Elettronica
Okmetic Oyj: FINANCIAL STATEMENTS FOR 1 JANUARY - 31 DECEMBER 2013: STRONG CASH FLOW IN A CHALLENGING MARKET SITUATION
OKMETIC OYJ FINANCIAL STATEMENTS RELEASE 13 FEBRUARY 2014 AT 11.30 A.M.
FINANCIAL STATEMENTS FOR 1 JANUARY - 31 DECEMBER 2013: STRONG CASH FLOW IN A CHALLENGING MARKET SITUATION
Unless otherwise stated, figures in parenthesis refer to the corresponding period in the previous year.
OCTOBER-DECEMBER IN BRIEF:
JANUARY-DECEMBER IN BRIEF:
The financial statement figures presented in this report are derived from the audited financial statements of the company.
SHORT-TERM OUTLOOK
In 2014, the demand for semiconductors is expected to continue on its growth track, which started in the second half of 2013. Volume growth is also expected for the silicon wafer market in 2014, but the average price level of wafers is expected to further decline.
Demand for Okmetic's sensor wafers is estimated to grow from the previous year, and the sales and price level of sensor wafers are expected to be fairly stable throughout the year. Prices of semiconductor wafers are hit by the weakened Japanese yen. The demand is expected to pick up compared to 2013.
In accordance with normal seasonal fluctuation, the demand for semiconductor wafers is strongest in the second and third quarters of the year. Other business sales are not expected to materially differ from the low level of 2013.
In 2014, net sales and operating profit are estimated to exceed the level of year 2013.
PRESIDENT KAI SEIKKU:
" In the challenging market conditions of year 2013, Okmetic's business operations remained well in control, even though the long-term operating profit target of 10% was not met. Fixed costs were adjusted by approximately 10 percent. Considerable cost savings were achieved in productivity and yield. Due to released working capital, cash flow from operations was strong towards the year-end. Changes in valuation practices and non-recurring items reduced operating profit in the second half of the year, particularly in the last quarter.
Market situation continued to be challenging. The average market prices in the silicon wafer industry, which have been declining since 2011, decreased by more than 10 percent per year for the second year in a row. The declined price level in the solar cell industry did not enable profitable growing of solar crystals, which cut net sales expectedly by nearly EUR 10 million.
Sales of sensor wafers, which are key to the company's strategy, continued to grow, and the growth is expected to accelerate in the upcoming years. Sensor wafers already accounted for approximately 60 percent of Okmetic's net sales. The price and margin level of these advanced wafers are clearly higher and more stable than those of other silicon wafers. Therefore, growth in the sales of sensor wafers will improve the company's profitability. In its core business as a manufacturer of silicon wafers, Okmetic outperformed the overall market development in 2012-2013: the company's silicon wafer business decreased by 5.5 percent during the period, whereas the market plummeted by an average of 24 percent (in US dollars).
Other business was at a ver y low level, as forecasted at the beginning of the year. The long-term polysilicon purchase agreements will burden the company's working capital until the end of 2015 . In terms of other items, working capital was effectively released in the second half of the year.
In the upcoming years, growth in the demand for Okmetic's sensor and semiconductor wafers will be focused on 200 millimeter wafers. This means that the company's own and subcontracted production capacity will gradually move to larger wafer size. In crystal growing and in sensor wafer production, particularly in SOI wafers, there are several interesting product development projects for future applications ongoing. These projects are carried out in cooperation with our key customers.
Among the geographical market areas, Europe was by far in the best shape. There is plenty of sensor manufacturing industry important for Okmetic in Europe. Sales in Asia and Japan decreased clearly due to the economic cycle and exchange rates, but also due to weakened technology sales to Asia.
Okmetic's business operations are going through a structural change in which sensor wafer sales are growing fairly steadily throughout economic cycles. The role of technology business, which generated considerable growth and profitability for approximately ten years, seems to be smaller in the future. New products developed for silicon wafers used in manufacturing of single and power semiconductors are expected to bring Okmetic back to a growth path."
KEY FIGURES
MARKETS
Sensor industry
According to different estimates, the sales value of sensor industry increased by 6-12 percent in 2013 compared to the previous year. The increasing use of micro sensors in many consumer electronics products has accelerated sensor sales growth. In 2014, the sales value of sensor industry is estimated to grow by 8-11 percent, and annual growth of 8-13 percent is forecasted for the next few years. In terms of volume, sensor shipments are likely to clearly rise to a new record in 2014 . (IHS, Yole)
Certain silicon-based microelectromechanical (MEMS) products within the sensor segment have higher sales growth than the others. The shipment volumes of silicon-based microphones experienced particularly strong growth in 2013 (IHS). Also, t he demand for pressure sensors, accelerometers, gyroscopes, and micromechanical filters increased. Silicon-on-insulator (SOI) technology is increasingly used in the manufacture of these products, among others. Okmetic is a pioneering supplier of SOI wafers for the sensor industry.
Semiconductor industry
The global semiconductor industry's sales in US dollars continued to grow in the last quarter of 2013. Sales in October-December exceeded those of the corresponding period in 2012 by seven percent (SIA). Annual sales in 2013 reached a new record. The estimates settle between 304 - 318 billion US dollars , corresponding to an annual growth of 4.4-4.9 percent ( WSTS, SIA, IHS, Cowan LRA).
Semiconductor industry is estimated to continue on a clear growth track. The market is forecasted to grow 5-8 percent in 2014, and the growth is anticipated to continue in 2015 (WSTS, Gartner, IHS, IC Insights). In particular, portable wireless applications play a key role in the growth of semiconductors . For the market that is key to Okmetic, semiconductors for wireless applications and automotive electronics, among others, the outlook is more positive than the market average (WSTS).
Silicon wafer market
According to the estimate published by SMG, the group of silicon wafer suppliers in SEMI (a global umbrella organisation for semiconductor materials and equipment industry) , the surface area of silicon wafer shipments grew 0.4 percent in 2013. In the fourth quarter, shipments were 5.7% lower than in the third quarter, but 2.2% higher than in the fourth quarter of 2012 (in surface area). In years 2014-2016, surface area is estimated to grow around 6 percent annually (Infiniti Research, SEMI).
Total value of the silicon wafer market in US dollars decreased by 13 percent in 2013 (SMG) due to declined average sales prices and weakening of the Japanese yen.
The key customer areas for Okmetic in the silicon wafer market
In line with its strategy, Okmetic seeks niches in the silicon wafer market, where growth exceeds market average and in which the company has special expertise. Okmetic supplies primarily 150mm and 200mm wafers. The sensor/MEMS industry is a key growth area for Okmetic. MEMS market grows as portable consumer products, automotive electronics, and industrial process control increase.
In the semiconductor market, Okmetic's growth areas include wafers for production of discrete and power semiconductors. In these wafer markets, areas for growth include, among others, components used in the production of renewable energy, increasing automotive electronics, portable consumer products, as well as different solutions related to power supply and efficiency improvement.
SALES
In 2013, Okmetic's net sales decreased by 17.5 percent (down 0.1 %) from the previous year amounting to 68.5 (83.1) million euro. Other business sales diminished significantly and amounted to 2.4 (12.3) million euro in year 2013. Value of sensor wafer shipments grew by 2.5 percent, while shipment value of semiconductor wafers decreased by 18.4 percent.
Sales per customer area
Sensor wafer sales grew in 2013 compared to the previous year. The demand for sensor wafers was at a good level throughout the whole year. T he rise in production and shipment volumes of the strategically important SOI wafers in the second half of the year was particularly positive. The use of sensors and their requirement level are expected to continue growing. Sensor applications are increasing in the automotive industry, and especially in consumer electronics products like smartphones, cameras, game consoles, and other mobile devices.
The sales of Okmetic's semiconductor wafers decreased in 2013 in line with the general market development. The demand was weak in the first quarter, but improved in the second as well as in third quarter. In the fourth quarter, the semiconductor wafer sales declined, in line with the normal seasonal fluctuation. The third quarter was the best in sales, which is typical of the industry.
Other business sales dropped clearly in 2013 from the level in the previous year. The declined price level in the solar cell industry did not enable profitable growing of solar crystals.
Sales per market area
In Europe, Okmetic's sales saw strong growth in 2013, thanks to solid demand for sensor wafers. North American and Asian sales decreased. The decrease of sales in Asia was largely due to the drop in Other business sales (earlier, technology sales formed a significant portion of sales in Asia), but also silicon wafer sales were weak in Asia.
PROFITABILITY
October-December
In October-December, Okmetic's operating profit was 0.3 (1.0) million euro. Operating profit accounted for 1.6 (4.9) percent of net sales. Profit for the period was 0.4 (0.2) million euro. The result for October-December was reduced by changes in valuation practices and non-recurring items. Basic earnings per share was 0.03 (0.01) euro. Diluted earnings per share was 0.03 (0.01) euro.
January-December
In January-December, Okmetic's operating profit was 5.0 (8.0) million euro and accounted for 7.3 (9.7) percent of net sales. Diminished operating profit was due to lower sales and price level in Other business. Solid demand for sensor wafers and adjustment of fixed costs softened the impact of declined sales on operating profit and profitability. Profit for the period was 3.8 (5.1) million euro.
The reduction in the Finnish corporate tax rate in 2014 decreased the Group's deferred tax liabilities by 0.5 million euro, which had a positive impact on profit for the period. The Group's effective tax rate in 2013 was 12.7 percent. In addition to the reduction in the corporate tax rate in 2014, this was due to the additional tax depreciations utilized in full on the 2013 machinery and equipment investments and the additional tax deductions of R&D salary expenses.
Basic earnings per share was 0.23 (0.31) euro. Diluted earnings per share was 0.22 (0.30) euro.
FINANCING
The company's financial situation is solid. In 2013, net cash flow from operations amounted to 9.7 (9.4) million euro. The net cash generated from operating activities was especially good in the second half, totalling 8.4 (7.8) million euro. Cash flow from operations improved by 4.9 million euro in the second half of the year, as all items under working capital developed favourably. For the whole year 2013, working capital increased by 2.1 million euro.
On 31 December 2013, the company's interest-bearing liabilities amounted to 11.7 (5.6) million euro. In January 2013, Okmetic announced that it has signed a five-year loan agreement for 10 million euro. The loan is used for the earlier announced investments and general corporate purposes. At the end of the reporting period, the amount of the loan outstanding was 9 million euro.
At the end of 2013, cash and cash equivalents amounted to 5.2 (7.3) million euro. On 31 December 2013, the company's cash and cash equivalents totalled 6.5 million euro less than the interest-bearing liabilities (on 31 December 2012, cash and cash equivalents were 1.7 million euro higher than interest-bearing liabilities). The group has ensured liquidity with committed credit facilities of 6.0 million euro. On 31 December 2013, the committed credit facilities were unused.
Return on equity amounted to 6.4 (8.3) percent. At the end of the year, the company's equity ratio was 68.2 (72.2) percent. Equity per share was 3.43 (3.72) euro.
INVESTMENTS
In 2013, Okmetic's capital expenditure amounted to 7.6 (14.3) million euro. The investments were directed to debottlenecking and automatisation of wafer production lines as well as expansion of the Vantaa plant. The expansion increases capacity for SOI and 200mm wafers in Vantaa.
PRODUCT DEVELOPMENT
In 2013, the company expensed 2.8 (2.3) million euro in product development projects. Product development costs accounted for 4.1 (2.8) percent of net sales and were not capitalised.
Okmetic's wafer range kept growing in 2013. The company focused, in particular, on products used in the manufacture of MEMS sensors and power management circuits by expanding the SOI product family and by improving the capability in crystal growing to enable growing of crystals with higher and lower resistivity than earlier. In epi-production, progress was made especially in wafers with a thick epi layer.
In 2013, Okmetic continued its long-term research of silicon material with universities and research institutions in Finland and abroad, and participated in several national and EU-funded technology projects. The company collaborated, among others, with VTT Technical Research Centre of Finland, Aalto University, Institute of Microelectronics and Fraunhofer Institute, as well as participated in member events of sensor and semiconductor associations. In Finland, Okmetic worked actively in the MemsCat-cluster, in which the company is a founding member.
PERSONNEL
Competent, motivated and content personnel is a prerequisite for Okmetic's growth and success. This is described in the values as well as in the human resources and quality policies of the company.
On average, Okmetic employed 363 (368) people in 2013. At the end of the year, Okmetic employed 355 (364) people of which 310 worked in Finland, 39 in the US, five in Japan, and one in Hong Kong.
Women accounted for 26 (26) percent and men 74 (74) percent of the personnel. White-collar employees accounted for 38 (36) percent and blue-collar employees for 62 (64) percent of the personnel. The average age of Okmetic's employees was 44 (43) years and the average length of employment was 11.6 (10.9) years.
Throughout the organization, salaries and bonuses are based on the level of skills required in each position. In 2013, salaries and bonuses amounted to 20.3 (21.4) million euro including 0.2 (0.4) million euro expenses of the share reward schemes. The group's parent company complies with the collective labour agreements of the Technology Industries of Finland.
All employee groups at Okmetic are eligible for an incentive scheme. The possible production bonuses for blue-collar employees are paid monthly according to the achievement of set targets. White-collar employees are subject to a profit-sharing scheme, which is based on annual targets set by the Board of Directors relating to the group's profitability, financial situation, and operative performance.
ENVIRONMENTAL ISSUES
Okmetic recognises the environmental risks associated with its operations. The company devises both a universal risk management plan and plans for individual processes. Ecologically sustainable operations support Okmetic's competitiveness and profitability.
Measures devised for eliminating environmental risks are integrated to Okmetic's operational processes. Environmental considerations are factored into the development of products and operations in line with continuous improvement principles. Planning of preventive measures is a fundamental part of environmental risk management.
Okmetic follows the development of environmental legislation both in Finland and internationally, and adjusts its operations to meet the regulations.
In October 2012, Okmetic submitted an application for the renewal of the Vantaa plant's environmental permit, as scheduled. The environmental authority approved the application in June 2013.
Okmetic's environmental programme had two objectives in 2013: saving silicon material with the new wire saw in production and replacing chromium trioxide in the laboratory . The first objective was reached, while work with the second objective continues in 2014.
Okmetic follows the chemical regulations of the European Union (REACH) and all Okmetic's products meet the requirements set in the RoHS-directive.
Okmetic has ISO 9001:2008, TS 16949:2009, and ISO 14001:2004 certified quality and environmental systems both at Vantaa and Allen plants. Okmetic expects its most important subcontractors and suppliers to comply with the ISO 9001 and ISO 14001 certifications.
Okmetic had no major environmental non-conformities in 2013. Okmetic's environmental management methods were found to match the high requirement level of international customer companies. The company is not subject to emissions trading regulations.
The company has assessed its consumption of energy, use of polysilicon, amount of acid waste as well as consumption of water and chemicals to have a significant environmental impact. The development of these factors is monitored regularly.
The key figures related to environmental protection at the Vantaa plant in 2013 are as follows:
BUSINESS RISKS
There have been no significant changes in the company's near future business risks and uncertainties.
Okmetic's business is confronted by risks, which can be derived from the company's operations or changes in its operating environment. The risks that can have an adverse effect on the company's business and valuation are described below.
Okmetic's silicon wafer sales are targeted at the sensor and semiconductor producers in the electronics industry. The demand for semiconductor wafers is sensitive to economic fluctuations and changes in the market situation can be sudden and dramatic. The demand for sensor wafers is more stable. The proliferation of sensors in consumer electronics applications may, however, increase the susceptibility of this market too to economic fluctuations. Other business sales have in recent years been mainly sales of solar materials to the solar cell industry. Okmetic has existing polysilicon purchasing obligations partly until 2015. Since the price level of the solar cell market has dropped, the validity of long-term polysilicon contracts typical of the industry may cause a price risk.
Okmetic's share of the global silicon wafer market is around one percent and the market prices have a notable effect on the price development of Okmetic's products. The company has considerable pricing power only with its own special products. The pricing of other wafers is mainly based on global market price.
Okmetic operates globally, and therefore the company's business is affected by risks due to exchange rate fluctuations, consisting of the cash flows of purchases and sales. A significant part of sales are conducted in US dollars. Despite hedging, the company remains exposed to exchange rate fluctuations.
Substantial volumes of electricity are used in Okmetic's production. Despite hedging, the company is exposed to fluctuations in the price of electricity.
SHARES AND SHAREHOLDERS
On 31 December 2013, Okmetic Oyj's paid-up share capital, as entered in the Finnish Trade Register, was 11,821,250.00 euro. The number of shares was 17,287,500. The shares have no nominal value attached. Each share entitles its holder to one vote at general meetings. The company has one class of shares. The company's shares are included in the Finnish book-entry securities system.
SHARE PRICE DEVELOPMENT AND TRADING
A total of 3.4 (3.3) million shares were traded between 1 January and 31 December 2013, representing 19.6 (19.3) percent of the weighted average of share total of 17.3 (17.3) million during the period. The lowest quotation of the reporting period was 4.25 (4.21) euro, and the highest 5.66 (6.01) euro, with the average being 4.92 (5.25) euro. The closing quotation for the period was 4.82 (5.02) euro. At the end of the period, the market capitalisation amounted to 83.3 (86.8) million euro.
Okmetic is listed on the Small Cap list of NASDAQ OMX Helsinki Ltd. under the trading code OKM1V. According to the International Classification Benchmark (ICB) of the exchange, Okmetic Oyj is listed under the Technology Industry.
DIVIDENDS PAID
In April 2013, the company distributed a dividend of 4.3 million euro for the year 2012 (including dividends distributed to Okmetic Management Oy, a total of 0.1 million euro). The dividend was 0.25 euro per share.
In December 2013, the company distributed an additional dividend of 3.2 million euro (including dividends distributed to Okmetic Management Oy, a total of 0.1 million euro). The dividend was 0.19 euro per share.
In April 2012, the company distributed a dividend of 4.8 million euro of the profit accrued in 2011 (including the 0.1 million euro dividend paid for Okmetic Management Oy). The dividend was 0.28 euro per share.
AUTHORISATION OF THE BOARD OF DIRECTORS TO DECIDE ON THE REPURCHASE AND/OR ACCEPTANCE AS PLEDGE OF THE COMPANY'S OWN SHARES
On 10 April 2013, the annual general meeting authorised the Board of directors to decide on the repurchase and/or acceptance as pledge of the company's own shares in one or more tranches. The aggregate number of shares repurchased and/or accepted as pledge shall not exceed 1,728,750 shares, which represents approximately 10 percent of all the shares of the company. The company and its subsidiaries together cannot at any time own and/or hold as pledge more than 10 percent of all the company's registered shares.
Only unrestricted equity can be used to repurchase the company's own shares under the authorisation. Own shares can be repurchased at a price determined by public trading on the day of repurchase or at another market-based price.
The Board of directors decides on the method of repurchasing and/or accepting as pledge of the company's own shares as well as the other terms and conditions. Shares can be repurchased otherwise than in the shareholders' proportional holding of shares (directed repurchase). The authorisation cancels the authorisation given by the annual general meeting on 12 April 2012 to the board of directors to decide on the repurchase and/or acceptance as a pledge of the company's own shares. The authorisation is effective until the next annual general meeting, however, no longer than until 10 October 2014.
AUTHORISATION OF THE BOARD OF DIRECTORS TO DECIDE ON THE ISSUANCE OF SHARES, THE TRANSFER OF THE COMPANY'S OWN SHARES AS WELL AS THE ISSUANCE OF SPECIAL RIGHTS ENTITLING TO SHARES
On 10 April 2013, the annual general meeting authorised the Board of directors to decide on the issuance of shares, the transfer of the company's own shares, and the issuance of special rights entitling to shares according to Chapter 10, Section 1 of the Finnish Companies Act in one or more tranches . The aggregate number of shares issued or transferred on the basis of the authorisation may not exceed 5,200,000 shares.
The Board of directors decides on all the terms and conditions of the issuance of shares, the transfer of the company's own shares, and the issuance of special rights entitling to shares according to Chapter 10, Section 1 of the Finnish Companies Act. The authorisation concerns both the issuance of new shares as well as the transfer of the company's own shares. The issuance of shares, the transfer of the company's own shares, and the issuance of special rights entitling to shares according to Chapter 10, Section 1 of the Finnish Companies Act may be carried out in deviation from the shareholders' pre-emptive rights (directed issue).
The authorisation cancels the authorisation given by the annual general meeting on 12 April 2012 to the Board of directors to decide on the issuance of shares, the transfer of the company's own shares as well as the issuance of special rights entitling to shares. The authorisation is effective until the next annual general meeting, however, no longer than until 10 October 2014.
Board of directors decided on 17 December 2013 to grant stock options to the key managers of Okmetic. The conditions of the stock option programme are presented below under the title Stock option plans.
OWN SHARES AND DIRECTED SHARE ISSUES
On 12 February 2013, Okmetic's Board of Directors decided on a transfer of 18,540 own shares held by the company, as a part of the company's share-based incentive scheme for the executive management group, of which the company has given a stock exchange release on 18 February 2012. All the shares were issued to the members of the executive management group in deviation from the shareholders' pre-emptive rights (directed share issue). The rewards of the share reward programme were paid in Okmetic shares and in a monetary amount covering taxes.
In line with the decision of the annual general meeting, Okmetic Oyj transferred a total of 15,283 shares to the Board members as payment of the annual remuneration on 10 May 2013.
At the end of the year, the company held a total of 194,123 (227,946) own shares, which is approximately 1.1 (1.3) percent of Okmetic's all shares and votes.
OTHER EVENTS DURING THE FINANCIAL YEAR
Okmetic's board of directors decided on 11 February 2013 on the share reward program for the Executive management group for 2013 as a part of the company's incentive and commitment plan. The purpose of the program is to commit and encourage the Executive management group to grow the shareholder value in the long run. The possible rewards of the share reward program will be paid in Okmetic shares and in a monetary amount covering taxes in accordance with reaching the set targets. The amount of the rewards corresponds to a maximum of 150,000 shares. In addition, a monetary amount covering taxes will be paid.
On 27 November 2013, Atte Haapalinna, D. Sc. (Tech.), was appointed member of the Executive management group, customer support and new business development as areas of responsibility. Haapalinna assumed the role on 1 January 2014. He has worked for Okmetic since 1998 in several positions.
Senior Vice President, Research, Okmetic Fellow Markku Tilli left the Executive management group on 31 December 2013. Tilli continues in his role as head of research at Okmetic.
Under the authorisation given by the annual general meeting, the Board of Directors decided on 27 November 2013 to distribute an additional dividend of 0.19 euro per share (3,247,741.63 euro in total). The d ividend was paid on 10 December 2013. No dividend was paid for Okmetic's own shares.
The extraordinary general meeting of Okmetic Oyj gathered on 19 December 2013. The general meeting decided, in accordance with the proposal of the Board of Directors, to distribute 0.07 euro per share to shareholders as a capital repayment from the invested unrestricted equity reserve. The payment was made on 31 December 2013. No repayment was made for shares held by Okmetic.
EVENTS AFTER THE END OF THE FINANCIAL YEAR
On 15 January 2014, the Board of Directors decided to dissolve the ownership arrangement of Okmetic Management Oy, owned by President Kai Seikku and Deputy to the President Mikko Montonen, with an arrangement in which Okmetic Oyj acquired the entire share capital of Okmetic Management Oy. Also 400,000 shares of Okmetic Oyj were transferred to the group via Okmetic Management Oy, as well as a loan receivable of Okmetic Oyj from Okmetic Management Oy. There were no shareholders of Okmetic Management Oy in the Board of Directors of Okmetic Oyj.
The value of the arrangement for the part of shares owned by Okmetic Management Oy was determined using the average trading price weighted by trading volume of the company's share in NASDAQ OMX Helsinki Oy on 16 January 2014, 4.9969 euro.
In a directed share issue on 16 January 2014, Okmetic Oyj transferred a total of 150,000 own shares held by the company to President Kai Seikku (140,000 shares) and Deputy to the President Mikko Montonen (10,000 shares). Subscription price per share was determined using the average trading price of the company's share weighted by trading volume in NASDAQ OMX Helsinki Oy on 16 January 2014, which was 4.9969 euro. Total value of the deal was 749,535 euro. The decision to transfer company's own shares is based on authorization of the Board of Directors given by the annual general meeting on 10 April 2013.
NOTIFICATION OF CHANGES IN HOLDINGS
Holding of Oy Ingman Finance Ab (Trade Register number 2241895-0) in Okmetic rose to 5.03 percent of the company's shares and votes on 12 March 2013.
STOCK OPTION PLANS
Okmetic Board of Directors decided on 17 December 2013 to grant stock options to the key managers of Okmetic. As a precondition for being eligible to receive the stock options, the key managers are required to invest in Okmetic shares. According to the investment requirement, the key managers are required to hold in the aggregate 262,600 Okmetic shares to be eligible to receive all of the stock options.
The maximum total number of stock options offered is 870,000, which entitle participants to subscribe for a maximum number of 870,000 Okmetic shares (4.8% of the company's shares on a fully diluted basis). Each stock option entitles participants to subscribe for one share. The shares subscribed with the stock options may either be new shares issued by the company or existing shares held by the company. Of the stock options, 320,000 shall be marked with the symbol 2013 A and 550,000 with the symbol 2013 B. The stock options shall be issued free of charge.
The share subscription price for the stock options 2013 A shall be euro 5.75 and for the stock options 2013 B euro 6.00. Future dividends and capital repayments from the invested unrestricted equity reserve distributed before the share subscription shall be deducted from the share subscription price.
The share subscription period for 25 percent of the stock options 2013 A and 2013 B will commence on or about February 1, 2016 and for 75 percent of the stock options 2013 A and 2013 B on or about February 1, 2017. The share subscription period for all the stock options ends on March 31, 2018.
The stock options are intended to align the interests of the shareholders and the key managers and to form a part of the incentive and c ommitment program of the key managers. The purpose of the arrangement is to encourage the key managers to invest in the company's shares and to work on a long-term basis to increase the company's share value. The deliberation period for the selected key executives concerning participation in the option plan will expire in the end of February 2014.
No costs of the stock option plan are recorded in the financial statements for year 2013.
MANAGEMENT AND AUDITOR
In 2013, Okmetic's Board of Directors comprised Henri Österlund as the chairman, Tapani Järvinen as the vice chairman, and members of the Board Hannu Martola, Mervi Paulasto-Kröckel and Mikko Puolakka.
Kai Seikku acts as President of Okmetic Oyj and Mikko Montonen, Executive Vice President, Customers and Markets as Deputy to the President.
In addition to the president, the group's Executive management group includes Mikko Montonen, Executive Vice President, Customers and Markets and Deputy to the President; Petri Antola, Senior Vice President, Technology Projects and Solar Materials; Juha Jaatinen, Senior Vice President, Finance, IT, and Communications; Jaakko Montonen, Senior Vice President, Supply Chain; Markus Virtanen, Senior Vice President, Human Resources, Quality, and Environment; and Anna-Riikka Vuorikari-Antikainen, Senior Vice President, Products. Head of Research Markku Tilli was a member of the Executive management group until 31 December 2013.
The company's auditor is PricewaterhouseCoopers Oy, Authorised Public Accountants, with Mikko Nieminen, Authorised Public Accountant, acting as the principal auditor .
THE BOARD OF DIRECTORS' PROPOSAL REGARDING THE USE OF DISTRIBUTABLE FUNDS
According to the financial statements dated on 31 December 2013, the parent company's distributable earnings amount to 17,969,052.99 euro. No significant changes have taken place in the company's financial position after the end of the financial year.
The Board of Directors of Okmetic Oyj has decided to propose to the annual general meeting that no dividend shall be paid for the financial year 2013 and that the loss of the parent company for the financial year, - 208,387.78 euro , shall be recorded to the company's retained earnings.
CONDENSED FINANCIAL STATEMENTS AND TABLES 1 JANUARY - 31 DECEMBER 2013
ACCOUNTING POLICIES
This financial statements release has been prepared in accordance with IAS 34, Interim Financial Reporting.
In preparing this financial statements release, Okmetic has followed the same accounting policies as in the financial statements for 2012 except for the effect of changes required by the adoption of the new or revised IFRS standards and IFRIC interpretations as of 1 January 2013. The adoption of the aforementioned standards and interpretations has not had an effect on the figures presented from the reporting period.
The financial statements presented in this report are derived from the audited financial statements of the company. The Auditor's report has been given on February 13, 2014.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONDENSED CONSOLIDATED BALANCE SHEET
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
1)"Other reserves" contains hedge reserve and translation differences.
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
COMMITMENTS AND CONTINGENCIES
The contract price of the derivatives has been used as the nominal value of the underlying asset.
HIERARCHY LEVELS OF DERIVATIVE CONTRACTS MEASURED AT FAIR VALUE
Fair value estimation
The group's financial instruments that are measured at fair value comprise derivatives used for hedging and held for trading, and they are classified on hierarchy level 2.
Fair values of level 2 instruments are based on other data than quoted prices in active markets, but on the data from which the asset is observable, either directly (i.e. price) or indirectly (i.e. derived from the prices).
Fair value determination
The fair values of currency derivatives are determined by using mark-to-market method at the reporting date.
The fair values of electricity derivatives are determined on the basis of market quotations and contract prices of the instruments at the reporting date.
RELATED PARTY TRANSACTIONS
In January-December, the key management compensation of the executive management group and Board of directors amounted to 1,730,787 (1,915,939) euro. The compensation includes share-based payments and the Board of directors' remuneration paid as shares 310,559 (524,464 ) euro.
KEY FIGURES SHOWING FINANCIAL PERFORMANCE
KEY FIGURES PER SHARE
When calculating equity per share, Okmetic's own shares and the Okmetic shares owned by Okmetic Management Oy are deducted from the total number of shares.
1) For 2012 including the additional dividend of 0.19 euro per share distributed in December 2013.
QUARTERLY KEY FIGURES
DEFINITIONS OF KEY FINANCIAL FIGURES
All figures of the financial tables are rounded, and consequently the sum of individual figures can deviate from the presented sum figure.
The future estimates and forecasts in this financial statements release are based on the company management's current knowledge. Actual events and results may differ from the estimates presented here.
NEWS CONFERENCE
A briefing for analysts, investors and media will take place on Thursday, 13 February 2014 at 2.00 p.m. in Helsinki Stock Exchange building, Fabianinkatu 14, Helsinki, (entrance via NASDAQ OMX's reception, 2nd floor). In the event, Okmetic's President Kai Seikku will present the group's performance in 2013 and prospects for 2014.
FINANCIAL REPORTING IN 2014
Okmetic will publish the financial statements, board of directors' report and auditor's report for 2013 as well as a separate corporate governance statement on its website www.okmetic.com on 18 March 2014 at the latest.
Interim report 1-3/2014 (Q1) 24 April 2014
Interim report 1-6/2014 (Q2) 24 July 2014
Interim report 1-9/2014 (Q3) 23 October 2014
Annual general meeting will be held on 9 April 2014.
OKMETIC OYJ
Board of directors
For further information, please contact:
President Kai Seikku, Okmetic Oyj,
tel. +358 400 200 288, email: kai.seikku@okmetic.com
Senior Vice President, Finance, IT, and Communications
Juha Jaatinen, Okmetic Oyj, tel. +358 9 5028 0286,
email: juha.jaatinen@okmetic.com
Distribution:
NASDAQ OMX Helsinki
Principal media
www.okmetic.com
OKMETIC IN BRIEF
Okmetic is a technology company which supplies tailor-made silicon wafers for sensor and semiconductor industries and sells its technological expertise. Okmetic provides its customers with solutions that boost their competitiveness and profitability.
Okmetic's silicon wafers are part of a further processing chain that produces end products that improve human interaction and quality of life. Okmetic's products are based on high-tech expertise that generates added value for customers, innovative product development and an extremely efficient production process.
Okmetic has a global customer base and sales network, production plants in Finland and the US and contract manufacturers in Japan and China. Okmetic's shares are listed on NASDAQ OMX Helsinki under the code OKM1V. For more information on the company, please visit our website at www.okmetic.com .
Copyright GlobeNewswire
Attachment(s)
http://hugin.info/132025/R/1761702/596570.pdf
Regulatory News
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
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