Teleste will focus on technology businesses and supporting higher added value services and will divest its services business in Germany
TELESTE CORPOTATION INSIDE INFORMATION 14.5.2020 AT 19:45 EET
TELESTE WILL FOCUS ON TECHNOLOGY BUSINESSES AND SUPPORTING HIGHER ADDED VALUE SERVICES AND WILL DIVEST ITS SERVICES BUSINESS IN GERMANY
Teleste has revised its strategy according to which the company will focus on technology business operations and the services of higher added value supporting them. As a result, the company has decided to divest its services business in Germany. The company will assess different options, the primary objective being to sell the services business of the Germany-based Cableway companies during the next few months. Teleste Corporation's Board of Directors has decided to classify the services business of the Germany-based Cableway companies according to IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations” and will report it according to the standard in its first quarter 2020 interim report.
The Germany-based extensive cable network field services have had limited synergies with Teleste's technology and product businesses. The operational development and growth of field services require investments that do not support Teleste's technology and product business operations. Teleste engages in the services business in Germany through the Cableway companies, which have a leading position in cable network field services. Business development and growth investments are better suited to an owner for whom extensive network field services are core business.
The Cableway companies provide German cable network operators with turnkey field services by both in-house staff and through subcontractors. The Cableway companies employ around 470 people, and the companies’ operations cover a geographically substantial part of all of Germany.
The net sales of the operations classified according to IFRS 5 standard was EUR 70.1 million and the operating result EUR -0.9 million in 2019. The net sales was 29.8% of the consolidated net sales and the net assets on the consolidated balance sheet were EUR 15.0 million as at 31 March 2020. The valuation of the business classified as an asset held for sale will be assessed on the basis of different options aimed at divestment. By divesting its Germany-based services business operations, Teleste seeks to safeguard its financial position and its ability to invest in growth areas in technology and product businesses. The services business in Germany will no longer be reported under the figures of the Network Services business area as of the beginning of the first quarter, but will instead be reported pursuant to IFRS 5 standard.
TELESTE CORPORATION
Board of Directors
FURTHER INFORMATION:
CEO Jukka Rinnevaara, phone 611
DISTRIBUTION:
Nasdaq Helsinki
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