Oral Hammaslääkärit Plc Financial Statements 14 February 2012 at 8:30 a.m.

Transcription

1 Oral Hammaslääkärit Plc Financial Statements 14 February 2012 at 8:30 a.m. OPERATING RESULT IMPROVED AND CASH FLOW FROM OPERATING ACTIVITIES INCREASED SIGNIFICANTLY ORAL HAMMASLÄÄKÄRIT PLC'S FINANCIAL STATEMENTS 1 JANUARY 31 DECEMBER Net sales EUR 50.3 (46.3) million, up 8.6%; Q4 net sales EUR 13.4 (12.5) million - Operating profit EUR 3.5 (2.7) million, UP 29.6%; Q4 operating profit EUR 1.3 (0.7) million - Operating result EUR 0.5 (0.0) million; Q4 operating result EUR 0.5 (-0.1) million - Profit for the period EUR 0.0 (-0.3) million; profit for Q4 EUR 0.3 (-0.2) million- Cash flow from operating activities EUR 4.1 (1.7) million; Q4 EUR 1.4 (1.5) million - Full-year earnings per share EUR 0.00 (-0.04) - Market position was strengthened - Net sales for 2013 are expected to grow relatively more than in 2012 and operating result is expected to improve on Oral Hammaslääkärit Plc is a company providing comprehensive oral and dental health services, and 455 dental health care professionals worked at its dental clinics at the end of the period in full-time equivalents. At the end of 2012, the Oral chain included 27 (23) dental clinics and 151 (139) dental units, or fully-equipped treatment rooms. There was a total of 256,630 (252,250) dental care visits at the clinics, increasing by 1.7%. Managing Director s Comment Our operating profit turned out to be clearly better than the previous in accordance with our objectives. We managed to increase our capacity utilization rate both at our dental clinics and in our laboratory operations. Acquisitions completed during the year had a visible positive impact on the result for the fourth quarter. The year 2012 was another year of expansion for Oral. Oulu and Pieksämäki joined the Oral chain in December as new locations. During the year, we also made several acquisitions to strengthen our existing clinics, especially in Helsinki. General economic uncertainty has decreased the demand for demanding treatments. Early in the year, demand was generally somewhat softer than expected, but picked up towards the end of the year after a quiet summer season, which is typical of our industry. Improving our result through growth and increasing utilization rates continues to be our key objective, says Martin Forss, Oral s Managing Director. 1

2 Operating environment The general economic uncertainty caused by the euro crisis has also impacted the demand for dental health services, even though not as strongly as many other sectors. The uncertainty decreases the demand for demanding treatments, such as artificial roots (implants), the clearest. Also, less urgent treatments, such as orthodontic treatment and tooth whitening, are postponed in a tough economic situation. Oral still estimates the value of the Finnish oral and dental health to total approximately EUR 900 million, divided almost equally between the private and public sectors. Public health care focuses on basic dental health services, while demanding special procedures are carried out considerably more by private dental clinics. In particular, the supply of dental specialist services needed by adults in health care centers does not meet the demand. A significant factor concerning the problems with the waiting time guarantee is the shortage of dentists, which is also among the risk factors of Oral's growth in certain areas. However, the availability of dentists for Oral Group has continued to be good. Typical of a service industry, the risk factors of growth vary considerably by region. Cooperation between the public and private sectors is increasing in the form of service vouchers, contracting, and various cooperation projects, among others. At the same time, new companies have entered the private sectors, especially in the Helsinki region, and competition for both customers and dentists has increased. In particular, increased spending power of the ageing population is expected to increase the demand for challenging procedures carried out in the private dental health care sector. The increasing appreciation of health, well-being and appearance will also increase demand. In addition to the quantitative and qualitative needs, the demand for private oral and dental care is influenced by the reimbursements paid by Kela, the Social Insurance Institution of Finland, and the amount of contracting out of services by municipalities. In 2012, Kela s direct reimbursement was expanded to cover care given by dental hygienists. Strategy and financial objectives Oral Hammaslääkärit Plc's objective continues to be to increase the net sales to EUR 80 million by the end of With regard to profitability, the target is still a minimum of 10% of net sales in The growth will be achieved through acquisitions as well as by expanding the existing clinics. In particular, growth is sought in major cities with good business locations. Mergers and acquisitions aim at faster expansion of the customer base than what could be reached through the recruitment of new dentists. Net sales and result Oral Hammaslääkärit Plc s net sales and result for 1 January 31 December 2012 met the expectations. Net sales increased by 8.6% to EUR 50.3 (46.3) million. Organic growth accounted for approximately 20 percent of the growth, mergers and acquisitions for approximately 80 percent. The most significant acquisitions were the dental laboratory Varahammas Oy, consolidated on 10 Mau 2012, Meilahden Hammaslääkärikeskus Oy and Vihdin Hammaspaikka Oy, both consolidated on 1 June 2012, and 2

3 Pieksamäen Hammasapu Oy and Hammas Botnia Oy, both consolidated on 1 December Organic growth includes the expansions of the existing clinics. The most significant expansion during the year was the new dental clinic in Tapiola, which was opened in March. Net sales for the fourth quarter increased by 7.2% to EUR 13.4 (12.5) million. Operating result for the period improved on the previous year, amounting to EUR 0.5 (0.0) million. Operating result for the fourth quarter amounted to EUR 0.5 (-0.1) million. The operating result for the period improved due to increased net sales and improved utilization rates. The operating result includes non-recurring items of EUR 0.1 million. Of these, recognition of unrealized additional purchase prices during the fourth quarter improved the operating result by EUR 0.3 million and non-recurring expenses due to the relocation of clinics and changes in the inventory management system recognized for the previous quarters decreased the operating result by EUR 0.2 million. The result for the period amounted to EUR 0.0 (-0.3) million. The result for the fourth quarter amounted to EUR 0.3 (-0.2) million. Earnings per share for the period amounted to EUR 0.00 (-0.04) Earnings per share for the fourth quarter were EUR 0.03 (-0.02). Balance sheet, financing and investments The balance sheet total of the Oral Hammaslääkärit Plc group on 31 December 2012 was EUR 31.6 (28.0) million. The Group s non-current assets were EUR 26.1 (22.8) million. The growth was mainly the result of mergers and acquisitions carried out. Current assets increased as well, amounting to EUR 5.5 (5.2) million. Their growth was due to an increase in cash and cash equivalents compared to the end of the previous year. The Group s net working capital developed favorably and was EUR 0.9 million less than the previous year. Interest-bearing net liabilities amounted to EUR 7.7 (5.8) million. They consist of current interest-bearing liabilities of EUR 1.6 (2.0) million, non-current interest-bearing liabilities of EUR 7.8 (5.0) million and cash and cash equivalents of EUR 1.7 (1.2) million. Interest-bearing liabilities increased mainly as the result of mergers and acquisitions carried out. The interest-bearing net liabilities include EUR 2.5 (1.2) million of final purchase prices related to acquisitions whose realization depends on the clinics' performance during the following years. The Group's quick ratio, i.e. liquidity, was 0.50 (0.52). The Group s shareholders equity was EUR 14.1 (14.4) million and equity per share was EUR 1.62 (1.65). The equity ratio at the end of the period was 44.7% (51.5%). Cash flow from operating activities improved significantly and was EUR 4.1 (1.7) million. Cash flow from operating activities improved both due to the company s improved profitability and positively developed net working capital. Cash flows from operating activities for the fourth quarter amounted to EUR 1.4 (1.5) million. Cash flows from investing activities amounted to EUR -3.5 (-3.2) million. Cash flows from financing activities amounted to EUR 0.0 (2.2) million during the financial period. A subscription rights issue was carried out during the comparison period. Group structure The Group's parent company is Oral Hammaslääkärit Plc, and its subsidiaries at the end of the period were Oral Hammaslääkärit Meilahti Oy, Oral Hammaslääkärit Nummela Oy, and Oral 3

4 Hammaslaboratorio Oy. All Group companies carry out operational business activities. The wholly-owned subsidiaries Oral Hammaslääkärit Seinäjoki Oy, Oral Hammaslääkärit Itäkeskus Oy, and Oral Hammaslääkärit Joensuu Oy were consolidated with the parent company as planned on 30 June The mergers were carried out in order to streamline the group structure, and no merger consideration was paid. The acquisitions were entered in the Trade Register on 30 June At the end of the financial period, Oral had a total of 27 dental health care clinics in Espoo, Helsinki, Hämeenlinna, Hyvinkää, Joensuu, Jyväskylä, Järvenpää, Kuopio, Lahti, Mikkeli, Nummela in Vihti, Oulu, Pieksämäki, Pori, Seinäjoki, Tampere, Tornio, Turku, Vaasa, and Vantaa. Acquisitions Oral expanded into Oulu and Pieksämäki during the fourth quarter. In Oulu, Oral acquired the business operations of Hammas Botnia Oy, a clinic with two dental units. Hammas Botnia employs approximately 20 dental care professionals, and its net sales for 2011 amounted to approximately EUR 1.9 million. In Pieksämäki, Oral acquired the business operations of Pieksämäen Hammasapu Oy. Pieksämäen Hammasapu Oy is a dental clinic with two dental units and an in-house dental laboratory. The company s annual net sales are approximately EUR 0.75 million. During the fourth quarter, Oral also acquired a single-unit dental clinic in Tampere. The acquired operations were merged into the Oral group on 1 December Previously during the quarter, Oral strengthened its market position through acquisitions in Nummela in Vihti, Helsinki, and Tapiola in Espoo, and expanded its dental laboratory activities. The effect of the acquired businesses on the consolidated balance sheet and result are presented in the notes to this bulletin. Personnel The Oral community mainly consists of dentists, dental assistants, dental hygienists and office personnel working at the clinics. During 2012, Oral Group had 434 employees on average in full-time equivalents. At the end of the year, the figure was 455 employees. The calculation method was adjusted at the beginning of 2012 so that the number of personnel is reported in full-time equivalents instead of the number of actual employees, as before. The total number of persons employed by the group has not changed substantially after the end of 2011, at which time there was a total of 702 full-time and part-time employees working in the group. Of those employed by the Group, full-time employees accounted for 55% at year's end and part-time employees correspondingly for 45%. Of all those working at Oral, 497 were employed by Oral at year s end and 205 worked as contracted selfemployed persons. The average age of employed persons was 39 (39) at year's end. Women accounted for 89% (90%) of employed personnel, men for 11% (10%). Personnel development focused on the development of managerial work and promoting a management culture that supports well-being at work. Supervisor surveys were carried out during the fall, and personal 4

5 development plans were prepared for the supervisors on the basis of them. A large number of supervisors started 18-month studies leading to a specialist vocational degree in management. HR management processes, such as the induction process and performance review procedures, were revised during the year. In addition, the early intervention model was specified further and cooperation with occupational health care services and the employment pension company was deepened. The employees coping at work in different life stages was supported through diverse flexibility of working hours. Follow-up of HR management processes was specified by paying attention to the functioning of the induction process and development of the amount of sick leaves. Clinical Care Advisory Board The Clinical Care Advisory Board of Oral Hammaslääkärit Plc is an independent body that provides advice and recommendations, mainly relying on expertise outside the company. In particular, the Advisory Board promotes the quality of care and patient safety. At the end of 2012, Oral Hammaslääkärit Plc s Clinical Care Advisory Board members were Mikko Rantala (D.D.S., Dental Specialist), Kimmo Suomalainen (Docent), Tapio Tammisalo (Docent), Olli Teronen (Docent), Susanne Tuominen (Dental Specialist), Heikki Alapulli (Dental Specialist) and Tuomas Waltimo (Professor) as the Chair. The company's Medical Director coordinates the work of the Clinical Care Advisory Board on behalf of Oral Hammaslääkärit Plc. Management and administration Oral Hammaslääkärit Plc's Managing Director was Martin Forss, M.Sc. (Econ.), during the financial period. In addition to the Managing Director, the Company's management team at the end of the financial period consisted of Medical Director Janne Ryhänen, Lic.Med, Lic.Dent., Business Director Anna-Maria Mäkelä, M.Sc. (Health Sci.), CFO Antti Uusitalo, M.Sc. (Econ.), and Research and Development Director Tuomas Waltimo, D.D.S. The position of Research and Development Director is part-time, and Tuomas Waltimo has a full-time position as Professor at the University of Basel in Switzerland. The following changes took place in the composition of the Management Team during the financial period: CFO Lauri Larjavaara resigned from the company in May, and Antti Uusitalo, previously Business Controller at the company, became new CFO on 1 June The position of Research and Development Director was established on 22 May 2012, at which time Tuomas Waltimo assumed the post. At the end of the financial period, Oral Hammaslääkärit Plc's Board of Directors had seven regular members elected by the Annual General Meeting of 22 March The Board members were Benedict (Ben) Wrede (Chairman), Juha Korhonen (Vice Chairman), Juhani Erma, Timo T. Laitinen, Kirsti Piponius, Ulrika Romantschuk, and Mia Åberg. The Board members until the Annual General Meeting were Benedict (Ben) Wrede, Juhani Erma, Mikael Ingberg, Antti Kasi, Timo T. Laitinen, Kirsti Piponius, and Tuomas Waltimo. The company's auditor is PricewaterhouseCoopers Oy. Martin Grandell, Authorized Public Accountant, has been the auditor in charge. Shares and share capital Oral Hammaslääkärit Plc's fully paid share capital entered in the Trade Register was EUR 570, on 31 December The number of shares was 8,742,042 at the end of the period. Each share carries one 5

6 vote. No changes took place in the number of shares or share capital during the period. On 3 April 2012, a dividend of EUR 0.03 was paid per share, or a total of EUR 262, thousand. The company did not have outstanding share options or valid share option programs at the end of the reporting period. General meetings of shareholders and authorizations of the Board of Directors Oral Hammaslääkärit Plc's Annual General Meeting on 24 March 2011 resolved to adopt the financial statements and discharge members of the Board of Directors and the Managing Director from liability, and decided on other matters to be dealt with by the Annual General Meeting as proposed by the Board of Directors and its Committees, authorizing the Board to decide on the repurchase of shares in the company and authorizing the Board to decide on a share issue and on issuing option rights and other special rights entitling to shares. The Annual General Meeting resolved that a refund of capital of EUR 0.03 per share be distributed for the financial period 1 January 31 December The Annual General Meeting elected seven members to the Board of Directors. The Annual General Meeting resolved that Juhani Erma (LL.Lic.), Timo T. Laitinen (M.Sc. Eng.), Kirsti Piponius (M.Sc. Econ.), and Ben Wrede (B.Sc. Eng) will continue as Board members. Mia Åberg (M.Sc. Econ.), CFO of Atine Group Oy; Ulrika Romantschuk (M.Sc. Pol.Sc.), SVP, Communications at Fazer Group; and Juha Korhonen (M.Sc. Econ.) were elected as new Board members. The Annual General Meeting elected PricewaterhouseCoopers Oy, Authorized Public Accountants, as the auditor with Martin Grandell, Authorized Public Accountant, as the auditor in charge. The Annual General Meeting resolved that the Chairman of the Board be paid EUR 2,550, the Vice Chairman of the Board EUR 2,000, the Chair of the Audit Committee EUR 2,000, and other Board members EUR 1,200 per month. The meeting fee paid for each Board Committee meeting is EUR 150. The Annual General Meeting authorized the Board to decide on the repurchase of a maximum of 865,851 Company shares so that the shares can be purchased otherwise than in proportion to the holdings of the shareholders using the non-restricted equity at the market price of the shares at the time of the acquisition in public trading. The authorization is valid for 12 months after the resolution of the Annual General Meeting. The Annual General Meeting authorized the Board of Directors to decide on the issue of a maximum of 3,500,000 new shares and/or to convey treasury shares held by the company against or without consideration. The new shares can be issued and treasury shares held by the company can be conveyed to shareholders in the company in proportion to their holdings or in deviation from the shareholders' preemptive rights in a directed issue in the event that there is a compelling financial reason on the part of the company. The Board may also issue special rights referred to in section 10(1) of the Limited Liability Companies Act. The Board of Directors decides on the other terms and conditions of share issues and special rights. The authorization is valid for four years after the resolution of the Annual General Meeting. 6

7 Changes in ownership Oral Hammaslääkärit Plc s largest shareholders, Atine Group Oy, made a compulsory takeover bid on all Oral Hammaslääkärit Plc shares on 21 February Atine Group Oy s purchase offer was EUR 3.20 for each Oral share in cash. The offer period commenced on 7 March and expired on 28 March Oral s Board of Directors published its opinion on the purchase offer on 15 March The Board of Directors did not recommend that the shareholders approve the offer made by Atine Group. As the result of the purchase offer, Atine s holding increased by 0.72 percentage points, and its holding in Oral increased to 30.82% of all shares and votes in Oral. At the end of the fiscal year, Atine Group's holding was 35.24%. Oral was not informed of any other changes in shareholding exceeding the threshold for flagging notifications during the year. Trading on NASDAQ OMX Helsinki During the financial year 1 January 31 December 2012, the lowest price of the Oral Hammaslääkärit Plc share was EUR 3.03 (2.89), the highest EUR 3.49 (5.79). On 31 December 2012, trading closed at EUR 3.28 (2.95), and the company's market capitalization was EUR 28.7 (25.8) million. Shares in Oral Hammaslääkärit Plc have been traded on NASDAQ OMX Helsinki since 1 June The trading code of the share is ORA1V. There were 2,497 (3,102) shareholders at the end of the financial period. Total share turnover for 2012 was 1,224,775 shares. Share turnover of all shares outstanding was 14% during Compliance with the Finnish Corporate Governance Code Oral Hammaslääkärit Plc complies with the Finnish Corporate Governance Code. The Corporate Governance Statement is available on the company's website as from the publication of the financial statements for The Oral Hammaslääkärit Plc Board of Directors convened a total of 20 times during the financial year 2012, and the average attendance rate was 94%. The Remuneration and Appointment Committee convened five times and the Audit Committee four times. Estimate of significant near-term risks and uncertainty factors Oral estimates that if the general economic situation in Finland worsens so that also general consumer demand decreases, this may have negative effects on the demand for Oral Hammaslääkärit Plc's services and therefore net sales and performance. Economic uncertainty decreases the demand for demanding treatments in particular. New competitors have entered the private sector in recent years, and competition is expected to increase to a certain extent. According to a survey of the Finnish Dental Association, the number of dentists per person is currently at its lowest in 25 years in Finland. However, the availability of dentists for Oral remained moderate during 7

8 the period under review. The nationwide and regional availability of dentists as well as continuity risk associated with personnel in company and business acquisitions continue to make up one of the most significant business risks of the company. Acquisitions are part of Oral s growth strategy. There are risks associated with their implementation and post-acquisition integration, and should they be realized, they could impair the company's profitability and growth. The risks are prepared for primarily through careful preparation and implementation of mergers and acquisitions. The most significant information system risks is associated with the procurement of a new patient information system. If the commissioning of the system is delayed considerably or unexpected problems occur in its use, this may momentarily impair Oral s customer service and it may also affect the company s net sales and result. Business and company acquisitions and related investment needs and expenditure due to building the chain require considerable use of external financing. The company's management seeks to ensure that the company has the financing it requires for growth, solvency and working capital needs in optimum terms at any time. The company's main financing risks are the availability of financing, interest rate risk and liquidity risk. Estimate of probable future development The demand for dental health services has remained relatively stable, and the private dental health service market is still expected to outperform the average economic growth in the long term. In particular, increasing need for care among the ageing population and increased spending power are expected to increase the demand for challenging procedures carried out in the private dental health care sector. In the short term, the general economic situation has an effect on demand. Oral believes that there is demand for a centrally and efficiently controlled dental health care chain in the fragmented market, even though competition is expected to tighten. Outlook for 2013 Oral estimates that the company s net sales will grow relatively more in 2013 than in 2012, when net sales increased by 8.6%. The company s operating result is estimated to improve on Board of Directors proposal to the Annual General Meeting The Board of Directors proposes to the Annual General Meeting that no dividend be paid for the financial period 1 January 31 December The Annual General Meeting of Oral Hammaslääkärit Plc will take place on Thursday, 21 March 2013, starting at 6:00 pm, in Helsinki. Notice of the meeting will be published in a separate stock exchange release. Events after the financial statements date Oral Hammaslääkärit Plc s Business Director Anna-Maria Mäkelä informed the company on 5 February 8

9 2013 that she is resigning from the company to join another employer outside the dental health industry. Accounting principles applied in the financial statements bulletin Oral Hammaslääkärit Plc's financial statements bulletin have been prepared in accordance with IAS 34. The company has followed the same accounting principles in preparing the financial statements bulletin as in the financial statements for The figures in the financial statements bulletin are unaudited. 9

10 SUMMARY FINANCIAL STATEMENTS AND NOTES CONSOLIDATED INCOME STATEMENT, EUR 1, / / / /2011 Net sales 50,295 46,268 13,429 12,464 Other operating income Materials and services -20,484-20,205-5,213-5,357 Employee compensation and benefit expense -17,195-15,662-4,536-4,279 Depreciation and impairment changes -2,991-2, Other operating expenses -9,567-8,045-2,703-2,190 Operating result Financial income and expenses Profit (loss) before taxes Income taxes Net profit/loss for the period Profit for the period attributable to owners of the parent Earnings per share for profit attributable to owners of the parent, EUR: - undiluted adjusted for dilution CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, EUR 1,000 Net profit/loss for the period New share issue expense COMPREHENSIVE INCOME for the period Profit for the period attributable to owners of the parent

11 BALANCE SHEET, EUR 1, NON-CURRENT ASSETS Property, plant and equipment 8,272 8,340 Goodwill 11,139 8,983 Other intangible assets 5,733 5,103 Deferred tax assets Available-for-sale investments Non-current assets, total 26,068 22,785 CURRENT ASSETS Inventories 1,242 1,261 Trade and other current receivables 2,545 2,766 Cash and cash equivalents 1,742 1,172 Current assets total 5,529 5,199 Assets total 31,598 27,984 SHAREHOLDERS' EQUITY AND LIABILITIES Share capital Invested non-restricted equity fund 12,463 12,726 Retained earnings/losses 1,117 1,434 Net profit/loss for the period Equity total 14,128 14,414 LIABILITIES Non-current liabilities Interest-bearing liabilities 7,794 4,983 Deferred tax liability 1,067 1,024 Non-current liabilities total 8,861 6,006 Provisions 72-11

12 Current liabilities Interest-bearing liabilities 1,644 1,990 Trade and other payables 6,893 5,574 Current liabilities total 8,537 7,564 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 31,598 27,984 CALCULATION OF RECONCILIATION OF EQUITY, EUR 1,000 Share capital Other reserves Retained earnings Equity total Shareholders equity 1 Jan ,726 1,117 14,414 Result for the period Refund of capital Shareholders equity 31 Dec ,464 1,093 14,128 Share capital Other reserves Retained earnings Equity total Shareholders equity 1 Jan ,585 2,305 9,461 Result for the period Share issue 6,018 6,018 Dividends paid Share subscriptions with options New share issue expenses Shareholders equity 31 Dec ,726 1,117 14,414 12

13 CASH FLOW STATEMENT, EUR 1, Cash flow from operating activities Net profit/loss for the period Adjustments to the result for the financial period Financial income and expenses Taxes for the period Other adjustments Depreciation 2,991 2,673 Change in net working capital Inventories Short-term receivables Current liabilities Other Interest Taxes Cash flow from operating activities 4,086 1,744 Net cash used in/from investing activities Investments in tangible assets -1,540-1,451 Investments in intangible assets Proceeds from sale of intangible and tangible assets - 15 Purchase price paid for assets in acquisitions -1,104-1,021 Acquisition of a subsidiary less cash and cash equivalents at the date of acquisition Other investments Cash flows from investing activities, total -3,494-3,244 13

14 Cash flow before financing 592-1,500 Cash flows from financing activities Proceeds from long-term debt 4, Repayments of long-term debt -3, Repayments of finance lease liabilities Proceeds from short-term debt 1, Repayments of short-term debt -1,363-2,306 Rights issue - 6,018 New share issue expense Share subscriptions with options Dividends paid / refunds of capital Cash flows from financing activities -22 2,240 Increase(+)/decrease(-) in cash and cash equivalents Cash and cash equivalents at beginning of the period 1, Cash and cash equivalents at end of the period 1,742 1,172 FINANCIAL DEVELOPMENT BY QUARTER EUR 1, / / / / /2012 Net sales 50,295 13,429 10,928 13,207 12,731 Profit/loss / / / / /2011 Net sales 46,268 12,464 9,788 12,424 11,592 Profit/loss

15 NOTES TO THE FINANCIAL STATEMENTS BULLETIN Acquired business operations The acquired business operations are described in the Board of Directors' report. The table below shows the total consideration paid, acquired assets and received liabilities at the fair value of the transaction dates for the acquisitions performed in 2012 and Some acquisitions comprise a conditional consideration, which is recorded at its discounted fair value at the time of the acquisition. The company has recorded the conditional considerations at their maximum values at the date of acquisition, i.e. assuming that the conditional purchase prices will be realized in full. The values of the acquired assets and liabilities were as follows at the dates of acquisition: EUR 1,000 Fair values used in recording the acquisitions made in 2012 Fair values used in recording the acquisitions made in 2011 Property, plant and equipment Intangible assets 1, Investments Inventories Receivables Cash and cash equivalents Assets total 1, Interest-bearing liabilities - 47 Deferred tax liability Other liabilities Liabilities, total Net assets 1, Purchase cost 2,995 1,895 Goodwill 2,216 1,301 Purchase price paid in cash 3,112 1,442 Cash and cash equivalents acquired Effect on cash flow -3,036-1,389 The effect of the operations acquired during 2012 on the operating profit is slightly positive. Furthermore, their acquisition resulted in EUR 85,000 in transaction costs. 15

16 The intangible assets acquired in the consolidation of the business operations described above are recorded separately from goodwill at their fair value at the time of acquisition, provided that the fair value of the asset can be reliably determined. With the acquisitions, the company has increased its patient base and the selling parties have committed to continue in its service, with associated prohibition of competition restrictions. The fair value of the intangible assets in the acquisitions has been recorded on the basis of the established prices and discounted values of estimated future cash flows. The remaining goodwill is comprised of the yield expectations determined separately in connection with each purchase process, the local value factors of the acquired operation, such as competent personnel and those synergy benefits concerning the basic elements of chain management, such as sales function, personnel resourcing, organization of production and procurement activity, which are estimated to be achieved in the acquired target when it is consolidated into the Oral chain. Conditional additional purchase prices allocated to the financial period resulted in revenue recognition of a total of EUR 445 thousand and impairment of goodwill of a total of EUR 60 thousand. As of the beginning of 2013, Oral Hammaslääkärit will report the values used in the recognition of acquired business operations semiannually in connection with January June and January December interim reports. Collaterals and contingent liabilities Guarantee commitments on behalf of Group companies (EUR 1,000) Business mortgage 13,000 10,000** Liabilities for which assets have been pledged (EUR 1,000) Loans from financial institutions 4,425 3,214 Lease liabilities and other liabilities (EUR 1,000) Maturing in 1 year Maturing in more than 1 year Lease liabilities and other liabilities total Rental liabilities (EUR 1,000) Rental liabilities for premises 9,139 8,800* Rental liabilities, total 9,139 8,800 * Rental liabilities for premises were presented incorrectly in the 2011 financial statements, with EUR 3,314 thousand missing from their total amount. The liabilities pursuant to the missing lease have been included in the figures for the comparison period ** The number of business mortgages in financial year 2011 has been corrected. 16

17 The following rents have been recognized as expenses during the financial period (EUR 1,000) Business premise rents 1,896 1,713 Vehicle rents Apartment rents Equipment rents Rents recognized as expenses during the period, total 2,113 2,082 Change in interest-bearing liabilities (EUR 1,000) Interest-bearing non-current liabilities 1 January 4,983 4,737 Change in interest-bearing non-current liabilities 2, Interest-bearing non-current liabilities 31 December 7,794 4,983 Interest-bearing current liabilities 1 January 1,990 3,613 Change in interest-bearing current liabilities ,623 Interest-bearing current liabilities 31 December 1,644 1,990 Change in inventories (EUR 1,000) Inventories 1 January 1,261 1,136 Change in inventories Inventories 31 December 1,242 1,261 Change in provisions (EUR 1,000) Provisions, total, 1 Jan 0 0 Change in provisions 72 0 Provisions, total 31 December 72 0 Change in property, plant and equipment Intangible assets Accounting value 1 January 14,086 12,917 17

18 Investments 3,598 2,030 Decrease Depreciation Impairment Accounting value 31 December 16,872 14,086 Property, plant and equipment Accounting value 1 January 8,342 7,065 Investments 2,128 3,365 Decrease -10 Depreciation -2,198-2,078 Impairment Accounting value 31 December 8,272 8,342 INDICATORS Earnings per share, EUR (rights issue adjusted) Equity/share, EUR Equity ratio, % Gross investments in property, plant and equipment 6,274 5,356 (EUR Quick 1,000) ratio Gearing, % Calculation of indicators and definition of terms used: Earnings per share: Result for the period/average number of shares during the period Equity/share: Equity attributable to shareholders of the parent company/undiluted number of shares at the closing date Equity ratio, %: Equity/Balance sheet total Operating profit: Operating result adjusted for depreciation Interest-bearing liabilities: Liabilities on the balance sheet deferred tax liabilities shown under liabilities noninterest-bearing trade payables, accrued expenses and advance payment liabilities other non-interest-bearing liabilities. Quick ratio: (Cash and cash equivalents + marketable securities + short-term receivables)/current liabilities Gearing, %: Interest-bearing non-current financial liabilities + current financial liabilities cash and cash equivalents and marketable securities / Shareholders equity 18

19 MAJOR SHAREHOLDERS 31 DECEMBER 2012 Shareholder Share, % Atine Group Oy Korhonen Juha 9.00 Ranki Kari 7.67 Ilmarinen Mutual Pension Insurance Company 5.15 Lahikainen Kimmo 3.70 Korhonen Sari 3.65 Placeringsfonden Aktia Secura 3.53 Sir 8 Oy (Antti Kasi) 2.29 Virta Erkki 1.59 Björkman Stefan largest, total Other Total ORAL HAMMASLÄÄKÄRIT PLC BOARD OF DIRECTORS For additional information, please contact: Martin Forss, Managing Director, tel Antti Uusitalo, Chief Financial Officer, tel The addresses are in the format firstname.lastname@oral.fi A briefing on the result for analysts and media will take place today, 14 February, at 12 noon at the Oral Hammaslääkärit Hakaniemi dental clinic, address Siltasaarenkatu 16, 8th floor, Helsinki. The financial statements and Board of Directors' report will be published in electronic form on the company website on 28 February 2013 at the latest. Distribution: NASDAQ OMX Helsinki, main media, 19