017 varsinaiseen yhtiökokoukseen saakka, kuitenkin enintään 18 kuukautta yhtiökokouksen päätöksestä lukien. Hallitus ei ole käyttänyt saamaansa valtuutusta. Hallituksen valtuuttaminen päättämään osakeannista, jossa luovutetaan yhtiön hallussa olevia omia osakkeita Yhtiökokous 9.4.2015 valtuutti hallituksen päättämään yhdessä tai useammassa erässä osakeannista, joka toteutetaan luovuttamalla yhtiön hallussa olevia omia osakkeita. Valtuutuksen perusteella luovutettavien osakkeiden määrä on yhteensä enintään 900 000 osaketta. Valtuutus on voimassa 30.9.2018 asti. Hallitus on käyttänyt saamaansa valtuutusta luovuttamalla 18.3.2016 yhteensä 88 970 yhtiön hallussa olevaa omaa osaketta vuosien 2015-2017 osakepalkkiojärjestelmän ansaintajaksolle 2015 kuuluville henkilöille. Hallituksen valtuuttaminen päättämään uusien osakkeiden osakeannista Yhtiökokous 9.4.2015 valtuutti hallituksen päättämään maksullisesta osakeannista. Valtuutus sisältää hallituksen oikeuden päättää kaikista muista osakeannin ehdoista ja se sisältää siten myös oikeuden päättää suunnatusta osakeannista, osakkeenomistajien merkintäetuoikeudesta poiketen, jos siihen on yhtiön kannalta painava taloudellinen syy. Osakeannissa liikkeeseen laskettavien uusien osakkeiden yhteenlaskettu lukumäärä voi olla enintään 1 500 000 osaketta. Valtuutus on voimassa 30.9.2018 asti. Hallitus ei ole käyttänyt saamaansa valtuutusta. OSAKKEENOMISTAJIEN NIMITYSTOIMIKUNNAN EHDOTUKSET YHTIÖKOKOUKSELLE Osakkeenomistajien nimitystoimikunnan muodostavat neljän suurimman osakkeenomistajan edustajat. Vuoden 2017 varsinaiselle yhtiökokoukselle ehdotukset tehneeseen nimitystoimikuntaan ovat kuuluneet 31.8.2016 osakasluettelon mukaan suurimpien osakkeenomistajien edustajat: Tatu Vehmas, puheenjohtaja (Vehmaksen suku); Veronica Timgren (Nybergin suku mukaan lukien Oy Havsudden Ab); Reima Rytsölä (Keskinäinen työeläkevakuutusyhtiö Varma) ja Mikko Mursula (Keskinäinen eläkevakuutusyhtiö Ilmarinen). Lisäksi Aspon hallituksen puheenjohtaja Gustav Nyberg on toiminut toimikunnan asiantuntijana. Aspo Oyj:n osakkeenomistajien nimitystoimikunta ehdottaa Aspo Oyj:n 5.4.2017 pidettävälle varsinaiselle yhtiökokoukselle, että hallituksen jäsenten määräksi vahvistetaan kuusi. Hallituksen kokoonpano Nimitystoimikunta ehdottaa, että toimikaudeksi, joka päättyy vuoden 2018 varsinaisen yhtiökokouksen päättyessä, hallituksen jäseniksi valitaan uudelleen yhtiön nykyiset hallituksen jäsenet Mammu Kaario, Mikael Laine, Roberto Lencioni, Gustav Nyberg, Salla Pöyry ja Risto Salo. Hallituksen jäsenille maksettavat palkkiot Nimitystoimikunta ehdottaa, että hallituksen jäsenten kuukausipalkkiot olisivat seuraavat: Nimitystoimikunta ehdottaa, että tarkastusvaliokunnan jäsenten kokouspalkkiot säilytetään ennallaan eli maksetaan 700 euroa / kokous. Tarkastusvaliokunnan puheenjohtajalle ehdotetaan kuitenkin maksettavaksi 1,5 x valiokunnan jäsenen kokouspalkkio eli 1 050 euroa / kokous (vuonna 2016 palkkio oli 700 euroa/kokous). Mikäli tarkastusvaliokunnan puheenjohtaja on myös hallituksen varapuheenjohtaja tai puheenjohtaja, tarkastusvaliokunnan puheenjohtajan palkkion ehdotetaan olevan sama kuin valiokunnan jäsenellä. Hallituksen jäsenelle ei makseta palkkiota, mikäli hän on työ- tai toimisuhteessa Aspo-konserniin kuuluvaan yhtiöön. OIKEUDENKÄYNNIT Helsingin käräjäoikeus antoi 27.2.2015 päätöksen ESL Shipping Oy:n ja Suomen valtion välisessä kanteessa, joka koskee vuosina 2001-2004 veloitettuja väylämaksuja. Helsingin käräjäoikeuden päätöksen mukaan Suomen valtio velvoitettiin maksamaan ESL Shippingille yhtiön vaateiden mukaisesti noin 3,0 miljoonaa euroa sekä oikeudenkäyntikulut ja korkoja. Valtio valitti käräjäoikeuden tuomiosta ja hovioikeus kumosi 8.8.2016 annetussa tuomiossa Helsingin käräjäoikeuden päätöksen ja hylkäsi ESL Shippingin kanteen vanhentuneena. Yhtiö on hakenut valituslupaa korkeimmalta oikeudelta. Varustamo on voittanut oikeusprosessin intialaista ABG Shipyard -telakkaa vastaan vuonna 2011 vastaanotetun m/s Alppilan takuuaikaisten korjausten korvaamisesta. Välimiesoikeuden antaman päätöksen mukaan ABG Shipyard -telakka velvoitettiin maksamaan ESL Shippingille yhtiön vaateiden mukaisesti korjauskulut ja korot. Päätöksen vaikutus tullaan huomioimaan sillä tilikaudella, jolla päätöksen mukaiset maksut saadaan. Helsingissä 15.2.2017 ASPO Oyj Hallitus LAATIMISPERIAATTEET Aspo Oyj:n tilinpäätöstiedote on laadittu IAS 34 Osavuosikatsaukset -standardin mukaan. Yhtiö on ottanut tilikauden alusta käyttöön tiettyjä uusia tai uudistettuja IFRS-standardeja ja IFRIC-tulkintoja vuoden 2015 tilinpäätöksessä kuvatulla tavalla. Näiden uusien ja uudistettujen normien käyttöönotolla ei ole ollut olennaista vaikutusta raportoituihin lukuihin. Muilta osin on noudatettu samoja laadintaperiaatteita kuin tilinpäätöksessä 31.12.2015. Katsauksen tietoja ei ole tilintarkastettu. Aspo Oyj on ottanut käyttöön Euroopan arvopaperimarkkinaviranomaisen (European Securities and Market Authority, ESMA) vaihtoehtoisista tunnusluvuista antaman ohjeistuksen. Yhtiö julkaisee IFRS-tunnuslukujen ohella tiettyjä yleisesti käytettyjä muita tunnuslukuja, jotka ovat pääosin johdettavissa laajasta tuloslaskelmasta ja taseesta. Johdon näkemyksen mukaan tunnusluvut selventävät laajan tuloslaskelman ja taseen antamaa kuvaa toiminnan tuloksesta ja taloudellisesta asemasta.Tunnuslukujen laskentakaavat on selostettu Vuosi 2015 -julkaisun sivulla 70. SEGMENTTIRAPORTOINTI Aspon toimintasegmentit ovat ESL Shipping, Leipurin, Telko ja Kauko. Muu toiminta sisältää Aspon konsernihallinnon, talous- ja ICT-palvelukeskuksen ja vähäisiä määriä muita toimialoille kuulumattomia toimintoja. Konserni raportoi liikevaihtoa seuraavan maantieteellisen jaon mukaan: Suomi, Skandinavia, Baltia, Venäjä + Ukraina + muut IVY-maat, sekä muut maat. TIEDOTUSTILAISUUS Lehdistö- ja analyytikkotilaisuus järjestetään tänään keskiviikkona 15.2.2017 klo 14.00 Paavo Nurmi -kabinetissa Hotel Kämpissä, Pohjoisesplanadi 29, 00100 Helsinki.  VARSINAINEN YHTIÖKOKOUS Aspo Oyj:n varsinainen yhtiökokous on tarkoitus pitää keskiviikkona 5.4.2017 klo 14.00 Helsingissä.  TALOUDELLINEN TIEDOTTAMINEN 2017 Aspon tilinpäätös julkaistaan viimeistään 15.3.2017 suomeksi ja englanniksi. Tilinpäätös ja toimintakertomus on luettavissa ja tilattavissa yhtiön verkkosivuilta osoitteessa www.aspo.fi.


News Article | March 3, 2017
Site: globenewswire.com

Financial statements release for the period January 1 - December 31, 2016 CONFIRMED ORDERS STRENGTHENED SIGNIFICANTLY AND MAIN POINTS OF RESTRUCTURING PROGRESSING AS PLANNED The fourth quarter 2016 in brief (previous-year figures in brackets): The review period in brief (previous-year figures in brackets): ·        Turnover for the review period was EUR 15.3 (EUR 17.0) million, a change of -10.3 per cent. ·        Earnings before interest, taxes, depreciation and amortization (EBITDA) were EUR -7.2 million, - 47.4 per cent of turnover, (EUR -7.4 million, -43.5 percent of turnover). ·        Operating result was EUR -7.7 million, -50.7 per cent of turnover (EUR -8.7 million, -51.2 per cent of turnover). ·        Net result was EUR -9.5 million, -62.6 percent of turnover (EUR -10.6 million, -62.3 percent of turnover). The operating profit of the company is expected to improve compared to 2016. “The positive development of our business has continued in the last quarter of 2016. The impact of streamlining our cost structure has begun to show and now it supports the improvement of our profitability. One indicator that has improved in a positive direction is also the confirmed orders that during the last quarter was at it’s highest during three years. The order intake in 2016 increased more that 70 % compared to the previous year. Typically deliveries stretch over a longer period, thus forming a base for long-term operations as well as a moderate impact on turnover. Also the turnover at the last quarter of the year was higher compared to the previous quarter, which in turn verifies that the company is about to turn and long-term efforts are bearing fruit. During the last quarter of the year we were able to enter significant new customer agreements. In November we concluded a new three-year contract within our In-Venue solution area where we develop holistic customer experiences to the users of public and commercial venues by combining smart digital solutions to different physical venues and services. Examples of such services are for example stadiums, shopping malls and cruise ferries. Another significant customer agreement that we concluded in November is the continuation of our agreement on a cloud-based online store in Honda cars. According to the contract comprising several years Ixonos continues developing and managing the Honda App Center on Honda’s Android based IVI solution that today is sold also in Russia and Turkey in addition to the European market. Also our other focus areas; Smart Citizen, IoT and Smart Data, Smart Devices and Digital Transformations have grown stronger both in terms of new confirmed orders from existing customers and the amount of new customers with whom we have started co-operation. Discovery as a Service and the 5-day Design Sprint that is derived from it are parts of our service portfolio and continue to open up new customer opportunities. The 5-day Design Sprint is a productized service where we during five days take the key stakeholders of our clients all the way from their challenge through ideation and idea validation to concrete prioritization and decisions about how to proceed. Our customers have appreciated the service that they feel it works as a tool that involves all substantive internal stakeholders into decision-making and helps them to clearly validate their ideas. When providing these services we can together with our clients process concrete issues and create a common roadmap while at the same time considering the wishes and views of the customer’s internal stakeholders. Our service business will continue to be the core of our business. Alongside it we bring asset-based services that aim to benefit our service business, focus our efforts to specific platforms and increase the amount of continuous turnover. These assets can be either provided by some other part or the company’s own platform solutions. With this we believe that we can deepen our service portfolio and further develop our praised quality. The structural change of our North American operations was completed during the last quarter of the year. Now our site- and organizational structure does enable producing services and sales in an operatively efficient way. In Great Britain our turnover increased during year 2016 and during 2017 we are expecting a strong growth in this market. Our journey as a turning company continues and we believe that the positive change that started in 2016 will continue also in 2017. Ixonos is a service company that combines design and technology in a versatile way. We offer creative and versatile digital solutions and consulting services to many different industries. We mainly focus our services towards a deep understanding of the digital challenges (like utilizing digitalization within business) of our customers. We create new digital solutions for our customers. These services are based on the latest technologies and trends that affect their businesses. Premium user experience requires design and technology to work seamlessly together, and Ixonos strives to be the leading expert for our growing clientele. Our Vision Discover-Design-Deliver contains user research in the initial phases of strategic design and defining feasible, sustainable technology services. The basic idea is to find the right components that are needed to build into customer order delivery, in order to ensure a premium user experience. Our operations are centralised in Finland, USA, Canada and United Kingdom. Our software development activities are mostly based in Finland, but these activities have been strengthened in our other locations. Design functions currently operate in Helsinki, London, San Francisco and Vancouver. Our design services consist of digital, mobile, and web design, as well as service and industrial design. We offer design services all the way from design strategy and user research to designing visuals and interaction. Our design services extend further to development workshops, designing prototypes, and usability testing. All our design innovations are implemented on different devices and platforms, as we are always striving for the best possible implementation that can be done within the time frames requested by our customers. As a technology company, we have extensive knowledge in developing creative software solutions for embedded systems and software. We use open standardised technologies (e.g. Java,Linux, Android, iOS, Net) and cooperate with our technology partners (Eg., IBM, Gigya, Redhat, Salesforce, Maxicaster, gimbal, and Brightcove) . We combine knowledge in software development with world-class technology competence and expert-level knowledge in user interface and usability design with first-class project management skills. This combination is a significant competitive advantage for the company. Our technology expertise comprises both software and hardware /mobile, wireless connectivity, Online services and devices). Regionally our organization is dived into Europe and North America. The operations in both regions comprise sales and design- and technology service units: ·        Design: Involving holistic design capabilities that generate strategic service design, a deep understanding of users and innovative design of user interfaces, and product design. ·        Technology: Comprised of the implementation of technical solutions, software development and customer projects, and delivering them successfully. The company has four focus areas within it’s offering: 1.      Smart Citizen – digital services for public actors such as cities, municipalities and ministries 2.      In-Venue – digital services for different physical venues such as shopping malls, cruise ferries, office- and residential buildings 3.      Smart Devices – holistic development of smart devices for challenging locations all the way from design to prototyping 4.      Smart Data and IoT – Internet of Things solutions for different industries utilising for example the IBM BlueMix –platform In addition to these focus areas we also support our customers in their digital transformation within other sectors. A new area in our service portfolio is Digital Service Platforms, where the business is built on asset based solutions and their development. The entire operations of the organization are supported by Group Services consisting Finance, HR, IT and legal functions. Our offices are located in our main markets: Finland, United States, Canada and Great Britain. All sites have both technical and design personnel as well as local sales persons. Confirmed orders during the review period were EUR 22.5 (EUR 13.1) million, which represents a 71.7% increase compared to the corresponding period. Turnover in the fourth quarter was EUR 4.5 (EUR 4.3) million, which represents 4.1% growth compared to the corresponding period. Turnover in the review period was EUR 15.3 (EUR 17.0) million, which is 10.3% lower compared to the corresponding period. The main reason for the decline is the divestment of the company's data center business (decline 2.1 million compared to the corresponding period) and the United States declined turnover (decline 2.5 million compared to the corresponding period). The digital transformation services turnover grew 0.8 million compared to the corresponding period although turnover decline in the United States. In particular, the company's Finnish clients have invested heavily with digital technology. During the review period, no single customer generated a dominating share of the turnover or exceeded 10 % of the total turnover. The combined turnover of companies controlled by Savox SA was 13% of the Group turnover. The operating result (EBIT) for the fourth quarter was EUR -1.1 (EUR -2.3) million and the result before taxes was EUR -1.3 (EUR 1.5) million. The net result for the fourth quarter was EUR -1.3 (EUR 1.5) million, earnings per share were EUR 0.00 (EUR 0.01), and cash flow from operating activities per share in the fourth quarter was EUR 0.00 (EUR -0.03). During the review period the operating result (EBIT) was EUR -7.7 (EUR -8.7) million. Despite decrease in turnover the operating result improved due to cost efficiency actions made. The result before taxes was EUR -9.5 (EUR -5.7) million. The net result for the review period was EUR -9.5 (EUR -10.6) million, earnings per share were EUR -0.03 (EUR -0.05), and cash flow from operating activities per share was EUR -0.01 (EUR -0.03). The Group's equity was negative EUR -4.2 (EUR 2.7) million and Return on equity (ROE) was 1.5 (-1421.9) %. Investments during the review period were EUR 0.7 (EUR 1.5) million. All R&D costs are included in the Group's profit for the review period, and nothing is capitalised in the balance sheet. The main reason for the decline of investments is the divestment of the company's data center business and no investments to it was done after Q1/2016, but the R&D focused on IoT –solutions. The balance sheet totalled EUR 16.1 (EUR 18.3) million. Shareholders’ equity was EUR -4.2 (EUR 2.7) million. The equity to total assets ratio was -26.1 (14.8) % The Group’s liquid assets at the end of the review period amounted to EUR 0.4 (EUR 1.9) million. Non-controlling interest of the equity was EUR 0.0 (EUR 0.2) million. The change in shareholders’ equity during the review period was due to both a negative result and a positive impact on convertible bonds of 2.1 million. At the end of the review period, the balance sheet included EUR 2.9 (EUR 3.0) million in loans from the financial institutions. This amount covers the overdrafts in use. The loan agreements from the financial institutions include covenants regarding equity ratio, which will be considered at the first time 31 December 2017 In addition to that the company has loan agreements and convertible bond from its main owner. Loan agreements with related party companies are described in detail in 'related party transactions' Consolidated cash flow from operating activities during the fourth quarter was EUR - 0.3 (EUR -4.0) million, showing an improvement of 92.3 %. Consolidated cash flow from operating activities during the review period was EUR –5.5 (EUR -11.5) million, showing an improvement of 52.2 % due to change in working capital. The Group sells part of its Finnish trade receivables to reduce the turnaround time of its receivables. On the annual closing 31.12.2016 the trade receivables amount that was sold was 0.5 (0.5) million euros. During the review period, EUR 5.1 (EUR 10.0) million trade receivables were sold. On December 31, 2016, the consolidated balance sheet included EUR 11.5 million in goodwill (EUR 12.0 million). The following parameters were used in the goodwill impairment testing: ·        1 % growth estimate used for terminal value calculation Ixonos conducted an impairment test on 31 December 2016, confirming that there is no need for any other impairment. The present value of future cash flows exceeded the carrying value of assets by EUR 17.3 million. The present value of the cash flow calculation of EUR 28.9 million is lower than the sum of the Company's financial liabilities (i.e. EUR 12.5 million) and the market price of the shares (i.e. EUR 35.4 million) as of 31 December 2016. The average number of employees during the fourth quarter was 178 (203). The average number of employees during the review period was 188 (217), and at the end of the period, there were 174 (200) employees. At the end of the review period, the Group had 132 (161) employees stationed in Finnish companies, while Group companies in other countries employed 42 (39). During the review period, the number of employees decreased by 26. During the financial period, the highest price of the Ixonos’ share was EUR 0.11 (EUR 0.11) and the lowest price was EUR 0.06 (EUR 0.05). The closing price on 30 December 2016 was EUR 0.10 (EUR 0.07). The weighted average price was EUR 0.08 (EUR 0.06). The number of shares traded during the review period was 24.568.296 (52.023.432), which corresponds to 6.95 % (14.7 %) of the total number of shares at the end of the review period. The market value of the share capital was EUR 35.356.490 (EUR 24.749.543) at closing on 30 December 2016. At the beginning of the review period, the company’s registered share capital was EUR 585.394.16 and the number of shares was 353.564.898. At the end of the review period, the registered share capital was EUR 585.394.16 and the number of shares was 353.564.898. The Board of Directors of Ixonos Plc decided on November 30, 2011 to grant new options. This decision was based on the authorisation given by the Annual General Meeting on March 29, 2011. The options were issued by December 31, 2011, free of charge, to a subsidiary wholly owned by Ixonos Plc. This subsidiary will distribute the options, as the Board decides, to employees of Ixonos Plc and other companies in the Ixonos Group, to increase their commitment and motivation. Options will not be issued to members of the Board of Directors of Ixonos Plc or to the Ixonos Group’s senior management. The options are marked IV/A, IV/B and IV/C. A total of 600.000 options will be issued. According to the terms of the options, the Board of Directors decides how the options will be divided between option series and, if needed, how undistributed options will be converted from one series to another. Each option entitles its holder to subscribe for one new or treasury share in Ixonos Plc. The exercise period for the IV/A options began on October 1, 2014, The option plans for IV/B options have been cancelled and for the IV/C options the exercise period began on October 1, 2016. The exercise periods for all options will end on December 31, 2018. The exercise price for each option series is a trade volume weighted average price at NASDAQ OMX Helsinki. The exercise prices will be reduced by the amount of dividends, and they can also be adjusted under other circumstances specified in the option terms. In order to ensure the equal treatment of shareholders and the holders of 2011 stock options, the Board of Directors of Ixonos has, due to the Rights Offering, adjusted the subscription ratios and the subscription prices of the Option Rights 2011 in accordance with the terms and conditions of the aforementioned option rights as follows: The subscription ratio of stock options IV/A shall be amended to 8.287 and the subscription price shall be amended to EUR 0.2 per share. As regards stock options IV/C, the subscription ratio shall be amended to 8.287 and the subscription price shall be amended to EUR 0.1497 per share. The total amount of shares is rounded down to full shares in connection with subscription of the shares and the total subscription price is calculated using the rounded amount of shares and rounded to the closest cent. Due to the above mentioned adjustments concerning stock options IV/A, the adjusted maximum total number of shares to be subscribed for based on the 2011 stock options shall be 4.971.966. The Board of Directors of Ixonos Plc decided to issue stock options on February 18, 2014, on the basis of the authorization granted by the Extraordinary General Meeting held on October 30, 2013. The stock options were offered to the global management team and certain key personnel of Ixonos Plc and its subsidiaries for the purpose of improving commitment and motivation. The options are marked 2014A, 2014B and 2014C. The Board of Directors of the Company has found the option rights 2014A, 2014B and 2014C under option plan V to have lapsed insofar as they remain undistributed. Out of the options belonging in the Company's option plan V, only option rights belonging in 2014A series have been distributed. Each option entitles its holder to subscribe for one new or treasury share in Ixonos Plc. The share subscription period with 2014A stock options started on March 1, 2016 and ends on December 31, 2018. The share subscription price is the volume weighted average price of the company's share on the Helsinki Exchange during the period March 1 to May 31, 2014. The subscription price may be decreased with the amount of dividends paid and may also otherwise be subject to change in accordance with the terms and conditions of the stock options among others. In order to ensure the equal treatment of shareholders and the holders of 2011 stock options, the Board of Directors of Ixonos has, due to the Rights Offering December 2015, adjusted the subscription ratios and the subscription prices of the Option Rights 2014 in accordance with the terms and conditions of the aforementioned option rights as follows:  the subscription ratio for 2014A shall be amended to 1.65 and share price to EUR 0.0903. The total amount of shares is rounded down to full shares in connection with subscription of the shares and the total subscription price is calculated using the rounded amount of shares and rounded to the closest cent. Due to the above adjustment concerning the Option Right 2014A, the adjusted maximum total number of shares to be subscribed for based on the Option Rights 2014 shall be 1.690.000. The Board of Directors of Ixonos Plc (“Ixonos” or “Company”) decided to issue option rights on November 21, 2016 on the basis of an authorisation granted by the Annual General Meeting held on 7 April 2016. The option rights will be distributed as determined by the Board of Directors to key persons employed or recruited by a company belonging in Ixonos Plc's group for the purpose of improving their commitment and motivation. The option rights will be marked as series 2016A, 2016B and 2016C.  The maximum amount of option rights issued is 35.356.560, and they entitle to subscribe altogether a maximum of 35.356.560 of new Company shares. The Board of Directors may decide on any additional conditions related to the receipt of option rights and on the redistribution of option rights that later revert back to the Company. Each option right entitles its holder to subscribe for one new Ixonos share. Shares subscribed on the basis of the option rights represent, on 3 November 2016, altogether a maximum of approximately 10 per cent of all Company shares and votes, corresponding to a dilution effect of approximately 9 per cent. The subscription period for shares subscribed for under option rights 2016A starts on 1 October 2017 and ends on 30 September 2018. The subscription price of a share subscribed for under option right 2016A is EUR 0.08, which corresponds to the weighted average price of the Company’s shares quoted on Nasdaq Helsinki Ltd (“Helsinki Stock Exchange”) between 18 May and 18 November 2016 rounded up to the nearest cent. The subscription period for shares subscribed for under option rights 2016B starts on 1 October 2018 and ends on 30 September 2019. The subscription price of a share subscribed for under option right 2016B is the weighted average price of the Company’s shares quoted on the Helsinki Stock Exchange between 1 July and 31 December 2017 rounded up to the nearest cent. The subscription period for shares subscribed for under option rights 2016C starts on 1 October 2019 and ends on 30 September 2020. The subscription price of a share subscribed under option right 2016C is the weighted average price of the Company’s shares quoted on the Helsinki Stock Exchange between 1 July and 31 December 2018 rounded up to the nearest cent. The subscription price may be decreased by, inter alia; the amount of dividends paid and may also    otherwise be subject to revision in accordance with the terms and conditions. The subscription price, however, may never be lower than EUR 0.01. The theoretical market value of the incentive scheme is approximately EUR 1.2 million, which is recognised as an expense in accordance with IFRS 2 for the years 2016-2020.The write-down is not based on cash flows. The theoretical market value of the option rights has been calculated using the Black & Scholes model. On 30 December 2016, Ixonos had 3.262 shareholders (3.035). Private persons owned 12.7% (12.5%), institutions owned 86.8% (87.5%), foreigners owned 0.5% (0.5%). Nominee-registered ownership was 1.5% (1.9%) of all shares. Tremoko Oy Ab, a related party, owns 82.2% of the Company’s shares. Options held by Tremoko can increase their ownership to 82.3%. On 14 March 2016, the Company entered a loan agreement with Tremoko Oy Ab. The new loan enabled additional financing of 1.5 million Euros. On 8 April 2016, Tremoko Oy Ab (“Tremoko”) subscribed to a convertible bond in full with a capital of EUR 9.200.000.95 (“Loan”) and attached an option or other special rights referred to in Chapter 10 Section 1(2) of the Limited Liability Companies Act (“Special Rights”), which were directed to be subscribed to by Tremoko as a result of decision-making in the Ixonos Plc (“Company”) General Meeting that took place on 7 April 2016. The Board of Directors of our Company has accepted Tremoko’s subscription. The Loan and attached Special Rights have been issued in order to strengthen the Company’s working capital and reorganise the capital structure as well as lower financing costs. Hence, there are weighty financial reasons for taking the Loan and granting the Special Rights. The Loan’s issuing price and conversion price have been defined according to market terms. The main specifications of the Terms of the Loan and the Special Rights are as follows: ·        The amount of the Loan is EUR 9.200.000.95. ·        An annual interest of Euribor 6 months (at least ≥ 0 %) + 4.0 per cent is paid on the principal of the Loan. ·        The conversion option attached to the Loan entitles Tremoko to a maximum amount of 131.428.585 of new Company’s shares. ·        The rate of conversion is fixed at EUR 0.07, and it shall be revised as set out in the Terms. ·        The loan period is 8 April 2016–8 April 2020, so that as of 8 April 2018, altogether EUR 1.700.000.05 of the loan will be paid biannually in five tranches of EUR 340.000.01. Additionally on 8 April 2020, the remaining loan, altogether EUR 7.500.000.90, will be paid in a one-off payment. Tremoko has paid the Loan and attached Special Rights in full by setting off receivables it has from the Company, amounting altogether to EUR 9.200.000.95. On 28 April 2016, Turret Oy Ab and Holdix Oy Ab were granted a directly enforceable guarantee (“Guarantee”) with the total amount of EUR 1.2 million to Nordea Bank Finland Plc on behalf of Ixonos Plc’s (“Ixonos”) and Ixonos Finland Ltd’s commitments. The Guarantee was given as a substitute to former guarantee given by Finnvera Plc. Turret Oy Ab and Holdix Oy Ab are the owners of Tremoko Oy Ab, which is the main owner of Ixonos. On 13 May 2016, Ixonos Plc’s (“Ixonos”), together with Ixonos Finland Ltd, did give countersecurity to Turret Oy Ab and Holdix Oy Ab in which, inter alia, they have undertaken to pay guarantee commission. The countersecurity has been given related to financial arrangements announced on 28 April 2016. The rate of the guarantee commission has been defined in market terms. Turret Oy Ab and Holdix Oy Ab have granted a directly enforceable guarantee with the total amount of EUR 1.2 million to Nordea Bank Finland Plc as collateral for Ixonos and Ixonos Finland Ltd’s commitments. Turret Oy Ab and Holdix Oy Ab are the owners of Tremoko Oy Ab, which is the main owner of Ixonos. On 20 June 2016, Ixonos Plc (“Ixonos”) and Savox Communications Oy Ab Ltd (“Savox”) concluded a framework agreement concerning product development. Ixonos had, for the duration of the Agreement, undertaken to provide Savox with research, design and/or product development services ordered separately later by Savox.   The Agreement will remain in force for a minimum of one year. The parties have non-bindingly estimated the potential value of the services provided by Ixonos to Savox to amount to EUR 1–2 million. Savox Communications Oy Ab (Ltd) is part of the Savox Communications Group, which is one of the world’s most notable suppliers of communication systems for professional use in demanding and dangerous circumstances. The Savox Communications Group has over three decades of experience in serving police and security, fire and rescue, military, maritime and industrial sectors. The Savox Communications Group is part of the Savox Group, into which Turret Oy Ab, one of the owners of Ixonos’ main owner Tremoko Oy Ab, also belongs. On 17 August 2016 The Company entered a loan agreement with Tremoko Oy Ab with. The loan agreement enables additional financing for a maximum of 2.5 million Euros until August 18, 2018. The last quarter of the year was quite active with many events and we were also together with our customers able, especially within the IoT area, to deliver final solutions and commit to new partnerships: -         We expanded our partnership with Wirepass from co-operating with their R&D concerning web tools to also customer solution. -         The highly valued CIOReview named Ixonos as one of the Top 50 most interesting IoT solution providers emphasizing especially Ixonos’ know-how within IoT and Business Design -         Slush Shanghai and the main Slush event in Helsinki enabled several product launches that have been developed together with Ixonos’ start up customers. -         The move of Ixonos’ head office to the heart of Helsinki was noticed among customers, media, personnel and potential recruits. The housewarming party received positive attention and allowed us to share thoughts on the importance of service design when creating new business. The Company held its Annual General Meeting on 7 April 2014. The minutes of Annual General Meeting and decisions are presented on the Company’s internet page, www.ixonos.com. Stock Exchange releases during the period are available on company’s website 3. February 2017 Ixonos has secured a EUR one (1) million loan agreement in order to strengthen its working capital with Tremoko Oy Ab. 3 February 2017 the Board of Directors have decided to accept Tremoko Oy Ab’s two (2) million euro binding  offer of a financial arrangement to strengthen it’s working capital. The Financial arrangement is combined with the additional financial arrangement of EUR 1.0 million implemented earlier and announced on 3 February 2017. Ixonos Plc’s risk management aims to ensure undisturbed continuity and development of the Company’s operations, support attainment of the commercial targets set by the Company and promote increasing Company value. Details on risk management organisation and process, as well as on recognised risks, are presented on the Company’s website at www.ixonos.com. Despite efficiency actions taken, Ixonos Plc results have been negative during recent years, which has directly impacted Ixonos’ sufficiency of working capital. The risk related to sufficient working capital is managed by maintaining readiness for various financing methods. Changes in key customer accounts may have adverse effects on Ixonos’ operations, earning power and financial position. Should a major customer switch its purchases from the Company to its competitors or make forceful changes to its own operating model, Ixonos would have limited ability to acquire, in the short term, new customer volume to compensate for such changes. The Group’s turnover consists primarily of relatively short-term customer contracts. Forecasting the starting dates and scope is from time to time is challenging; yet at the same time, the cost structure is fairly rigid. This may result in unexpected fluctuations in turnover and profitability. Part of the Company’s business operations is based on fixed-price project deliveries. Fixed-price projects may include risks related to their duration and content. These risks are being managed by means of contract management as well as project management. Some part of the Group’s turnover is invoiced in foreign currency. Risks related to currency fluctuation are managed through different means. The Company’s balance sheet includes a significant amount of goodwill, which may still be impaired should internal or external factors reduce the profit expectations of the Company’s cash flow. Goodwill is tested each quarter and, if necessary, at other times. The company’s financial agreements have covenants attached to them. A covenant breach may increase the company’s financial expenses or lead to a call for swift partial or full repayment of non-equity loans. The main risks related to covenant breaches are associated with EBITDA fluctuation due to the market situation and with a potential need to increase the company’s working capital through non-equity funding. The company manages these risks by negotiating with financiers and by maintaining readiness for various financing methods. In the long term, Ixonos aims to achieve an operating result of at least 10 per cent. To reach its long-term goals, Ixonos focuses its strategy on deepening the company’s service and solution business and combining technology and design.  The company aims to grow with new accounts within different industries by repeating Ixonos unique way to offer business advantage through digitalisation and mobility. THE BOARD OF DIRECTORS’ PROPOSAL TO THE ANNUAL GENERAL MEETING The Board of Directors of Ixonos Plc proposes to the Annual General Meeting that the distributable   funds will be left in shareholders’ equity and that no dividend for the financial period 2016 will be paid to shareholders. The parent company’s distributable funds on December 31, 2016 are EUR 16.461.631. Ixonos Plc's Annual General Meeting will be held on Wednesday, 29 March, 2017, in Helsinki, Finland. Ixonos' Financial Statements 2016 will be published and posted on the company's website on Tuesday, 7th March 2017. The financial statement for the period January 1 – March 31, 2017 will be published on Thursday, 4 May, 2017. For more information, please contact: SUMMARY OF FINANCIAL STATEMENTS AND NOTES TO THE FINANCIAL STATEMENTS January 1 – December 31, 2016 STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY, EUR 1.000 G:             Total equity attributable to equity holders of the parent This interim report has been prepared in accordance with IAS 34 (Interim Financial Reporting) and the accounting policies for the annual financial statement of December 31, 2014. The IFRS amendments and interpretations that entered into force on January 1, 2016 have not affected the consolidated financial statements. Preparing interim reports in accordance with IFRS requires Ixonos’ management to make estimates and assumptions that affect the amounts of assets and liabilities on the balance sheet date as well as the amounts of income and expenses for the financial period. In addition, judgement must be used in applying the accounting policies. As the estimates and assumptions are based on views prevailing at the time of releasing the interim report, they involve risks and uncertainty factors. Actual results may differ from estimates and assumptions. The figures in the income statement and balance sheet are consolidated. The consolidated balance sheet includes all group companies as well as Ixonos Management Invest Oy. Ixonos Management Invest Oy is mergered to Ixonos Finland Oy during 2016. The original annual report is in Finnish. The annual report in English is a translation of the original report. As the figures in the report have been rounded, sums of individual figures may differ from the sums presented. The annual report is unaudited. During the past year the company’s confirmed orders improved significantly compared to the previous year. In addition to that the cost structure was lightened. This annual report has been prepared according to the going concern principle taking into account the realized financial arrangements during the financial year 2016 and financial estimations made up for the year 2017. The estimations take into consideration probable or foreseeable changes in future expectations in revenues as well as in costs. On the balance sheet day, the company estimated that its existing working capital may not be sufficient to cover the company’s funding needs over the next 12 months. The financial gap in the cash flow forecast in the beginning of the year 2017 can be filled with bridge financing. After the balance sheet day the company has secured a EUR 1 million loan agreement with its main owner and a EUR 1 million commitment for additional loan with its main owner which company's Board of Directors has approved. Ixonos made an impairment testing for the goodwill value on the balance sheet on December 30, 2016. The goodwill is attributed to the one cash generating unit (CGU) starting from November 1, 2013. The impairment test showed a surplus of EUR 17.3 million based on discounted cash flow valuation compared to tested amount and no impairment was recognized. The carrying amount of goodwill is EUR 11.5 million. The present value of the cash flows calculated, EUR 28.9 million is lower than the sum of the company's financial liabilities (EUR 12.5 million) and the market price of the shares (EUR 35.4 million) on December 31, 2016. The impairment test of the company is based on operative company value. The forecasting period used in impairment testing at December 31, 2016 was Q1 2017 to Q4 2020. In the forecast the year 2017 is a year of relatively small growth. For the years 2018-2020 the company expects to reach stronger growth, on average of 20 per cent, as digitalization will impact an ever growing part of the business community. The forecasted EBIT level is assumed to increase to on average of 10 per cent. Even though the company’s long term target level for EBIT is 10 per cent the uncertainty of forecasts has been taken into consideration and therefore the average, normalized EBIT level has been used in the calculation. The impairment test is done by comparing the carrying value of assets to present value of future cash flow taking into consideration forecasted cash flows during the forecast period, discount factor and growth rate used in calculating terminal value. The discount factor used is 11 per cent p.a. and growth rate used in calculating terminal value is 1 per cent p.a. When calculating the terminal value, the weighted average EBIT percentage level for the period was used. The impairment test is most sensitive besides to the cash flow forecast itself and the assumptions behind it, to the growth rate used when calculating the terminal value and to the discount factor. If the growth rate -20 per cent had been used instead of 1 per cent, the tested value would have been equal to the discounted cash flow. If the discount factor had been 22 per cent instead of 10 per cent, the tested value would have been equal to the discounted cash flow. If the EBIT percentage used had been 1.6 per cent instead of 10 per cent, the tested value would have been equal to the discounted cash flow. The Company has a total amount of bank loans on December 30, 2016 EUR 2.9 million.  The loan agreements include covenants regarding equity ratio, which will be considered at the first time on 31 December, 2017 (EUR 8.2 million). Should the company not be within the limits of a covenant, the creditor is entitled to call in the loans to which that covenant applies. The covenant levels are reviewed semi-annually on a rolling twelve-month basis after 31 December 2017. The equity ratio must be minimum 30 per cent. On December 30, 2016 the company's equity ratio was -26.1 per cent (14.8 per cent) EBITDA = Earnings before Interest, Taxes and Depreciation and Amortization Diluted earnings per share = result for the period ∕ number of shares, adjusted for issues and dilution, average Earnings per share = result for the period ∕ number of shares, adjusted for issues, average Shareholders’ equity per share = shareholders’ equity ∕ number of shares, undiluted, on the closing date Cash flow from operating activities, per share, diluted = net cash flow from operating activities ∕ number of shares, adjusted for issues and dilution, average Return on investment = (result before taxes + interest expenses + other financial expenses) ∕ (balance sheet total - non-interest-bearing liabilities, average) × 100


News Article | February 23, 2017
Site: globenewswire.com

Webcast presentation tomorrow, 24 February 2017, at 14.00 CET/8 AM ET, +32 2 400 6926, www.glpg.com Mechelen, Belgium; 23 February 2017, regulated information - Galapagos NV (Euronext & NASDAQ: GLPG) presents financial results and highlights the key events for the full year 2016. "Galapagos remains on track to become an integrated biopharmaceutical company. In collaboration with Gilead, three Phase 3 programs with filgotinib were launched last year. Our FITZROY studies demonstrated the potential for filgotinib in Crohn's disease, with encouraging endoscopy and histopathology results. We initiated critical path safety studies for our triple combination therapy in cystic fibrosis, keeping us on track to evaluate safety of our triple combination in the first half of this year, with a goal to move into patient evaluations by mid-2017. The CF program was substantially strengthened by the competitive patient data shown in the SAPHIRA Phase 2 studies. We ended the year with a rich portfolio of late stage programs in which we expect to generate new patient data over the next 18 months. We are in a very strong position, both financially and operationally," CEO Onno van de Stolpe commented. Bart Filius, CFO, added: "Galapagos  had an extraordinary year with strong financial results. We ended 2016 with the largest cash balance in our history, and with cash burn well under control. Our cash balance now exceeds the cumulative investments made by all investors in Galapagos since its inception in 1999. We will continue to ramp up our late stage development activities this year, as we plan to increase our investments in filgotinib and CF and initiate more clinical studies with our proprietary programs. All this will contribute to our financial guidance for operational cash burn of €135-155 million for full year 2017." Key figures (consolidated) (€ millions, except basic income/loss per share) Notes: 1) Reflects non-cash financial asset adjustment resulting from the Gilead subscription agreement. Details of the financial results Revenues Galapagos' revenues and other income for 2016 amounted to €151.6 million, compared to €60.6 million in 2015. Increased revenues were mainly driven by a substantial increase in milestone payments from our collaboration partners. Operating result The Group realized a net operating loss in 2016 of €11.5 million, compared to a net operating loss of €89.4 million in 2015. R&D expenses for the Group in 2016 were €139.6 million compared to €129.7 million in 2015. This planned increase was due mainly to increased efforts on our clinical and pre-clinical programs, primarily the cystic fibrosis program and the proprietary pre-clinical programs in inflammation, HBV and fibrosis. G&A and S&M expenses of the Group were €23.5 million in 2016, compared to €20.3 million in 2015. This increase was due primarily to non-cash items such as a higher liability for short term and long term management bonus and higher costs for warrant plans, mainly as a result of the increase of the Galapagos share price. Non-cash adjustment on short term financial assetIn 2015 Galapagos recognized a short term financial asset worth €39 million and an offsetting deferred income of €39 million upon signing of the share subscription agreement with Gilead, as required under IAS 39. This financial asset initially reflected the share premium that Gilead committed to pay above the closing stock price of Galapagos on the day of signing of the subscription agreement. Under IAS 39, the fair value of the financial asset needed to be re-measured at year end 2015 and again upon entering into force of the subscription agreement on 19 January 2016, when the financial asset expired. Variations in fair value of the financial asset were recorded in the income statement. The decrease in the fair value of the financial asset resulting from the increase in the Galapagos share price between signing of the subscription agreement and 31 December 2015, resulted in a negative, non-cash fair value charge of €30.6 million in the 2015 financial results. The subsequent increase in the fair value of the financial asset resulting from the decrease in the Galapagos share price between 1 January 2016 and 19 January 2016 resulted in a positive non-cash gain of €57.5 million in the financial result of 2016. The €65.9 million current financial asset from the Share Subscription Agreement reflected the premium that Gilead paid compared to the closing price of the Galapagos share on the day of the capital increase. This financial asset expired on 19 January 2016, the effective date of the Share Subscription Agreement and was derecognized through the share premium account. A net increase of €632.7 million in cash, cash equivalents and restricted cash was recorded in 2016. Net cash flows from financing activities generated €391.8 million through a subscription of Galapagos shares by Gilead, as well as €4.3 million from warrant exercises. Furthermore, a net cash inflow from operating activities was realized for €239.4 million in 2016 resulting from the license fee of $300 million (€275.6 million) received from Gilead and, by difference, from an operating cash burn of €36.2 million. Finally, €7.3 million was used in investing activities and €4.8 million positive exchange rate differences were generated on cash and cash equivalents. When excluding the license fee and milestone payments from Gilead (€56.4 million), the net cash outflows used in operating and investing activities amount to €100.3 million, within our cash burn guidance for 2016 of €100 - 120 million. Furthermore, Galapagos' balance sheet holds an unconditional and unrestricted receivable from the French government (Crédit d'Impôt Recherche[1]) now amounting to €34.2 million, payable in 4 yearly tranches. Galapagos' balance sheet also holds a receivable from the Belgian Government for R&D incentives now amounting to €30.2 million. Outlook 2017 Galapagos aims to initiate a CF patient evaluation of its triple combination therapy in mid-2017, as well as multiple new clinical studies with CF candidates and combinations throughout the year. Together with our collaboration partner Gilead we plan to start multiple proof-of-concept studies with filgotinib. Topline results from the FLORA Phase 2a study with GLPG1690 in IPF and from the Phase 1b study with MOR106 in atopic dermatitis patients are expected in the second half of 2017. Galapagos expects to initiate a Phase 1b study with GLPG1972 in osteoarthritis patients in the United States, as well as Phase 1 studies with GLPG2938 and GLPG2534. The Company expects an operational use of cash of €135-155 million during 2017. Annual Report 2016 Galapagos is currently finalizing its financial statements for the year ended 31 December 2016. The Auditor has confirmed that his audit procedures, which are substantially completed, have not revealed any material corrections required to be made to the financial information included in this press release. Should any material changes arise during the audit finalization, an additional press release will be issued. Galapagos expects to be able to publish its fully audited Annual Report for the full year 2016 on or around 24 March 2017. Galapagos will conduct a conference call open to the public tomorrow, 24 February 2017, at 14:00 CET/8 AM ET, which will also be webcast. To participate in the conference call, please call one of the following numbers ten minutes prior to commencement: A question and answer session will follow the presentation of the results. Go to www.glpg.com to access the live audio webcast. The archived webcast will also be available for replay shortly after the close of the call. Financial calendar 25 April 2017               Annual General Meeting of Shareholders in Mechelen, Belgium 27 April 2017                First Quarter 2017 Results (webcast 28 April 2017) 27 July 2017                 First Half 2017 Results (webcast 28 July 2017) 26 October 2017           Third Quarter 2017 Results (webcast 27 October 2017) 22 February 2018           Full Year 2017 Results (webcast 23 February 2018) About Galapagos Galapagos (Euronext & NASDAQ: GLPG) is a clinical-stage biotechnology company specialized in the discovery and development of small molecule medicines with novel modes of action. Our pipeline comprises Phase 3, Phase 2, Phase 1, pre-clinical, and discovery programs in cystic fibrosis, inflammation, fibrosis, osteoarthritis and other indications. We have discovered and developed filgotinib: in collaboration with Gilead we aim to bring this JAK1-selective inhibitor for inflammatory indications to patients all over the world. Galapagos is focused on the development and commercialization of novel medicines that will improve people's lives. The Galapagos group, including fee-for-service subsidiary Fidelta, has approximately 510 employees, operating from its Mechelen, Belgium headquarters and facilities in The Netherlands, France, and Croatia. More information at www.glpg.com. Forward-looking statements This release may contain forward-looking statements, including, among other things, statements regarding the guidance from management (including guidance regarding the expected operational cash burn during financial year 2017), financial results, the timing of audited financial results, timing and/or results of clinical trials, and interaction with regulators. Galapagos cautions the reader that forward-looking statements are not guarantees of future performance. Forward-looking statements involve known and unknown risks, uncertainties and other factors which might cause the actual results, financial condition and liquidity, performance or achievements of Galapagos, or industry results, to be materially different from any historic or future results, financial conditions and liquidity, performance or achievements expressed or implied by such forward-looking statements. In addition, even if Galapagos' results, performance, financial condition and liquidity, and the development of the industry in which it operates are consistent with such forward-looking statements, they may not be predictive of results or developments in future periods. Among the factors that may result in differences are that Galapagos' expectations regarding its 2017 operating expenses may be incorrect (including because one or more of its assumptions underlying its  expense expectations may not be realized), Galapagos' expectations regarding its development programs may be incorrect, the inherent uncertainties associated with competitive developments, clinical trial and product development activities and regulatory approval requirements (including that data from Galapagos' ongoing clinical research programs may not support registration or further development of its product candidates due to safety, efficacy or other reasons), Galapagos' reliance on collaborations with third parties, and estimating the commercial potential of its development programs. A further list and description of these risks, uncertainties and other risks can be found in Galapagos' Securities and Exchange Commission (SEC) filings and reports, including in Galapagos' most recent annual report on form 20-F filed with the SEC and other filings and reports filed by Galapagos with the SEC. Given these uncertainties, the reader is advised not to place any undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date of publication of this document. Galapagos expressly disclaims any obligation to update any such forward-looking statements in this document to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements, unless specifically required by law or regulation. [1] Crédit d'Impôt Recherche refers to an innovation incentive system underwritten by the French government.


News Article | February 23, 2017
Site: www.businesswire.com

NEW YORK--(BUSINESS WIRE)--Hanlon today announced a new agreement with Morningstar, Inc. (NASDAQ:MORN), a leading provider of independent investment research, for Morningstar’s ByAllAccounts on Hanlon’s Wealth Platform. Morningstar® ByAllAccounts℠ service for Advisors aggregates investor accounts and provides daily updates for a more holistic view of total wealth. Sean Hanlon, Chairman and CEO of Hanlon, said, "We are thrilled to work with Morningstar to bring our advisors, their firms, and their clients the most comprehensive aggregation technology. The Hanlon Wealth Platform is uniquely designed to reduce back-office tasks, creating time for advisors to deepen their client relationships. The ByAllAccounts integration delivers our advisors what they have asked us for: increased productivity, less back office work, greater ease with tasks like reconciling across multiple custodians and enhanced compliance reporting.” Hanlon added, "as mobile client capabilities become a requirement to service the next generation of investors we can now provide them a device based window into their spending activity and investment monitoring.” The aggregation platform includes drag-and-drop functionality that looks at an investor's total wealth, balance sheet, cash flows, and asset allocation. This enhancement includes customized report generation, a document vault, and alerts that notify investors if their asset allocation is no longer in balance, funds are transferred out of an account, or a deposit is made to an account. Hanlon advisors can also customize branding of the platform and use it to analyze their entire book of business. David Johnson, head of Morningstar ByAllAccounts, said, "Since the launch of ByAllAccounts, we have helped redefine the way advisors run their businesses. By removing the work associated with manual aggregation, and systematizing the delivery of client services, ByAllAccounts’ advisors can focus on delivering an extraordinary client experience. Investors continue to demand more robust reporting technology. With the ability to access up-to-date information, from any mobile device, this digital wealth management solution strengthens the client-advisor bond. The client now has a current personal financial picture, the advisor now knows more about the client’s financials, and subsequent conversations better allow an advisor to demonstrate their added value.” Founded in 1999 by Sean Hanlon, CFP®, Hanlon Investment Management has more than $2.2 billion of assets under management, distributed through thousands of financial planners and advisors. Hanlon serves the needs of over 20,000 individual investors, retirement plans, trusts and institutions. In 2012, Hanlon acquired Interactive Advisory Software (IAS) the only fully-integrated, cloud-based technology solution to operate a financial planning and wealth management practice. IAS powers the Hanlon Wealth Platform. IAS has relationships with 130 firms that are collectively advising on more than $40 billion in assets. For more information, visit Hanlon.com.

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